SB0016 EngrossedLRB100 05169 KTG 15179 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Labor Relations Act is
5amended by changing Sections 10 and 15 and by adding Section
67.6 as follows:
 
7    (5 ILCS 315/7.6 new)
8    Sec. 7.6. No collective bargaining or interest arbitration
9regarding certain changes to the Illinois Pension Code.
10    (a) Notwithstanding any other provision of this Act,
11employers shall not be required to bargain over matters
12affected by the changes, the impact of the changes, and the
13implementation of the changes to Article 14, 15, 16, or 17 of
14the Illinois Pension Code made by the addition of Section
1514-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
16Pension Code, which are deemed to be prohibited subjects of
17bargaining. Notwithstanding any provision of this Act, the
18changes, impact of the changes, or implementation of the
19changes to Article 14, 15, 16, or 17 of the Illinois Pension
20Code made by the addition of Section 14-106.5, 15-132.9,
2116-122.9, or 17-115.5 of the Illinois Pension Code shall not be
22subject to interest arbitration or any award issued pursuant to
23interest arbitration. The provisions of this Section shall not

 

 

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1apply to an employment contract or collective bargaining
2agreement that is in effect on the effective date of this
3amendatory Act of the 100th General Assembly. However, any such
4contract or agreement that is modified, amended, renewed, or
5superseded after the effective date of this amendatory Act of
6the 100th General Assembly shall be subject to the provisions
7of this Section. Each employer with active employees
8participating in a retirement system or pension fund
9established under Article 14, 15, 16, or 17 of the Illinois
10Pension Code shall comply with and be subject to the provisions
11of this amendatory Act of the 100th General Assembly. The
12provisions of this Section shall not apply to the ability of
13any employer and employee representative to bargain
14collectively with regard to the pick up of employee
15contributions pursuant to Section 14-133.1, 15-157.1,
1616-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
17    (b) Subject to and except for the matters set forth in
18subsection (a) of this Section that are deemed prohibited
19subjects of bargaining, nothing in this Section shall be
20construed as otherwise limiting any of the obligations and
21requirements applicable to employers under any of the
22provisions of this Act, including, but not limited to, the
23requirement to bargain collectively with regard to policy
24matters directly affecting wages, hours, and terms and
25conditions of employment as well as the impact thereon upon
26request by employee representatives. Subject to and except for

 

 

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1the matters set forth in subsection (a) of this Section that
2are deemed prohibited subjects of bargaining, nothing in this
3Section shall be construed as otherwise limiting any of the
4rights of employees or employee representatives under the
5provisions of this Act.
6    (c) In case of any conflict between this Section and any
7other provisions of this Act or any other law, the provisions
8of this Section shall control.
 
9    (5 ILCS 315/10)  (from Ch. 48, par. 1610)
10    Sec. 10. Unfair labor practices.
11    (a) It shall be an unfair labor practice for an employer or
12its agents:
13        (1) to interfere with, restrain or coerce public
14    employees in the exercise of the rights guaranteed in this
15    Act or to dominate or interfere with the formation,
16    existence or administration of any labor organization or
17    contribute financial or other support to it; provided, an
18    employer shall not be prohibited from permitting employees
19    to confer with him during working hours without loss of
20    time or pay;
21        (2) to discriminate in regard to hire or tenure of
22    employment or any term or condition of employment in order
23    to encourage or discourage membership in or other support
24    for any labor organization. Nothing in this Act or any
25    other law precludes a public employer from making an

 

 

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1    agreement with a labor organization to require as a
2    condition of employment the payment of a fair share under
3    paragraph (e) of Section 6;
4        (3) to discharge or otherwise discriminate against a
5    public employee because he has signed or filed an
6    affidavit, petition or charge or provided any information
7    or testimony under this Act;
8        (4) subject to and except as provided in Section 7.6,
9    to refuse to bargain collectively in good faith with a
10    labor organization which is the exclusive representative
11    of public employees in an appropriate unit, including, but
12    not limited to, the discussing of grievances with the
13    exclusive representative; however, no actions of the
14    employer taken to implement or otherwise comply with the
15    provisions of subsection (a) of Section 7.6 shall
16    constitute or give rise to an unfair labor practice under
17    this Act;
18        (5) to violate any of the rules and regulations
19    established by the Board with jurisdiction over them
20    relating to the conduct of representation elections or the
21    conduct affecting the representation elections;
22        (6) to expend or cause the expenditure of public funds
23    to any external agent, individual, firm, agency,
24    partnership or association in any attempt to influence the
25    outcome of representational elections held pursuant to
26    Section 9 of this Act; provided, that nothing in this

 

 

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1    subsection shall be construed to limit an employer's right
2    to internally communicate with its employees as provided in
3    subsection (c) of this Section, to be represented on any
4    matter pertaining to unit determinations, unfair labor
5    practice charges or pre-election conferences in any formal
6    or informal proceeding before the Board, or to seek or
7    obtain advice from legal counsel. Nothing in this paragraph
8    shall be construed to prohibit an employer from expending
9    or causing the expenditure of public funds on, or seeking
10    or obtaining services or advice from, any organization,
11    group, or association established by and including public
12    or educational employers, whether covered by this Act, the
13    Illinois Educational Labor Relations Act or the public
14    employment labor relations law of any other state or the
15    federal government, provided that such services or advice
16    are generally available to the membership of the
17    organization, group or association, and are not offered
18    solely in an attempt to influence the outcome of a
19    particular representational election; or
20        (7) to refuse to reduce a collective bargaining
21    agreement to writing or to refuse to sign such agreement.
22    (b) It shall be an unfair labor practice for a labor
23organization or its agents:
24        (1) to restrain or coerce public employees in the
25    exercise of the rights guaranteed in this Act, provided,
26    (i) that this paragraph shall not impair the right of a

 

 

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1    labor organization to prescribe its own rules with respect
2    to the acquisition or retention of membership therein or
3    the determination of fair share payments and (ii) that a
4    labor organization or its agents shall commit an unfair
5    labor practice under this paragraph in duty of fair
6    representation cases only by intentional misconduct in
7    representing employees under this Act;
8        (2) to restrain or coerce a public employer in the
9    selection of his representatives for the purposes of
10    collective bargaining or the settlement of grievances; or
11        (3) to cause, or attempt to cause, an employer to
12    discriminate against an employee in violation of
13    subsection (a)(2);
14        (4) to refuse to bargain collectively in good faith
15    with a public employer, if it has been designated in
16    accordance with the provisions of this Act as the exclusive
17    representative of public employees in an appropriate unit;
18        (5) to violate any of the rules and regulations
19    established by the boards with jurisdiction over them
20    relating to the conduct of representation elections or the
21    conduct affecting the representation elections;
22        (6) to discriminate against any employee because he has
23    signed or filed an affidavit, petition or charge or
24    provided any information or testimony under this Act;
25        (7) to picket or cause to be picketed, or threaten to
26    picket or cause to be picketed, any public employer where

 

 

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1    an object thereof is forcing or requiring an employer to
2    recognize or bargain with a labor organization of the
3    representative of its employees, or forcing or requiring
4    the employees of an employer to accept or select such labor
5    organization as their collective bargaining
6    representative, unless such labor organization is
7    currently certified as the representative of such
8    employees:
9            (A) where the employer has lawfully recognized in
10        accordance with this Act any labor organization and a
11        question concerning representation may not
12        appropriately be raised under Section 9 of this Act;
13            (B) where within the preceding 12 months a valid
14        election under Section 9 of this Act has been
15        conducted; or
16            (C) where such picketing has been conducted
17        without a petition under Section 9 being filed within a
18        reasonable period of time not to exceed 30 days from
19        the commencement of such picketing; provided that when
20        such a petition has been filed the Board shall
21        forthwith, without regard to the provisions of
22        subsection (a) of Section 9 or the absence of a showing
23        of a substantial interest on the part of the labor
24        organization, direct an election in such unit as the
25        Board finds to be appropriate and shall certify the
26        results thereof; provided further, that nothing in

 

 

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1        this subparagraph shall be construed to prohibit any
2        picketing or other publicity for the purpose of
3        truthfully advising the public that an employer does
4        not employ members of, or have a contract with, a labor
5        organization unless an effect of such picketing is to
6        induce any individual employed by any other person in
7        the course of his employment, not to pick up, deliver,
8        or transport any goods or not to perform any services;
9        or
10        (8) to refuse to reduce a collective bargaining
11    agreement to writing or to refuse to sign such agreement.
12    (c) The expressing of any views, argument, or opinion or
13the dissemination thereof, whether in written, printed,
14graphic, or visual form, shall not constitute or be evidence of
15an unfair labor practice under any of the provisions of this
16Act, if such expression contains no threat of reprisal or force
17or promise of benefit.
18(Source: P.A. 86-412; 87-736.)
 
19    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 15. Act Takes Precedence.
23    (a) In case of any conflict between the provisions of this
24Act and any other law (other than Section 5 of the State
25Employees Group Insurance Act of 1971 and other than the

 

 

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1changes made to the Illinois Pension Code by this amendatory
2Act of the 96th General Assembly), executive order or
3administrative regulation relating to wages, hours and
4conditions of employment and employment relations, the
5provisions of this Act or any collective bargaining agreement
6negotiated thereunder shall prevail and control. Nothing in
7this Act shall be construed to replace or diminish the rights
8of employees established by Sections 28 and 28a of the
9Metropolitan Transit Authority Act, Sections 2.15 through 2.19
10of the Regional Transportation Authority Act. The provisions of
11this Act are subject to Section 5 of the State Employees Group
12Insurance Act of 1971. Nothing in this Act shall be construed
13to replace the necessity of complaints against a sworn peace
14officer, as defined in Section 2(a) of the Uniform Peace
15Officer Disciplinary Act, from having a complaint supported by
16a sworn affidavit.
17    (b) Except as provided in subsection (a) above, any
18collective bargaining contract between a public employer and a
19labor organization executed pursuant to this Act shall
20supersede any contrary statutes, charters, ordinances, rules
21or regulations relating to wages, hours and conditions of
22employment and employment relations adopted by the public
23employer or its agents. Any collective bargaining agreement
24entered into prior to the effective date of this Act shall
25remain in full force during its duration.
26    (c) It is the public policy of this State, pursuant to

 

 

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1paragraphs (h) and (i) of Section 6 of Article VII of the
2Illinois Constitution, that the provisions of this Act are the
3exclusive exercise by the State of powers and functions which
4might otherwise be exercised by home rule units. Such powers
5and functions may not be exercised concurrently, either
6directly or indirectly, by any unit of local government,
7including any home rule unit, except as otherwise authorized by
8this Act.
9    (d) Notwithstanding any other provision of law, no
10collective bargaining agreement entered into, renewed, or
11extended after the effective date of this amendatory Act of the
12100th General Assembly or any arbitration award issued under
13such collective bargaining agreement may violate or conflict
14with the changes made by this amendatory Act of the 100th
15General Assembly.
16(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
17    Section 10. The State Employees Group Insurance Act of 1971
18is amended by changing Sections 3 and 10 as follows:
 
19    (5 ILCS 375/3)  (from Ch. 127, par. 523)
20    Sec. 3. Definitions. Unless the context otherwise
21requires, the following words and phrases as used in this Act
22shall have the following meanings. The Department may define
23these and other words and phrases separately for the purpose of
24implementing specific programs providing benefits under this

 

 

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1Act.
2    (a) "Administrative service organization" means any
3person, firm or corporation experienced in the handling of
4claims which is fully qualified, financially sound and capable
5of meeting the service requirements of a contract of
6administration executed with the Department.
7    (b) "Annuitant" means (1) an employee who retires, or has
8retired, on or after January 1, 1966 on an immediate annuity
9under the provisions of Articles 2, 14 (including an employee
10who has elected to receive an alternative retirement
11cancellation payment under Section 14-108.5 of the Illinois
12Pension Code in lieu of an annuity or who meets the criteria
13for retirement, but in lieu of receiving an annuity under that
14Article has elected to receive an accelerated pension benefit
15payment under Section 14-147.5 of that Article), 15 (including
16an employee who has retired under the optional retirement
17program established under Section 15-158.2 or who meets the
18criteria for retirement but in lieu of receiving an annuity
19under that Article has elected to receive an accelerated
20pension benefit payment under Section 15-185.5 of the Article),
21paragraphs (2), (3), or (5) of Section 16-106 (including an
22employee who meets the criteria for retirement, but in lieu of
23receiving an annuity under that Article has elected to receive
24an accelerated pension benefit payment under Section 16-190.5
25of the Illinois Pension Code), or Article 18 of the Illinois
26Pension Code; (2) any person who was receiving group insurance

 

 

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1coverage under this Act as of March 31, 1978 by reason of his
2status as an annuitant, even though the annuity in relation to
3which such coverage was provided is a proportional annuity
4based on less than the minimum period of service required for a
5retirement annuity in the system involved; (3) any person not
6otherwise covered by this Act who has retired as a
7participating member under Article 2 of the Illinois Pension
8Code but is ineligible for the retirement annuity under Section
92-119 of the Illinois Pension Code; (4) the spouse of any
10person who is receiving a retirement annuity under Article 18
11of the Illinois Pension Code and who is covered under a group
12health insurance program sponsored by a governmental employer
13other than the State of Illinois and who has irrevocably
14elected to waive his or her coverage under this Act and to have
15his or her spouse considered as the "annuitant" under this Act
16and not as a "dependent"; or (5) an employee who retires, or
17has retired, from a qualified position, as determined according
18to rules promulgated by the Director, under a qualified local
19government, a qualified rehabilitation facility, a qualified
20domestic violence shelter or service, or a qualified child
21advocacy center. (For definition of "retired employee", see (p)
22post).
23    (b-5) (Blank).
24    (b-6) (Blank).
25    (b-7) (Blank).
26    (c) "Carrier" means (1) an insurance company, a corporation

 

 

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1organized under the Limited Health Service Organization Act or
2the Voluntary Health Services Plan Act, a partnership, or other
3nongovernmental organization, which is authorized to do group
4life or group health insurance business in Illinois, or (2) the
5State of Illinois as a self-insurer.
6    (d) "Compensation" means salary or wages payable on a
7regular payroll by the State Treasurer on a warrant of the
8State Comptroller out of any State, trust or federal fund, or
9by the Governor of the State through a disbursing officer of
10the State out of a trust or out of federal funds, or by any
11Department out of State, trust, federal or other funds held by
12the State Treasurer or the Department, to any person for
13personal services currently performed, and ordinary or
14accidental disability benefits under Articles 2, 14, 15
15(including ordinary or accidental disability benefits under
16the optional retirement program established under Section
1715-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
18Article 18 of the Illinois Pension Code, for disability
19incurred after January 1, 1966, or benefits payable under the
20Workers' Compensation or Occupational Diseases Act or benefits
21payable under a sick pay plan established in accordance with
22Section 36 of the State Finance Act. "Compensation" also means
23salary or wages paid to an employee of any qualified local
24government, qualified rehabilitation facility, qualified
25domestic violence shelter or service, or qualified child
26advocacy center.

 

 

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1    (e) "Commission" means the State Employees Group Insurance
2Advisory Commission authorized by this Act. Commencing July 1,
31984, "Commission" as used in this Act means the Commission on
4Government Forecasting and Accountability as established by
5the Legislative Commission Reorganization Act of 1984.
6    (f) "Contributory", when referred to as contributory
7coverage, shall mean optional coverages or benefits elected by
8the member toward the cost of which such member makes
9contribution, or which are funded in whole or in part through
10the acceptance of a reduction in earnings or the foregoing of
11an increase in earnings by an employee, as distinguished from
12noncontributory coverage or benefits which are paid entirely by
13the State of Illinois without reduction of the member's salary.
14    (g) "Department" means any department, institution, board,
15commission, officer, court or any agency of the State
16government receiving appropriations and having power to
17certify payrolls to the Comptroller authorizing payments of
18salary and wages against such appropriations as are made by the
19General Assembly from any State fund, or against trust funds
20held by the State Treasurer and includes boards of trustees of
21the retirement systems created by Articles 2, 14, 15, 16 and 18
22of the Illinois Pension Code. "Department" also includes the
23Illinois Comprehensive Health Insurance Board, the Board of
24Examiners established under the Illinois Public Accounting
25Act, and the Illinois Finance Authority.
26    (h) "Dependent", when the term is used in the context of

 

 

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1the health and life plan, means a member's spouse and any child
2(1) from birth to age 26 including an adopted child, a child
3who lives with the member from the time of the filing of a
4petition for adoption until entry of an order of adoption, a
5stepchild or adjudicated child, or a child who lives with the
6member if such member is a court appointed guardian of the
7child or (2) age 19 or over who has a mental or physical
8disability from a cause originating prior to the age of 19 (age
926 if enrolled as an adult child dependent). For the health
10plan only, the term "dependent" also includes (1) any person
11enrolled prior to the effective date of this Section who is
12dependent upon the member to the extent that the member may
13claim such person as a dependent for income tax deduction
14purposes and (2) any person who has received after June 30,
152000 an organ transplant and who is financially dependent upon
16the member and eligible to be claimed as a dependent for income
17tax purposes. A member requesting to cover any dependent must
18provide documentation as requested by the Department of Central
19Management Services and file with the Department any and all
20forms required by the Department.
21    (i) "Director" means the Director of the Illinois
22Department of Central Management Services.
23    (j) "Eligibility period" means the period of time a member
24has to elect enrollment in programs or to select benefits
25without regard to age, sex or health.
26    (k) "Employee" means and includes each officer or employee

 

 

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1in the service of a department who (1) receives his
2compensation for service rendered to the department on a
3warrant issued pursuant to a payroll certified by a department
4or on a warrant or check issued and drawn by a department upon
5a trust, federal or other fund or on a warrant issued pursuant
6to a payroll certified by an elected or duly appointed officer
7of the State or who receives payment of the performance of
8personal services on a warrant issued pursuant to a payroll
9certified by a Department and drawn by the Comptroller upon the
10State Treasurer against appropriations made by the General
11Assembly from any fund or against trust funds held by the State
12Treasurer, and (2) is employed full-time or part-time in a
13position normally requiring actual performance of duty during
14not less than 1/2 of a normal work period, as established by
15the Director in cooperation with each department, except that
16persons elected by popular vote will be considered employees
17during the entire term for which they are elected regardless of
18hours devoted to the service of the State, and (3) except that
19"employee" does not include any person who is not eligible by
20reason of such person's employment to participate in one of the
21State retirement systems under Articles 2, 14, 15 (either the
22regular Article 15 system or the optional retirement program
23established under Section 15-158.2) or 18, or under paragraph
24(2), (3), or (5) of Section 16-106, of the Illinois Pension
25Code, but such term does include persons who are employed
26during the 6 month qualifying period under Article 14 of the

 

 

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1Illinois Pension Code. Such term also includes any person who
2(1) after January 1, 1966, is receiving ordinary or accidental
3disability benefits under Articles 2, 14, 15 (including
4ordinary or accidental disability benefits under the optional
5retirement program established under Section 15-158.2),
6paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
7the Illinois Pension Code, for disability incurred after
8January 1, 1966, (2) receives total permanent or total
9temporary disability under the Workers' Compensation Act or
10Occupational Disease Act as a result of injuries sustained or
11illness contracted in the course of employment with the State
12of Illinois, or (3) is not otherwise covered under this Act and
13has retired as a participating member under Article 2 of the
14Illinois Pension Code but is ineligible for the retirement
15annuity under Section 2-119 of the Illinois Pension Code.
16However, a person who satisfies the criteria of the foregoing
17definition of "employee" except that such person is made
18ineligible to participate in the State Universities Retirement
19System by clause (4) of subsection (a) of Section 15-107 of the
20Illinois Pension Code is also an "employee" for the purposes of
21this Act. "Employee" also includes any person receiving or
22eligible for benefits under a sick pay plan established in
23accordance with Section 36 of the State Finance Act. "Employee"
24also includes (i) each officer or employee in the service of a
25qualified local government, including persons appointed as
26trustees of sanitary districts regardless of hours devoted to

 

 

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1the service of the sanitary district, (ii) each employee in the
2service of a qualified rehabilitation facility, (iii) each
3full-time employee in the service of a qualified domestic
4violence shelter or service, and (iv) each full-time employee
5in the service of a qualified child advocacy center, as
6determined according to rules promulgated by the Director.
7    (l) "Member" means an employee, annuitant, retired
8employee or survivor. In the case of an annuitant or retired
9employee who first becomes an annuitant or retired employee on
10or after the effective date of this amendatory Act of the 97th
11General Assembly, the individual must meet the minimum vesting
12requirements of the applicable retirement system in order to be
13eligible for group insurance benefits under that system. In the
14case of a survivor who first becomes a survivor on or after the
15effective date of this amendatory Act of the 97th General
16Assembly, the deceased employee, annuitant, or retired
17employee upon whom the annuity is based must have been eligible
18to participate in the group insurance system under the
19applicable retirement system in order for the survivor to be
20eligible for group insurance benefits under that system.
21    (m) "Optional coverages or benefits" means those coverages
22or benefits available to the member on his or her voluntary
23election, and at his or her own expense.
24    (n) "Program" means the group life insurance, health
25benefits and other employee benefits designed and contracted
26for by the Director under this Act.

 

 

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1    (o) "Health plan" means a health benefits program offered
2by the State of Illinois for persons eligible for the plan.
3    (p) "Retired employee" means any person who would be an
4annuitant as that term is defined herein but for the fact that
5such person retired prior to January 1, 1966. Such term also
6includes any person formerly employed by the University of
7Illinois in the Cooperative Extension Service who would be an
8annuitant but for the fact that such person was made ineligible
9to participate in the State Universities Retirement System by
10clause (4) of subsection (a) of Section 15-107 of the Illinois
11Pension Code.
12    (q) "Survivor" means a person receiving an annuity as a
13survivor of an employee or of an annuitant. "Survivor" also
14includes: (1) the surviving dependent of a person who satisfies
15the definition of "employee" except that such person is made
16ineligible to participate in the State Universities Retirement
17System by clause (4) of subsection (a) of Section 15-107 of the
18Illinois Pension Code; (2) the surviving dependent of any
19person formerly employed by the University of Illinois in the
20Cooperative Extension Service who would be an annuitant except
21for the fact that such person was made ineligible to
22participate in the State Universities Retirement System by
23clause (4) of subsection (a) of Section 15-107 of the Illinois
24Pension Code; and (3) the surviving dependent of a person who
25was an annuitant under this Act by virtue of receiving an
26alternative retirement cancellation payment under Section

 

 

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114-108.5 of the Illinois Pension Code.
2    (q-2) "SERS" means the State Employees' Retirement System
3of Illinois, created under Article 14 of the Illinois Pension
4Code.
5    (q-3) "SURS" means the State Universities Retirement
6System, created under Article 15 of the Illinois Pension Code.
7    (q-4) "TRS" means the Teachers' Retirement System of the
8State of Illinois, created under Article 16 of the Illinois
9Pension Code.
10    (q-5) (Blank).
11    (q-6) (Blank).
12    (q-7) (Blank).
13    (r) "Medical services" means the services provided within
14the scope of their licenses by practitioners in all categories
15licensed under the Medical Practice Act of 1987.
16    (s) "Unit of local government" means any county,
17municipality, township, school district (including a
18combination of school districts under the Intergovernmental
19Cooperation Act), special district or other unit, designated as
20a unit of local government by law, which exercises limited
21governmental powers or powers in respect to limited
22governmental subjects, any not-for-profit association with a
23membership that primarily includes townships and township
24officials, that has duties that include provision of research
25service, dissemination of information, and other acts for the
26purpose of improving township government, and that is funded

 

 

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1wholly or partly in accordance with Section 85-15 of the
2Township Code; any not-for-profit corporation or association,
3with a membership consisting primarily of municipalities, that
4operates its own utility system, and provides research,
5training, dissemination of information, or other acts to
6promote cooperation between and among municipalities that
7provide utility services and for the advancement of the goals
8and purposes of its membership; the Southern Illinois
9Collegiate Common Market, which is a consortium of higher
10education institutions in Southern Illinois; the Illinois
11Association of Park Districts; and any hospital provider that
12is owned by a county that has 100 or fewer hospital beds and
13has not already joined the program. "Qualified local
14government" means a unit of local government approved by the
15Director and participating in a program created under
16subsection (i) of Section 10 of this Act.
17    (t) "Qualified rehabilitation facility" means any
18not-for-profit organization that is accredited by the
19Commission on Accreditation of Rehabilitation Facilities or
20certified by the Department of Human Services (as successor to
21the Department of Mental Health and Developmental
22Disabilities) to provide services to persons with disabilities
23and which receives funds from the State of Illinois for
24providing those services, approved by the Director and
25participating in a program created under subsection (j) of
26Section 10 of this Act.

 

 

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1    (u) "Qualified domestic violence shelter or service" means
2any Illinois domestic violence shelter or service and its
3administrative offices funded by the Department of Human
4Services (as successor to the Illinois Department of Public
5Aid), approved by the Director and participating in a program
6created under subsection (k) of Section 10.
7    (v) "TRS benefit recipient" means a person who:
8        (1) is not a "member" as defined in this Section; and
9        (2) is receiving a monthly benefit or retirement
10    annuity under Article 16 of the Illinois Pension Code; and
11        (3) either (i) has at least 8 years of creditable
12    service under Article 16 of the Illinois Pension Code, or
13    (ii) was enrolled in the health insurance program offered
14    under that Article on January 1, 1996, or (iii) is the
15    survivor of a benefit recipient who had at least 8 years of
16    creditable service under Article 16 of the Illinois Pension
17    Code or was enrolled in the health insurance program
18    offered under that Article on the effective date of this
19    amendatory Act of 1995, or (iv) is a recipient or survivor
20    of a recipient of a disability benefit under Article 16 of
21    the Illinois Pension Code.
22    (w) "TRS dependent beneficiary" means a person who:
23        (1) is not a "member" or "dependent" as defined in this
24    Section; and
25        (2) is a TRS benefit recipient's: (A) spouse, (B)
26    dependent parent who is receiving at least half of his or

 

 

SB0016 Engrossed- 23 -LRB100 05169 KTG 15179 b

1    her support from the TRS benefit recipient, or (C) natural,
2    step, adjudicated, or adopted child who is (i) under age
3    26, (ii) was, on January 1, 1996, participating as a
4    dependent beneficiary in the health insurance program
5    offered under Article 16 of the Illinois Pension Code, or
6    (iii) age 19 or over who has a mental or physical
7    disability from a cause originating prior to the age of 19
8    (age 26 if enrolled as an adult child).
9    "TRS dependent beneficiary" does not include, as indicated
10under paragraph (2) of this subsection (w), a dependent of the
11survivor of a TRS benefit recipient who first becomes a
12dependent of a survivor of a TRS benefit recipient on or after
13the effective date of this amendatory Act of the 97th General
14Assembly unless that dependent would have been eligible for
15coverage as a dependent of the deceased TRS benefit recipient
16upon whom the survivor benefit is based.
17    (x) "Military leave" refers to individuals in basic
18training for reserves, special/advanced training, annual
19training, emergency call up, activation by the President of the
20United States, or any other training or duty in service to the
21United States Armed Forces.
22    (y) (Blank).
23    (z) "Community college benefit recipient" means a person
24who:
25        (1) is not a "member" as defined in this Section; and
26        (2) is receiving a monthly survivor's annuity or

 

 

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1    retirement annuity under Article 15 of the Illinois Pension
2    Code; and
3        (3) either (i) was a full-time employee of a community
4    college district or an association of community college
5    boards created under the Public Community College Act
6    (other than an employee whose last employer under Article
7    15 of the Illinois Pension Code was a community college
8    district subject to Article VII of the Public Community
9    College Act) and was eligible to participate in a group
10    health benefit plan as an employee during the time of
11    employment with a community college district (other than a
12    community college district subject to Article VII of the
13    Public Community College Act) or an association of
14    community college boards, or (ii) is the survivor of a
15    person described in item (i).
16    (aa) "Community college dependent beneficiary" means a
17person who:
18        (1) is not a "member" or "dependent" as defined in this
19    Section; and
20        (2) is a community college benefit recipient's: (A)
21    spouse, (B) dependent parent who is receiving at least half
22    of his or her support from the community college benefit
23    recipient, or (C) natural, step, adjudicated, or adopted
24    child who is (i) under age 26, or (ii) age 19 or over and
25    has a mental or physical disability from a cause
26    originating prior to the age of 19 (age 26 if enrolled as

 

 

SB0016 Engrossed- 25 -LRB100 05169 KTG 15179 b

1    an adult child).
2    "Community college dependent beneficiary" does not
3include, as indicated under paragraph (2) of this subsection
4(aa), a dependent of the survivor of a community college
5benefit recipient who first becomes a dependent of a survivor
6of a community college benefit recipient on or after the
7effective date of this amendatory Act of the 97th General
8Assembly unless that dependent would have been eligible for
9coverage as a dependent of the deceased community college
10benefit recipient upon whom the survivor annuity is based.
11    (bb) "Qualified child advocacy center" means any Illinois
12child advocacy center and its administrative offices funded by
13the Department of Children and Family Services, as defined by
14the Children's Advocacy Center Act (55 ILCS 80/), approved by
15the Director and participating in a program created under
16subsection (n) of Section 10.
17(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
18    (5 ILCS 375/10)  (from Ch. 127, par. 530)
19    Sec. 10. Contributions by the State and members.
20    (a) The State shall pay the cost of basic non-contributory
21group life insurance and, subject to member paid contributions
22set by the Department or required by this Section and except as
23provided in this Section, the basic program of group health
24benefits on each eligible member, except a member, not
25otherwise covered by this Act, who has retired as a

 

 

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1participating member under Article 2 of the Illinois Pension
2Code but is ineligible for the retirement annuity under Section
32-119 of the Illinois Pension Code, and part of each eligible
4member's and retired member's premiums for health insurance
5coverage for enrolled dependents as provided by Section 9. The
6State shall pay the cost of the basic program of group health
7benefits only after benefits are reduced by the amount of
8benefits covered by Medicare for all members and dependents who
9are eligible for benefits under Social Security or the Railroad
10Retirement system or who had sufficient Medicare-covered
11government employment, except that such reduction in benefits
12shall apply only to those members and dependents who (1) first
13become eligible for such Medicare coverage on or after July 1,
141992; or (2) are Medicare-eligible members or dependents of a
15local government unit which began participation in the program
16on or after July 1, 1992; or (3) remain eligible for, but no
17longer receive Medicare coverage which they had been receiving
18on or after July 1, 1992. The Department may determine the
19aggregate level of the State's contribution on the basis of
20actual cost of medical services adjusted for age, sex or
21geographic or other demographic characteristics which affect
22the costs of such programs.
23    The cost of participation in the basic program of group
24health benefits for the dependent or survivor of a living or
25deceased retired employee who was formerly employed by the
26University of Illinois in the Cooperative Extension Service and

 

 

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1would be an annuitant but for the fact that he or she was made
2ineligible to participate in the State Universities Retirement
3System by clause (4) of subsection (a) of Section 15-107 of the
4Illinois Pension Code shall not be greater than the cost of
5participation that would otherwise apply to that dependent or
6survivor if he or she were the dependent or survivor of an
7annuitant under the State Universities Retirement System.
8    (a-1) (Blank).
9    (a-2) (Blank).
10    (a-3) (Blank).
11    (a-4) (Blank).
12    (a-5) (Blank).
13    (a-6) (Blank).
14    (a-7) (Blank).
15    (a-8) Any annuitant, survivor, or retired employee may
16waive or terminate coverage in the program of group health
17benefits. Any such annuitant, survivor, or retired employee who
18has waived or terminated coverage may enroll or re-enroll in
19the program of group health benefits only during the annual
20benefit choice period, as determined by the Director; except
21that in the event of termination of coverage due to nonpayment
22of premiums, the annuitant, survivor, or retired employee may
23not re-enroll in the program.
24    (a-8.5) Beginning on the effective date of this amendatory
25Act of the 97th General Assembly, the Director of Central
26Management Services shall, on an annual basis, determine the

 

 

SB0016 Engrossed- 28 -LRB100 05169 KTG 15179 b

1amount that the State shall contribute toward the basic program
2of group health benefits on behalf of annuitants (including
3individuals who (i) participated in the General Assembly
4Retirement System, the State Employees' Retirement System of
5Illinois, the State Universities Retirement System, the
6Teachers' Retirement System of the State of Illinois, or the
7Judges Retirement System of Illinois and (ii) qualify as
8annuitants under subsection (b) of Section 3 of this Act),
9survivors (including individuals who (i) receive an annuity as
10a survivor of an individual who participated in the General
11Assembly Retirement System, the State Employees' Retirement
12System of Illinois, the State Universities Retirement System,
13the Teachers' Retirement System of the State of Illinois, or
14the Judges Retirement System of Illinois and (ii) qualify as
15survivors under subsection (q) of Section 3 of this Act), and
16retired employees (as defined in subsection (p) of Section 3 of
17this Act). The remainder of the cost of coverage for each
18annuitant, survivor, or retired employee, as determined by the
19Director of Central Management Services, shall be the
20responsibility of that annuitant, survivor, or retired
21employee.
22    Contributions required of annuitants, survivors, and
23retired employees shall be the same for all retirement systems
24and shall also be based on whether an individual has made an
25election under Section 15-135.1 of the Illinois Pension Code.
26Contributions may be based on annuitants', survivors', or

 

 

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1retired employees' Medicare eligibility, but may not be based
2on Social Security eligibility.
3    (a-9) No later than May 1 of each calendar year, the
4Director of Central Management Services shall certify in
5writing to the Executive Secretary of the State Employees'
6Retirement System of Illinois the amounts of the Medicare
7supplement health care premiums and the amounts of the health
8care premiums for all other retirees who are not Medicare
9eligible.
10    A separate calculation of the premiums based upon the
11actual cost of each health care plan shall be so certified.
12    The Director of Central Management Services shall provide
13to the Executive Secretary of the State Employees' Retirement
14System of Illinois such information, statistics, and other data
15as he or she may require to review the premium amounts
16certified by the Director of Central Management Services.
17    The Department of Central Management Services, or any
18successor agency designated to procure healthcare contracts
19pursuant to this Act, is authorized to establish funds,
20separate accounts provided by any bank or banks as defined by
21the Illinois Banking Act, or separate accounts provided by any
22savings and loan association or associations as defined by the
23Illinois Savings and Loan Act of 1985 to be held by the
24Director, outside the State treasury, for the purpose of
25receiving the transfer of moneys from the Local Government
26Health Insurance Reserve Fund. The Department may promulgate

 

 

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1rules further defining the methodology for the transfers. Any
2interest earned by moneys in the funds or accounts shall inure
3to the Local Government Health Insurance Reserve Fund. The
4transferred moneys, and interest accrued thereon, shall be used
5exclusively for transfers to administrative service
6organizations or their financial institutions for payments of
7claims to claimants and providers under the self-insurance
8health plan. The transferred moneys, and interest accrued
9thereon, shall not be used for any other purpose including, but
10not limited to, reimbursement of administration fees due the
11administrative service organization pursuant to its contract
12or contracts with the Department.
13    (a-10) To the extent that participation, benefits, or
14premiums under this Act are based on a person's service credit
15under an Article of the Illinois Pension Code, service credit
16terminated in exchange for an accelerated pension benefit
17payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
18Code shall be included in determining a person's service credit
19for the purposes of this Act.
20    (b) State employees who become eligible for this program on
21or after January 1, 1980 in positions normally requiring actual
22performance of duty not less than 1/2 of a normal work period
23but not equal to that of a normal work period, shall be given
24the option of participating in the available program. If the
25employee elects coverage, the State shall contribute on behalf
26of such employee to the cost of the employee's benefit and any

 

 

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1applicable dependent supplement, that sum which bears the same
2percentage as that percentage of time the employee regularly
3works when compared to normal work period.
4    (c) The basic non-contributory coverage from the basic
5program of group health benefits shall be continued for each
6employee not in pay status or on active service by reason of
7(1) leave of absence due to illness or injury, (2) authorized
8educational leave of absence or sabbatical leave, or (3)
9military leave. This coverage shall continue until expiration
10of authorized leave and return to active service, but not to
11exceed 24 months for leaves under item (1) or (2). This
1224-month limitation and the requirement of returning to active
13service shall not apply to persons receiving ordinary or
14accidental disability benefits or retirement benefits through
15the appropriate State retirement system or benefits under the
16Workers' Compensation or Occupational Disease Act.
17    (d) The basic group life insurance coverage shall continue,
18with full State contribution, where such person is (1) absent
19from active service by reason of disability arising from any
20cause other than self-inflicted, (2) on authorized educational
21leave of absence or sabbatical leave, or (3) on military leave.
22    (e) Where the person is in non-pay status for a period in
23excess of 30 days or on leave of absence, other than by reason
24of disability, educational or sabbatical leave, or military
25leave, such person may continue coverage only by making
26personal payment equal to the amount normally contributed by

 

 

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1the State on such person's behalf. Such payments and coverage
2may be continued: (1) until such time as the person returns to
3a status eligible for coverage at State expense, but not to
4exceed 24 months or (2) until such person's employment or
5annuitant status with the State is terminated (exclusive of any
6additional service imposed pursuant to law).
7    (f) The Department shall establish by rule the extent to
8which other employee benefits will continue for persons in
9non-pay status or who are not in active service.
10    (g) The State shall not pay the cost of the basic
11non-contributory group life insurance, program of health
12benefits and other employee benefits for members who are
13survivors as defined by paragraphs (1) and (2) of subsection
14(q) of Section 3 of this Act. The costs of benefits for these
15survivors shall be paid by the survivors or by the University
16of Illinois Cooperative Extension Service, or any combination
17thereof. However, the State shall pay the amount of the
18reduction in the cost of participation, if any, resulting from
19the amendment to subsection (a) made by this amendatory Act of
20the 91st General Assembly.
21    (h) Those persons occupying positions with any department
22as a result of emergency appointments pursuant to Section 8b.8
23of the Personnel Code who are not considered employees under
24this Act shall be given the option of participating in the
25programs of group life insurance, health benefits and other
26employee benefits. Such persons electing coverage may

 

 

SB0016 Engrossed- 33 -LRB100 05169 KTG 15179 b

1participate only by making payment equal to the amount normally
2contributed by the State for similarly situated employees. Such
3amounts shall be determined by the Director. Such payments and
4coverage may be continued until such time as the person becomes
5an employee pursuant to this Act or such person's appointment
6is terminated.
7    (i) Any unit of local government within the State of
8Illinois may apply to the Director to have its employees,
9annuitants, and their dependents provided group health
10coverage under this Act on a non-insured basis. To participate,
11a unit of local government must agree to enroll all of its
12employees, who may select coverage under either the State group
13health benefits plan or a health maintenance organization that
14has contracted with the State to be available as a health care
15provider for employees as defined in this Act. A unit of local
16government must remit the entire cost of providing coverage
17under the State group health benefits plan or, for coverage
18under a health maintenance organization, an amount determined
19by the Director based on an analysis of the sex, age,
20geographic location, or other relevant demographic variables
21for its employees, except that the unit of local government
22shall not be required to enroll those of its employees who are
23covered spouses or dependents under this plan or another group
24policy or plan providing health benefits as long as (1) an
25appropriate official from the unit of local government attests
26that each employee not enrolled is a covered spouse or

 

 

SB0016 Engrossed- 34 -LRB100 05169 KTG 15179 b

1dependent under this plan or another group policy or plan, and
2(2) at least 50% of the employees are enrolled and the unit of
3local government remits the entire cost of providing coverage
4to those employees, except that a participating school district
5must have enrolled at least 50% of its full-time employees who
6have not waived coverage under the district's group health plan
7by participating in a component of the district's cafeteria
8plan. A participating school district is not required to enroll
9a full-time employee who has waived coverage under the
10district's health plan, provided that an appropriate official
11from the participating school district attests that the
12full-time employee has waived coverage by participating in a
13component of the district's cafeteria plan. For the purposes of
14this subsection, "participating school district" includes a
15unit of local government whose primary purpose is education as
16defined by the Department's rules.
17    Employees of a participating unit of local government who
18are not enrolled due to coverage under another group health
19policy or plan may enroll in the event of a qualifying change
20in status, special enrollment, special circumstance as defined
21by the Director, or during the annual Benefit Choice Period. A
22participating unit of local government may also elect to cover
23its annuitants. Dependent coverage shall be offered on an
24optional basis, with the costs paid by the unit of local
25government, its employees, or some combination of the two as
26determined by the unit of local government. The unit of local

 

 

SB0016 Engrossed- 35 -LRB100 05169 KTG 15179 b

1government shall be responsible for timely collection and
2transmission of dependent premiums.
3    The Director shall annually determine monthly rates of
4payment, subject to the following constraints:
5        (1) In the first year of coverage, the rates shall be
6    equal to the amount normally charged to State employees for
7    elected optional coverages or for enrolled dependents
8    coverages or other contributory coverages, or contributed
9    by the State for basic insurance coverages on behalf of its
10    employees, adjusted for differences between State
11    employees and employees of the local government in age,
12    sex, geographic location or other relevant demographic
13    variables, plus an amount sufficient to pay for the
14    additional administrative costs of providing coverage to
15    employees of the unit of local government and their
16    dependents.
17        (2) In subsequent years, a further adjustment shall be
18    made to reflect the actual prior years' claims experience
19    of the employees of the unit of local government.
20    In the case of coverage of local government employees under
21a health maintenance organization, the Director shall annually
22determine for each participating unit of local government the
23maximum monthly amount the unit may contribute toward that
24coverage, based on an analysis of (i) the age, sex, geographic
25location, and other relevant demographic variables of the
26unit's employees and (ii) the cost to cover those employees

 

 

SB0016 Engrossed- 36 -LRB100 05169 KTG 15179 b

1under the State group health benefits plan. The Director may
2similarly determine the maximum monthly amount each unit of
3local government may contribute toward coverage of its
4employees' dependents under a health maintenance organization.
5    Monthly payments by the unit of local government or its
6employees for group health benefits plan or health maintenance
7organization coverage shall be deposited in the Local
8Government Health Insurance Reserve Fund.
9    The Local Government Health Insurance Reserve Fund is
10hereby created as a nonappropriated trust fund to be held
11outside the State Treasury, with the State Treasurer as
12custodian. The Local Government Health Insurance Reserve Fund
13shall be a continuing fund not subject to fiscal year
14limitations. The Local Government Health Insurance Reserve
15Fund is not subject to administrative charges or charge-backs,
16including but not limited to those authorized under Section 8h
17of the State Finance Act. All revenues arising from the
18administration of the health benefits program established
19under this Section shall be deposited into the Local Government
20Health Insurance Reserve Fund. Any interest earned on moneys in
21the Local Government Health Insurance Reserve Fund shall be
22deposited into the Fund. All expenditures from this Fund shall
23be used for payments for health care benefits for local
24government and rehabilitation facility employees, annuitants,
25and dependents, and to reimburse the Department or its
26administrative service organization for all expenses incurred

 

 

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1in the administration of benefits. No other State funds may be
2used for these purposes.
3    A local government employer's participation or desire to
4participate in a program created under this subsection shall
5not limit that employer's duty to bargain with the
6representative of any collective bargaining unit of its
7employees.
8    (j) Any rehabilitation facility within the State of
9Illinois may apply to the Director to have its employees,
10annuitants, and their eligible dependents provided group
11health coverage under this Act on a non-insured basis. To
12participate, a rehabilitation facility must agree to enroll all
13of its employees and remit the entire cost of providing such
14coverage for its employees, except that the rehabilitation
15facility shall not be required to enroll those of its employees
16who are covered spouses or dependents under this plan or
17another group policy or plan providing health benefits as long
18as (1) an appropriate official from the rehabilitation facility
19attests that each employee not enrolled is a covered spouse or
20dependent under this plan or another group policy or plan, and
21(2) at least 50% of the employees are enrolled and the
22rehabilitation facility remits the entire cost of providing
23coverage to those employees. Employees of a participating
24rehabilitation facility who are not enrolled due to coverage
25under another group health policy or plan may enroll in the
26event of a qualifying change in status, special enrollment,

 

 

SB0016 Engrossed- 38 -LRB100 05169 KTG 15179 b

1special circumstance as defined by the Director, or during the
2annual Benefit Choice Period. A participating rehabilitation
3facility may also elect to cover its annuitants. Dependent
4coverage shall be offered on an optional basis, with the costs
5paid by the rehabilitation facility, its employees, or some
6combination of the 2 as determined by the rehabilitation
7facility. The rehabilitation facility shall be responsible for
8timely collection and transmission of dependent premiums.
9    The Director shall annually determine quarterly rates of
10payment, subject to the following constraints:
11        (1) In the first year of coverage, the rates shall be
12    equal to the amount normally charged to State employees for
13    elected optional coverages or for enrolled dependents
14    coverages or other contributory coverages on behalf of its
15    employees, adjusted for differences between State
16    employees and employees of the rehabilitation facility in
17    age, sex, geographic location or other relevant
18    demographic variables, plus an amount sufficient to pay for
19    the additional administrative costs of providing coverage
20    to employees of the rehabilitation facility and their
21    dependents.
22        (2) In subsequent years, a further adjustment shall be
23    made to reflect the actual prior years' claims experience
24    of the employees of the rehabilitation facility.
25    Monthly payments by the rehabilitation facility or its
26employees for group health benefits shall be deposited in the

 

 

SB0016 Engrossed- 39 -LRB100 05169 KTG 15179 b

1Local Government Health Insurance Reserve Fund.
2    (k) Any domestic violence shelter or service within the
3State of Illinois may apply to the Director to have its
4employees, annuitants, and their dependents provided group
5health coverage under this Act on a non-insured basis. To
6participate, a domestic violence shelter or service must agree
7to enroll all of its employees and pay the entire cost of
8providing such coverage for its employees. The domestic
9violence shelter shall not be required to enroll those of its
10employees who are covered spouses or dependents under this plan
11or another group policy or plan providing health benefits as
12long as (1) an appropriate official from the domestic violence
13shelter attests that each employee not enrolled is a covered
14spouse or dependent under this plan or another group policy or
15plan and (2) at least 50% of the employees are enrolled and the
16domestic violence shelter remits the entire cost of providing
17coverage to those employees. Employees of a participating
18domestic violence shelter who are not enrolled due to coverage
19under another group health policy or plan may enroll in the
20event of a qualifying change in status, special enrollment, or
21special circumstance as defined by the Director or during the
22annual Benefit Choice Period. A participating domestic
23violence shelter may also elect to cover its annuitants.
24Dependent coverage shall be offered on an optional basis, with
25employees, or some combination of the 2 as determined by the
26domestic violence shelter or service. The domestic violence

 

 

SB0016 Engrossed- 40 -LRB100 05169 KTG 15179 b

1shelter or service shall be responsible for timely collection
2and transmission of dependent premiums.
3    The Director shall annually determine rates of payment,
4subject to the following constraints:
5        (1) In the first year of coverage, the rates shall be
6    equal to the amount normally charged to State employees for
7    elected optional coverages or for enrolled dependents
8    coverages or other contributory coverages on behalf of its
9    employees, adjusted for differences between State
10    employees and employees of the domestic violence shelter or
11    service in age, sex, geographic location or other relevant
12    demographic variables, plus an amount sufficient to pay for
13    the additional administrative costs of providing coverage
14    to employees of the domestic violence shelter or service
15    and their dependents.
16        (2) In subsequent years, a further adjustment shall be
17    made to reflect the actual prior years' claims experience
18    of the employees of the domestic violence shelter or
19    service.
20    Monthly payments by the domestic violence shelter or
21service or its employees for group health insurance shall be
22deposited in the Local Government Health Insurance Reserve
23Fund.
24    (l) A public community college or entity organized pursuant
25to the Public Community College Act may apply to the Director
26initially to have only annuitants not covered prior to July 1,

 

 

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11992 by the district's health plan provided health coverage
2under this Act on a non-insured basis. The community college
3must execute a 2-year contract to participate in the Local
4Government Health Plan. Any annuitant may enroll in the event
5of a qualifying change in status, special enrollment, special
6circumstance as defined by the Director, or during the annual
7Benefit Choice Period.
8    The Director shall annually determine monthly rates of
9payment subject to the following constraints: for those
10community colleges with annuitants only enrolled, first year
11rates shall be equal to the average cost to cover claims for a
12State member adjusted for demographics, Medicare
13participation, and other factors; and in the second year, a
14further adjustment of rates shall be made to reflect the actual
15first year's claims experience of the covered annuitants.
16    (l-5) The provisions of subsection (l) become inoperative
17on July 1, 1999.
18    (m) The Director shall adopt any rules deemed necessary for
19implementation of this amendatory Act of 1989 (Public Act
2086-978).
21    (n) Any child advocacy center within the State of Illinois
22may apply to the Director to have its employees, annuitants,
23and their dependents provided group health coverage under this
24Act on a non-insured basis. To participate, a child advocacy
25center must agree to enroll all of its employees and pay the
26entire cost of providing coverage for its employees. The child

 

 

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1advocacy center shall not be required to enroll those of its
2employees who are covered spouses or dependents under this plan
3or another group policy or plan providing health benefits as
4long as (1) an appropriate official from the child advocacy
5center attests that each employee not enrolled is a covered
6spouse or dependent under this plan or another group policy or
7plan and (2) at least 50% of the employees are enrolled and the
8child advocacy center remits the entire cost of providing
9coverage to those employees. Employees of a participating child
10advocacy center who are not enrolled due to coverage under
11another group health policy or plan may enroll in the event of
12a qualifying change in status, special enrollment, or special
13circumstance as defined by the Director or during the annual
14Benefit Choice Period. A participating child advocacy center
15may also elect to cover its annuitants. Dependent coverage
16shall be offered on an optional basis, with the costs paid by
17the child advocacy center, its employees, or some combination
18of the 2 as determined by the child advocacy center. The child
19advocacy center shall be responsible for timely collection and
20transmission of dependent premiums.
21    The Director shall annually determine rates of payment,
22subject to the following constraints:
23        (1) In the first year of coverage, the rates shall be
24    equal to the amount normally charged to State employees for
25    elected optional coverages or for enrolled dependents
26    coverages or other contributory coverages on behalf of its

 

 

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1    employees, adjusted for differences between State
2    employees and employees of the child advocacy center in
3    age, sex, geographic location, or other relevant
4    demographic variables, plus an amount sufficient to pay for
5    the additional administrative costs of providing coverage
6    to employees of the child advocacy center and their
7    dependents.
8        (2) In subsequent years, a further adjustment shall be
9    made to reflect the actual prior years' claims experience
10    of the employees of the child advocacy center.
11    Monthly payments by the child advocacy center or its
12employees for group health insurance shall be deposited into
13the Local Government Health Insurance Reserve Fund.
14(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
 
15    Section 15. The Civil Administrative Code of Illinois is
16amended by adding Section 5-647 as follows:
 
17    (20 ILCS 5/5-647 new)
18    Sec. 5-647. Future increases in income. A Department must
19not pay, offer, or agree to pay any future increase in income,
20as that term is defined in Section 14-103.42, 15-112.1, or
2116-121.1 of the Illinois Pension Code, to any person in a
22manner that violates Section 14-106.5, 15-132.9, or 16-122.9 of
23the Illinois Pension Code.
 

 

 

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1    Section 20. The Attorney General Act is amended by adding
2Section 5 as follows:
 
3    (15 ILCS 205/5 new)
4    Sec. 5. Future increases in income. The Office of the
5Attorney General must not pay, offer, or agree to pay any
6future increase in income, as that term is defined in Section
714-103.42 of the Illinois Pension Code, to any person in a
8manner that violates Section 14-106.5 of the Illinois Pension
9Code.
 
10    Section 25. The Secretary of State Merit Employment Code is
11amended by adding Section 13a as follows:
 
12    (15 ILCS 310/13a new)
13    Sec. 13a. Future increases in income. The Office of the
14Secretary of State must not pay, offer, or agree to pay any
15future increase in income, as that term is defined in Section
1614-103.42 of the Illinois Pension Code, to any person in a
17manner that violates Section 14-106.5 of the Illinois Pension
18Code.
 
19    Section 30. The Comptroller Merit Employment Code is
20amended by adding Section 13a as follows:
 
21    (15 ILCS 410/13a new)

 

 

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1    Sec. 13a. Future increases in income. The Office of the
2Comptroller must not pay, offer, or agree to pay any future
3increase in income, as that term is defined in Section
414-103.42 of the Illinois Pension Code, to any person in a
5manner that violates Section 14-106.5 of the Illinois Pension
6Code.
 
7    Section 35. The State Treasurer Employment Code is amended
8by adding Section 12a as follows:
 
9    (15 ILCS 510/12a new)
10    Sec. 12a. Future increases in income. The Office of the
11State Treasurer must not pay, offer, or agree to pay any future
12increase in income, as that term is defined in Section
1314-103.42 of the Illinois Pension Code, to any person in a
14manner that violates Section 14-106.5 of the Illinois Pension
15Code.
 
16    Section 40. The Budget Stabilization Act is amended by
17changing Section 20 as follows:
 
18    (30 ILCS 122/20)
19    (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21    Sec. 20. Pension Stabilization Fund.
22    (a) The Pension Stabilization Fund is hereby created as a

 

 

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1special fund in the State treasury. Moneys in the fund shall be
2used for the sole purpose of making payments to the designated
3retirement systems as provided in Section 25.
4    (b) For each fiscal year through State fiscal year 2020,
5when the General Assembly's appropriations and transfers or
6diversions as required by law from general funds do not exceed
799% of the estimated general funds revenues pursuant to
8subsection (a) of Section 10, the Comptroller shall transfer
9from the General Revenue Fund as provided by this Section a
10total amount equal to 0.5% of the estimated general funds
11revenues to the Pension Stabilization Fund.
12    (c) For each fiscal year through State fiscal year 2020,
13when the General Assembly's appropriations and transfers or
14diversions as required by law from general funds do not exceed
1598% of the estimated general funds revenues pursuant to
16subsection (b) of Section 10, the Comptroller shall transfer
17from the General Revenue Fund as provided by this Section a
18total amount equal to 1.0% of the estimated general funds
19revenues to the Pension Stabilization Fund.
20    (c-5) In addition to any other amounts required to be
21transferred under this Section, in State fiscal year 2021 and
22each fiscal year thereafter through State fiscal year 2045, or
23when each of the designated retirement systems, as defined in
24Section 25, has achieved 100% funding, whichever occurs first,
25the State Comptroller shall order transferred and the State
26Treasurer shall transfer from the General Revenue Fund to the

 

 

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1Pension Stabilization Fund an amount equal to (1) the sum of
2the amounts certified by the designated retirement systems
3under subsection (a-10) of Section 14-135.08, subsection
4(a-10) of Section 15-165, and subsection (a-10) of Section
516-158 of this Code for that fiscal year minus (2) the sum of
6the required State contributions certified by the retirement
7systems under subsection (a-5) of Section 14-135.08,
8subsection (a-5) of Section 15-165, and subsection (a-5) of
9Section 16-158 of this Code for that fiscal year. The
10transferred amount is intended to represent the annual savings
11to the State resulting from the enactment of Section 1-161 and
12Section 14-155.2, the enactment of subsection (a-2) of Section
1315-155 and subsection (b-4) of Section 16-158, and the changes
14made to Section 1-160 by this amendatory Act of the 100th
15General Assembly.
16    (d) The Comptroller shall transfer 1/12 of the total amount
17to be transferred each fiscal year under this Section into the
18Pension Stabilization Fund on the first day of each month of
19that fiscal year or as soon thereafter as possible; except that
20the final transfer of the fiscal year shall be made as soon as
21practical after the August 31 following the end of the fiscal
22year.
23    Until State fiscal year 2021, before Before the final
24transfer for a fiscal year is made, the Comptroller shall
25reconcile the estimated general funds revenues used in
26calculating the other transfers under this Section for that

 

 

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1fiscal year with the actual general funds revenues for that
2fiscal year. The final transfer for the fiscal year shall be
3adjusted so that the total amount transferred under this
4Section for that fiscal year is equal to the percentage
5specified in subsection (b) or (c) of this Section, whichever
6is applicable, of the actual general funds revenues for that
7fiscal year. The actual general funds revenues for the fiscal
8year shall be calculated in a manner consistent with subsection
9(c) of Section 10 of this Act.
10(Source: P.A. 94-839, eff. 6-6-06.)
 
11    Section 45. The Illinois Pension Code is amended by
12changing Sections 1-160, 2-101, 2-105, 2-107, 2-108, 2-119.1,
132-124, 2-126, 2-134, 2-162, 14-103.10, 14-114, 14-131, 14-133,
1414-135.08, 14-152.1, 15-108.1, 15-108.2, 15-111, 15-136,
1515-155, 15-157, 15-165, 15-198, 16-121, 16-133.1, 16-136.1,
1616-152, 16-158, 16-203, 17-116, 17-119.2, 17-129, 17-130,
1718-131, 18-140, 20-121, 20-123, 20-124, and 20-125 and by
18adding Sections 1-161, 1-162, 2-105.3, 2-107.9, 2-107.10,
192-110.3, 2-165.1, 2-166.1, 14-103.41, 14-103.42, 14-103.43,
2014-106.5, 14-147.5, 14-155.1, 14-155.2, 14-156.1, 15-112.1,
2115-112.2, 15-132.9, 15-185.5, 15-200.1, 15-201.1, 16-107.1,
2216-121.1, 16-121.2, 16-122.9, 16-190.5, 16-205.1, 16-206.1,
2317-106.05, 17-113.4, 17-113.5, 17-113.6, and 17-115.5 as
24follows:
 

 

 

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1    (40 ILCS 5/1-160)
2    (Text of Section WITHOUT the changes made by P.A. 98-641,
3which has been held unconstitutional)
4    Sec. 1-160. Provisions applicable to new hires.
5    (a) The provisions of this Section apply to a person who,
6on or after January 1, 2011, first becomes a member or a
7participant under any reciprocal retirement system or pension
8fund established under this Code, other than a retirement
9system or pension fund established under Article 2, 3, 4, 5, 6,
1015 or 18 of this Code, notwithstanding any other provision of
11this Code to the contrary, but do not apply to any self-managed
12plan established under this Code, to any person with respect to
13service as a sheriff's law enforcement employee under Article
147, or to any participant of the retirement plan established
15under Section 22-101. Notwithstanding anything to the contrary
16in this Section, for purposes of this Section, a person who
17participated in a retirement system under Article 15 prior to
18January 1, 2011 shall be deemed a person who first became a
19member or participant prior to January 1, 2011 under any
20retirement system or pension fund subject to this Section. The
21changes made to this Section by Public Act 98-596 this
22amendatory Act of the 98th General Assembly are a clarification
23of existing law and are intended to be retroactive to January
241, 2011 (the effective date of Public Act 96-889),
25notwithstanding the provisions of Section 1-103.1 of this Code.
26    This Section does not apply to a person who, on or after 6

 

 

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1months after the effective date of this amendatory Act of the
2100th General Assembly, first becomes a member or participant
3under Article 14 or 16, unless that person (i) is a covered
4employee under Article 14 who has not elected to participate in
5the defined contribution plan under Section 14-155.2 or (ii)
6elects under subsection (b) of Section 1-161 to receive the
7benefits provided under this Section and the applicable
8provisions of the Article under which he or she is a member or
9participant. This Section also does not apply to a person who
10first becomes a member or participant of an affected pension
11fund on or after 6 months after the resolution or ordinance
12date, as defined in Section 1-162, unless that person elects
13under subsection (c) of Section 1-162 to receive the benefits
14provided under this Section and the applicable provisions of
15the Article under which he or she is a member or participant.
16    (b) "Final average salary" means the average monthly (or
17annual) salary obtained by dividing the total salary or
18earnings calculated under the Article applicable to the member
19or participant during the 96 consecutive months (or 8
20consecutive years) of service within the last 120 months (or 10
21years) of service in which the total salary or earnings
22calculated under the applicable Article was the highest by the
23number of months (or years) of service in that period. For the
24purposes of a person who first becomes a member or participant
25of any retirement system or pension fund to which this Section
26applies on or after January 1, 2011, in this Code, "final

 

 

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1average salary" shall be substituted for the following:
2        (1) In Article 7 (except for service as sheriff's law
3    enforcement employees), "final rate of earnings".
4        (2) In Articles 8, 9, 10, 11, and 12, "highest average
5    annual salary for any 4 consecutive years within the last
6    10 years of service immediately preceding the date of
7    withdrawal".
8        (3) In Article 13, "average final salary".
9        (4) In Article 14, "final average compensation".
10        (5) In Article 17, "average salary".
11        (6) In Section 22-207, "wages or salary received by him
12    at the date of retirement or discharge".
13    (b-5) Beginning on January 1, 2011, for all purposes under
14this Code (including without limitation the calculation of
15benefits and employee contributions), the annual earnings,
16salary, or wages (based on the plan year) of a member or
17participant to whom this Section applies shall not exceed
18$106,800; however, that amount shall annually thereafter be
19increased by the lesser of (i) 3% of that amount, including all
20previous adjustments, or (ii) one-half the annual unadjusted
21percentage increase (but not less than zero) in the consumer
22price index-u for the 12 months ending with the September
23preceding each November 1, including all previous adjustments.
24    For the purposes of this Section, "consumer price index-u"
25means the index published by the Bureau of Labor Statistics of
26the United States Department of Labor that measures the average

 

 

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1change in prices of goods and services purchased by all urban
2consumers, United States city average, all items, 1982-84 =
3100. The new amount resulting from each annual adjustment shall
4be determined by the Public Pension Division of the Department
5of Insurance and made available to the boards of the retirement
6systems and pension funds by November 1 of each year.
7    (c) A member or participant is entitled to a retirement
8annuity upon written application if he or she has attained age
967 (beginning January 1, 2015, age 65 with respect to service
10under Article 12 of this Code that is subject to this Section)
11and has at least 10 years of service credit and is otherwise
12eligible under the requirements of the applicable Article.
13    A member or participant who has attained age 62 (beginning
14January 1, 2015, age 60 with respect to service under Article
1512 of this Code that is subject to this Section) and has at
16least 10 years of service credit and is otherwise eligible
17under the requirements of the applicable Article may elect to
18receive the lower retirement annuity provided in subsection (d)
19of this Section.
20    (d) The retirement annuity of a member or participant who
21is retiring after attaining age 62 (beginning January 1, 2015,
22age 60 with respect to service under Article 12 of this Code
23that is subject to this Section) with at least 10 years of
24service credit shall be reduced by one-half of 1% for each full
25month that the member's age is under age 67 (beginning January
261, 2015, age 65 with respect to service under Article 12 of

 

 

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1this Code that is subject to this Section).
2    (e) Any retirement annuity or supplemental annuity shall be
3subject to annual increases on the January 1 occurring either
4on or after the attainment of age 67 (beginning January 1,
52015, age 65 with respect to service under Article 12 of this
6Code that is subject to this Section) or the first anniversary
7of the annuity start date, whichever is later. Each annual
8increase shall be calculated at 3% or one-half the annual
9unadjusted percentage increase (but not less than zero) in the
10consumer price index-u for the 12 months ending with the
11September preceding each November 1, whichever is less, of the
12originally granted retirement annuity. If the annual
13unadjusted percentage change in the consumer price index-u for
14the 12 months ending with the September preceding each November
151 is zero or there is a decrease, then the annuity shall not be
16increased.
17    (f) The initial survivor's or widow's annuity of an
18otherwise eligible survivor or widow of a retired member or
19participant who first became a member or participant on or
20after January 1, 2011 shall be in the amount of 66 2/3% of the
21retired member's or participant's retirement annuity at the
22date of death. In the case of the death of a member or
23participant who has not retired and who first became a member
24or participant on or after January 1, 2011, eligibility for a
25survivor's or widow's annuity shall be determined by the
26applicable Article of this Code. The initial benefit shall be

 

 

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166 2/3% of the earned annuity without a reduction due to age. A
2child's annuity of an otherwise eligible child shall be in the
3amount prescribed under each Article if applicable. Any
4survivor's or widow's annuity shall be increased (1) on each
5January 1 occurring on or after the commencement of the annuity
6if the deceased member died while receiving a retirement
7annuity or (2) in other cases, on each January 1 occurring
8after the first anniversary of the commencement of the annuity.
9Each annual increase shall be calculated at 3% or one-half the
10annual unadjusted percentage increase (but not less than zero)
11in the consumer price index-u for the 12 months ending with the
12September preceding each November 1, whichever is less, of the
13originally granted survivor's annuity. If the annual
14unadjusted percentage change in the consumer price index-u for
15the 12 months ending with the September preceding each November
161 is zero or there is a decrease, then the annuity shall not be
17increased.
18    (g) The benefits in Section 14-110 apply only if the person
19is a State policeman, a fire fighter in the fire protection
20service of a department, or a security employee of the
21Department of Corrections or the Department of Juvenile
22Justice, as those terms are defined in subsection (b) of
23Section 14-110. A person who meets the requirements of this
24Section is entitled to an annuity calculated under the
25provisions of Section 14-110, in lieu of the regular or minimum
26retirement annuity, only if the person has withdrawn from

 

 

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1service with not less than 20 years of eligible creditable
2service and has attained age 60, regardless of whether the
3attainment of age 60 occurs while the person is still in
4service.
5    (h) If a person who first becomes a member or a participant
6of a retirement system or pension fund subject to this Section
7on or after January 1, 2011 is receiving a retirement annuity
8or retirement pension under that system or fund and becomes a
9member or participant under any other system or fund created by
10this Code and is employed on a full-time basis, except for
11those members or participants exempted from the provisions of
12this Section under subsection (a) of this Section, then the
13person's retirement annuity or retirement pension under that
14system or fund shall be suspended during that employment. Upon
15termination of that employment, the person's retirement
16annuity or retirement pension payments shall resume and be
17recalculated if recalculation is provided for under the
18applicable Article of this Code.
19    If a person who first becomes a member of a retirement
20system or pension fund subject to this Section on or after
21January 1, 2012 and is receiving a retirement annuity or
22retirement pension under that system or fund and accepts on a
23contractual basis a position to provide services to a
24governmental entity from which he or she has retired, then that
25person's annuity or retirement pension earned as an active
26employee of the employer shall be suspended during that

 

 

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1contractual service. A person receiving an annuity or
2retirement pension under this Code shall notify the pension
3fund or retirement system from which he or she is receiving an
4annuity or retirement pension, as well as his or her
5contractual employer, of his or her retirement status before
6accepting contractual employment. A person who fails to submit
7such notification shall be guilty of a Class A misdemeanor and
8required to pay a fine of $1,000. Upon termination of that
9contractual employment, the person's retirement annuity or
10retirement pension payments shall resume and, if appropriate,
11be recalculated under the applicable provisions of this Code.
12    (i) (Blank).
13    (j) Except for Sections 1-161 and 1-162, in In the case of
14a conflict between the provisions of this Section and any other
15provision of this Code, the provisions of this Section shall
16control.
17(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
18eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
 
19    (40 ILCS 5/1-161 new)
20    Sec. 1-161. Optional benefits for certain Tier 2 members
21under Articles 14, 15, and 16.
22    (a) Notwithstanding any other provision of this Code to the
23contrary, the provisions of this Section apply to a person who,
24on or after 6 months after the effective date of this
25amendatory Act of the 100th General Assembly, first becomes a

 

 

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1member or a participant under Article 14, 15, or 16 and who
2does not make the election under subsection (b) or (c),
3whichever is applicable. The provisions of this Section do not
4apply to any participant in a self-managed plan or to a covered
5employee under Article 14.
6    (b) In lieu of the benefits provided under this Section, a
7member or participant, except for a participant under Article
815, may irrevocably elect the benefits under Section 1-160 and
9the benefits otherwise applicable to that member or
10participant. The election must be made within 30 days after
11becoming a member or participant. Each retirement system shall
12establish procedures for making this election.
13    (c) A participant under Article 15 may irrevocably elect
14the benefits otherwise provided to a Tier 2 participant under
15Article 15. The election must be made within 30 days after
16becoming a participant. The retirement system under Article 15
17shall establish procedures for making this election.
18    (d) "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the total salary or
20earnings calculated under the Article applicable to the member
21or participant during the last 120 months (or 10 years) of
22service in which the total salary or earnings calculated under
23the applicable Article was the highest by the number of months
24(or years) of service in that period. For the purposes of a
25person who first becomes a member or participant of any
26retirement system to which this Section applies on or after 6

 

 

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1months after the effective date of this amendatory Act of the
2100th General Assembly, in this Code, "final average salary"
3shall be substituted for "final average compensation" in
4Article 14.
5    (e) Beginning 6 months after the effective date of this
6amendatory Act of the 100th General Assembly, for all purposes
7under this Code (including without limitation the calculation
8of benefits and employee contributions), the annual earnings,
9salary, or wages (based on the plan year) of a member or
10participant to whom this Section applies shall not at any time
11exceed the federal Social Security Wage Base then in effect.
12    (f) A member or participant is entitled to a retirement
13annuity upon written application if he or she has attained the
14normal retirement age determined by the Social Security
15Administration for that member or participant's year of birth,
16but no earlier than 67 years of age, and has at least 10 years
17of service credit and is otherwise eligible under the
18requirements of the applicable Article.
19    (g) The amount of the retirement annuity to which a member
20or participant is entitled shall be computed by multiplying
211.25% for each year of service credit by his or her final
22average salary.
23    (h) Any retirement annuity or supplemental annuity shall be
24subject to annual increases on the first anniversary of the
25annuity start date. Each annual increase shall be one-half the
26annual unadjusted percentage increase (but not less than zero)

 

 

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1in the consumer price index-w for the 12 months ending with the
2September preceding each November 1 of the originally granted
3retirement annuity. If the annual unadjusted percentage change
4in the consumer price index-w for the 12 months ending with the
5September preceding each November 1 is zero or there is a
6decrease, then the annuity shall not be increased.
7    For the purposes of this Section, "consumer price index-w"
8means the index published by the Bureau of Labor Statistics of
9the United States Department of Labor that measures the average
10change in prices of goods and services purchased by Urban Wage
11Earners and Clerical Workers, United States city average, all
12items, 1982-84 = 100. The new amount resulting from each annual
13adjustment shall be determined by the Public Pension Division
14of the Department of Insurance and made available to the boards
15of the retirement systems and pension funds by November 1 of
16each year.
17    (i) The initial survivor's or widow's annuity of an
18otherwise eligible survivor or widow of a retired member or
19participant who first became a member or participant on or
20after 6 months after the effective date of this amendatory Act
21of the 100th General Assembly shall be in the amount of 66 2/3%
22of the retired member's or participant's retirement annuity at
23the date of death. In the case of the death of a member or
24participant who has not retired and who first became a member
25or participant on or after 6 months after the effective date of
26this amendatory Act of the 100th General Assembly, eligibility

 

 

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1for a survivor's or widow's annuity shall be determined by the
2applicable Article of this Code. The benefit shall be 66 2/3%
3of the earned annuity without a reduction due to age. A child's
4annuity of an otherwise eligible child shall be in the amount
5prescribed under each Article if applicable.
6    (j) In lieu of any other employee contributions, except for
7the contribution to the defined contribution plan under
8subsection (k) of this Section, each employee shall contribute
96.2% of his her or salary to the retirement system. However,
10the employee contribution under this subsection shall not
11exceed the amount of the normal cost of the benefits under this
12Section (except for the defined contribution plan under
13subsection (k) of this Section), expressed as a percentage of
14payroll and determined on or before November 1 of each year by
15the board of trustees of the retirement system. If the board of
16trustees of the retirement system determines that the 6.2%
17employee contribution rate exceeds the normal cost of the
18benefits under this Section (except for the defined
19contribution plan under subsection (k) of this Section), then
20on or before December 1 of that year, the board of trustees
21shall certify the amount of the normal cost of the benefits
22under this Section (except for the defined contribution plan
23under subsection (k) of this Section), expressed as a
24percentage of payroll, to the State Actuary and the Commission
25on Government Forecasting and Accountability, and the employee
26contribution under this subsection shall be reduced to that

 

 

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1amount beginning January 1 of the following year. Thereafter,
2if the normal cost of the benefits under this Section (except
3for the defined contribution plan under subsection (k) of this
4Section), expressed as a percentage of payroll and determined
5on or before November 1 of each year by the board of trustees
6of the retirement system, exceeds 6.2% of salary, then on or
7before December 1 of that year, the board of trustees shall
8certify the normal cost to the State Actuary and the Commission
9on Government Forecasting and Accountability, and the employee
10contributions shall revert back to 6.2% of salary beginning
11January 1 of the following year.
12    (k) No later than 5 months after the effective date of this
13amendatory Act of the 100th General Assembly, each retirement
14system under Article 14, 15, or 16 shall prepare and implement
15a defined contribution plan for members or participants who are
16subject to this Section. The defined contribution plan
17developed under this subsection shall be a plan that aggregates
18employer and employee contributions in individual participant
19accounts which, after meeting any other requirements, are used
20for payouts after retirement in accordance with this subsection
21and any other applicable laws.
22        (1) Each member or participant shall contribute a
23    minimum of 4% of his or her salary to the defined
24    contribution plan.
25        (2) For each participant in the defined contribution
26    plan who has been employed with the same employer for at

 

 

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1    least one year, employer contributions shall be paid into
2    that participant's accounts at a rate expressed as a
3    percentage of salary. This rate may be set for individual
4    employees, but shall be no higher than 6% of salary and
5    shall be no lower than 2% of salary.
6        (3) Employer contributions shall vest when those
7    contributions are paid into a member's or participant's
8    account.
9        (4) The defined contribution plan shall provide a
10    variety of options for investments. These options shall
11    include investments handled by the Illinois State Board of
12    Investment as well as private sector investment options.
13        (5) The defined contribution plan shall provide a
14    variety of options for payouts to retirees and their
15    survivors.
16        (6) To the extent authorized under federal law and as
17    authorized by the retirement system, the defined
18    contribution plan shall allow former participants in the
19    plan to transfer or roll over employee and employer
20    contributions, and the earnings thereon, into other
21    qualified retirement plans.
22        (7) Each retirement system shall reduce the employee
23    contributions credited to the member's defined
24    contribution plan account by an amount determined by that
25    retirement system to cover the cost of offering the
26    benefits under this subsection and any applicable

 

 

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1    administrative fees.
2        (8) No person shall begin participating in the defined
3    contribution plan until it has attained qualified plan
4    status and received all necessary approvals from the U.S.
5    Internal Revenue Service.
6    (l) By accepting the benefits under this Section, a member
7or participant acknowledges and consents that benefits once
8earned may not be diminished, but that future benefits may be
9modified, including, but not limited to, changes in the
10retirement age at which a member or participant becomes
11eligible to receive future benefits, changes in the amount of
12the automatic annual increase for those future benefits, or the
13amount of the retirement annuity. Any increase in benefits
14under this Section applicable to persons under Article 15 or 16
15does not apply unless it is approved by resolution or ordinance
16of the governing body of the unit of local government with
17regard to the members or participants under that unit of local
18government.
19    (m) In the case of a conflict between the provisions of
20this Section and any other provision of this Code, the
21provisions of this Section shall control.
 
22    (40 ILCS 5/1-162 new)
23    Sec. 1-162. Optional benefits for certain Tier 2 members of
24pension funds under Articles 8, 9, 10, 11, 12, and 17.
25    (a) As used in this Section:

 

 

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1    "Affected pension fund" means a pension fund established
2under Article 8, 9, 10, 11, 12, or 17 that the governing body
3of the unit of local government has designated as an affected
4pension fund by adoption of a resolution or ordinance.
5    "Resolution or ordinance date" means the date on which the
6governing body of the unit of local government designates a
7pension fund under Article 8, 9, 10, 11, 12, or 17 as an
8affected pension fund by adoption of a resolution or ordinance.
9    (b) Notwithstanding any other provision of this Code to the
10contrary, the provisions of this Section apply to a person who
11first becomes a member or a participant in an affected pension
12fund on or after 6 months after the resolution or ordinance
13date and who does not make the election under subsection (c).
14    (c) In lieu of the benefits provided under this Section, a
15member or participant may irrevocably elect the benefits under
16Section 1-160 and the benefits otherwise applicable to that
17member or participant. The election must be made within 30 days
18after becoming a member or participant. Each affected pension
19fund shall establish procedures for making this election.
20    (d) "Final average salary" means the average monthly (or
21annual) salary obtained by dividing the total salary or
22earnings calculated under the Article applicable to the member
23or participant during the last 120 months (or 10 years) of
24service in which the total salary or earnings calculated under
25the applicable Article was the highest by the number of months
26(or years) of service in that period. For the purposes of a

 

 

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1person who first becomes a member or participant of an affected
2pension fund on or after 6 months after the ordinance or
3resolution date, in this Code, "final average salary" shall be
4substituted for the following:
5        (1) In Articles 8, 9, 10, 11, and 12, "highest average
6    annual salary for any 4 consecutive years within the last
7    10 years of service immediately preceding the date of
8    withdrawal".
9        (2) In Article 17, "average salary".
10    (e) Beginning 6 months after the resolution or ordinance
11date, for all purposes under this Code (including without
12limitation the calculation of benefits and employee
13contributions), the annual earnings, salary, or wages (based on
14the plan year) of a member or participant to whom this Section
15applies shall not at any time exceed the federal Social
16Security Wage Base then in effect.
17    (f) A member or participant is entitled to a retirement
18annuity upon written application if he or she has attained the
19normal retirement age determined by the Social Security
20Administration for that member or participant's year of birth,
21but no earlier than 67 years of age, and has at least 10 years
22of service credit and is otherwise eligible under the
23requirements of the applicable Article.
24    (g) The amount of the retirement annuity to which a member
25or participant is entitled shall be computed by multiplying
261.25% for each year of service credit by his or her final

 

 

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1average salary.
2    (h) Any retirement annuity or supplemental annuity shall be
3subject to annual increases on the first anniversary of the
4annuity start date. Each annual increase shall be one-half the
5annual unadjusted percentage increase (but not less than zero)
6in the consumer price index-w for the 12 months ending with the
7September preceding each November 1 of the originally granted
8retirement annuity. If the annual unadjusted percentage change
9in the consumer price index-w for the 12 months ending with the
10September preceding each November 1 is zero or there is a
11decrease, then the annuity shall not be increased.
12    For the purposes of this Section, "consumer price index-w"
13means the index published by the Bureau of Labor Statistics of
14the United States Department of Labor that measures the average
15change in prices of goods and services purchased by Urban Wage
16Earners and Clerical Workers, United States city average, all
17items, 1982-84 = 100. The new amount resulting from each annual
18adjustment shall be determined by the Public Pension Division
19of the Department of Insurance and made available to the boards
20of the retirement systems and pension funds by November 1 of
21each year.
22    (i) The initial survivor's or widow's annuity of an
23otherwise eligible survivor or widow of a retired member or
24participant who first became a member or participant on or
25after 6 months after the resolution or ordinance date shall be
26in the amount of 66 2/3% of the retired member's or

 

 

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1participant's retirement annuity at the date of death. In the
2case of the death of a member or participant who has not
3retired and who first became a member or participant on or
4after 6 months after the resolution or ordinance date,
5eligibility for a survivor's or widow's annuity shall be
6determined by the applicable Article of this Code. The benefit
7shall be 66 2/3% of the earned annuity without a reduction due
8to age. A child's annuity of an otherwise eligible child shall
9be in the amount prescribed under each Article if applicable.
10    (j) In lieu of any other employee contributions, except for
11the contribution to the defined contribution plan under
12subsection (k) of this Section, each employee shall contribute
136.2% of his her or salary to the affected pension fund.
14However, the employee contribution under this subsection shall
15not exceed the amount of the normal cost of the benefits under
16this Section (except for the defined contribution plan under
17subsection (k) of this Section), expressed as a percentage of
18payroll and determined on or before November 1 of each year by
19the board of trustees of the affected pension fund. If the
20board of trustees of the affected pension fund determines that
21the 6.2% employee contribution rate exceeds the normal cost of
22the benefits under this Section (except for the defined
23contribution plan under subsection (k) of this Section), then
24on or before December 1 of that year, the board of trustees
25shall certify the amount of the normal cost of the benefits
26under this Section (except for the defined contribution plan

 

 

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1under subsection (k) of this Section), expressed as a
2percentage of payroll, to the State Actuary and the Commission
3on Government Forecasting and Accountability, and the employee
4contribution under this subsection shall be reduced to that
5amount beginning January 1 of the following year. Thereafter,
6if the normal cost of the benefits under this Section (except
7for the defined contribution plan under subsection (k) of this
8Section), expressed as a percentage of payroll and determined
9on or before November 1 of each year by the board of trustees
10of the affected pension fund, exceeds 6.2% of salary, then on
11or before December 1 of that year, the board of trustees shall
12certify the normal cost to the State Actuary and the Commission
13on Government Forecasting and Accountability, and the employee
14contributions shall revert back to 6.2% of salary beginning
15January 1 of the following year.
16    (k) No later than 5 months after the resolution or
17ordinance date, an affected pension fund shall prepare and
18implement a defined contribution plan for members or
19participants who are subject to this Section. The defined
20contribution plan developed under this subsection shall be a
21plan that aggregates employer and employee contributions in
22individual participant accounts which, after meeting any other
23requirements, are used for payouts after retirement in
24accordance with this subsection and any other applicable laws.
25        (1) Each member or participant shall contribute a
26    minimum of 4% of his or her salary to the defined

 

 

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1    contribution plan.
2        (2) For each participant in the defined contribution
3    plan who has been employed with the same employer for at
4    least one year, employer contributions shall be paid into
5    that participant's accounts at a rate expressed as a
6    percentage of salary. This rate may be set for individual
7    employees, but shall be no higher than 6% of salary and
8    shall be no lower than 2% of salary.
9        (3) Employer contributions shall vest when those
10    contributions are paid into a member's or participant's
11    account.
12        (4) The defined contribution plan shall provide a
13    variety of options for investments. These options shall
14    include investments handled by the Illinois State Board of
15    Investment as well as private sector investment options.
16        (5) The defined contribution plan shall provide a
17    variety of options for payouts to retirees and their
18    survivors.
19        (6) To the extent authorized under federal law and as
20    authorized by the affected pension fund, the defined
21    contribution plan shall allow former participants in the
22    plan to transfer or roll over employee and employer
23    contributions, and the earnings thereon, into other
24    qualified retirement plans.
25        (7) Each affected pension fund shall reduce the
26    employee contributions credited to the member's defined

 

 

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1    contribution plan account by an amount determined by that
2    affected pension fund to cover the cost of offering the
3    benefits under this subsection and any applicable
4    administrative fees.
5        (8) No person shall begin participating in the defined
6    contribution plan until it has attained qualified plan
7    status and received all necessary approvals from the U.S.
8    Internal Revenue Service.
9    (l) By accepting the benefits under this Section, a member
10or participant acknowledges and consents that benefits once
11earned may not be diminished, but that future benefits may be
12modified, including, but not limited to, changes in the
13retirement age at which a member or participant becomes
14eligible to receive future benefits, changes in the amount of
15the automatic annual increase for those future benefits, or the
16amount of the retirement annuity. Any increase in benefits
17under this Section does not apply unless it is approved by
18resolution or ordinance of the governing body of the unit of
19local government with regard to the members or participants
20under that unit of local government.
21    (m) In the case of a conflict between the provisions of
22this Section and any other provision of this Code, the
23provisions of this Section shall control.
 
24    (40 ILCS 5/2-101)  (from Ch. 108 1/2, par. 2-101)
25    Sec. 2-101. Creation of system. A retirement system is

 

 

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1created to provide retirement annuities, survivor's annuities
2and other benefits for certain members of the General Assembly,
3certain elected state officials, and their beneficiaries.
4    The system shall be known as the "General Assembly
5Retirement System". All its funds and property shall be a trust
6separate from all other entities, maintained for the purpose of
7securing payment of annuities and benefits under this Article.
8    Participation in the retirement system created under this
9Article is restricted to persons who became participants before
10the effective date of this amendatory Act of the 100th General
11Assembly. Beginning on that date, the System shall not accept
12any new participants.
13(Source: P.A. 83-1440.)
 
14    (40 ILCS 5/2-105)  (from Ch. 108 1/2, par. 2-105)
15    Sec. 2-105. Member. "Member": Members of the General
16Assembly of this State, including persons who enter military
17service while a member of the General Assembly, and any person
18serving as Governor, Lieutenant Governor, Secretary of State,
19Treasurer, Comptroller, or Attorney General for the period of
20service in such office.
21    Any person who has served for 10 or more years as Clerk or
22Assistant Clerk of the House of Representatives, Secretary or
23Assistant Secretary of the Senate, or any combination thereof,
24may elect to become a member of this system while thenceforth
25engaged in such service by filing a written election with the

 

 

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1board. Any person so electing shall be deemed an active member
2of the General Assembly for the purpose of validating and
3transferring any service credits earned under any of the funds
4and systems established under Articles 3 through 18 of this
5Code.
6    However, notwithstanding any other provision of this
7Article, a person shall not be deemed a member for the purposes
8of this Article unless he or she became a participant of the
9System before the effective date of this amendatory Act of the
10100th General Assembly.
11(Source: P.A. 85-1008.)
 
12    (40 ILCS 5/2-105.3 new)
13    Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
14participant who first became a participant before January 1,
152011.
 
16    (40 ILCS 5/2-107)  (from Ch. 108 1/2, par. 2-107)
17    Sec. 2-107. Participant. "Participant": Any member who
18elects to participate; and any former member who elects to
19continue participation under Section 2-117.1, for the duration
20of such continued participation. However, notwithstanding any
21other provision of this Article, a person shall not be deemed a
22participant for the purposes of this Article unless he or she
23became a participant of the System before the effective date of
24this amendatory Act of the 100th General Assembly.

 

 

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1(Source: P.A. 86-1488.)
 
2    (40 ILCS 5/2-107.9 new)
3    Sec. 2-107.9. Future increase in income. "Future increase
4in income" means an increase to a Tier 1 employee's base pay
5that is offered to the Tier 1 employee for service under this
6Article after June 30, 2018 that qualifies as "salary", as
7defined in Section 2-108, or would qualify as "salary" but for
8the fact that it was offered to and accepted by the Tier 1
9employee under the condition set forth in subsection (c) of
10Section 2-110.3.
 
11    (40 ILCS 5/2-107.10 new)
12    Sec. 2-107.10. Base pay. As used in Section 2-107.9 of
13this Code, "base pay" means the Tier 1 employee's annualized
14rate of salary as of June 30, 2018. For a person returning to
15active service as a Tier 1 employee after June 30, 2018,
16however, "base pay" means the employee's annualized rate of
17salary as of the employee's last date of service prior to July
181, 2018. The System shall calculate the base pay of each Tier 1
19employee pursuant to this Section.
 
20    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
21    (Text of Section WITHOUT the changes made by P.A. 98-599,
22which has been held unconstitutional)
23    Sec. 2-108. Salary. "Salary":

 

 

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1    (1) For members of the General Assembly, the total
2compensation paid to the member by the State for one year of
3service, including the additional amounts, if any, paid to the
4member as an officer pursuant to Section 1 of "An Act in
5relation to the compensation and emoluments of the members of
6the General Assembly", approved December 6, 1907, as now or
7hereafter amended.
8    (2) For the State executive officers specified in Section
92-105, the total compensation paid to the member for one year
10of service.
11    (3) For members of the System who are participants under
12Section 2-117.1, or who are serving as Clerk or Assistant Clerk
13of the House of Representatives or Secretary or Assistant
14Secretary of the Senate, the total compensation paid to the
15member for one year of service, but not to exceed the salary of
16the highest salaried officer of the General Assembly.
17    However, in the event that federal law results in any
18participant receiving imputed income based on the value of
19group term life insurance provided by the State, such imputed
20income shall not be included in salary for the purposes of this
21Article.
22    Notwithstanding any other provision of this Section,
23"salary" does not include any future increase in income that is
24offered for service to a Tier 1 employee under this Article
25pursuant to the condition set forth in subsection (c) of
26Section 2-110.3 and accepted under that condition by a Tier 1

 

 

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1employee who has made the election under paragraph (2) of
2subsection (a) of Section 2-110.3.
3    Notwithstanding any other provision of this Section,
4"salary" does not include any consideration payment made to a
5Tier 1 employee.
6(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
7    (40 ILCS 5/2-110.3 new)
8    Sec. 2-110.3. Election by Tier 1 employees.
9    (a) Each active Tier 1 employee shall make an irrevocable
10election either:
11        (1) to agree to delay his or her eligibility for
12    automatic annual increases in retirement annuity as
13    provided in subsection (a-1) of Section 2-119.1 and to have
14    the amount of the automatic annual increases in his or her
15    retirement annuity and survivor's annuity that are
16    otherwise provided for in this Article calculated,
17    instead, as provided in subsection (a-1) of Section
18    2-119.1; or
19        (2) to not agree to paragraph (1) of this subsection.
20    The election required under this subsection (a) shall be
21made by each active Tier 1 employee no earlier than January 1,
222018 and no later than March 31, 2018, except that a person who
23returns to active service as a Tier 1 employee under this
24Article on or after January 1, 2018 and has not yet made an
25election under this Section must make the election under this

 

 

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1subsection (a) within 60 days after returning to active service
2as a Tier 1 employee.
3    If a Tier 1 employee fails for any reason to make a
4required election under this subsection within the time
5specified, then the employee shall be deemed to have made the
6election under paragraph (2) of this subsection.
7    (a-5) If this Section is enjoined or stayed by an Illinois
8court or a court of competent jurisdiction pending the entry of
9a final and unappealable decision, and this Section is
10determined to be constitutional or otherwise valid by a final
11unappealable decision of an Illinois court or a court of
12competent jurisdiction, then the election procedure set forth
13in subsection (a) of this Section shall commence on the 180th
14calendar day after the date of the issuance of the final
15unappealable decision and shall conclude at the end of the
16270th calendar day after that date.
17    (a-10) All elections under subsection (a) that are made or
18deemed to be made before July 1, 2018 shall take effect on July
191, 2018. Elections that are made or deemed to be made on or
20after July 1, 2018 shall take effect on the first day of the
21month following the month in which the election is made or
22deemed to be made.
23    (b) As adequate and legal consideration provided under this
24amendatory Act of the 100th General Assembly for making an
25election under paragraph (1) of subsection (a) of this Section,
26the State of Illinois shall be expressly and irrevocably

 

 

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1prohibited from offering any future increases in income to a
2Tier 1 employee who has made an election under paragraph (1) of
3subsection (a) of this Section on the condition of not
4constituting salary under Section 2-108.
5    As adequate and legal consideration provided under this
6amendatory Act of the 100th General Assembly for making an
7election under paragraph (1) of subsection (a) of this Section,
8each Tier 1 employee who has made an election under paragraph
9(1) of subsection (a) of this Section shall receive a
10consideration payment equal to 10% of the contributions made by
11or on behalf of the employee under Section 2-126 before the
12effective date of that election. The State Comptroller shall
13pay the consideration payment to the Tier 1 employee out of
14funds appropriated for that purpose under Section 1.9 of the
15State Pension Funds Continuing Appropriation Act. The System
16shall calculate the amount of each consideration payment and,
17by July 1, 2018, shall certify to the State Comptroller the
18amount of the consideration payment, together with the name,
19address, and any other available payment information of the
20Tier 1 employee as found in the records of the System. The
21System shall make additional calculations and certifications
22of consideration payments to the State Comptroller as the
23System deems necessary.
24    (c) A Tier 1 employee who makes the election under
25paragraph (2) of subsection (a) of this Section shall not be
26subject to paragraph (1) of subsection (a) of this Section.

 

 

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1However, each future increase in income offered for service as
2a member under this Article to a Tier 1 employee who has made
3the election under paragraph (2) of subsection (a) of this
4Section shall be offered expressly and irrevocably on the
5condition of not constituting salary under Section 2-108 and
6that the Tier 1 employee's acceptance of the offered future
7increase in income shall constitute his or her agreement to
8that condition.
9    (d) The System shall make a good faith effort to contact
10each Tier 1 employee subject to this Section. The System shall
11mail information describing the required election to each Tier
121 employee by United States Postal Service mail to his or her
13last known address on file with the System. If the Tier 1
14employee is not responsive to other means of contact, it is
15sufficient for the System to publish the details of any
16required elections on its website or to publish those details
17in a regularly published newsletter or other existing public
18forum.
19    Tier 1 employees who are subject to this Section shall be
20provided with an election packet containing information
21regarding their options, as well as the forms necessary to make
22the required election. Upon request, the System shall offer
23Tier 1 employees an opportunity to receive information from the
24System before making the required election. The information may
25be provided through video materials, group presentations,
26individual consultation with a member or authorized

 

 

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1representative of the System in person or by telephone or other
2electronic means, or any combination of those methods. The
3System shall not provide advice or counseling with respect to
4which election a Tier 1 employee should make or specific to the
5legal or tax circumstances of or consequences to the Tier 1
6employee.
7    The System shall inform Tier 1 employees in the election
8packet required under this subsection that the Tier 1 employee
9may also wish to obtain information and counsel relating to the
10election required under this Section from any other available
11source, including, but not limited to, labor organizations and
12private counsel.
13    In no event shall the System, its staff, or the Board be
14held liable for any information given to a member regarding the
15elections under this Section. The System shall coordinate with
16the Illinois Department of Central Management Services and each
17other retirement system administering an election in
18accordance with this amendatory Act of the 100th General
19Assembly to provide information concerning the impact of the
20election set forth in this Section.
21    (e) Notwithstanding any other provision of law, each future
22increase in income offered by the State of Illinois for service
23as a member must be offered expressly and irrevocably on the
24condition of not constituting "salary" under Section 2-108 to
25any Tier 1 employee who has made an election under paragraph
26(2) of subsection (a) of this Section. The offer shall also

 

 

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1provide that the Tier 1 employee's acceptance of the offered
2future increase in income shall constitute his or her agreement
3to the condition set forth in this subsection.
4    For purposes of legislative intent, the condition set forth
5in this subsection shall be construed in a manner that ensures
6that the condition is not violated or circumvented through any
7contrivance of any kind.
8    (f) A member's election under this Section is not a
9prohibited election under subdivision (j)(1) of Section 1-119
10of this Code.
11    (g) No provision of this Section shall be interpreted in a
12way that would cause the System to cease to be a qualified plan
13under Section 401(a) of the Internal Revenue Code of 1986. The
14provisions of this Section shall be subject to and implemented
15in a manner that complies with Section 11 of Article IV of the
16Illinois Constitution.
17    (h) If an election created by this amendatory Act in any
18other Article of this Code or any change deriving from that
19election is determined to be unconstitutional or otherwise
20invalid by a final unappealable decision of an Illinois court
21or a court of competent jurisdiction, the invalidity of that
22provision shall not in any way affect the validity of this
23Section or the changes deriving from the election required
24under this Section.
 
25    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)

 

 

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1    (Text of Section WITHOUT the changes made by P.A. 98-599,
2which has been held unconstitutional)
3    Sec. 2-119.1. Automatic increase in retirement annuity.
4    (a) Except as provided in subsection (a-1), a A participant
5who retires after June 30, 1967, and who has not received an
6initial increase under this Section before the effective date
7of this amendatory Act of 1991, shall, in January or July next
8following the first anniversary of retirement, whichever
9occurs first, and in the same month of each year thereafter,
10but in no event prior to age 60, have the amount of the
11originally granted retirement annuity increased as follows:
12for each year through 1971, 1 1/2%; for each year from 1972
13through 1979, 2%; and for 1980 and each year thereafter, 3%.
14Annuitants who have received an initial increase under this
15subsection prior to the effective date of this amendatory Act
16of 1991 shall continue to receive their annual increases in the
17same month as the initial increase.
18    (a-1) Notwithstanding any other provision of this Article,
19for a Tier 1 employee who made the election under paragraph (1)
20of subsection (a) of Section 2-110.3:
21        (1) The initial increase in retirement annuity under
22    this Section shall occur on the January 1 occurring either
23    on or after the attainment of age 67 or the fifth
24    anniversary of the annuity start date, whichever is
25    earlier.
26        (2) The amount of each automatic annual increase in

 

 

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1    retirement annuity or survivor's annuity occurring on or
2    after the effective date of that election shall be
3    calculated as a percentage of the originally granted
4    retirement annuity or survivor's annuity, equal to 3% or
5    one-half the annual unadjusted percentage increase (but
6    not less than zero) in the consumer price index-u for the
7    12 months ending with the September preceding each November
8    1, whichever is less. If the annual unadjusted percentage
9    change in the consumer price index-u for the 12 months
10    ending with the September preceding each November 1 is zero
11    or there is a decrease, then the annuity shall not be
12    increased.
13    For the purposes of this Section, "consumer price index-u"
14means the index published by the Bureau of Labor Statistics of
15the United States Department of Labor that measures the average
16change in prices of goods and services purchased by all urban
17consumers, United States city average, all items, 1982-84 =
18100. The new amount resulting from each annual adjustment shall
19be determined by the Public Pension Division of the Department
20of Insurance and made available to the board of the retirement
21system by November 1 of each year.
22    (b) Beginning January 1, 1990, for eligible participants
23who remain in service after attaining 20 years of creditable
24service, the 3% increases provided under subsection (a) shall
25begin to accrue on the January 1 next following the date upon
26which the participant (1) attains age 55, or (2) attains 20

 

 

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1years of creditable service, whichever occurs later, and shall
2continue to accrue while the participant remains in service;
3such increases shall become payable on January 1 or July 1,
4whichever occurs first, next following the first anniversary of
5retirement. For any person who has service credit in the System
6for the entire period from January 15, 1969 through December
731, 1992, regardless of the date of termination of service, the
8reference to age 55 in clause (1) of this subsection (b) shall
9be deemed to mean age 50.
10    This subsection (b) does not apply to any person who first
11becomes a member of the System after August 8, 2003 (the
12effective date of Public Act 93-494) this amendatory Act of the
1393rd General Assembly.
14    (b-5) Notwithstanding any other provision of this Article,
15a participant who first becomes a participant on or after
16January 1, 2011 (the effective date of Public Act 96-889)
17shall, in January or July next following the first anniversary
18of retirement, whichever occurs first, and in the same month of
19each year thereafter, but in no event prior to age 67, have the
20amount of the retirement annuity then being paid increased by
213% or the annual unadjusted percentage increase in the Consumer
22Price Index for All Urban Consumers as determined by the Public
23Pension Division of the Department of Insurance under
24subsection (a) of Section 2-108.1, whichever is less.
25    (c) The foregoing provisions relating to automatic
26increases are not applicable to a participant who retires

 

 

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1before having made contributions (at the rate prescribed in
2Section 2-126) for automatic increases for less than the
3equivalent of one full year. However, in order to be eligible
4for the automatic increases, such a participant may make
5arrangements to pay to the system the amount required to bring
6the total contributions for the automatic increase to the
7equivalent of one year's contributions based upon his or her
8last salary.
9    (d) A participant who terminated service prior to July 1,
101967, with at least 14 years of service is entitled to an
11increase in retirement annuity beginning January, 1976, and to
12additional increases in January of each year thereafter.
13    The initial increase shall be 1 1/2% of the originally
14granted retirement annuity multiplied by the number of full
15years that the annuitant was in receipt of such annuity prior
16to January 1, 1972, plus 2% of the originally granted
17retirement annuity for each year after that date. The
18subsequent annual increases shall be at the rate of 2% of the
19originally granted retirement annuity for each year through
201979 and at the rate of 3% for 1980 and thereafter.
21    (e) Beginning January 1, 1990, and except as provided in
22subsection (a-1), all automatic annual increases payable under
23this Section shall be calculated as a percentage of the total
24annuity payable at the time of the increase, including previous
25increases granted under this Article.
26(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 2-124. Contributions by State.
5    (a) The State shall make contributions to the System by
6appropriations of amounts which, together with the
7contributions of participants, interest earned on investments,
8and other income will meet the cost of maintaining and
9administering the System on a 90% funded basis in accordance
10with actuarial recommendations.
11    (b) The Board shall determine the amount of State
12contributions required for each fiscal year on the basis of the
13actuarial tables and other assumptions adopted by the Board and
14the prescribed rate of interest, using the formula in
15subsection (c).
16    (c) For State fiscal years 2018 through 2045 (except as
17otherwise provided for fiscal year 2019), the minimum
18contribution to the System to be made by the State for each
19fiscal year shall be an amount determined by the System to be
20sufficient to bring the total assets of the System up to 90% of
21the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of total payroll, including payroll that is
25not deemed pensionable, but excluding payroll attributable to

 

 

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1participants in the defined contribution plan under Section
22-165.1, over the years remaining to and including fiscal year
32045 and shall be determined under the projected unit credit
4actuarial cost method.
5    For State fiscal year 2019:
6        (1) The initial calculation and certification shall be
7    based on the amount determined above.
8        (2) For purposes of the recertification due on or
9    before May 1, 2018, the recalculation of the required State
10    contribution for fiscal year 2019 shall take into account
11    the effect on the System's liabilities of the elections
12    made under Section 2-110.3.
13        (3) For purposes of the recertification due on or
14    before October 1, 2018, the total required State
15    contribution for fiscal year 2019 shall be reduced by the
16    amount of the consideration payments made to Tier 1
17    employees who made the election under paragraph (1) of
18    subsection (a) of Section 2-110.3.
19    Beginning in State fiscal year 2018, any increase or
20decrease in State contribution over the prior fiscal year due
21exclusively to changes in actuarial or investment assumptions
22adopted by the Board shall be included in the State
23contribution to the System, as a percentage of the applicable
24employee payroll, and shall be increased in equal annual
25increments so that by the State fiscal year occurring 5 years
26after the adoption of the actuarial or investment assumptions,

 

 

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1the State is contributing at the rate otherwise required under
2this Section.
3    For State fiscal years 2012 through 2017 2045, the minimum
4contribution to the System to be made by the State for each
5fiscal year shall be an amount determined by the System to be
6sufficient to bring the total assets of the System up to 90% of
7the total actuarial liabilities of the System by the end of
8State fiscal year 2045. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2006 is
20$4,157,000.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2007 is
23$5,220,300.
24    For each of State fiscal years 2008 through 2009, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

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1from the required State contribution for State fiscal year
22007, so that by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2010 is
6$10,454,000 and shall be made from the proceeds of bonds sold
7in fiscal year 2010 pursuant to Section 7.2 of the General
8Obligation Bond Act, less (i) the pro rata share of bond sale
9expenses determined by the System's share of total bond
10proceeds, (ii) any amounts received from the General Revenue
11Fund in fiscal year 2010, and (iii) any reduction in bond
12proceeds due to the issuance of discounted bonds, if
13applicable.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2011 is
16the amount recertified by the System on or before April 1, 2011
17pursuant to Section 2-134 and shall be made from the proceeds
18of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
19the General Obligation Bond Act, less (i) the pro rata share of
20bond sale expenses determined by the System's share of total
21bond proceeds, (ii) any amounts received from the General
22Revenue Fund in fiscal year 2011, and (iii) any reduction in
23bond proceeds due to the issuance of discounted bonds, if
24applicable.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

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1maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 90%. A reference in this Article to
12the "required State contribution" or any substantially similar
13term does not include or apply to any amounts payable to the
14System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 and each fiscal year thereafter, as calculated
18under this Section and certified under Section 2-134, shall not
19exceed an amount equal to (i) the amount of the required State
20contribution that would have been calculated under this Section
21for that fiscal year if the System had not received any
22payments under subsection (d) of Section 7.2 of the General
23Obligation Bond Act, minus (ii) the portion of the State's
24total debt service payments for that fiscal year on the bonds
25issued in fiscal year 2003 for the purposes of that Section
267.2, as determined and certified by the Comptroller, that is

 

 

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1the same as the System's portion of the total moneys
2distributed under subsection (d) of Section 7.2 of the General
3Obligation Bond Act. In determining this maximum for State
4fiscal years 2008 through 2010, however, the amount referred to
5in item (i) shall be increased, as a percentage of the
6applicable employee payroll, in equal increments calculated
7from the sum of the required State contribution for State
8fiscal year 2007 plus the applicable portion of the State's
9total debt service payments for fiscal year 2007 on the bonds
10issued in fiscal year 2003 for the purposes of Section 7.2 of
11the General Obligation Bond Act, so that, by State fiscal year
122011, the State is contributing at the rate otherwise required
13under this Section.
14    (d) For purposes of determining the required State
15contribution to the System, the value of the System's assets
16shall be equal to the actuarial value of the System's assets,
17which shall be calculated as follows:
18    As of June 30, 2008, the actuarial value of the System's
19assets shall be equal to the market value of the assets as of
20that date. In determining the actuarial value of the System's
21assets for fiscal years after June 30, 2008, any actuarial
22gains or losses from investment return incurred in a fiscal
23year shall be recognized in equal annual amounts over the
245-year period following that fiscal year.
25    (e) For purposes of determining the required State
26contribution to the system for a particular year, the actuarial

 

 

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1value of assets shall be assumed to earn a rate of return equal
2to the system's actuarially assumed rate of return.
3(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
57-13-12.)
 
6    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 2-126. Contributions by participants.
10    (a) Each participant shall contribute toward the cost of
11his or her retirement annuity a percentage of each payment of
12salary received by him or her for service as a member as
13follows: for service between October 31, 1947 and January 1,
141959, 5%; for service between January 1, 1959 and June 30,
151969, 6%; for service between July 1, 1969 and January 10,
161973, 6 1/2%; for service after January 10, 1973, 7%; for
17service after December 31, 1981, 8 1/2%.
18    (b) Beginning August 2, 1949, each male participant, and
19from July 1, 1971, each female participant shall contribute
20towards the cost of the survivor's annuity 2% of salary.
21    A participant who has no eligible survivor's annuity
22beneficiary may elect to cease making contributions for
23survivor's annuity under this subsection. A survivor's annuity
24shall not be payable upon the death of a person who has made
25this election, unless prior to that death the election has been

 

 

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1revoked and the amount of the contributions that would have
2been paid under this subsection in the absence of the election
3is paid to the System, together with interest at the rate of 4%
4per year from the date the contributions would have been made
5to the date of payment.
6    (c) Beginning July 1, 1967, each participant shall
7contribute 1% of salary towards the cost of automatic increase
8in annuity provided in Section 2-119.1. These contributions
9shall be made concurrently with contributions for retirement
10annuity purposes.
11    (d) In addition, each participant serving as an officer of
12the General Assembly shall contribute, for the same purposes
13and at the same rates as are required of a regular participant,
14on each additional payment received as an officer. If the
15participant serves as an officer for at least 2 but less than 4
16years, he or she shall contribute an amount equal to the amount
17that would have been contributed had the participant served as
18an officer for 4 years. Persons who serve as officers in the
1987th General Assembly but cannot receive the additional payment
20to officers because of the ban on increases in salary during
21their terms may nonetheless make contributions based on those
22additional payments for the purpose of having the additional
23payments included in their highest salary for annuity purposes;
24however, persons electing to make these additional
25contributions must also pay an amount representing the
26corresponding employer contributions, as calculated by the

 

 

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1System.
2    (e) Notwithstanding any other provision of this Article,
3the required contribution of a participant who first becomes a
4participant on or after January 1, 2011 shall not exceed the
5contribution that would be due under this Article if that
6participant's highest salary for annuity purposes were
7$106,800, plus any increases in that amount under Section
82-108.1.
9    (f) Beginning July 1, 2018 or the effective date of the
10Tier 1 employee's election under paragraph (1) of subsection
11(a) of Section 2-110.3, whichever is later, in lieu of the
12contributions otherwise required under this Section, each Tier
131 employee who made the election under paragraph (1) of
14subsection (a) of Section 2-110.3 shall contribute 8.5% of each
15payment of salary toward the cost of his or her retirement
16annuity and 1.85% of each payment of salary toward the cost of
17the survivor's annuity.
18    (g) Notwithstanding subsection (f) of this Section,
19beginning July 1, 2018 or the effective date of the Tier 1
20employee's election under paragraph (1) of subsection (a) of
21Section 2-110.3, whichever is later, in lieu of the
22contributions otherwise required under this Section, each Tier
231 employee who made the election under paragraph (1) of
24subsection (a) of Section 2-110.3 and has elected to cease
25making contributions for survivor's annuity under subsection
26(b) of this Section, shall contribute 8.55% of each payment of

 

 

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1salary toward the cost of his or her retirement annuity.
2(Source: P.A. 96-1490, eff. 1-1-11.)
 
3    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
4    (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6    Sec. 2-134. To certify required State contributions and
7submit vouchers.
8    (a) The Board shall certify to the Governor on or before
9December 15 of each year until December 15, 2011 the amount of
10the required State contribution to the System for the next
11fiscal year and shall specifically identify the System's
12projected State normal cost for that fiscal year. The
13certification shall include a copy of the actuarial
14recommendations upon which it is based and shall specifically
15identify the System's projected State normal cost for that
16fiscal year.
17    On or before November 1 of each year, beginning November 1,
182012, the Board shall submit to the State Actuary, the
19Governor, and the General Assembly a proposed certification of
20the amount of the required State contribution to the System for
21the next fiscal year, along with all of the actuarial
22assumptions, calculations, and data upon which that proposed
23certification is based. On or before January 1 of each year
24beginning January 1, 2013, the State Actuary shall issue a
25preliminary report concerning the proposed certification and

 

 

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1identifying, if necessary, recommended changes in actuarial
2assumptions that the Board must consider before finalizing its
3certification of the required State contributions. On or before
4January 15, 2013 and every January 15 thereafter, the Board
5shall certify to the Governor and the General Assembly the
6amount of the required State contribution for the next fiscal
7year. The Board's certification must note any deviations from
8the State Actuary's recommended changes, the reason or reasons
9for not following the State Actuary's recommended changes, and
10the fiscal impact of not following the State Actuary's
11recommended changes on the required State contribution.
12    On or before May 1, 2004, the Board shall recalculate and
13recertify to the Governor the amount of the required State
14contribution to the System for State fiscal year 2005, taking
15into account the amounts appropriated to and received by the
16System under subsection (d) of Section 7.2 of the General
17Obligation Bond Act.
18    On or before July 1, 2005, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2006, taking
21into account the changes in required State contributions made
22by this amendatory Act of the 94th General Assembly.
23    On or before April 1, 2011, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2011, applying
26the changes made by Public Act 96-889 to the System's assets

 

 

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1and liabilities as of June 30, 2009 as though Public Act 96-889
2was approved on that date.
3    As soon as practical after the effective date of this
4amendatory Act of the 100th General Assembly, the Board shall
5recalculate and recertify to the State Actuary, the Governor,
6and the General Assembly the amount of the State contribution
7to the System for State fiscal year 2018, taking into account
8the changes in required State contributions made by this
9amendatory Act of the 100th General Assembly. The State Actuary
10shall review the assumptions and valuations underlying the
11Board's revised certification and issue a preliminary report
12concerning the proposed recertification and identifying, if
13necessary, recommended changes in actuarial assumptions that
14the Board must consider before finalizing its certification of
15the required State contributions. The Board's final
16certification must note any deviations from the State Actuary's
17recommended changes, the reason or reasons for not following
18the State Actuary's recommended changes, and the fiscal impact
19of not following the State Actuary's recommended changes on the
20required State contribution.
21    On or before May 1, 2018, the Board shall recalculate and
22recertify to the Governor and the General Assembly the amount
23of the required State contribution to the System for State
24fiscal year 2019, taking into account the effect on the
25System's liabilities of the elections made under Section
262-110.3.

 

 

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1    On or before October 1, 2018, the Board shall recalculate
2and recertify to the Governor and the General Assembly the
3amount of the required State contribution to the System for
4State fiscal year 2019, taking into account the reduction
5specified under item (3) of subsection (c) of Section 2-124.
6    (b) Beginning in State fiscal year 1996, on or as soon as
7possible after the 15th day of each month the Board shall
8submit vouchers for payment of State contributions to the
9System, in a total monthly amount of one-twelfth of the
10required annual State contribution certified under subsection
11(a). From the effective date of this amendatory Act of the 93rd
12General Assembly through June 30, 2004, the Board shall not
13submit vouchers for the remainder of fiscal year 2004 in excess
14of the fiscal year 2004 certified contribution amount
15determined under this Section after taking into consideration
16the transfer to the System under subsection (d) of Section
176z-61 of the State Finance Act. These vouchers shall be paid by
18the State Comptroller and Treasurer by warrants drawn on the
19funds appropriated to the System for that fiscal year. If in
20any month the amount remaining unexpended from all other
21appropriations to the System for the applicable fiscal year
22(including the appropriations to the System under Section 8.12
23of the State Finance Act and Section 1 of the State Pension
24Funds Continuing Appropriation Act) is less than the amount
25lawfully vouchered under this Section, the difference shall be
26paid from the General Revenue Fund under the continuing

 

 

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1appropriation authority provided in Section 1.1 of the State
2Pension Funds Continuing Appropriation Act.
3    (c) The full amount of any annual appropriation for the
4System for State fiscal year 1995 shall be transferred and made
5available to the System at the beginning of that fiscal year at
6the request of the Board. Any excess funds remaining at the end
7of any fiscal year from appropriations shall be retained by the
8System as a general reserve to meet the System's accrued
9liabilities.
10(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1197-694, eff. 6-18-12.)
 
12    (40 ILCS 5/2-162)
13    (Text of Section WITHOUT the changes made by P.A. 98-599,
14which has been held unconstitutional)
15    Sec. 2-162. Application and expiration of new benefit
16increases.
17    (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article, that results from an amendment
21to this Code that takes effect after the effective date of this
22amendatory Act of the 94th General Assembly. "New benefit
23increase", however, does not include any benefit increase
24resulting from the changes made to this Article by this
25amendatory Act of the 100th General Assembly.

 

 

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1    (b) Notwithstanding any other provision of this Code or any
2subsequent amendment to this Code, every new benefit increase
3is subject to this Section and shall be deemed to be granted
4only in conformance with and contingent upon compliance with
5the provisions of this Section.
6    (c) The Public Act enacting a new benefit increase must
7identify and provide for payment to the System of additional
8funding at least sufficient to fund the resulting annual
9increase in cost to the System as it accrues.
10    Every new benefit increase is contingent upon the General
11Assembly providing the additional funding required under this
12subsection. The Commission on Government Forecasting and
13Accountability shall analyze whether adequate additional
14funding has been provided for the new benefit increase and
15shall report its analysis to the Public Pension Division of the
16Department of Insurance Financial and Professional Regulation.
17A new benefit increase created by a Public Act that does not
18include the additional funding required under this subsection
19is null and void. If the Public Pension Division determines
20that the additional funding provided for a new benefit increase
21under this subsection is or has become inadequate, it may so
22certify to the Governor and the State Comptroller and, in the
23absence of corrective action by the General Assembly, the new
24benefit increase shall expire at the end of the fiscal year in
25which the certification is made.
26    (d) Every new benefit increase shall expire 5 years after

 

 

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1its effective date or on such earlier date as may be specified
2in the language enacting the new benefit increase or provided
3under subsection (c). This does not prevent the General
4Assembly from extending or re-creating a new benefit increase
5by law.
6    (e) Except as otherwise provided in the language creating
7the new benefit increase, a new benefit increase that expires
8under this Section continues to apply to persons who applied
9and qualified for the affected benefit while the new benefit
10increase was in effect and to the affected beneficiaries and
11alternate payees of such persons, but does not apply to any
12other person, including without limitation a person who
13continues in service after the expiration date and did not
14apply and qualify for the affected benefit while the new
15benefit increase was in effect.
16(Source: P.A. 94-4, eff. 6-1-05.)
 
17    (40 ILCS 5/2-165.1 new)
18    Sec. 2-165.1. Defined contribution plan.
19    (a) By July 1, 2018, the System shall prepare and implement
20a voluntary defined contribution plan for up to 5% of eligible
21active Tier 1 employees. The System shall determine the 5% cap
22by the number of active Tier 1 employees on the effective date
23of this Section. The defined contribution plan developed under
24this Section shall be a plan that aggregates employer and
25employee contributions in individual participant accounts

 

 

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1which, after meeting any other requirements, are used for
2payouts after retirement in accordance with this Section and
3any other applicable laws.
4    As used in this Section, "defined benefit plan" means the
5retirement plan available under this Article to Tier 1
6employees who have not made the election authorized under this
7Section.
8        (1) Under the defined contribution plan, an active Tier
9    1 employee of this System could elect to cease accruing
10    benefits in the defined benefit plan under this Article and
11    begin accruing benefits for future service in the defined
12    contribution plan. Service credit under the defined
13    contribution plan may be used for determining retirement
14    eligibility under the defined benefit plan.
15        (2) Participants in the defined contribution plan
16    shall pay employee contributions at the same rate as Tier 1
17    employees in this System who do not participate in the
18    defined contribution plan.
19        (3) State contributions shall be paid into the accounts
20    of all participants in the defined contribution plan at a
21    uniform rate, expressed as a percentage of compensation and
22    determined for each year. This rate shall be no higher than
23    the employer's normal cost for Tier 1 employees in the
24    defined benefit plan for that year, as determined by the
25    System and expressed as a percentage of compensation, and
26    shall be no lower than 3% of compensation. The State shall

 

 

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1    adjust this rate annually.
2        (4) The defined contribution plan shall require 5 years
3    of participation in the defined contribution plan before
4    vesting in State contributions. If the participant fails to
5    vest in them, the State contributions, and the earnings
6    thereon, shall be forfeited.
7        (5) The defined contribution plan may provide for
8    participants in the plan to be eligible for defined
9    disability benefits. If it does, the System shall reduce
10    the employee contributions credited to the participant's
11    defined contribution plan account by an amount determined
12    by the System to cover the cost of offering such benefits.
13        (6) The defined contribution plan shall provide a
14    variety of options for investments. These options shall
15    include investments handled by the Illinois State Board of
16    Investment as well as private sector investment options.
17        (7) The defined contribution plan shall provide a
18    variety of options for payouts to retirees and their
19    survivors.
20        (8) To the extent authorized under federal law and as
21    authorized by the System, the plan shall allow former
22    participants in the plan to transfer or roll over employee
23    and vested State contributions, and the earnings thereon,
24    into other qualified retirement plans.
25        (9) The System shall reduce the employee contributions
26    credited to the participant's defined contribution plan

 

 

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1    account by an amount determined by the System to cover the
2    cost of offering these benefits and any applicable
3    administrative fees.
4    (b) Only persons who are active Tier 1 employees of the
5System on the effective date of this Section are eligible to
6participate in the defined contribution plan. Participation in
7the defined contribution plan shall be limited to the first 5%
8of eligible persons who elect to participate. The election to
9participate in the defined contribution plan is voluntary and
10irrevocable.
11    (c) An eligible active Tier 1 employee may irrevocably
12elect to participate in the defined contribution plan by filing
13with the System a written application to participate that is
14received by the System prior to its determination that 5% of
15eligible persons have elected to participate in the defined
16contribution plan.
17    When the System first determines that 5% of eligible
18persons have elected to participate in the defined contribution
19plan, the System shall provide notice to previously eligible
20employees that the plan is no longer available and shall cease
21accepting applications to participate.
22    (d) The System shall make a good faith effort to contact
23each active Tier 1 employee who is eligible to participate in
24the defined contribution plan. The System shall mail
25information describing the option to join the defined
26contribution plan to each of these employees to his or her last

 

 

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1known address on file with the System. If the employee is not
2responsive to other means of contact, it is sufficient for the
3System to publish the details of the option on its website.
4    Upon request for further information describing the
5option, the System shall provide employees with information
6from the System before exercising the option to join the plan,
7including information on the impact to their vested benefits or
8non-vested service. The individual consultation shall include
9projections of the participant's defined benefits at
10retirement or earlier termination of service and the value of
11the participant's account at retirement or earlier termination
12of service. The System shall not provide advice or counseling
13with respect to whether the employee should exercise the
14option. The System shall inform Tier 1 employees who are
15eligible to participate in the defined contribution plan that
16they may also wish to obtain information and counsel relating
17to their option from any other available source, including but
18not limited to labor organizations, private counsel, and
19financial advisors.
20    (e) In no event shall the System, its staff, its authorized
21representatives, or the Board be liable for any information
22given to an employee under this Section. The System may
23coordinate with the Illinois Department of Central Management
24Services and other retirement systems administering a defined
25contribution plan in accordance with this amendatory Act of the
26100th General Assembly to provide information concerning the

 

 

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1impact of the option set forth in this Section.
2    (f) Notwithstanding any other provision of this Section, no
3person shall begin participating in the defined contribution
4plan until it has attained qualified plan status and received
5all necessary approvals from the U.S. Internal Revenue Service.
6    (g) The System shall report on its progress under this
7Section, including the available details of the defined
8contribution plan and the System's plans for informing eligible
9Tier 1 employees about the plan, to the Governor and the
10General Assembly on or before January 15, 2018.
11    (h) The Illinois State Board of Investments shall be the
12plan sponsor for the defined contribution plan established
13under this Section.
14    (i) The intent of this amendatory Act of the 100th General
15Assembly is to ensure that the State's normal cost of
16participation in the defined contribution plan is similar, and
17if possible equal, to the State's normal cost of participation
18in the defined benefit plan, unless a lower State's normal cost
19is necessary to ensure cost neutrality.
 
20    (40 ILCS 5/2-166.1 new)
21    Sec. 2-166.1. Defined contribution plan; termination. If
22the defined contribution plan is terminated or becomes
23inoperative pursuant to law, then each participant in the plan
24shall automatically be deemed to have been a contributing Tier
251 employee in the System's defined benefit plan during the time

 

 

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1in which he or she participated in the defined contribution
2plan, and for that purpose the System shall be entitled to
3recover the amounts in the participant's defined contribution
4accounts.
 
5    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 14-103.10. Compensation.
9    (a) For periods of service prior to January 1, 1978, the
10full rate of salary or wages payable to an employee for
11personal services performed if he worked the full normal
12working period for his position, subject to the following
13maximum amounts: (1) prior to July 1, 1951, $400 per month or
14$4,800 per year; (2) between July 1, 1951 and June 30, 1957
15inclusive, $625 per month or $7,500 per year; (3) beginning
16July 1, 1957, no limitation.
17    In the case of service of an employee in a position
18involving part-time employment, compensation shall be
19determined according to the employees' earnings record.
20    (b) For periods of service on and after January 1, 1978,
21all remuneration for personal services performed defined as
22"wages" under the Social Security Enabling Act, including that
23part of such remuneration which is in excess of any maximum
24limitation provided in such Act, and including any benefits
25received by an employee under a sick pay plan in effect before

 

 

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1January 1, 1981, but excluding lump sum salary payments:
2        (1) for vacation,
3        (2) for accumulated unused sick leave,
4        (3) upon discharge or dismissal,
5        (4) for approved holidays.
6    (c) For periods of service on or after December 16, 1978,
7compensation also includes any benefits, other than lump sum
8salary payments made at termination of employment, which an
9employee receives or is eligible to receive under a sick pay
10plan authorized by law.
11    (d) For periods of service after September 30, 1985,
12compensation also includes any remuneration for personal
13services not included as "wages" under the Social Security
14Enabling Act, which is deducted for purposes of participation
15in a program established pursuant to Section 125 of the
16Internal Revenue Code or its successor laws.
17    (e) For members for which Section 1-160 applies for periods
18of service on and after January 1, 2011, all remuneration for
19personal services performed defined as "wages" under the Social
20Security Enabling Act, excluding remuneration that is in excess
21of the annual earnings, salary, or wages of a member or
22participant, as provided in subsection (b-5) of Section 1-160,
23but including any benefits received by an employee under a sick
24pay plan in effect before January 1, 1981. Compensation shall
25exclude lump sum salary payments:
26        (1) for vacation;

 

 

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1        (2) for accumulated unused sick leave;
2        (3) upon discharge or dismissal; and
3        (4) for approved holidays.
4    (f) Notwithstanding the other provisions of this Section,
5for service on or after July 1, 2013, "compensation" does not
6include any stipend payable to an employee for service on a
7board or commission.
8    (g) Notwithstanding any other provision of this Section,
9"compensation" does not include any future increase in income
10that is offered for service by a department to a Tier 1
11employee under this Article pursuant to the condition set forth
12in subsection (c) of Section 14-106.5 and accepted under that
13condition by a Tier 1 employee who has made the election under
14paragraph (2) of subsection (a) of Section 14-106.5.
15    (h) Notwithstanding any other provision of this Section,
16"compensation" does not include any consideration payment made
17to a Tier 1 employee.
18(Source: P.A. 98-449, eff. 8-16-13.)
 
19    (40 ILCS 5/14-103.41 new)
20    Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
21employee under this Article who first became a member or
22participant before January 1, 2011 under any reciprocal
23retirement system or pension fund established under this Code
24other than a retirement system or pension fund established
25under Article 2, 3, 4, 5, 6, or 18 of this Code.
 

 

 

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1    (40 ILCS 5/14-103.42 new)
2    Sec. 14-103.42. Future increase in income. "Future
3increase in income" means an increase to a Tier 1 employee's
4base pay that is offered by a department to the Tier 1 employee
5for service under this Article after June 30, 2019 that
6qualifies as "compensation", as defined in Section 14-103.10,
7or would qualify as "compensation" but for the fact that it was
8offered to and accepted by the Tier 1 employee under the
9condition set forth in subsection (c) of Section 14-106.5. The
10term "future increase in income" includes an increase to a Tier
111 employee's base pay that is paid to the Tier 1 employee
12pursuant to an extension, amendment, or renewal of any
13employment contract or collective bargaining agreement after
14the effective date of this Section.
 
15    (40 ILCS 5/14-103.43 new)
16    Sec. 14-103.43. Base pay. As used in Section 14-103.42 of
17this Code, "base pay" means the greater of either (i) the Tier
181 employee's annualized rate of compensation as of June 30,
192019, or (ii) the Tier 1 employee's annualized rate of
20compensation immediately preceding the expiration, renewal, or
21amendment of an employment contract or collective bargaining
22agreement in effect on the effective date of this Section. For
23a person returning to active service as a Tier 1 employee after
24June 30, 2019, however, "base pay" means the employee's

 

 

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1annualized rate of compensation as of the employee's last date
2of service prior to July 1, 2019. The System shall calculate
3the base pay of each Tier 1 employee pursuant to this Section.
 
4    (40 ILCS 5/14-106.5 new)
5    Sec. 14-106.5. Election by Tier 1 employees.
6    (a) Each active Tier 1 employee shall make an irrevocable
7election either:
8        (1) to agree to delay his or her eligibility for
9    automatic annual increases in retirement annuity as
10    provided in subsection (a-1) of Section 14-114 and to have
11    the amount of the automatic annual increases in his or her
12    retirement annuity and survivors or widow's annuity that
13    are otherwise provided for in this Article calculated,
14    instead, as provided in subsection (a-1) of Section 14-114;
15    or
16        (2) to not agree to paragraph (1) of this subsection.
17    The election required under this subsection (a) shall be
18made by each active Tier 1 employee no earlier than January 1,
192019 and no later than March 31, 2019, except that:
20        (i) a person who becomes a Tier 1 employee under this
21    Article on or after January 1, 2019 must make the election
22    under this subsection (a) within 60 days after becoming a
23    Tier 1 employee; and
24        (ii) a person who returns to active service as a Tier 1
25    employee under this Article on or after January 1, 2019 and

 

 

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1    has not yet made an election under this Section must make
2    the election under this subsection (a) within 60 days after
3    returning to active service as a Tier 1 employee.
4    If a Tier 1 employee fails for any reason to make a
5required election under this subsection within the time
6specified, then the employee shall be deemed to have made the
7election under paragraph (2) of this subsection.
8    (a-5) If this Section is enjoined or stayed by an Illinois
9court or a court of competent jurisdiction pending the entry of
10a final and unappealable decision, and this Section is
11determined to be constitutional or otherwise valid by a final
12unappealable decision of an Illinois court or a court of
13competent jurisdiction, then the election procedure set forth
14in subsection (a) of this Section shall commence on the 180th
15calendar day after the date of the issuance of the final
16unappealable decision and shall conclude at the end of the
17270th calendar day after that date.
18    (a-10) All elections under subsection (a) that are made or
19deemed to be made before July 1, 2019 shall take effect on July
201, 2019. Elections that are made or deemed to be made on or
21after July 1, 2019 shall take effect on the first day of the
22month following the month in which the election is made or
23deemed to be made.
24    (b) As adequate and legal consideration provided under this
25amendatory Act of the 100th General Assembly for making an
26election under paragraph (1) of subsection (a) of this Section,

 

 

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1the department shall be expressly and irrevocably prohibited
2from offering any future increases in income to a Tier 1
3employee who has made an election under paragraph (1) of
4subsection (a) of this Section on the condition of not
5constituting compensation under Section 14-103.10.
6    As adequate and legal consideration provided under this
7amendatory Act of the 100th General Assembly for making an
8election under paragraph (1) of subsection (a) of this Section,
9each Tier 1 employee who has made an election under paragraph
10(1) of subsection (a) of this Section shall receive a
11consideration payment equal to 10% of the contributions made by
12or on behalf of the employee before the effective date of that
13election. The State Comptroller shall pay the consideration
14payment to the Tier 1 employee out of funds appropriated for
15that purpose under Section 1.9 of the State Pension Funds
16Continuing Appropriation Act. The System shall calculate the
17amount of each consideration payment and, by July 1, 2019,
18shall certify to the State Comptroller the amount of the
19consideration payment, together with the name, address, and any
20other available payment information of the Tier 1 employee as
21found in the records of the System. The System shall make
22additional calculations and certifications of consideration
23payments to the State Comptroller as it deems necessary.
24    (c) A Tier 1 employee who makes the election under
25paragraph (2) of subsection (a) of this Section shall not be
26subject to paragraph (1) of subsection (a) of this Section.

 

 

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1However, each future increase in income offered by a department
2under this Article to a Tier 1 employee who has made the
3election under paragraph (2) of subsection (a) of this Section
4shall be offered by the department expressly and irrevocably on
5the condition of not constituting compensation under Section
614-103.10 and that the Tier 1 employee's acceptance of the
7offered future increase in income shall constitute his or her
8agreement to that condition.
9    (d) The System shall make a good faith effort to contact
10each Tier 1 employee subject to this Section. The System shall
11mail information describing the required election to each Tier
121 employee by United States Postal Service mail to his or her
13last known address on file with the System. If the Tier 1
14employee is not responsive to other means of contact, it is
15sufficient for the System to publish the details of any
16required elections on its website or to publish those details
17in a regularly published newsletter or other existing public
18forum.
19    Tier 1 employees who are subject to this Section shall be
20provided with an election packet containing information
21regarding their options, as well as the forms necessary to make
22the required election. Upon request, the System shall offer
23Tier 1 employees an opportunity to receive information from the
24System before making the required election. The information may
25consist of video materials, group presentations, individual
26consultation with a member or authorized representative of the

 

 

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1System in person or by telephone or other electronic means, or
2any combination of those methods. The System shall not provide
3advice or counseling with respect to which election a Tier 1
4employee should make or specific to the legal or tax
5circumstances of or consequences to the Tier 1 employee.
6    The System shall inform Tier 1 employees in the election
7packet required under this subsection that the Tier 1 employee
8may also wish to obtain information and counsel relating to the
9election required under this Section from any other available
10source, including, but not limited to, labor organizations and
11private counsel.
12    In no event shall the System, its staff, or the Board be
13held liable for any information given to a member regarding the
14elections under this Section. The System shall coordinate with
15the Illinois Department of Central Management Services and each
16other retirement system administering an election in
17accordance with this amendatory Act of the 100th General
18Assembly to provide information concerning the impact of the
19election set forth in this Section.
20    (e) Notwithstanding any other provision of law, a
21department under this Article is required to offer each future
22increase in income expressly and irrevocably on the condition
23of not constituting "compensation" under Section 14-103.10 to
24any Tier 1 employee who has made an election under paragraph
25(2) of subsection (a) of this Section. The offer shall also
26provide that the Tier 1 employee's acceptance of the offered

 

 

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1future increase in income shall constitute his or her agreement
2to the condition set forth in this subsection.
3    For purposes of legislative intent, the condition set forth
4in this subsection shall be construed in a manner that ensures
5that the condition is not violated or circumvented through any
6contrivance of any kind.
7    (f) A member's election under this Section is not a
8prohibited election under subdivision (j)(1) of Section 1-119
9of this Code.
10    (g) No provision of this Section shall be interpreted in a
11way that would cause the System to cease to be a qualified plan
12under Section 401(a) of the Internal Revenue Code of 1986. The
13provisions of this Section shall be subject to and implemented
14in a manner that complies with Section 21 of Article V of the
15Illinois Constitution.
16    (h) If an election created by this amendatory Act in any
17other Article of this Code or any change deriving from that
18election is determined to be unconstitutional or otherwise
19invalid by a final unappealable decision of an Illinois court
20or a court of competent jurisdiction, the invalidity of that
21provision shall not in any way affect the validity of this
22Section or the changes deriving from the election required
23under this Section.
 
24    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
25    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

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1which has been held unconstitutional)
2    Sec. 14-114. Automatic increase in retirement annuity.
3    (a) Subject to the provisions of subsections (a-1), any Any
4person receiving a retirement annuity under this Article who
5retires having attained age 60, or who retires before age 60
6having at least 35 years of creditable service, or who retires
7on or after January 1, 2001 at an age which, when added to the
8number of years of his or her creditable service, equals at
9least 85, shall, on January 1 next following the first full
10year of retirement, have the amount of the then fixed and
11payable monthly retirement annuity increased 3%. Any person
12receiving a retirement annuity under this Article who retires
13before attainment of age 60 and with less than (i) 35 years of
14creditable service if retirement is before January 1, 2001, or
15(ii) the number of years of creditable service which, when
16added to the member's age, would equal 85, if retirement is on
17or after January 1, 2001, shall have the amount of the fixed
18and payable retirement annuity increased by 3% on the January 1
19occurring on or next following (1) attainment of age 60, or (2)
20the first anniversary of retirement, whichever occurs later.
21However, for persons who receive the alternative retirement
22annuity under Section 14-110, references in this subsection (a)
23to attainment of age 60 shall be deemed to refer to attainment
24of age 55. For a person receiving early retirement incentives
25under Section 14-108.3 whose retirement annuity began after
26January 1, 1992 pursuant to an extension granted under

 

 

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1subsection (e) of that Section, the first anniversary of
2retirement shall be deemed to be January 1, 1993. For a person
3who retires on or after June 28, 2001 and on or before October
41, 2001, and whose retirement annuity is calculated, in whole
5or in part, under Section 14-110 or subsection (g) or (h) of
6Section 14-108, the first anniversary of retirement shall be
7deemed to be January 1, 2002.
8    On each January 1 following the date of the initial
9increase under this subsection, the employee's monthly
10retirement annuity shall be increased by an additional 3%.
11    Beginning January 1, 1990, and except as provided in
12subsection (a-1), all automatic annual increases payable under
13this Section shall be calculated as a percentage of the total
14annuity payable at the time of the increase, including previous
15increases granted under this Article.
16    (a-1) Notwithstanding any other provision of this Article,
17for a Tier 1 employee who made the election under paragraph (1)
18of subsection (a) of Section 14-106.5:
19        (1) The initial increase in retirement annuity under
20    this Section shall occur on the January 1 occurring either
21    on or after the attainment of age 67 or the fifth
22    anniversary of the annuity start date, whichever is
23    earlier.
24        (2) The amount of each automatic annual increase in
25    retirement annuity or survivors or widow's annuity
26    occurring on or after the effective date of that election

 

 

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1    shall be calculated as a percentage of the originally
2    granted retirement annuity or survivors or widow's
3    annuity, equal to 3% or one-half the annual unadjusted
4    percentage increase (but not less than zero) in the
5    consumer price index-u for the 12 months ending with the
6    September preceding each November 1, whichever is less. If
7    the annual unadjusted percentage change in the consumer
8    price index-u for the 12 months ending with the September
9    preceding each November 1 is zero or there is a decrease,
10    then the annuity shall not be increased.
11    For the purposes of this Section, "consumer price index-u"
12means the index published by the Bureau of Labor Statistics of
13the United States Department of Labor that measures the average
14change in prices of goods and services purchased by all urban
15consumers, United States city average, all items, 1982-84 =
16100. The new amount resulting from each annual adjustment shall
17be determined by the Public Pension Division of the Department
18of Insurance and made available to the board of the retirement
19system by November 1 of each year.
20    (b) The provisions of subsection (a) of this Section shall
21be applicable to an employee only if the employee makes the
22additional contributions required after December 31, 1969 for
23the purpose of the automatic increases for not less than the
24equivalent of one full year. If an employee becomes an
25annuitant before his additional contributions equal one full
26year's contributions based on his salary at the date of

 

 

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1retirement, the employee may pay the necessary balance of the
2contributions to the system, without interest, and be eligible
3for the increasing annuity authorized by this Section.
4    (c) The provisions of subsection (a) of this Section shall
5not be applicable to any annuitant who is on retirement on
6December 31, 1969, and thereafter returns to State service,
7unless the member has established at least one year of
8additional creditable service following reentry into service.
9    (d) In addition to other increases which may be provided by
10this Section, on January 1, 1981 any annuitant who was
11receiving a retirement annuity on or before January 1, 1971
12shall have his retirement annuity then being paid increased $1
13per month for each year of creditable service. On January 1,
141982, any annuitant who began receiving a retirement annuity on
15or before January 1, 1977, shall have his retirement annuity
16then being paid increased $1 per month for each year of
17creditable service.
18    On January 1, 1987, any annuitant who began receiving a
19retirement annuity on or before January 1, 1977, shall have the
20monthly retirement annuity increased by an amount equal to 8
21per year of creditable service times the number of years that
22have elapsed since the annuity began.
23    (e) Every person who receives the alternative retirement
24annuity under Section 14-110 and who is eligible to receive the
253% increase under subsection (a) on January 1, 1986, shall also
26receive on that date a one-time increase in retirement annuity

 

 

SB0016 Engrossed- 120 -LRB100 05169 KTG 15179 b

1equal to the difference between (1) his actual retirement
2annuity on that date, including any increases received under
3subsection (a), and (2) the amount of retirement annuity he
4would have received on that date if the amendments to
5subsection (a) made by Public Act 84-162 had been in effect
6since the date of his retirement.
7(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
892-651, eff. 7-11-02.)
 
9    (40 ILCS 5/14-131)
10    Sec. 14-131. Contributions by State.
11    (a) The State shall make contributions to the System by
12appropriations of amounts which, together with other employer
13contributions from trust, federal, and other funds, employee
14contributions, investment income, and other income, will be
15sufficient to meet the cost of maintaining and administering
16the System on a 90% funded basis in accordance with actuarial
17recommendations.
18    For the purposes of this Section and Section 14-135.08,
19references to State contributions refer only to employer
20contributions and do not include employee contributions that
21are picked up or otherwise paid by the State or a department on
22behalf of the employee.
23    (b) The Board shall determine the total amount of State
24contributions required for each fiscal year on the basis of the
25actuarial tables and other assumptions adopted by the Board,

 

 

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1using the formula in subsection (e).
2    The Board shall also determine a State contribution rate
3for each fiscal year, expressed as a percentage of payroll,
4based on the total required State contribution for that fiscal
5year (less the amount received by the System from
6appropriations under Section 8.12 of the State Finance Act and
7Section 1 of the State Pension Funds Continuing Appropriation
8Act, if any, for the fiscal year ending on the June 30
9immediately preceding the applicable November 15 certification
10deadline), the estimated payroll (including all forms of
11compensation) for personal services rendered by eligible
12employees, and the recommendations of the actuary.
13    For the purposes of this Section and Section 14.1 of the
14State Finance Act, the term "eligible employees" includes
15employees who participate in the System, persons who may elect
16to participate in the System but have not so elected, persons
17who are serving a qualifying period that is required for
18participation, and annuitants employed by a department as
19described in subdivision (a)(1) or (a)(2) of Section 14-111.
20    (c) Contributions shall be made by the several departments
21for each pay period by warrants drawn by the State Comptroller
22against their respective funds or appropriations based upon
23vouchers stating the amount to be so contributed. These amounts
24shall be based on the full rate certified by the Board under
25Section 14-135.08 for that fiscal year. From the effective date
26of this amendatory Act of the 93rd General Assembly through the

 

 

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1payment of the final payroll from fiscal year 2004
2appropriations, the several departments shall not make
3contributions for the remainder of fiscal year 2004 but shall
4instead make payments as required under subsection (a-1) of
5Section 14.1 of the State Finance Act. The several departments
6shall resume those contributions at the commencement of fiscal
7year 2005.
8    (c-1) Notwithstanding subsection (c) of this Section, for
9fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
10contributions by the several departments are not required to be
11made for General Revenue Funds payrolls processed by the
12Comptroller. Payrolls paid by the several departments from all
13other State funds must continue to be processed pursuant to
14subsection (c) of this Section.
15    (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,
162016, and 2017 only, on or as soon as possible after the 15th
17day of each month, the Board shall submit vouchers for payment
18of State contributions to the System, in a total monthly amount
19of one-twelfth of the fiscal year General Revenue Fund
20contribution as certified by the System pursuant to Section
2114-135.08 of the Illinois Pension Code.
22    (d) If an employee is paid from trust funds or federal
23funds, the department or other employer shall pay employer
24contributions from those funds to the System at the certified
25rate, unless the terms of the trust or the federal-State
26agreement preclude the use of the funds for that purpose, in

 

 

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1which case the required employer contributions shall be paid by
2the State. From the effective date of this amendatory Act of
3the 93rd General Assembly through the payment of the final
4payroll from fiscal year 2004 appropriations, the department or
5other employer shall not pay contributions for the remainder of
6fiscal year 2004 but shall instead make payments as required
7under subsection (a-1) of Section 14.1 of the State Finance
8Act. The department or other employer shall resume payment of
9contributions at the commencement of fiscal year 2005.
10    (e) For State fiscal years 2018 through 2045 (except as
11otherwise provided for fiscal year 2020), the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 90% of
15the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of total payroll, including payroll that is
19not deemed pensionable, over the years remaining to and
20including fiscal year 2045 and shall be determined under the
21projected unit credit actuarial cost method.
22    For State fiscal year 2020:
23        (1) The initial calculation and certification shall be
24    based on the amount determined above.
25        (2) For purposes of the recertification due on or
26    before May 1, 2019, the recalculation of the required State

 

 

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1    contribution for fiscal year 2020 shall take into account
2    the effect on the System's liabilities of the elections
3    made under Section 14-106.5.
4        (3) For purposes of the recertification due on or
5    before October 1, 2019, the total required State
6    contribution for fiscal year 2020 shall be reduced by the
7    amount of the consideration payments made to Tier 1
8    employees who made the election under paragraph (1) of
9    subsection (a) of Section 14-106.5.
10    Beginning in State fiscal year 2018, any increase or
11decrease in State contribution over the prior fiscal year due
12exclusively to changes in actuarial or investment assumptions
13adopted by the Board shall be included in the State
14contribution to the System, as a percentage of the applicable
15employee payroll, and shall be increased in equal annual
16increments so that by the State fiscal year occurring 5 years
17after the adoption of the actuarial or investment assumptions,
18the State is contributing at the rate otherwise required under
19this Section.
20    For State fiscal years 2012 through 2017 2045, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23sufficient to bring the total assets of the System up to 90% of
24the total actuarial liabilities of the System by the end of
25State fiscal year 2045. In making these determinations, the
26required State contribution shall be calculated each year as a

 

 

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1level percentage of payroll over the years remaining to and
2including fiscal year 2045 and shall be determined under the
3projected unit credit actuarial cost method.
4    For State fiscal years 1996 through 2005, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7so that by State fiscal year 2011, the State is contributing at
8the rate required under this Section; except that (i) for State
9fiscal year 1998, for all purposes of this Code and any other
10law of this State, the certified percentage of the applicable
11employee payroll shall be 5.052% for employees earning eligible
12creditable service under Section 14-110 and 6.500% for all
13other employees, notwithstanding any contrary certification
14made under Section 14-135.08 before the effective date of this
15amendatory Act of 1997, and (ii) in the following specified
16State fiscal years, the State contribution to the System shall
17not be less than the following indicated percentages of the
18applicable employee payroll, even if the indicated percentage
19will produce a State contribution in excess of the amount
20otherwise required under this subsection and subsection (a):
219.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
222002; 10.6% in FY 2003; and 10.8% in FY 2004.
23    Notwithstanding any other provision of this Article, the
24total required State contribution to the System for State
25fiscal year 2006 is $203,783,900.
26    Notwithstanding any other provision of this Article, the

 

 

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1total required State contribution to the System for State
2fiscal year 2007 is $344,164,400.
3    For each of State fiscal years 2008 through 2009, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6from the required State contribution for State fiscal year
72007, so that by State fiscal year 2011, the State is
8contributing at the rate otherwise required under this Section.
9    Notwithstanding any other provision of this Article, the
10total required State General Revenue Fund contribution for
11State fiscal year 2010 is $723,703,100 and shall be made from
12the proceeds of bonds sold in fiscal year 2010 pursuant to
13Section 7.2 of the General Obligation Bond Act, less (i) the
14pro rata share of bond sale expenses determined by the System's
15share of total bond proceeds, (ii) any amounts received from
16the General Revenue Fund in fiscal year 2010, and (iii) any
17reduction in bond proceeds due to the issuance of discounted
18bonds, if applicable.
19    Notwithstanding any other provision of this Article, the
20total required State General Revenue Fund contribution for
21State fiscal year 2011 is the amount recertified by the System
22on or before April 1, 2011 pursuant to Section 14-135.08 and
23shall be made from the proceeds of bonds sold in fiscal year
242011 pursuant to Section 7.2 of the General Obligation Bond
25Act, less (i) the pro rata share of bond sale expenses
26determined by the System's share of total bond proceeds, (ii)

 

 

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1any amounts received from the General Revenue Fund in fiscal
2year 2011, and (iii) any reduction in bond proceeds due to the
3issuance of discounted bonds, if applicable.
4    Beginning in State fiscal year 2046, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 90% of the total
7actuarial liabilities of the System.
8    Amounts received by the System pursuant to Section 25 of
9the Budget Stabilization Act or Section 8.12 of the State
10Finance Act in any fiscal year do not reduce and do not
11constitute payment of any portion of the minimum State
12contribution required under this Article in that fiscal year.
13Such amounts shall not reduce, and shall not be included in the
14calculation of, the required State contributions under this
15Article in any future year until the System has reached a
16funding ratio of at least 90%. A reference in this Article to
17the "required State contribution" or any substantially similar
18term does not include or apply to any amounts payable to the
19System under Section 25 of the Budget Stabilization Act.
20    Notwithstanding any other provision of this Section, the
21required State contribution for State fiscal year 2005 and for
22fiscal year 2008 and each fiscal year thereafter, as calculated
23under this Section and certified under Section 14-135.08, shall
24not exceed an amount equal to (i) the amount of the required
25State contribution that would have been calculated under this
26Section for that fiscal year if the System had not received any

 

 

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1payments under subsection (d) of Section 7.2 of the General
2Obligation Bond Act, minus (ii) the portion of the State's
3total debt service payments for that fiscal year on the bonds
4issued in fiscal year 2003 for the purposes of that Section
57.2, as determined and certified by the Comptroller, that is
6the same as the System's portion of the total moneys
7distributed under subsection (d) of Section 7.2 of the General
8Obligation Bond Act. In determining this maximum for State
9fiscal years 2008 through 2010, however, the amount referred to
10in item (i) shall be increased, as a percentage of the
11applicable employee payroll, in equal increments calculated
12from the sum of the required State contribution for State
13fiscal year 2007 plus the applicable portion of the State's
14total debt service payments for fiscal year 2007 on the bonds
15issued in fiscal year 2003 for the purposes of Section 7.2 of
16the General Obligation Bond Act, so that, by State fiscal year
172011, the State is contributing at the rate otherwise required
18under this Section.
19    (f) After the submission of all payments for eligible
20employees from personal services line items in fiscal year 2004
21have been made, the Comptroller shall provide to the System a
22certification of the sum of all fiscal year 2004 expenditures
23for personal services that would have been covered by payments
24to the System under this Section if the provisions of this
25amendatory Act of the 93rd General Assembly had not been
26enacted. Upon receipt of the certification, the System shall

 

 

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1determine the amount due to the System based on the full rate
2certified by the Board under Section 14-135.08 for fiscal year
32004 in order to meet the State's obligation under this
4Section. The System shall compare this amount due to the amount
5received by the System in fiscal year 2004 through payments
6under this Section and under Section 6z-61 of the State Finance
7Act. If the amount due is more than the amount received, the
8difference shall be termed the "Fiscal Year 2004 Shortfall" for
9purposes of this Section, and the Fiscal Year 2004 Shortfall
10shall be satisfied under Section 1.2 of the State Pension Funds
11Continuing Appropriation Act. If the amount due is less than
12the amount received, the difference shall be termed the "Fiscal
13Year 2004 Overpayment" for purposes of this Section, and the
14Fiscal Year 2004 Overpayment shall be repaid by the System to
15the Pension Contribution Fund as soon as practicable after the
16certification.
17    (g) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

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15-year period following that fiscal year.
2    (h) For purposes of determining the required State
3contribution to the System for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the System's actuarially assumed rate of return.
6    (i) After the submission of all payments for eligible
7employees from personal services line items paid from the
8General Revenue Fund in fiscal year 2010 have been made, the
9Comptroller shall provide to the System a certification of the
10sum of all fiscal year 2010 expenditures for personal services
11that would have been covered by payments to the System under
12this Section if the provisions of this amendatory Act of the
1396th General Assembly had not been enacted. Upon receipt of the
14certification, the System shall determine the amount due to the
15System based on the full rate certified by the Board under
16Section 14-135.08 for fiscal year 2010 in order to meet the
17State's obligation under this Section. The System shall compare
18this amount due to the amount received by the System in fiscal
19year 2010 through payments under this Section. If the amount
20due is more than the amount received, the difference shall be
21termed the "Fiscal Year 2010 Shortfall" for purposes of this
22Section, and the Fiscal Year 2010 Shortfall shall be satisfied
23under Section 1.2 of the State Pension Funds Continuing
24Appropriation Act. If the amount due is less than the amount
25received, the difference shall be termed the "Fiscal Year 2010
26Overpayment" for purposes of this Section, and the Fiscal Year

 

 

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12010 Overpayment shall be repaid by the System to the General
2Revenue Fund as soon as practicable after the certification.
3    (j) After the submission of all payments for eligible
4employees from personal services line items paid from the
5General Revenue Fund in fiscal year 2011 have been made, the
6Comptroller shall provide to the System a certification of the
7sum of all fiscal year 2011 expenditures for personal services
8that would have been covered by payments to the System under
9this Section if the provisions of this amendatory Act of the
1096th General Assembly had not been enacted. Upon receipt of the
11certification, the System shall determine the amount due to the
12System based on the full rate certified by the Board under
13Section 14-135.08 for fiscal year 2011 in order to meet the
14State's obligation under this Section. The System shall compare
15this amount due to the amount received by the System in fiscal
16year 2011 through payments under this Section. If the amount
17due is more than the amount received, the difference shall be
18termed the "Fiscal Year 2011 Shortfall" for purposes of this
19Section, and the Fiscal Year 2011 Shortfall shall be satisfied
20under Section 1.2 of the State Pension Funds Continuing
21Appropriation Act. If the amount due is less than the amount
22received, the difference shall be termed the "Fiscal Year 2011
23Overpayment" for purposes of this Section, and the Fiscal Year
242011 Overpayment shall be repaid by the System to the General
25Revenue Fund as soon as practicable after the certification.
26    (k) For fiscal years 2012 through 2017 only, after the

 

 

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1submission of all payments for eligible employees from personal
2services line items paid from the General Revenue Fund in the
3fiscal year have been made, the Comptroller shall provide to
4the System a certification of the sum of all expenditures in
5the fiscal year for personal services. Upon receipt of the
6certification, the System shall determine the amount due to the
7System based on the full rate certified by the Board under
8Section 14-135.08 for the fiscal year in order to meet the
9State's obligation under this Section. The System shall compare
10this amount due to the amount received by the System for the
11fiscal year. If the amount due is more than the amount
12received, the difference shall be termed the "Prior Fiscal Year
13Shortfall" for purposes of this Section, and the Prior Fiscal
14Year Shortfall shall be satisfied under Section 1.2 of the
15State Pension Funds Continuing Appropriation Act. If the amount
16due is less than the amount received, the difference shall be
17termed the "Prior Fiscal Year Overpayment" for purposes of this
18Section, and the Prior Fiscal Year Overpayment shall be repaid
19by the System to the General Revenue Fund as soon as
20practicable after the certification.
21(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
22eff. 7-9-15; 99-523, eff. 6-30-16.)
 
23    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
24    (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

 

 

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1    Sec. 14-133. Contributions on behalf of members.
2    (a) Except as provided in subsection (a-5), each Each
3participating employee shall make contributions to the System,
4based on the employee's compensation, as follows:
5        (1) Covered employees, except as indicated below, 3.5%
6    for retirement annuity, and 0.5% for a widow or survivors
7    annuity;
8        (2) Noncovered employees, except as indicated below,
9    7% for retirement annuity and 1% for a widow or survivors
10    annuity;
11        (3) Noncovered employees serving in a position in which
12    "eligible creditable service" as defined in Section 14-110
13    may be earned, 1% for a widow or survivors annuity plus the
14    following amount for retirement annuity: 8.5% through
15    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
16    in 2004 and thereafter;
17        (4) Covered employees serving in a position in which
18    "eligible creditable service" as defined in Section 14-110
19    may be earned, 0.5% for a widow or survivors annuity plus
20    the following amount for retirement annuity: 5% through
21    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
22    and thereafter;
23        (5) Each security employee of the Department of
24    Corrections or of the Department of Human Services who is a
25    covered employee, 0.5% for a widow or survivors annuity
26    plus the following amount for retirement annuity: 5%

 

 

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1    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
2    in 2004 and thereafter;
3        (6) Each security employee of the Department of
4    Corrections or of the Department of Human Services who is
5    not a covered employee, 1% for a widow or survivors annuity
6    plus the following amount for retirement annuity: 8.5%
7    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
8    11.5% in 2004 and thereafter.
9    (a-5) Beginning July 1, 2019 or the effective date of the
10Tier 1 employee's election under paragraph (1) of subsection
11(a) of Section 14-106.5, whichever is later, in lieu of the
12contributions otherwise required under subsection (a), each
13Tier 1 employee who made the election under paragraph (1) of
14subsection (a) of Section 14-106.5 who is a participating
15employee shall make contributions to the System, based on his
16or her compensation, as follows:
17        (1) Covered employees, except as indicated below,
18    3.15% for retirement annuity, and 0.45% for a widow or
19    survivors annuity;
20        (2) Noncovered employees, except as indicated below,
21    6.3% for retirement annuity and 0.9% for a widow or
22    survivors annuity;
23        (3) Noncovered employees serving in a position in which
24    "eligible creditable service" as defined in Section 14-110
25    may be earned, 10.35% for retirement annuity and 0.9% for a
26    widow or survivors annuity;

 

 

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1        (4) Covered employees serving in a position in which
2    "eligible creditable service" as defined in Section 14-110
3    may be earned, 7.2% for retirement annuity and 0.45% for a
4    widow or survivors annuity;
5        (5) Each security employee of the Department of
6    Corrections or of the Department of Human Services who is a
7    covered employee, 10.8% for retirement annuity and 0.45%
8    for a widow or survivors annuity;
9        (6) Each security employee of the Department of
10    Corrections or of the Department of Human Services who is
11    not a covered employee, 10.35% for retirement annuity and
12    0.9% for a widow or survivors annuity.
13    (b) Contributions shall be in the form of a deduction from
14compensation and shall be made notwithstanding that the
15compensation paid in cash to the employee shall be reduced
16thereby below the minimum prescribed by law or regulation. Each
17member is deemed to consent and agree to the deductions from
18compensation provided for in this Article, and shall receipt in
19full for salary or compensation.
20(Source: P.A. 92-14, eff. 6-28-01.)
 
21    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 14-135.08. To certify required State contributions.
25    (a) To certify to the Governor and to each department, on

 

 

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1or before November 15 of each year until November 15, 2011, the
2required rate for State contributions to the System for the
3next State fiscal year, as determined under subsection (b) of
4Section 14-131. The certification to the Governor under this
5subsection (a) shall include a copy of the actuarial
6recommendations upon which the rate is based and shall
7specifically identify the System's projected State normal cost
8for that fiscal year.
9    (a-5) On or before November 1 of each year, beginning
10November 1, 2012, the Board shall submit to the State Actuary,
11the Governor, and the General Assembly a proposed certification
12of the amount of the required State contribution to the System
13for the next fiscal year, along with all of the actuarial
14assumptions, calculations, and data upon which that proposed
15certification is based. On or before January 1 of each year
16beginning January 1, 2013, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification of the required State contributions. On or before
21January 15, 2013 and each January 15 thereafter, the Board
22shall certify to the Governor and the General Assembly the
23amount of the required State contribution for the next fiscal
24year. The Board's certification must note any deviations from
25the State Actuary's recommended changes, the reason or reasons
26for not following the State Actuary's recommended changes, and

 

 

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1the fiscal impact of not following the State Actuary's
2recommended changes on the required State contribution.
3    (a-10) For purposes of subsection (c-5) of Section 20 of
4the Budget Stabilization Act, on or before November 1 of each
5year beginning November 1, 2019, the Board shall determine the
6amount of the State contribution to the System that would have
7been required for the next fiscal year if Section 1-161,
8Section 14-155.2, and the changes made to Section 1-160 by this
9amendatory Act of the 100th General Assembly had not taken
10effect, using the best and most recent available data but based
11on the law in effect on May 31, 2019. The Board shall submit to
12the State Actuary, the Governor, and the General Assembly a
13proposed certification, along with the relevant law, actuarial
14assumptions, calculations, and data upon which that
15certification is based. On or before January 1, 2020 and every
16January 1 thereafter, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification. On or before January 15, 2020 and every January
211 thereafter, the Board shall certify to the Governor and the
22General Assembly the amount of the State contribution to the
23System that would have been required for the next fiscal year
24if Section 1-161, Section 14-155.2, and the changes made to
25Section 1-160 by this amendatory Act of the 100th General
26Assembly had not taken effect, using the best and most recent

 

 

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1available data but based on the law in effect on May 31, 2019.
2The Board's certification must note any deviations from the
3State Actuary's recommended changes, the reason or reasons for
4not following the State Actuary's recommended changes, and the
5impact of not following the State Actuary's recommended
6changes.
7    (b) The certifications under subsections (a) and (a-5)
8shall include an additional amount necessary to pay all
9principal of and interest on those general obligation bonds due
10the next fiscal year authorized by Section 7.2(a) of the
11General Obligation Bond Act and issued to provide the proceeds
12deposited by the State with the System in July 2003,
13representing deposits other than amounts reserved under
14Section 7.2(c) of the General Obligation Bond Act. For State
15fiscal year 2005, the Board shall make a supplemental
16certification of the additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18in State fiscal years 2004 and 2005 authorized by Section
197.2(a) of the General Obligation Bond Act and issued to provide
20the proceeds deposited by the State with the System in July
212003, representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act, as soon as
23practical after the effective date of this amendatory Act of
24the 93rd General Assembly.
25    On or before May 1, 2004, the Board shall recalculate and
26recertify to the Governor and to each department the amount of

 

 

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1the required State contribution to the System and the required
2rates for State contributions to the System for State fiscal
3year 2005, taking into account the amounts appropriated to and
4received by the System under subsection (d) of Section 7.2 of
5the General Obligation Bond Act.
6    On or before July 1, 2005, the Board shall recalculate and
7recertify to the Governor and to each department the amount of
8the required State contribution to the System and the required
9rates for State contributions to the System for State fiscal
10year 2006, taking into account the changes in required State
11contributions made by this amendatory Act of the 94th General
12Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor and to each department the amount of
15the required State contribution to the System for State fiscal
16year 2011, applying the changes made by Public Act 96-889 to
17the System's assets and liabilities as of June 30, 2009 as
18though Public Act 96-889 was approved on that date.
19    As soon as practical after the effective date of this
20amendatory Act of the 100th General Assembly, the Board shall
21recalculate and recertify to the State Actuary, the Governor,
22and the General Assembly the amount of the State contribution
23to the System for State fiscal year 2018, taking into account
24the changes in required State contributions made by this
25amendatory Act of the 100th General Assembly. The State Actuary
26shall review the assumptions and valuations underlying the

 

 

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1Board's revised certification and issue a preliminary report
2concerning the proposed recertification and identifying, if
3necessary, recommended changes in actuarial assumptions that
4the Board must consider before finalizing its certification of
5the required State contributions. The Board's final
6certification must note any deviations from the State Actuary's
7recommended changes, the reason or reasons for not following
8the State Actuary's recommended changes, and the fiscal impact
9of not following the State Actuary's recommended changes on the
10required State contribution.
11    On or before May 1, 2019, the Board shall recalculate and
12recertify to the Governor and the General Assembly the amount
13of the required State contribution to the System for State
14fiscal year 2020, taking into account the effect on the
15System's liabilities of the elections made under Section
1614-106.5.
17    On or before October 1, 2019, the Board shall recalculate
18and recertify to the Governor and the General Assembly the
19amount of the required State contribution to the System for
20State fiscal year 2020, taking into account the reduction
21specified under item (3) of subsection (e) of Section 14-131.
22(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2397-694, eff. 6-18-12.)
 
24    (40 ILCS 5/14-147.5 new)
25    Sec. 14-147.5. Accelerated pension benefit payment.

 

 

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1    (a) As used in this Section:
2    "Eligible person" means a person who:
3        (1) has terminated service;
4        (2) has accrued sufficient service credit to be
5    eligible to receive a retirement annuity under this
6    Article;
7        (3) has not received any retirement annuity under this
8    Article; and
9        (4) does not have a QILDRO in effect against him or her
10    under this Article.
11    "Pension benefit" means the benefits under this Article, or
12Article 1 as it relates to those benefits, including any
13anticipated annual increases, that an eligible person is
14entitled to upon attainment of the applicable retirement age.
15"Pension benefit" also includes applicable survivor's or
16disability benefits.
17    (b) Before January 1, 2019, and annually thereafter, the
18System shall calculate, using actuarial tables and other
19assumptions adopted by the Board, the net present value of
20pension benefits for each eligible person and shall offer each
21eligible person the opportunity to irrevocably elect to receive
22an amount determined by the System to be equal to 70% of the
23net present value of his or her pension benefits in lieu of
24receiving any pension benefit. The offer shall specify the
25dollar amount that the eligible person will receive if he or
26she so elects and shall expire when a subsequent offer is made

 

 

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1to an eligible person or when the System determines that 10% of
2eligible persons in that year have made the election under this
3subsection, whichever occurs first. The System shall make a
4good faith effort to contact every eligible person to notify
5him or her of the election and of the amount of the accelerated
6pension benefit payment.
7    Until the System determines that 10% of eligible persons in
8that year have made the election under this subsection, an
9eligible person may irrevocably elect to receive an accelerated
10pension benefit payment in the amount that the System offers
11under this subsection in lieu of receiving any pension benefit.
12A person who elects to receive an accelerated pension benefit
13payment under this Section may not elect to proceed under the
14Retirement Systems Reciprocal Act with respect to service under
15this Article.
16    (c) A person's credits and creditable service under this
17Article shall be terminated upon the person's receipt of an
18accelerated pension benefit payment under this Section, and no
19other benefit shall be paid under this Article based on those
20terminated credits and creditable service, including any
21retirement, survivor, or other benefit; except that to the
22extent that participation, benefits, or premiums under the
23State Employees Group Insurance Act of 1971 are based on the
24amount of service credit, the terminated service credit shall
25be used for that purpose.
26    (d) If a person who has received an accelerated pension

 

 

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1benefit payment under this Section returns to active service
2under this Article, then:
3        (1) Any benefits under the System earned as a result of
4    that return to active service shall be based solely on the
5    person's credits and creditable service arising from the
6    return to active service.
7        (2) The accelerated pension benefit payment may not be
8    repaid to the System, and the terminated credits and
9    creditable service may not under any circumstances be
10    reinstated.
11    (e) As a condition of receiving an accelerated pension
12benefit payment, an eligible person must have another
13retirement plan or account qualified under the Internal Revenue
14Code of 1986, as amended, for the accelerated pension benefit
15payment to be rolled into. The accelerated pension benefit
16payment under this Section may be subject to withholding or
17payment of applicable taxes, but to the extent permitted by
18federal law, a person who receives an accelerated pension
19benefit payment under this Section must direct the System to
20pay all of that payment as a rollover into another retirement
21plan or account qualified under the Internal Revenue Code of
221986, as amended.
23    (f) Before January 1, 2020 and every January 1 thereafter,
24the Board shall certify to the Illinois Finance Authority and
25the General Assembly the amount by which the total amount of
26accelerated pension benefit payments made under this Section

 

 

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1exceed the amount appropriated to the System for the purpose of
2making those payments.
3    (g) The Board shall adopt any rules necessary to implement
4this Section.
5    (h) No provision of this Section shall be interpreted in a
6way that would cause the applicable System to cease to be a
7qualified plan under the Internal Revenue Code of 1986.
8    (i) Notwithstanding any other provision of this Section, in
9no case shall the total amount of accelerated pension benefit
10payments paid under this Section, Section 15-185.5, and Section
1116-190.5 cause the Illinois Finance Authority to issue more
12than the $250,000,000 of State Pension Obligation Acceleration
13Bonds authorized in subsection (c-5) of Section 801-40 of the
14Illinois Finance Authority Act.
 
15    (40 ILCS 5/14-152.1)
16    (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18    Sec. 14-152.1. Application and expiration of new benefit
19increases.
20    (a) As used in this Section, "new benefit increase" means
21an increase in the amount of any benefit provided under this
22Article, or an expansion of the conditions of eligibility for
23any benefit under this Article, that results from an amendment
24to this Code that takes effect after June 1, 2005 (the
25effective date of Public Act 94-4). "New benefit increase",

 

 

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1however, does not include any benefit increase resulting from
2the changes made to this Article by Public Act 96-37 or by this
3amendatory Act of the 100th General Assembly this amendatory
4Act of the 96th General Assembly.
5    (b) Notwithstanding any other provision of this Code or any
6subsequent amendment to this Code, every new benefit increase
7is subject to this Section and shall be deemed to be granted
8only in conformance with and contingent upon compliance with
9the provisions of this Section.
10    (c) The Public Act enacting a new benefit increase must
11identify and provide for payment to the System of additional
12funding at least sufficient to fund the resulting annual
13increase in cost to the System as it accrues.
14    Every new benefit increase is contingent upon the General
15Assembly providing the additional funding required under this
16subsection. The Commission on Government Forecasting and
17Accountability shall analyze whether adequate additional
18funding has been provided for the new benefit increase and
19shall report its analysis to the Public Pension Division of the
20Department of Insurance Financial and Professional Regulation.
21A new benefit increase created by a Public Act that does not
22include the additional funding required under this subsection
23is null and void. If the Public Pension Division determines
24that the additional funding provided for a new benefit increase
25under this subsection is or has become inadequate, it may so
26certify to the Governor and the State Comptroller and, in the

 

 

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1absence of corrective action by the General Assembly, the new
2benefit increase shall expire at the end of the fiscal year in
3which the certification is made.
4    (d) Every new benefit increase shall expire 5 years after
5its effective date or on such earlier date as may be specified
6in the language enacting the new benefit increase or provided
7under subsection (c). This does not prevent the General
8Assembly from extending or re-creating a new benefit increase
9by law.
10    (e) Except as otherwise provided in the language creating
11the new benefit increase, a new benefit increase that expires
12under this Section continues to apply to persons who applied
13and qualified for the affected benefit while the new benefit
14increase was in effect and to the affected beneficiaries and
15alternate payees of such persons, but does not apply to any
16other person, including without limitation a person who
17continues in service after the expiration date and did not
18apply and qualify for the affected benefit while the new
19benefit increase was in effect.
20(Source: P.A. 96-37, eff. 7-13-09.)
 
21    (40 ILCS 5/14-155.1 new)
22    Sec. 14-155.1. Defined contribution plan.
23    (a) By July 1, 2019, the System shall prepare and implement
24a voluntary defined contribution plan for up to 5% of eligible
25active Tier 1 employees. The System shall determine the 5% cap

 

 

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1by the number of active Tier 1 employees on the effective date
2of this Section. The defined contribution plan developed under
3this Section shall be a plan that aggregates employer and
4employee contributions in individual participant accounts
5which, after meeting any other requirements, are used for
6payouts after retirement in accordance with this Section and
7any other applicable laws.
8    As used in this Section, "defined benefit plan" means the
9retirement plan available under this Article to Tier 1
10employees who have not made the election authorized under this
11Section.
12        (1) Under the defined contribution plan, an active Tier
13    1 employee of this System could elect to cease accruing
14    benefits in the defined benefit plan under this Article and
15    begin accruing benefits for future service in the defined
16    contribution plan. Service credit under the defined
17    contribution plan may be used for determining retirement
18    eligibility under the defined benefit plan.
19        (2) Participants in the defined contribution plan
20    shall pay employee contributions at the same rate as Tier 1
21    employees in this System who do not participate in the
22    defined contribution plan.
23        (3) State contributions shall be paid into the accounts
24    of all participants in the defined contribution plan at a
25    uniform rate, expressed as a percentage of compensation and
26    determined for each year. This rate shall be no higher than

 

 

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1    the employer's normal cost for Tier 1 employees in the
2    defined benefit plan for that year, as determined by the
3    System and expressed as a percentage of compensation, and
4    shall be no lower than 3% of compensation. The State shall
5    adjust this rate annually.
6        (4) The defined contribution plan shall require 5 years
7    of participation in the defined contribution plan before
8    vesting in State contributions. If the participant fails to
9    vest in them, the State contributions, and the earnings
10    thereon, shall be forfeited.
11        (5) The defined contribution plan may provide for
12    participants in the plan to be eligible for the defined
13    disability benefits available to other participants under
14    this Article. If it does, the System shall reduce the
15    employee contributions credited to the member's defined
16    contribution plan account by an amount determined by the
17    System to cover the cost of offering such benefits.
18        (6) The defined contribution plan shall provide a
19    variety of options for investments. These options shall
20    include investments handled by the Illinois State Board of
21    Investment as well as private sector investment options.
22        (7) The defined contribution plan shall provide a
23    variety of options for payouts to retirees and their
24    survivors.
25        (8) To the extent authorized under federal law and as
26    authorized by the System, the plan shall allow former

 

 

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1    participants in the plan to transfer or roll over employee
2    and vested State contributions, and the earnings thereon,
3    into other qualified retirement plans.
4        (9) The System shall reduce the employee contributions
5    credited to the member's defined contribution plan account
6    by an amount determined by the System to cover the cost of
7    offering these benefits and any applicable administrative
8    fees.
9    (b) Only persons who are active Tier 1 employees of the
10System on the effective date of this Section are eligible to
11participate in the defined contribution plan. Participation in
12the defined contribution plan shall be limited to the first 5%
13of eligible persons who elect to participate. The election to
14participate in the defined contribution plan is voluntary and
15irrevocable.
16    (c) An eligible Tier 1 employee may irrevocably elect to
17participate in the defined contribution plan by filing with the
18System a written application to participate that is received by
19the System prior to its determination that 5% of eligible
20persons have elected to participate in the defined contribution
21plan.
22    When the System first determines that 5% of eligible
23persons have elected to participate in the defined contribution
24plan, the System shall provide notice to previously eligible
25employees that the plan is no longer available and shall cease
26accepting applications to participate.

 

 

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1    (d) The System shall make a good faith effort to contact
2each active Tier 1 employee who is eligible to participate in
3the defined contribution plan. The System shall mail
4information describing the option to join the defined
5contribution plan to each of these employees to his or her last
6known address on file with the System. If the employee is not
7responsive to other means of contact, it is sufficient for the
8System to publish the details of the option on its website.
9    Upon request for further information describing the
10option, the System shall provide employees with information
11from the System before exercising the option to join the plan,
12including information on the impact to their vested benefits or
13non-vested service. The individual consultation shall include
14projections of the member's defined benefits at retirement or
15earlier termination of service and the value of the member's
16account at retirement or earlier termination of service. The
17System shall not provide advice or counseling with respect to
18whether the employee should exercise the option. The System
19shall inform Tier 1 employees who are eligible to participate
20in the defined contribution plan that they may also wish to
21obtain information and counsel relating to their option from
22any other available source, including, but not limited to,
23labor organizations, private counsel, and financial advisors.
24    (e) In no event shall the System, its staff, its authorized
25representatives, or the Board be liable for any information
26given to an employee under this Section. The System may

 

 

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1coordinate with the Illinois Department of Central Management
2Services and other retirement systems administering a defined
3contribution plan in accordance with this amendatory Act of the
4100th General Assembly to provide information concerning the
5impact of the option set forth in this Section.
6    (f) Notwithstanding any other provision of this Section, no
7person shall begin participating in the defined contribution
8plan until it has attained qualified plan status and received
9all necessary approvals from the U.S. Internal Revenue Service.
10    (g) The System shall report on its progress under this
11Section, including the available details of the defined
12contribution plan and the System's plans for informing eligible
13Tier 1 employees about the plan, to the Governor and the
14General Assembly on or before January 15, 2019.
15    (h) The Illinois State Board of Investment shall be the
16plan sponsor for the defined contribution plan established
17under this Section.
18    (i) The intent of this amendatory Act of the 100th General
19Assembly is to ensure that the State's normal cost of
20participation in the defined contribution plan is similar, and
21if possible equal, to the State's normal cost of participation
22in the defined benefit plan, unless a lower State's normal cost
23is necessary to ensure cost neutrality.
 
24    (40 ILCS 5/14-155.2 new)
25    Sec. 14-155.2. Defined contribution plan for certain

 

 

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1covered employees.
2    (a) As used in this Section:
3    "Defined benefit plan" means the retirement plan available
4under this Article and Section 1-160 to eligible covered
5employees who do not make the election authorized under this
6Section.
7    "Eligible covered employee" means a covered employee who
8first becomes a participant under this Article on or after 6
9months after the effective date of this amendatory Act of the
10100th General Assembly.
11    (b) In lieu of the defined benefit plan, an eligible
12covered employee may irrevocably elect to participate in the
13defined contribution plan under this Section. The election to
14participate in the defined contribution plan must be made
15within 30 days after becoming an eligible covered employee. The
16election to participate in the defined contribution plan under
17this Section is voluntary and irrevocable.
18    (c) No later than 5 months after the effective date of this
19amendatory Act of the 100th General Assembly, the System shall
20prepare and implement a voluntary defined contribution plan for
21eligible covered employees. The defined contribution plan
22developed under this Section shall be a plan that aggregates
23employer and employee contributions in individual participant
24accounts which, after meeting any other requirements, are used
25for payouts after retirement in accordance with this Section
26and any other applicable laws.

 

 

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1        (1) A participant in the defined contribution plan
2    shall contribute a minimum of 3% of his or her compensation
3    to the defined contribution plan.
4        (2) For persons who participate in the defined
5    contribution plan for at least one year, employer
6    contributions shall be paid into the accounts of those
7    participants at a rate of 3% of compensation.
8        (3) Employer contributions shall vest when those
9    contributions are paid into a participant's account.
10        (4) The defined contribution plan shall provide a
11    variety of options for investments. These options shall
12    include investments handled by the Illinois State Board of
13    Investment as well as private sector investment options.
14        (5) The defined contribution plan shall provide a
15    variety of options for payouts to retirees and their
16    survivors.
17        (6) To the extent authorized under federal law and as
18    authorized by the affected pension fund, the defined
19    contribution plan shall allow former participants in the
20    plan to transfer or roll over employee and employer
21    contributions, and the earnings thereon, into other
22    qualified retirement plans.
23        (7) The System shall reduce the employee contributions
24    credited to the participant's defined contribution plan
25    account by an amount determined by the System to cover the
26    cost of offering the benefits under this Section and any

 

 

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1    applicable administrative fees.
 
2    (40 ILCS 5/14-156.1 new)
3    Sec. 14-156.1. Defined contribution plan; termination. If
4the defined contribution plan under Section 14-155.1 is
5terminated or becomes inoperative pursuant to law, then each
6participant in the plan shall automatically be deemed to have
7been a contributing Tier 1 employee in the System's defined
8benefit plan during the time in which he or she participated in
9the defined contribution plan, and for that purpose the System
10shall be entitled to recover the amounts in the participant's
11defined contribution accounts.
 
12    (40 ILCS 5/15-108.1)
13    Sec. 15-108.1. Tier 1 member; Tier 1 employee.
14    "Tier 1 member": A participant or an annuitant of a
15retirement annuity under this Article, other than a participant
16in the self-managed plan under Section 15-158.2, who first
17became a participant or member before January 1, 2011 under any
18reciprocal retirement system or pension fund established under
19this Code, other than a retirement system or pension fund
20established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
21"Tier 1 member" includes a person who first became a
22participant under this System before January 1, 2011 and who
23accepts a refund and is subsequently reemployed by an employer
24on or after January 1, 2011.

 

 

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1    "Tier 1 employee": A Tier 1 member who is a participating
2employee, unless he or she is a disability benefit recipient
3under Section 15-150. However, for the purposes of the election
4under Section 15-132.9, "Tier 1 employee" does not include an
5individual who has made an irrevocable election on or before
6June 1, 2017 to retire from service pursuant to the terms of an
7employment contract or a collective bargaining agreement in
8effect on June 1, 2017, excluding any extension, amendment, or
9renewal of that agreement on or after that date, and has
10notified the System of that election.
11(Source: P.A. 98-92, eff. 7-16-13.)
 
12    (40 ILCS 5/15-108.2)
13    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
14first becomes a participant under this Article on or after
15January 1, 2011 and before 6 months after the effective date of
16this amendatory Act of the 100th General Assembly, other than a
17person in the self-managed plan established under Section
1815-158.2 or a person who makes the election under subsection
19(c) of Section 1-161, unless the person is otherwise a Tier 1
20member. The changes made to this Section by this amendatory Act
21of the 98th General Assembly are a correction of existing law
22and are intended to be retroactive to the effective date of
23Public Act 96-889, notwithstanding the provisions of Section
241-103.1 of this Code.
25(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 

 

 

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1    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
2    Sec. 15-111. Earnings.
3    (a) "Earnings": Subject to Section 15-111.5, an amount paid
4for personal services equal to the sum of the basic
5compensation plus extra compensation for summer teaching,
6overtime or other extra service. For periods for which an
7employee receives service credit under subsection (c) of
8Section 15-113.1 or Section 15-113.2, earnings are equal to the
9basic compensation on which contributions are paid by the
10employee during such periods. Compensation for employment
11which is irregular, intermittent and temporary shall not be
12considered earnings, unless the participant is also receiving
13earnings from the employer as an employee under Section 15-107.
14    With respect to transition pay paid by the University of
15Illinois to a person who was a participating employee employed
16in the fire department of the University of Illinois's
17Champaign-Urbana campus immediately prior to the elimination
18of that fire department:
19        (1) "Earnings" includes transition pay paid to the
20    employee on or after the effective date of this amendatory
21    Act of the 91st General Assembly.
22        (2) "Earnings" includes transition pay paid to the
23    employee before the effective date of this amendatory Act
24    of the 91st General Assembly only if (i) employee
25    contributions under Section 15-157 have been withheld from

 

 

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1    that transition pay or (ii) the employee pays to the System
2    before January 1, 2001 an amount representing employee
3    contributions under Section 15-157 on that transition pay.
4    Employee contributions under item (ii) may be paid in a
5    lump sum, by withholding from additional transition pay
6    accruing before January 1, 2001, or in any other manner
7    approved by the System. Upon payment of the employee
8    contributions on transition pay, the corresponding
9    employer contributions become an obligation of the State.
10    (a-5) Notwithstanding any other provision of this Section,
11"earnings" does not include any future increase in income that
12is offered for service by an employer to a Tier 1 employee
13under this Article pursuant to the condition set forth in
14subsection (c) of Section 15-132.9 and accepted under that
15condition by a Tier 1 employee who has made the election under
16paragraph (2) of subsection (a) of Section 15-132.9.
17    (a-10) Notwithstanding any other provision of this
18Section, "earnings" does not include any consideration payment
19made to a Tier 1 employee.
20    (b) For a Tier 2 member, the annual earnings shall not
21exceed $106,800; however, that amount shall annually
22thereafter be increased by the lesser of (i) 3% of that amount,
23including all previous adjustments, or (ii) one half the annual
24unadjusted percentage increase (but not less than zero) in the
25consumer price index-u for the 12 months ending with the
26September preceding each November 1, including all previous

 

 

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1adjustments.
2    For the purposes of this Section, "consumer price index u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the boards of the retirement
10systems and pension funds by November 1 of each year.
11    (c) With each submission of payroll information in the
12manner prescribed by the System, the employer shall certify
13that the payroll information is correct and complies with all
14applicable State and federal laws.
15(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
 
16    (40 ILCS 5/15-112.1 new)
17    Sec. 15-112.1. Future increase in income. "Future increase
18in income" means an increase to a Tier 1 employee's base pay
19that is offered by an employer to the Tier 1 employee for
20service under this Article after June 30, 2018 that qualifies
21as "earnings", as defined in Section 15-111, or would qualify
22as "earnings" but for the fact that it was offered to and
23accepted by the Tier 1 employee under the condition set forth
24in subsection (c) of Section 15-132.9. The term "future
25increase in income" includes an increase to a Tier 1 employee's

 

 

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1base pay that is paid to the Tier 1 employee pursuant to an
2extension, amendment, or renewal of any such employment
3contract or collective bargaining agreement after the
4effective date of this Section.
 
5    (40 ILCS 5/15-112.2 new)
6    Sec. 15-112.2. Base pay. As used in Section 15-112.1 of
7this Code, "base pay" means the greater of either (i) the Tier
81 employee's annualized rate of earnings as of June 30, 2018,
9or (ii) the Tier 1 employee's annualized rate of earnings
10immediately preceding the expiration, renewal, or amendment of
11an employment contract or collective bargaining agreement in
12effect on the effective date of this Section. For a person
13returning to participating employee status as a Tier 1 employee
14after June 30, 2018, however, "base pay" means the employee's
15annualized rate of earnings as of the employee's last date of
16service prior to July 1, 2018. The System shall calculate the
17base pay of each Tier 1 employee pursuant to this Section.
 
18    (40 ILCS 5/15-132.9 new)
19    Sec. 15-132.9. Election by Tier 1 employees.
20    (a) Each Tier 1 employee shall make an irrevocable election
21either:
22        (1) to agree to delay his or her eligibility for
23    automatic annual increases in retirement annuity as
24    provided in subsection (d-1) of Section 15-136 and to have

 

 

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1    the amount of the automatic annual increases in his or her
2    retirement annuity and survivor annuity that are otherwise
3    provided for in this Article calculated, instead, as
4    provided in subsection (d-1) of Section 15-136; or
5        (2) to not agree to the provisions of paragraph (1) of
6    this subsection.
7    The election required under this subsection (a) shall be
8made by each Tier 1 employee no earlier than January 1, 2018
9and no later than March 31, 2018, except that:
10        (i) a person who becomes a Tier 1 employee under this
11    Article on or after January 1, 2018 must make the election
12    under this subsection (a) within 60 days after becoming a
13    Tier 1 employee;
14        (ii) a person who returns to participating employee
15    status as a Tier 1 employee under this Article on or after
16    January 1, 2018 and has not yet made an election under this
17    Section must make the election under this subsection (a)
18    within 60 days after returning to participating employee
19    status as a Tier 1 employee; and
20        (iii) a person who returns to participating employee
21    status as a Tier 1 employee under this Article but who has
22    not made an election under Section 15-134.5 must make the
23    election under this subsection (a) at the same time as the
24    election under Section 15-134.5 and within the timeframes
25    required by that Section.
26    If a Tier 1 employee fails for any reason to make a

 

 

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1required election under this subsection within the time
2specified, then the employee shall be deemed to have made the
3election under paragraph (2) of this subsection.
4    (a-5) If this Section is enjoined or stayed by an Illinois
5court or a court of competent jurisdiction pending the entry of
6a final and unappealable decision, and this Section is
7determined to be constitutional or otherwise valid by a final
8unappealable decision of an Illinois court or a court of
9competent jurisdiction, then the election procedure set forth
10in subsection (a) of this Section shall commence on the 180th
11calendar day after the date of the issuance of the final
12unappealable decision and shall conclude at the end of the
13270th calendar day after that date.
14    (a-10) All elections under subsection (a) that are made or
15deemed to be made before July 1, 2018 shall take effect on July
161, 2018. Elections that are made or deemed to be made on or
17after July 1, 2018 shall take effect on the first day of the
18month following the month in which the election is made or
19deemed to be made.
20    (b) As adequate and legal consideration provided under this
21amendatory Act of the 100th General Assembly for making an
22election under paragraph (1) of subsection (a) of this Section,
23the employer shall be expressly and irrevocably prohibited from
24offering any future increases in income to a Tier 1 employee
25who has made an election under paragraph (1) of subsection (a)
26of this Section on the condition of not constituting earnings

 

 

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1under Section 15-111.
2    As adequate and legal consideration provided under this
3amendatory Act of the 100th General Assembly for making an
4election under paragraph (1) of subsection (a) of this Section,
5each Tier 1 employee who has made an election under paragraph
6(1) of subsection (a) of this Section shall receive a
7consideration payment equal to 10% of the contributions made by
8or on behalf of the employee under Section 15-157 before the
9effective date of that election. The State Comptroller shall
10pay the consideration payment to the Tier 1 employee out of
11funds appropriated for that purpose under Section 1.9 of the
12State Pension Funds Continuing Appropriation Act. The System
13shall calculate the amount of each consideration payment and,
14by July 1, 2018, shall certify to the State Comptroller the
15amount of the consideration payment, together with the name,
16address, and any other available payment information of the
17Tier 1 employee as found in the records of the System. The
18System shall make additional calculations and certifications
19of consideration payments to the State Comptroller as the
20System deems necessary.
21    (c) A Tier 1 employee who makes the election under
22paragraph (2) of subsection (a) of this Section shall not be
23subject to paragraph (1) of subsection (a) of this Section.
24However, each future increase in income offered by an employer
25under this Article to a Tier 1 employee who has made the
26election under paragraph (2) of subsection (a) of this Section

 

 

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1shall be offered by the employer expressly and irrevocably on
2the condition of not constituting earnings under Section 15-111
3and that the Tier 1 employee's acceptance of the offered future
4increase in income shall constitute his or her agreement to
5that condition.
6    (d) The System shall make a good faith effort to contact
7each Tier 1 employee subject to this Section. The System shall
8mail information describing the required election to each Tier
91 employee by United States Postal Service mail to his or her
10last known address on file with the System. If the Tier 1
11employee is not responsive to other means of contact, it is
12sufficient for the System to publish the details of any
13required elections on its website or to publish those details
14in a regularly published newsletter or other existing public
15forum.
16    Tier 1 employees who are subject to this Section shall be
17provided with an election packet containing information
18regarding their options, as well as the forms necessary to make
19the required election. Upon request, the System shall offer
20Tier 1 employees an opportunity to receive information from the
21System before making the required election. The information may
22consist of video materials, benefit estimators, group
23presentations, individual consultation with a member or
24authorized representative of the System in person or by
25telephone or other electronic means, or any combination of
26these methods. The System shall not provide advice or

 

 

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1counseling with respect to which election a Tier 1 employee
2should make or specific to the legal or tax circumstances of or
3consequences to the Tier 1 employee.
4    The System shall inform Tier 1 employees in the election
5packet required under this subsection that the Tier 1 employee
6may also wish to obtain information and counsel relating to the
7election required under this Section from any other available
8source, including, but not limited to, labor organizations and
9private counsel.
10    In no event shall the System, its staff, or the Board be
11held liable for any information given to a member regarding the
12elections under this Section. The System shall coordinate with
13the Illinois Department of Central Management Services and each
14other retirement system administering an election in
15accordance with this amendatory Act of the 100th General
16Assembly to provide information concerning the impact of the
17election set forth in this Section.
18    (e) Notwithstanding any other provision of law, an employer
19under this Article is required to offer each future increase in
20income expressly and irrevocably on the condition of not
21constituting "earnings" under Section 15-111 to any Tier 1
22employee who has made an election under paragraph (2) of
23subsection (a) of this Section. The offer shall also provide
24that the Tier 1 employee's acceptance of the offered future
25increase in income shall constitute his or her agreement to the
26condition set forth in this subsection.

 

 

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1    For purposes of legislative intent, the condition set forth
2in this subsection shall be construed in a manner that ensures
3that the condition is not violated or circumvented through any
4contrivance of any kind.
5    (f) A member's election under this Section is not a
6prohibited election under subdivision (j)(1) of Section 1-119
7of this Code.
8    (g) No provision of this Section shall be interpreted in a
9way that would cause the System to cease to be a qualified plan
10under Section 401(a) of the Internal Revenue Code of 1986.
11    (h) If an election created by this amendatory Act in any
12other Article of this Code or any change deriving from that
13election is determined to be unconstitutional or otherwise
14invalid by a final unappealable decision of an Illinois court
15or a court of competent jurisdiction, the invalidity of that
16provision shall not in any way affect the validity of this
17Section or the changes deriving from the election required
18under this Section.
 
19    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 15-136. Retirement annuities - Amount. The provisions
23of this Section 15-136 apply only to those participants who are
24participating in the traditional benefit package or the
25portable benefit package and do not apply to participants who

 

 

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1are participating in the self-managed plan.
2    (a) The amount of a participant's retirement annuity,
3expressed in the form of a single-life annuity, shall be
4determined by whichever of the following rules is applicable
5and provides the largest annuity:
6    Rule 1: The retirement annuity shall be 1.67% of final rate
7of earnings for each of the first 10 years of service, 1.90%
8for each of the next 10 years of service, 2.10% for each year
9of service in excess of 20 but not exceeding 30, and 2.30% for
10each year in excess of 30; or for persons who retire on or
11after January 1, 1998, 2.2% of the final rate of earnings for
12each year of service.
13    Rule 2: The retirement annuity shall be the sum of the
14following, determined from amounts credited to the participant
15in accordance with the actuarial tables and the effective rate
16of interest in effect at the time the retirement annuity
17begins:
18        (i) the normal annuity which can be provided on an
19    actuarially equivalent basis, by the accumulated normal
20    contributions as of the date the annuity begins;
21        (ii) an annuity from employer contributions of an
22    amount equal to that which can be provided on an
23    actuarially equivalent basis from the accumulated normal
24    contributions made by the participant under Section
25    15-113.6 and Section 15-113.7 plus 1.4 times all other
26    accumulated normal contributions made by the participant;

 

 

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1    and
2        (iii) the annuity that can be provided on an
3    actuarially equivalent basis from the entire contribution
4    made by the participant under Section 15-113.3.
5    With respect to a police officer or firefighter who retires
6on or after August 14, 1998, the accumulated normal
7contributions taken into account under clauses (i) and (ii) of
8this Rule 2 shall include the additional normal contributions
9made by the police officer or firefighter under Section
1015-157(a).
11    The amount of a retirement annuity calculated under this
12Rule 2 shall be computed solely on the basis of the
13participant's accumulated normal contributions, as specified
14in this Rule and defined in Section 15-116. Neither an employee
15or employer contribution for early retirement under Section
1615-136.2 nor any other employer contribution shall be used in
17the calculation of the amount of a retirement annuity under
18this Rule 2.
19    This amendatory Act of the 91st General Assembly is a
20clarification of existing law and applies to every participant
21and annuitant without regard to whether status as an employee
22terminates before the effective date of this amendatory Act.
23    This Rule 2 does not apply to a person who first becomes an
24employee under this Article on or after July 1, 2005.
25    Rule 3: The retirement annuity of a participant who is
26employed at least one-half time during the period on which his

 

 

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1or her final rate of earnings is based, shall be equal to the
2participant's years of service not to exceed 30, multiplied by
3(1) $96 if the participant's final rate of earnings is less
4than $3,500, (2) $108 if the final rate of earnings is at least
5$3,500 but less than $4,500, (3) $120 if the final rate of
6earnings is at least $4,500 but less than $5,500, (4) $132 if
7the final rate of earnings is at least $5,500 but less than
8$6,500, (5) $144 if the final rate of earnings is at least
9$6,500 but less than $7,500, (6) $156 if the final rate of
10earnings is at least $7,500 but less than $8,500, (7) $168 if
11the final rate of earnings is at least $8,500 but less than
12$9,500, and (8) $180 if the final rate of earnings is $9,500 or
13more, except that the annuity for those persons having made an
14election under Section 15-154(a-1) shall be calculated and
15payable under the portable retirement benefit program pursuant
16to the provisions of Section 15-136.4.
17    Rule 4: A participant who is at least age 50 and has 25 or
18more years of service as a police officer or firefighter, and a
19participant who is age 55 or over and has at least 20 but less
20than 25 years of service as a police officer or firefighter,
21shall be entitled to a retirement annuity of 2 1/4% of the
22final rate of earnings for each of the first 10 years of
23service as a police officer or firefighter, 2 1/2% for each of
24the next 10 years of service as a police officer or
25firefighter, and 2 3/4% for each year of service as a police
26officer or firefighter in excess of 20. The retirement annuity

 

 

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1for all other service shall be computed under Rule 1. A Tier 2
2member is eligible for a retirement annuity calculated under
3Rule 4 only if that Tier 2 member meets the service
4requirements for that benefit calculation as prescribed under
5this Rule 4 in addition to the applicable age requirement under
6subsection (a-5) of Section 15-135.
7    For purposes of this Rule 4, a participant's service as a
8firefighter shall also include the following:
9        (i) service that is performed while the person is an
10    employee under subsection (h) of Section 15-107; and
11        (ii) in the case of an individual who was a
12    participating employee employed in the fire department of
13    the University of Illinois's Champaign-Urbana campus
14    immediately prior to the elimination of that fire
15    department and who immediately after the elimination of
16    that fire department transferred to another job with the
17    University of Illinois, service performed as an employee of
18    the University of Illinois in a position other than police
19    officer or firefighter, from the date of that transfer
20    until the employee's next termination of service with the
21    University of Illinois.
22    (b) For a Tier 1 member, the retirement annuity provided
23under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
24month the participant is under age 60 at the time of
25retirement. However, this reduction shall not apply in the
26following cases:

 

 

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1        (1) For a disabled participant whose disability
2    benefits have been discontinued because he or she has
3    exhausted eligibility for disability benefits under clause
4    (6) of Section 15-152;
5        (2) For a participant who has at least the number of
6    years of service required to retire at any age under
7    subsection (a) of Section 15-135; or
8        (3) For that portion of a retirement annuity which has
9    been provided on account of service of the participant
10    during periods when he or she performed the duties of a
11    police officer or firefighter, if these duties were
12    performed for at least 5 years immediately preceding the
13    date the retirement annuity is to begin.
14    (b-5) The retirement annuity of a Tier 2 member who is
15retiring after attaining age 62 with at least 10 years of
16service credit shall be reduced by 1/2 of 1% for each full
17month that the member's age is under age 67.
18    (c) The maximum retirement annuity provided under Rules 1,
192, 4, and 5 shall be the lesser of (1) the annual limit of
20benefits as specified in Section 415 of the Internal Revenue
21Code of 1986, as such Section may be amended from time to time
22and as such benefit limits shall be adjusted by the
23Commissioner of Internal Revenue, and (2) 80% of final rate of
24earnings.
25    (d) Subject to the provisions of subsection (d-1), a A Tier
261 member whose status as an employee terminates after August

 

 

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114, 1969 shall receive automatic increases in his or her
2retirement annuity as follows:
3    Effective January 1 immediately following the date the
4retirement annuity begins, the annuitant shall receive an
5increase in his or her monthly retirement annuity of 0.125% of
6the monthly retirement annuity provided under Rule 1, Rule 2,
7Rule 3, or Rule 4 contained in this Section, multiplied by the
8number of full months which elapsed from the date the
9retirement annuity payments began to January 1, 1972, plus
100.1667% of such annuity, multiplied by the number of full
11months which elapsed from January 1, 1972, or the date the
12retirement annuity payments began, whichever is later, to
13January 1, 1978, plus 0.25% of such annuity multiplied by the
14number of full months which elapsed from January 1, 1978, or
15the date the retirement annuity payments began, whichever is
16later, to the effective date of the increase.
17    The annuitant shall receive an increase in his or her
18monthly retirement annuity on each January 1 thereafter during
19the annuitant's life of 3% of the monthly annuity provided
20under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
21Section. The change made under this subsection by P.A. 81-970
22is effective January 1, 1980 and applies to each annuitant
23whose status as an employee terminates before or after that
24date.
25    Beginning January 1, 1990, and except as provided in
26subsection (d-1), all automatic annual increases payable under

 

 

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1this Section shall be calculated as a percentage of the total
2annuity payable at the time of the increase, including all
3increases previously granted under this Article.
4    The change made in this subsection by P.A. 85-1008 is
5effective January 26, 1988, and is applicable without regard to
6whether status as an employee terminated before that date.
7    (d-1) Notwithstanding any other provision of this Article,
8for a Tier 1 employee who made the election under paragraph (1)
9of subsection (a) of Section 15-132.9:
10        (1) The initial increase in retirement annuity under
11    this Section shall occur on the January 1 occurring either
12    on or after the attainment of age 67 or the fifth
13    anniversary of the annuity start date, whichever is
14    earlier.
15        (2) The amount of each automatic annual increase in
16    retirement annuity or survivor annuity occurring on or
17    after the effective date of that election shall be
18    calculated as a percentage of the originally granted
19    retirement annuity or survivor annuity, equal to 3% or
20    one-half the annual unadjusted percentage increase (but
21    not less than zero) in the consumer price index-u for the
22    12 months ending with the September preceding each November
23    1, whichever is less. If the annual unadjusted percentage
24    change in the consumer price index-u for the 12 months
25    ending with the September preceding each November 1 is zero
26    or there is a decrease, then the annuity shall not be

 

 

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1    increased.
2    For the purposes of this Section, "consumer price index-u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the board of the retirement
10system by November 1 of each year.
11    (d-5) A retirement annuity of a Tier 2 member shall receive
12annual increases on the January 1 occurring either on or after
13the attainment of age 67 or the first anniversary of the
14annuity start date, whichever is later. Each annual increase
15shall be calculated at 3% or one half the annual unadjusted
16percentage increase (but not less than zero) in the consumer
17price index-u for the 12 months ending with the September
18preceding each November 1, whichever is less, of the originally
19granted retirement annuity. If the annual unadjusted
20percentage change in the consumer price index-u for the 12
21months ending with the September preceding each November 1 is
22zero or there is a decrease, then the annuity shall not be
23increased.
24    (e) If, on January 1, 1987, or the date the retirement
25annuity payment period begins, whichever is later, the sum of
26the retirement annuity provided under Rule 1 or Rule 2 of this

 

 

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1Section and the automatic annual increases provided under the
2preceding subsection or Section 15-136.1, amounts to less than
3the retirement annuity which would be provided by Rule 3, the
4retirement annuity shall be increased as of January 1, 1987, or
5the date the retirement annuity payment period begins,
6whichever is later, to the amount which would be provided by
7Rule 3 of this Section. Such increased amount shall be
8considered as the retirement annuity in determining benefits
9provided under other Sections of this Article. This paragraph
10applies without regard to whether status as an employee
11terminated before the effective date of this amendatory Act of
121987, provided that the annuitant was employed at least
13one-half time during the period on which the final rate of
14earnings was based.
15    (f) A participant is entitled to such additional annuity as
16may be provided on an actuarially equivalent basis, by any
17accumulated additional contributions to his or her credit.
18However, the additional contributions made by the participant
19toward the automatic increases in annuity provided under this
20Section shall not be taken into account in determining the
21amount of such additional annuity.
22    (g) If, (1) by law, a function of a governmental unit, as
23defined by Section 20-107 of this Code, is transferred in whole
24or in part to an employer, and (2) a participant transfers
25employment from such governmental unit to such employer within
266 months after the transfer of the function, and (3) the sum of

 

 

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1(A) the annuity payable to the participant under Rule 1, 2, or
23 of this Section (B) all proportional annuities payable to the
3participant by all other retirement systems covered by Article
420, and (C) the initial primary insurance amount to which the
5participant is entitled under the Social Security Act, is less
6than the retirement annuity which would have been payable if
7all of the participant's pension credits validated under
8Section 20-109 had been validated under this system, a
9supplemental annuity equal to the difference in such amounts
10shall be payable to the participant.
11    (h) On January 1, 1981, an annuitant who was receiving a
12retirement annuity on or before January 1, 1971 shall have his
13or her retirement annuity then being paid increased $1 per
14month for each year of creditable service. On January 1, 1982,
15an annuitant whose retirement annuity began on or before
16January 1, 1977, shall have his or her retirement annuity then
17being paid increased $1 per month for each year of creditable
18service.
19    (i) On January 1, 1987, any annuitant whose retirement
20annuity began on or before January 1, 1977, shall have the
21monthly retirement annuity increased by an amount equal to 8
22per year of creditable service times the number of years that
23have elapsed since the annuity began.
24(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
2598-92, eff. 7-16-13.)
 

 

 

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1    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
2    Sec. 15-155. Employer contributions.
3    (a) The State of Illinois shall make contributions by
4appropriations of amounts which, together with the other
5employer contributions from trust, federal, and other funds,
6employee contributions, income from investments, and other
7income of this System, will be sufficient to meet the cost of
8maintaining and administering the System on a 90% funded basis
9in accordance with actuarial recommendations.
10    The Board shall determine the amount of State contributions
11required for each fiscal year on the basis of the actuarial
12tables and other assumptions adopted by the Board and the
13recommendations of the actuary, using the formula in subsection
14(a-1).
15    (a-1) For State fiscal years 2018 through 2045 (except as
16otherwise provided for fiscal year 2019), the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of total payroll, including payroll that is
24not deemed pensionable, but excluding payroll attributable to
25participants in the defined contribution plan under Section
2615-200.1, over the years remaining to and including fiscal year

 

 

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12045 and shall be determined under the projected unit credit
2actuarial cost method.
3    For State fiscal year 2019:
4        (1) The initial calculation and certification shall be
5    based on the amount determined above.
6        (2) For purposes of the recertification due on or
7    before May 1, 2018, the recalculation of the required State
8    contribution for fiscal year 2019 shall take into account
9    the effect on the System's liabilities of the elections
10    made under Section 15-132.9.
11        (3) For purposes of the recertification due on or
12    before October 1, 2018, the total required State
13    contribution for fiscal year 2019 shall be reduced by the
14    amount of the consideration payments made to Tier 1
15    employees who made the election under paragraph (1) of
16    subsection (a) of Section 15-132.9.
17    Beginning in State fiscal year 2018, any increase or
18decrease in State contribution over the prior fiscal year due
19exclusively to changes in actuarial or investment assumptions
20adopted by the Board shall be included in the State
21contribution to the System, as a percentage of the applicable
22employee payroll, and shall be increased in equal annual
23increments so that by the State fiscal year occurring 5 years
24after the adoption of the actuarial or investment assumptions,
25the State is contributing at the rate otherwise required under
26this Section.

 

 

SB0016 Engrossed- 178 -LRB100 05169 KTG 15179 b

1    For State fiscal years 2012 through 2017 2045, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11    For State fiscal years 1996 through 2005, the State
12contribution to the System, as a percentage of the applicable
13employee payroll, shall be increased in equal annual increments
14so that by State fiscal year 2011, the State is contributing at
15the rate required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2006 is
18$166,641,900.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2007 is
21$252,064,100.
22    For each of State fiscal years 2008 through 2009, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25from the required State contribution for State fiscal year
262007, so that by State fiscal year 2011, the State is

 

 

SB0016 Engrossed- 179 -LRB100 05169 KTG 15179 b

1contributing at the rate otherwise required under this Section.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2010 is
4$702,514,000 and shall be made from the State Pensions Fund and
5proceeds of bonds sold in fiscal year 2010 pursuant to Section
67.2 of the General Obligation Bond Act, less (i) the pro rata
7share of bond sale expenses determined by the System's share of
8total bond proceeds, (ii) any amounts received from the General
9Revenue Fund in fiscal year 2010, (iii) any reduction in bond
10proceeds due to the issuance of discounted bonds, if
11applicable.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2011 is
14the amount recertified by the System on or before April 1, 2011
15pursuant to Section 15-165 and shall be made from the State
16Pensions Fund and proceeds of bonds sold in fiscal year 2011
17pursuant to Section 7.2 of the General Obligation Bond Act,
18less (i) the pro rata share of bond sale expenses determined by
19the System's share of total bond proceeds, (ii) any amounts
20received from the General Revenue Fund in fiscal year 2011, and
21(iii) any reduction in bond proceeds due to the issuance of
22discounted bonds, if applicable.
23    Beginning in State fiscal year 2046, the minimum State
24contribution for each fiscal year shall be the amount needed to
25maintain the total assets of the System at 90% of the total
26actuarial liabilities of the System.

 

 

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1    Amounts received by the System pursuant to Section 25 of
2the Budget Stabilization Act or Section 8.12 of the State
3Finance Act in any fiscal year do not reduce and do not
4constitute payment of any portion of the minimum State
5contribution required under this Article in that fiscal year.
6Such amounts shall not reduce, and shall not be included in the
7calculation of, the required State contributions under this
8Article in any future year until the System has reached a
9funding ratio of at least 90%. A reference in this Article to
10the "required State contribution" or any substantially similar
11term does not include or apply to any amounts payable to the
12System under Section 25 of the Budget Stabilization Act.
13    Notwithstanding any other provision of this Section, the
14required State contribution for State fiscal year 2005 and for
15fiscal year 2008 and each fiscal year thereafter, as calculated
16under this Section and certified under Section 15-165, shall
17not exceed an amount equal to (i) the amount of the required
18State contribution that would have been calculated under this
19Section for that fiscal year if the System had not received any
20payments under subsection (d) of Section 7.2 of the General
21Obligation Bond Act, minus (ii) the portion of the State's
22total debt service payments for that fiscal year on the bonds
23issued in fiscal year 2003 for the purposes of that Section
247.2, as determined and certified by the Comptroller, that is
25the same as the System's portion of the total moneys
26distributed under subsection (d) of Section 7.2 of the General

 

 

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1Obligation Bond Act. In determining this maximum for State
2fiscal years 2008 through 2010, however, the amount referred to
3in item (i) shall be increased, as a percentage of the
4applicable employee payroll, in equal increments calculated
5from the sum of the required State contribution for State
6fiscal year 2007 plus the applicable portion of the State's
7total debt service payments for fiscal year 2007 on the bonds
8issued in fiscal year 2003 for the purposes of Section 7.2 of
9the General Obligation Bond Act, so that, by State fiscal year
102011, the State is contributing at the rate otherwise required
11under this Section.
12     (a-2) For employees first hired on or after 6 months after
13the effective date of this amendatory Act of the 100th General
14Assembly who have elected the benefits under Section 1-161 of
15this Code, the employer shall annually contribute an amount,
16expressed as a percentage of payroll, equal to the defined
17benefit normal cost of the defined benefit plan, less the
18employee contribution, plus 2%. On an annual basis, the System
19shall certify to each employer the amount of unfunded liability
20accrued in the employer's account to be paid by the employer so
21that the System is 90% funded by the end of State fiscal year
222045. The contributions shall be divided equally over a
2312-month period and made monthly. The employer shall also
24contribute an amount equal to the employer defined
25contribution, as set on an individual employee basis, under
26paragraph (2) of subsection (k) of Section 1-161 during each

 

 

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1pay period. The System shall have the authority to adopt rules
2regarding implementation of employer contributions.
3    (b) If an employee is paid from trust or federal funds, the
4employer shall pay to the Board contributions from those funds
5which are sufficient to cover the accruing normal costs on
6behalf of the employee. However, universities having employees
7who are compensated out of local auxiliary funds, income funds,
8or service enterprise funds are not required to pay such
9contributions on behalf of those employees. The local auxiliary
10funds, income funds, and service enterprise funds of
11universities shall not be considered trust funds for the
12purpose of this Article, but funds of alumni associations,
13foundations, and athletic associations which are affiliated
14with the universities included as employers under this Article
15and other employers which do not receive State appropriations
16are considered to be trust funds for the purpose of this
17Article.
18    (b-1) The City of Urbana and the City of Champaign shall
19each make employer contributions to this System for their
20respective firefighter employees who participate in this
21System pursuant to subsection (h) of Section 15-107. The rate
22of contributions to be made by those municipalities shall be
23determined annually by the Board on the basis of the actuarial
24assumptions adopted by the Board and the recommendations of the
25actuary, and shall be expressed as a percentage of salary for
26each such employee. The Board shall certify the rate to the

 

 

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1affected municipalities as soon as may be practical. The
2employer contributions required under this subsection shall be
3remitted by the municipality to the System at the same time and
4in the same manner as employee contributions.
5    (c) Through State fiscal year 1995: The total employer
6contribution shall be apportioned among the various funds of
7the State and other employers, whether trust, federal, or other
8funds, in accordance with actuarial procedures approved by the
9Board. State of Illinois contributions for employers receiving
10State appropriations for personal services shall be payable
11from appropriations made to the employers or to the System. The
12contributions for Class I community colleges covering earnings
13other than those paid from trust and federal funds, shall be
14payable solely from appropriations to the Illinois Community
15College Board or the System for employer contributions.
16    (d) Beginning in State fiscal year 1996, the required State
17contributions to the System shall be appropriated directly to
18the System and shall be payable through vouchers issued in
19accordance with subsection (c) of Section 15-165, except as
20provided in subsection (g).
21    (e) The State Comptroller shall draw warrants payable to
22the System upon proper certification by the System or by the
23employer in accordance with the appropriation laws and this
24Code.
25    (f) Normal costs under this Section means liability for
26pensions and other benefits which accrues to the System because

 

 

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1of the credits earned for service rendered by the participants
2during the fiscal year and expenses of administering the
3System, but shall not include the principal of or any
4redemption premium or interest on any bonds issued by the Board
5or any expenses incurred or deposits required in connection
6therewith.
7    (g) For academic years beginning on or after June 1, 2005
8and before July 1, 2018, if If the amount of a participant's
9earnings for any academic year used to determine the final rate
10of earnings, determined on a full-time equivalent basis,
11exceeds the amount of his or her earnings with the same
12employer for the previous academic year, determined on a
13full-time equivalent basis, by more than 6%, the participant's
14employer shall pay to the System, in addition to all other
15payments required under this Section and in accordance with
16guidelines established by the System, the present value of the
17increase in benefits resulting from the portion of the increase
18in earnings that is in excess of 6%. This present value shall
19be computed by the System on the basis of the actuarial
20assumptions and tables used in the most recent actuarial
21valuation of the System that is available at the time of the
22computation. The System may require the employer to provide any
23pertinent information or documentation.
24    Whenever it determines that a payment is or may be required
25under this subsection (g), the System shall calculate the
26amount of the payment and bill the employer for that amount.

 

 

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1The bill shall specify the calculations used to determine the
2amount due. If the employer disputes the amount of the bill, it
3may, within 30 days after receipt of the bill, apply to the
4System in writing for a recalculation. The application must
5specify in detail the grounds of the dispute and, if the
6employer asserts that the calculation is subject to subsection
7(h) or (i) of this Section, must include an affidavit setting
8forth and attesting to all facts within the employer's
9knowledge that are pertinent to the applicability of subsection
10(h) or (i). Upon receiving a timely application for
11recalculation, the System shall review the application and, if
12appropriate, recalculate the amount due.
13    The employer contributions required under this subsection
14(g) may be paid in the form of a lump sum within 90 days after
15receipt of the bill. If the employer contributions are not paid
16within 90 days after receipt of the bill, then interest will be
17charged at a rate equal to the System's annual actuarially
18assumed rate of return on investment compounded annually from
19the 91st day after receipt of the bill. Payments must be
20concluded within 3 years after the employer's receipt of the
21bill.
22    When assessing payment for any amount due under this
23subsection (g), the System shall include earnings, to the
24extent not established by a participant under Section 15-113.11
25or 15-113.12, that would have been paid to the participant had
26the participant not taken (i) periods of voluntary or

 

 

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1involuntary furlough occurring on or after July 1, 2015 and on
2or before June 30, 2017 or (ii) periods of voluntary pay
3reduction in lieu of furlough occurring on or after July 1,
42015 and on or before June 30, 2017. Determining earnings that
5would have been paid to a participant had the participant not
6taken periods of voluntary or involuntary furlough or periods
7of voluntary pay reduction shall be the responsibility of the
8employer, and shall be reported in a manner prescribed by the
9System.
10    (g-1) For academic years beginning on or after July 1,
112018, if the amount of a participant's earnings for any
12academic year used to determine the final rate of earnings,
13determined on a full-time equivalent basis, exceeds the amount
14of his or her earnings with the same employer for the previous
15academic year, determined on a full-time equivalent basis, by
16more than the unadjusted percentage increase in the consumer
17price index-u for the calendar year immediately preceding the
18beginning of the academic year, published by the Public Pension
19Division of the Department of Insurance by November 1 of each
20year, then the participant's employer shall pay to the System,
21in addition to all other payments required under this Section
22and in accordance with guidelines established by the System,
23the present value of the increase in benefits resulting from
24the portion of the increase in earnings that is in excess of
25the unadjusted percentage increase in the consumer price
26index-u for the applicable calendar year. This present value

 

 

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1shall be computed by the System on the basis of the actuarial
2assumptions and tables used in the most recent actuarial
3valuation of the System that is available at the time of the
4computation. The System may require the employer to provide any
5pertinent information or documentation.
6    Whenever it determines that a payment is or may be required
7under this subsection (g-1), the System shall calculate the
8amount of the payment and bill the employer for that amount.
9The bill shall specify the calculations used to determine the
10amount due. If the employer disputes the amount of the bill, it
11may, within 30 days after receipt of the bill, apply to the
12System in writing for a recalculation. The application must
13specify in detail the grounds of the dispute and, if the
14employer asserts that the calculation is subject to subsection
15(i-1) of this Section, must include an affidavit setting forth
16and attesting to all facts within the employer's knowledge that
17are pertinent to the applicability of subsection (i-1). Upon
18receiving a timely application for recalculation, the System
19shall review the application and, if appropriate, recalculate
20the amount due.
21    The employer contributions required under this subsection
22(g-1) may be paid in the form of a lump sum within 90 days after
23receipt of the bill. If the employer contributions are not paid
24within 90 days after receipt of the bill, then interest shall
25be charged at a rate equal to the System's annual actuarially
26assumed rate of return on investment compounded annually from

 

 

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1the 91st day after receipt of the bill. Payments must be
2concluded within 3 years after the employer's receipt of the
3bill.
4    For the purposes of this Section, "consumer price index-u"
5means the index published by the Bureau of Labor Statistics of
6the United States Department of Labor that measures the average
7change in prices of goods and services purchased by all urban
8consumers, United States city average, all items, 1982-84 =
9100. The new amount resulting from each annual adjustment shall
10be determined by the Public Pension Division of the Department
11of Insurance and made available to the boards of the retirement
12systems and pension funds by November 1 of each year.
13    (h) This subsection (h) applies only to payments made or
14salary increases given on or after June 1, 2005 but before July
151, 2011. The changes made by Public Act 94-1057 shall not
16require the System to refund any payments received before July
1731, 2006 (the effective date of Public Act 94-1057).
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases paid to
20participants under contracts or collective bargaining
21agreements entered into, amended, or renewed before June 1,
222005.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to a
25participant at a time when the participant is 10 or more years
26from retirement eligibility under Section 15-135.

 

 

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1    When assessing payment for any amount due under subsection
2(g), the System shall exclude earnings increases resulting from
3overload work, including a contract for summer teaching, or
4overtime when the employer has certified to the System, and the
5System has approved the certification, that: (i) in the case of
6overloads (A) the overload work is for the sole purpose of
7academic instruction in excess of the standard number of
8instruction hours for a full-time employee occurring during the
9academic year that the overload is paid and (B) the earnings
10increases are equal to or less than the rate of pay for
11academic instruction computed using the participant's current
12salary rate and work schedule; and (ii) in the case of
13overtime, the overtime was necessary for the educational
14mission.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude any earnings increase resulting
17from (i) a promotion for which the employee moves from one
18classification to a higher classification under the State
19Universities Civil Service System, (ii) a promotion in academic
20rank for a tenured or tenure-track faculty position, or (iii) a
21promotion that the Illinois Community College Board has
22recommended in accordance with subsection (k) of this Section.
23These earnings increases shall be excluded only if the
24promotion is to a position that has existed and been filled by
25a member for no less than one complete academic year and the
26earnings increase as a result of the promotion is an increase

 

 

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1that results in an amount no greater than the average salary
2paid for other similar positions.
3    (i) When assessing payment for any amount due under
4subsection (g), the System shall exclude any salary increase
5described in subsection (h) of this Section given on or after
6July 1, 2011 but before July 1, 2014 under a contract or
7collective bargaining agreement entered into, amended, or
8renewed on or after June 1, 2005 but before July 1, 2011.
9Notwithstanding any other provision of this Section, any
10payments made or salary increases given after June 30, 2014
11shall be used in assessing payment for any amount due under
12subsection (g) of this Section.
13    (i-1) When assessing payment for any amount due under
14subsection (g-1), the System shall exclude salary increases
15paid to participants under contracts or collective bargaining
16agreements entered into, amended, or renewed before the
17effective date of this amendatory Act of the 100th General
18Assembly.
19    (j) The System shall prepare a report and file copies of
20the report with the Governor and the General Assembly by
21January 1, 2007 that contains all of the following information:
22        (1) The number of recalculations required by the
23    changes made to this Section by Public Act 94-1057 for each
24    employer.
25        (2) The dollar amount by which each employer's
26    contribution to the System was changed due to

 

 

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1    recalculations required by Public Act 94-1057.
2        (3) The total amount the System received from each
3    employer as a result of the changes made to this Section by
4    Public Act 94-4.
5        (4) The increase in the required State contribution
6    resulting from the changes made to this Section by Public
7    Act 94-1057.
8    (j-5) For academic years beginning on or after July 1,
92018, if the amount of a participant's earnings for any
10academic year, determined on a full-time equivalent basis,
11exceeds $140,000, the participant's employer shall pay to the
12System, in addition to all other payments required under this
13Section and in accordance with guidelines established by the
14System, the amount of the earnings that exceed $140,000
15multiplied by the level percentage of payroll used in that
16fiscal year, as determined by the System, to be sufficient to
17bring the total assets of the System up to 90% of the total
18actuarial liabilities of the System by the end of State fiscal
19year 2045. This amount shall be computed by the System on the
20basis of the actuarial assumptions and tables used in the most
21recent actuarial valuation of the System that is available at
22the time of the computation. The System may require the
23employer to provide any pertinent information or
24documentation.
25    Whenever it determines that a payment is or may be required
26under this subsection, the System shall calculate the amount of

 

 

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1the payment and bill the employer for that amount. The bill
2shall specify the calculations used to determine the amount
3due. If the employer disputes the amount of the bill, it may,
4within 30 days after receipt of the bill, apply to the System
5in writing for a recalculation. The application must specify in
6detail the grounds of the dispute. Upon receiving a timely
7application for recalculation, the System shall review the
8application and, if appropriate, recalculate the amount due.
9    The employer contributions required under this subsection
10may be paid in the form of a lump sum within 90 days after
11receipt of the bill. If the employer contributions are not paid
12within 90 days after receipt of the bill, then interest will be
13charged at a rate equal to the System's annual actuarially
14assumed rate of return on investment compounded annually from
15the 91st day after receipt of the bill. Payments must be
16concluded within 3 years after the employer's receipt of the
17bill.
18    (k) The Illinois Community College Board shall adopt rules
19for recommending lists of promotional positions submitted to
20the Board by community colleges and for reviewing the
21promotional lists on an annual basis. When recommending
22promotional lists, the Board shall consider the similarity of
23the positions submitted to those positions recognized for State
24universities by the State Universities Civil Service System.
25The Illinois Community College Board shall file a copy of its
26findings with the System. The System shall consider the

 

 

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1findings of the Illinois Community College Board when making
2determinations under this Section. The System shall not exclude
3any earnings increases resulting from a promotion when the
4promotion was not submitted by a community college. Nothing in
5this subsection (k) shall require any community college to
6submit any information to the Community College Board.
7    (l) For purposes of determining the required State
8contribution to the System, the value of the System's assets
9shall be equal to the actuarial value of the System's assets,
10which shall be calculated as follows:
11    As of June 30, 2008, the actuarial value of the System's
12assets shall be equal to the market value of the assets as of
13that date. In determining the actuarial value of the System's
14assets for fiscal years after June 30, 2008, any actuarial
15gains or losses from investment return incurred in a fiscal
16year shall be recognized in equal annual amounts over the
175-year period following that fiscal year.
18    (m) For purposes of determining the required State
19contribution to the system for a particular year, the actuarial
20value of assets shall be assumed to earn a rate of return equal
21to the system's actuarially assumed rate of return.
22(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
2399-897, eff. 1-1-17.)
 
24    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
25    Sec. 15-157. Employee Contributions.

 

 

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1    (a) Each participating employee shall make contributions
2towards the retirement benefits payable under the retirement
3program applicable to the employee from each payment of
4earnings applicable to employment under this system on and
5after the date of becoming a participant as follows: Prior to
6September 1, 1949, 3 1/2% of earnings; from September 1, 1949
7to August 31, 1955, 5%; from September 1, 1955 to August 31,
81969, 6%; from September 1, 1969, 6 1/2%. These contributions
9are to be considered as normal contributions for purposes of
10this Article.
11    Each participant who is a police officer or firefighter
12shall make normal contributions of 8% of each payment of
13earnings applicable to employment as a police officer or
14firefighter under this system on or after September 1, 1981,
15unless he or she files with the board within 60 days after the
16effective date of this amendatory Act of 1991 or 60 days after
17the board receives notice that he or she is employed as a
18police officer or firefighter, whichever is later, a written
19notice waiving the retirement formula provided by Rule 4 of
20Section 15-136. This waiver shall be irrevocable. If a
21participant had met the conditions set forth in Section
2215-132.1 prior to the effective date of this amendatory Act of
231991 but failed to make the additional normal contributions
24required by this paragraph, he or she may elect to pay the
25additional contributions plus compound interest at the
26effective rate. If such payment is received by the board, the

 

 

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1service shall be considered as police officer service in
2calculating the retirement annuity under Rule 4 of Section
315-136. While performing service described in clause (i) or
4(ii) of Rule 4 of Section 15-136, a participating employee
5shall be deemed to be employed as a firefighter for the purpose
6of determining the rate of employee contributions under this
7Section.
8    (b) Starting September 1, 1969, each participating
9employee shall make additional contributions of 1/2 of 1% of
10earnings to finance a portion of the cost of the annual
11increases in retirement annuity provided under Section 15-136,
12except that with respect to participants in the self-managed
13plan this additional contribution shall be used to finance the
14benefits obtained under that retirement program. Beginning
15July 1, 2018 or the effective date of the Tier 1 employee's
16election under paragraph (1) of subsection (a) of Section
1715-132.9, whichever is later, each Tier 1 employee who made the
18election under paragraph (1) of subsection (a) of Section
1915-132.9 is no longer required to make contributions under this
20subsection.
21    (c) Except as provided in subsection (c-5), in In addition
22to the amounts described in subsections (a) and (b) of this
23Section, each participating employee shall make contributions
24of 1% of earnings applicable under this system on and after
25August 1, 1959. The contributions made under this subsection
26(c) shall be considered as survivor's insurance contributions

 

 

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1for purposes of this Article if the employee is covered under
2the traditional benefit package, and such contributions shall
3be considered as additional contributions for purposes of this
4Article if the employee is participating in the self-managed
5plan or has elected to participate in the portable benefit
6package and has completed the applicable one-year waiting
7period. Contributions in excess of $80 during any fiscal year
8beginning before August 31, 1969 and in excess of $120 during
9any fiscal year thereafter until September 1, 1971 shall be
10considered as additional contributions for purposes of this
11Article.
12    (c-5) Beginning July 1, 2018 or the effective date of the
13Tier 1 employee's election under paragraph (1) of subsection
14(a) of Section 15-132.9, whichever is later, in lieu of the
15contributions otherwise required under subsection (c), each
16Tier 1 employee who made the election under paragraph (1) of
17subsection (a) of Section 15-132.9 shall make contributions of
180.7% of earnings applicable under this System and each Tier 1
19employee who is a police officer or firefighter who makes
20normal contributions of 8% of each payment of earnings
21applicable to employment as a police officer or firefighter
22under this System and who made the election under paragraph (1)
23of subsection (a) of Section 15-132.9 shall make contributions
24of 0.55% of earnings applicable under this System. The
25contributions made under this subsection (c-5) shall be
26considered as survivor's insurance contributions for purposes

 

 

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1of this Article and such contributions shall be considered as
2additional contributions for purposes of this Article if the
3employee has elected to participate in the portable benefit
4package and has completed the applicable one-year waiting
5period.
6    (d) If the board by board rule so permits and subject to
7such conditions and limitations as may be specified in its
8rules, a participant may make other additional contributions of
9such percentage of earnings or amounts as the participant shall
10elect in a written notice thereof received by the board.
11    (e) That fraction of a participant's total accumulated
12normal contributions, the numerator of which is equal to the
13number of years of service in excess of that which is required
14to qualify for the maximum retirement annuity, and the
15denominator of which is equal to the total service of the
16participant, shall be considered as accumulated additional
17contributions. The determination of the applicable maximum
18annuity and the adjustment in contributions required by this
19provision shall be made as of the date of the participant's
20retirement.
21    (f) Notwithstanding the foregoing, a participating
22employee shall not be required to make contributions under this
23Section after the date upon which continuance of such
24contributions would otherwise cause his or her retirement
25annuity to exceed the maximum retirement annuity as specified
26in clause (1) of subsection (c) of Section 15-136.

 

 

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1    (g) A participant may make contributions for the purchase
2of service credit under this Article; however, only a
3participating employee may make optional contributions under
4subsection (b) of Section 15-157.1 of this Article.
5    (h) A Tier 2 member shall not make contributions on
6earnings that exceed the limitation as prescribed under
7subsection (b) of Section 15-111 of this Article.
8(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
9    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 15-165. To certify amounts and submit vouchers.
13    (a) The Board shall certify to the Governor on or before
14November 15 of each year until November 15, 2011 the
15appropriation required from State funds for the purposes of
16this System for the following fiscal year. The certification
17under this subsection (a) shall include a copy of the actuarial
18recommendations upon which it is based and shall specifically
19identify the System's projected State normal cost for that
20fiscal year and the projected State cost for the self-managed
21plan for that fiscal year.
22    On or before May 1, 2004, the Board shall recalculate and
23recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2005, taking
25into account the amounts appropriated to and received by the

 

 

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1System under subsection (d) of Section 7.2 of the General
2Obligation Bond Act.
3    On or before July 1, 2005, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2006, taking
6into account the changes in required State contributions made
7by this amendatory Act of the 94th General Assembly.
8    On or before April 1, 2011, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2011, applying
11the changes made by Public Act 96-889 to the System's assets
12and liabilities as of June 30, 2009 as though Public Act 96-889
13was approved on that date.
14    (a-5) On or before November 1 of each year, beginning
15November 1, 2012, the Board shall submit to the State Actuary,
16the Governor, and the General Assembly a proposed certification
17of the amount of the required State contribution to the System
18for the next fiscal year, along with all of the actuarial
19assumptions, calculations, and data upon which that proposed
20certification is based. On or before January 1 of each year,
21beginning January 1, 2013, the State Actuary shall issue a
22preliminary report concerning the proposed certification and
23identifying, if necessary, recommended changes in actuarial
24assumptions that the Board must consider before finalizing its
25certification of the required State contributions. On or before
26January 15, 2013 and each January 15 thereafter, the Board

 

 

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1shall certify to the Governor and the General Assembly the
2amount of the required State contribution for the next fiscal
3year. The Board's certification must note, in a written
4response to the State Actuary, any deviations from the State
5Actuary's recommended changes, the reason or reasons for not
6following the State Actuary's recommended changes, and the
7fiscal impact of not following the State Actuary's recommended
8changes on the required State contribution.
9    (a-10) For purposes of subsection (c-5) of Section 20 of
10the Budget Stabilization Act, on or before November 1 of each
11year beginning November 1, 2019, the Board shall determine the
12amount of the State contribution to the System that would have
13been required for the next fiscal year if Section 1-161,
14subsection (a-2) of Section 15-155, and the changes made to
15Section 1-160 by this amendatory Act of the 100th General
16Assembly had not taken effect, using the best and most recent
17available data but based on the law in effect on May 31, 2019.
18The Board shall submit to the State Actuary, the Governor, and
19the General Assembly a proposed certification, along with the
20relevant law, actuarial assumptions, calculations, and data
21upon which that certification is based. On or before January 1,
222020 and every January 1 thereafter, the State Actuary shall
23issue a preliminary report concerning the proposed
24certification and identifying, if necessary, recommended
25changes in actuarial assumptions that the Board must consider
26before finalizing its certification. On or before January 15,

 

 

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12020 and every January 1 thereafter, the Board shall certify to
2the Governor and the General Assembly the amount of the State
3contribution to the System that would have been required for
4the next fiscal year if Section 1-161, subsection (a-2) of
5Section 15-155, and the changes made to Section 1-160 by this
6amendatory Act of the 100th General Assembly had not taken
7effect, using the best and most recent available data but based
8on the law in effect on May 31, 2019. The Board's certification
9must note any deviations from the State Actuary's recommended
10changes, the reason or reasons for not following the State
11Actuary's recommended changes, and the impact of not following
12the State Actuary's recommended changes.
13    (a-15) As soon as practical after the effective date of
14this amendatory Act of the 100th General Assembly, the Board
15shall recalculate and recertify to the State Actuary, the
16Governor, and the General Assembly the amount of the State
17contribution to the System for State fiscal year 2018, taking
18into account the changes in required State contributions made
19by this amendatory Act of the 100th General Assembly. The State
20Actuary shall review the assumptions and valuations underlying
21the Board's revised certification and issue a preliminary
22report concerning the proposed recertification and
23identifying, if necessary, recommended changes in actuarial
24assumptions that the Board must consider before finalizing its
25certification of the required State contributions. The Board's
26final certification must note any deviations from the State

 

 

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1Actuary's recommended changes, the reason or reasons for not
2following the State Actuary's recommended changes, and the
3fiscal impact of not following the State Actuary's recommended
4changes on the required State contribution.
5    (a-20) On or before May 1, 2018, the Board shall
6recalculate and recertify to the Governor and the General
7Assembly the amount of the required State contribution to the
8System for State fiscal year 2019, taking into account the
9effect on the System's liabilities of the elections made under
10Section 15-132.9.
11    On or before October 1, 2018, the Board shall recalculate
12and recertify to the Governor and the General Assembly the
13amount of the required State contribution to the System for
14State fiscal year 2019, taking into account the reduction
15specified under item (3) of subsection (a-1) of Section 15-155.
16    (b) The Board shall certify to the State Comptroller or
17employer, as the case may be, from time to time, by its
18chairperson and secretary, with its seal attached, the amounts
19payable to the System from the various funds.
20    (c) Beginning in State fiscal year 1996, on or as soon as
21possible after the 15th day of each month the Board shall
22submit vouchers for payment of State contributions to the
23System, in a total monthly amount of one-twelfth of the
24required annual State contribution certified under subsection
25(a). From the effective date of this amendatory Act of the 93rd
26General Assembly through June 30, 2004, the Board shall not

 

 

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1submit vouchers for the remainder of fiscal year 2004 in excess
2of the fiscal year 2004 certified contribution amount
3determined under this Section after taking into consideration
4the transfer to the System under subsection (b) of Section
56z-61 of the State Finance Act. These vouchers shall be paid by
6the State Comptroller and Treasurer by warrants drawn on the
7funds appropriated to the System for that fiscal year.
8    If in any month the amount remaining unexpended from all
9other appropriations to the System for the applicable fiscal
10year (including the appropriations to the System under Section
118.12 of the State Finance Act and Section 1 of the State
12Pension Funds Continuing Appropriation Act) is less than the
13amount lawfully vouchered under this Section, the difference
14shall be paid from the General Revenue Fund under the
15continuing appropriation authority provided in Section 1.1 of
16the State Pension Funds Continuing Appropriation Act.
17    (d) So long as the payments received are the full amount
18lawfully vouchered under this Section, payments received by the
19System under this Section shall be applied first toward the
20employer contribution to the self-managed plan established
21under Section 15-158.2. Payments shall be applied second toward
22the employer's portion of the normal costs of the System, as
23defined in subsection (f) of Section 15-155. The balance shall
24be applied toward the unfunded actuarial liabilities of the
25System.
26    (e) In the event that the System does not receive, as a

 

 

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1result of legislative enactment or otherwise, payments
2sufficient to fully fund the employer contribution to the
3self-managed plan established under Section 15-158.2 and to
4fully fund that portion of the employer's portion of the normal
5costs of the System, as calculated in accordance with Section
615-155(a-1), then any payments received shall be applied
7proportionately to the optional retirement program established
8under Section 15-158.2 and to the employer's portion of the
9normal costs of the System, as calculated in accordance with
10Section 15-155(a-1).
11(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
 
12    (40 ILCS 5/15-185.5 new)
13    Sec. 15-185.5. Accelerated pension benefit payment.
14    (a) As used in this Section:
15    "Eligible person" means a person who:
16        (1) has terminated service;
17        (2) has accrued sufficient service credit to be
18    eligible to receive a retirement annuity under this
19    Article;
20        (3) has not received any retirement annuity under this
21    Article;
22        (4) does not have a QILDRO in effect against him or her
23    under this Article; and
24        (5) is not a participant in the self-managed plan under
25    Section 15-158.2.

 

 

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1    "Pension benefit" means the benefits under this Article, or
2Article 1 as it relates to those benefits, including any
3anticipated annual increases, that an eligible person is
4entitled to upon attainment of the applicable retirement age.
5"Pension benefit" also includes applicable survivor's or
6disability benefits.
7    (b) Before January 1, 2018, and annually thereafter, the
8System shall calculate, using actuarial tables and other
9assumptions adopted by the Board, the net present value of
10pension benefits for each eligible person and shall offer each
11eligible person the opportunity to irrevocably elect to receive
12an amount determined by the System to be equal to 70% of the
13net present value of his or her pension benefits in lieu of
14receiving any pension benefit. The offer shall specify the
15dollar amount that the eligible person will receive if he or
16she so elects and shall expire when a subsequent offer is made
17to an eligible person or when the System determines that 10% of
18eligible persons in that year have made the election under this
19subsection, whichever occurs first. The System shall make a
20good faith effort to contact every eligible person to notify
21him or her of the election and of the amount of the accelerated
22pension benefit payment.
23    Until the System determines that 10% of eligible persons in
24that year have made the election under this subsection, an
25eligible person may irrevocably elect to receive an accelerated
26pension benefit payment in the amount that the System offers

 

 

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1under this subsection in lieu of receiving any pension benefit.
2A person who elects to receive an accelerated pension benefit
3payment under this Section may not elect to proceed under the
4Retirement Systems Reciprocal Act with respect to service under
5this Article.
6    (c) A person's credits and creditable service under this
7Article shall be terminated upon the person's receipt of an
8accelerated pension benefit payment under this Section, and no
9other benefit shall be paid under this Article based on those
10terminated credits and creditable service, including any
11retirement, survivor, or other benefit; except that to the
12extent that participation, benefits, or premiums under the
13State Employees Group Insurance Act of 1971 are based on the
14amount of service credit, the terminated service credit shall
15be used for that purpose.
16    (d) If a person who has received an accelerated pension
17benefit payment under this Section returns to participating
18employee status under this Article, then:
19        (1) Any benefits under the System earned as a result of
20    that return to participating employee status shall be based
21    solely on the person's credits and creditable service
22    arising from the return to participating employee status.
23        (2) The accelerated pension benefit payment may not be
24    repaid to the System, and the terminated credits and
25    creditable service may not under any circumstances be
26    reinstated.

 

 

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1    (e) As a condition of receiving an accelerated pension
2benefit payment, an eligible person must have another
3retirement plan or account qualified under the Internal Revenue
4Code of 1986, as amended, for the accelerated pension benefit
5payment to be rolled into. The accelerated pension benefit
6payment under this Section may be subject to withholding or
7payment of applicable taxes, but to the extent permitted by
8federal law, a person who receives an accelerated pension
9benefit payment under this Section must direct the System to
10pay all of that payment as a rollover into another retirement
11plan or account qualified under the Internal Revenue Code of
121986, as amended.
13    (f) Before January 1, 2019 and every January 1 thereafter,
14the Board shall certify to the Illinois Finance Authority and
15the General Assembly the amount by which the total amount of
16accelerated pension benefit payments made under this Section
17exceed the amount appropriated to the System for the purpose of
18making those payments.
19    (g) The Board shall adopt any rules necessary to implement
20this Section.
21    (h) No provision of this Section shall be interpreted in a
22way that would cause the applicable System to cease to be a
23qualified plan under the Internal Revenue Code of 1986.
24    (i) Notwithstanding any other provision of this Section, in
25no case shall the total amount of accelerated pension benefit
26payments paid under this Section, Section 14-147.5, and Section

 

 

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116-190.5 cause the Illinois Finance Authority to issue more
2than the $250,000,000 of State Pension Obligation Acceleration
3Bonds authorized in subsection (c-5) of Section 801-40 of the
4Illinois Finance Authority Act.
 
5    (40 ILCS 5/15-198)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 15-198. Application and expiration of new benefit
9increases.
10    (a) As used in this Section, "new benefit increase" means
11an increase in the amount of any benefit provided under this
12Article, or an expansion of the conditions of eligibility for
13any benefit under this Article, that results from an amendment
14to this Code that takes effect after the effective date of this
15amendatory Act of the 94th General Assembly. "New benefit
16increase", however, does not include any benefit increase
17resulting from the changes made to this Article by this
18amendatory Act of the 100th General Assembly.
19    (b) Notwithstanding any other provision of this Code or any
20subsequent amendment to this Code, every new benefit increase
21is subject to this Section and shall be deemed to be granted
22only in conformance with and contingent upon compliance with
23the provisions of this Section.
24    (c) The Public Act enacting a new benefit increase must
25identify and provide for payment to the System of additional

 

 

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1funding at least sufficient to fund the resulting annual
2increase in cost to the System as it accrues.
3    Every new benefit increase is contingent upon the General
4Assembly providing the additional funding required under this
5subsection. The Commission on Government Forecasting and
6Accountability shall analyze whether adequate additional
7funding has been provided for the new benefit increase and
8shall report its analysis to the Public Pension Division of the
9Department of Insurance Financial and Professional Regulation.
10A new benefit increase created by a Public Act that does not
11include the additional funding required under this subsection
12is null and void. If the Public Pension Division determines
13that the additional funding provided for a new benefit increase
14under this subsection is or has become inadequate, it may so
15certify to the Governor and the State Comptroller and, in the
16absence of corrective action by the General Assembly, the new
17benefit increase shall expire at the end of the fiscal year in
18which the certification is made.
19    (d) Every new benefit increase shall expire 5 years after
20its effective date or on such earlier date as may be specified
21in the language enacting the new benefit increase or provided
22under subsection (c). This does not prevent the General
23Assembly from extending or re-creating a new benefit increase
24by law.
25    (e) Except as otherwise provided in the language creating
26the new benefit increase, a new benefit increase that expires

 

 

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1under this Section continues to apply to persons who applied
2and qualified for the affected benefit while the new benefit
3increase was in effect and to the affected beneficiaries and
4alternate payees of such persons, but does not apply to any
5other person, including without limitation a person who
6continues in service after the expiration date and did not
7apply and qualify for the affected benefit while the new
8benefit increase was in effect.
9(Source: P.A. 94-4, eff. 6-1-05.)
 
10    (40 ILCS 5/15-200.1 new)
11    Sec. 15-200.1. Defined contribution plan.
12    (a) By July 1, 2018, the System shall prepare and implement
13a voluntary defined contribution plan for up to 5% of eligible
14Tier 1 employees. The System shall determine the 5% cap by the
15number of Tier 1 employees on the effective date of this
16Section. The defined contribution plan developed under this
17Section shall be a plan that aggregates employer and employee
18contributions in individual participant accounts which, after
19meeting any other requirements, are used for payouts after
20retirement in accordance with this Section and any other
21applicable laws.
22    As used in this Section, "defined benefit plan" means the
23retirement plan available under this Article to Tier 1
24employees who have not made the election authorized under this
25Section.

 

 

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1        (1) Under the defined contribution plan, a Tier 1
2    employee of this System could elect to cease accruing
3    benefits in the defined benefit plan under this Article and
4    begin accruing benefits for future service in the defined
5    contribution plan. Service credit under the defined
6    contribution plan may be used for determining retirement
7    eligibility under the defined benefit plan. A Tier 1
8    employee who elects to cease accruing benefits in his or
9    her defined benefit plan shall be prohibited from
10    purchasing service credit on or after the date of his or
11    her election. A Tier 1 employee making the irrevocable
12    election provided under this Section shall not receive
13    interest accruals to his or her Rule 2 benefit on or after
14    the date of his or her election.
15        (2) Participants in the defined contribution plan
16    shall pay employee contributions at the same rate as other
17    participants under this Article as determined by the
18    System.
19        (3) State contributions shall be paid into the accounts
20    of all participants in the defined contribution plan at a
21    uniform rate, expressed as a percentage of earnings and
22    determined for each year. This rate shall be no higher than
23    the employer's normal cost for Tier 1 employees in the
24    defined benefit plan for that year, as determined by the
25    System and expressed as a percentage of earnings, and shall
26    be no lower than 3% of earnings. The State shall adjust

 

 

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1    this rate annually.
2        (4) The defined contribution plan shall require 5 years
3    of participation in the defined contribution plan before
4    vesting in State contributions. If the participant fails to
5    vest in them, the State contributions, and the earnings
6    thereon, shall be forfeited.
7        (5) The defined contribution plan may provide for
8    participants in the plan to be eligible for the defined
9    disability benefits available to other participants under
10    this Article. If it does, the System shall reduce the
11    employee contributions credited to the member's defined
12    contribution plan account by an amount determined by the
13    System to cover the cost of offering such benefits.
14        (6) The defined contribution plan shall provide a
15    variety of options for investments. These options shall
16    include investments handled by the System as well as
17    private sector investment options.
18        (7) The defined contribution plan shall provide a
19    variety of options for payouts to retirees and their
20    survivors.
21        (8) To the extent authorized under federal law and as
22    authorized by the System, the plan shall allow former
23    participants in the plan to transfer or roll over employee
24    and vested State contributions, and the earnings thereon,
25    into other qualified retirement plans.
26        (9) The System shall reduce the employee contributions

 

 

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1    credited to the member's defined contribution plan account
2    by an amount determined by the System to cover the cost of
3    offering these benefits and any applicable administrative
4    fees.
5    (b) Only persons who are Tier 1 employees of the System on
6the effective date of this Section are eligible to participate
7in the defined contribution plan. Participation in the defined
8contribution plan shall be limited to the first 5% of eligible
9persons who elect to participate. The election to participate
10in the defined contribution plan is voluntary and irrevocable.
11    (c) An eligible Tier 1 employee may irrevocably elect to
12participate in the defined contribution plan by filing with the
13System a written application to participate that is received by
14the System prior to its determination that 5% of eligible
15persons have elected to participate in the defined contribution
16plan.
17    When the System first determines that 5% of eligible
18persons have elected to participate in the defined contribution
19plan, the System shall provide notice to previously eligible
20employees that the plan is no longer available and shall cease
21accepting applications to participate.
22    (d) The System shall make a good faith effort to contact
23each Tier 1 employee who is eligible to participate in the
24defined contribution plan. The System shall mail information
25describing the option to join the defined contribution plan to
26each of these employees to his or her last known address on

 

 

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1file with the System. If the employee is not responsive to
2other means of contact, it is sufficient for the System to
3publish the details of the option on its website.
4    Upon request for further information describing the
5option, the System shall provide employees with information
6from the System before exercising the option to join the plan,
7including information on the impact to their vested benefits or
8non-vested service. The individual consultation shall include
9projections of the member's defined benefits at retirement or
10earlier termination of service and the value of the member's
11account at retirement or earlier termination of service. The
12System shall not provide advice or counseling with respect to
13whether the employee should exercise the option. The System
14shall inform Tier 1 employees who are eligible to participate
15in the defined contribution plan that they may also wish to
16obtain information and counsel relating to their option from
17any other available source, including but not limited to labor
18organizations, private counsel, and financial advisors.
19    (e) In no event shall the System, its staff, its authorized
20representatives, or the Board be liable for any information
21given to an employee under this Section. The System may
22coordinate with the Illinois Department of Central Management
23Services and other retirement systems administering a defined
24contribution plan in accordance with this amendatory Act of the
25100th General Assembly to provide information concerning the
26impact of the option set forth in this Section.

 

 

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1    (f) Notwithstanding any other provision of this Section, no
2person shall begin participating in the defined contribution
3plan until it has attained qualified plan status and received
4all necessary approvals from the U.S. Internal Revenue Service.
5    (g) The System shall report on its progress under this
6Section, including the available details of the defined
7contribution plan and the System's plans for informing eligible
8Tier 1 employees about the plan, to the Governor and the
9General Assembly on or before January 15, 2018.
10    (h) If a Tier 1 employee has not made an election under
11Section 15-134.5 of this Code, then the plan prescribed under
12this Section shall not apply to that Tier 1 employee and that
13Tier 1 employee shall remain eligible to make the election
14prescribed under Section 15-134.5.
15    (i) The intent of this amendatory Act of the 100th General
16Assembly is to ensure that the State's normal cost of
17participation in the defined contribution plan is similar, and
18if possible equal, to the State's normal cost of participation
19in the defined benefit plan, unless a lower State's normal cost
20is necessary to ensure cost neutrality.
 
21    (40 ILCS 5/15-201.1 new)
22    Sec. 15-201.1. Defined contribution plan; termination. If
23the defined contribution plan is terminated or becomes
24inoperative pursuant to law, then each participant in the plan
25shall automatically be deemed to have been a contributing Tier

 

 

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11 employee participating in the System's defined benefit plan
2during the time in which he or she participated in the defined
3contribution plan, and for that purpose the System shall be
4entitled to recover the amounts in the participant's defined
5contribution accounts.
 
6    (40 ILCS 5/16-107.1 new)
7    Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
8teacher under this Article who first became a member or
9participant before January 1, 2011 under any reciprocal
10retirement system or pension fund established under this Code
11other than a retirement system or pension fund established
12under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
13the purposes of the election under Section 16-122.9, "Tier 1
14employee" does not include a teacher under this Article who
15would qualify as a Tier 1 employee but who has made an
16irrevocable election on or before June 1, 2017 to retire from
17service pursuant to the terms of an employment contract or a
18collective bargaining agreement in effect on June 1, 2017,
19excluding any extension, amendment, or renewal of that
20agreement after that date, and has notified the System of that
21election.
 
22    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)

 

 

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1    Sec. 16-121. Salary. "Salary": The actual compensation
2received by a teacher during any school year and recognized by
3the system in accordance with rules of the board. For purposes
4of this Section, "school year" includes the regular school term
5plus any additional period for which a teacher is compensated
6and such compensation is recognized by the rules of the board.
7    Notwithstanding any other provision of this Section,
8"salary" does not include any future increase in income that is
9offered by an employer for service as a Tier 1 employee under
10this Article pursuant to the condition set forth in subsection
11(c) of Section 16-122.9 and accepted under that condition by a
12Tier 1 employee who has made the election under paragraph (2)
13of subsection (a) of Section 16-122.9.
14    Notwithstanding any other provision of this Section,
15"salary" does not include any consideration payment made to a
16Tier 1 employee.
17(Source: P.A. 84-1028.)
 
18    (40 ILCS 5/16-121.1 new)
19    Sec. 16-121.1. Future increase in income. "Future increase
20in income" means an increase to a Tier 1 employee's base pay
21that is offered by an employer to the Tier 1 employee for
22service under this Article after June 30, 2018 that qualifies
23as "salary", as defined in Section 16-121, or would qualify as
24"salary" but for the fact that it was offered to and accepted
25by the Tier 1 employee under the condition set forth in

 

 

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1subsection (c) of Section 16-122.9. The term "future increase
2in income" includes an increase to a Tier 1 employee's base pay
3that is paid to the Tier 1 employee pursuant to an extension,
4amendment, or renewal of any such employment contract or
5collective bargaining agreement after the effective date of
6this Section.
 
7    (40 ILCS 5/16-121.2 new)
8    Sec. 16-121.2. Base pay. As used in Section 16-121.1 of
9this Code, "base pay" means the greater of either (i) the Tier
101 employee's annualized rate of salary as of June 30, 2018, or
11(ii) the Tier 1 employee's annualized rate of salary
12immediately preceding the expiration, renewal, or amendment of
13an employment contract or collective bargaining agreement in
14effect on the effective date of this Section. For a person
15returning to active service as a Tier 1 employee after June 30,
162018, however, "base pay" means the employee's annualized rate
17of salary as of the employee's last date of service prior to
18July 1, 2018. The System shall calculate the base pay of each
19Tier 1 employee pursuant to this Section.
 
20    (40 ILCS 5/16-122.9 new)
21    Sec. 16-122.9. Election by Tier 1 employees.
22    (a) Each active Tier 1 employee shall make an irrevocable
23election either:
24        (1) to agree to delay his or her eligibility for

 

 

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1    automatic annual increases in retirement annuity as
2    provided in subsection (a-1) of Section 16-133.1 or
3    subsection (b-1) of Section 16-136.1, whichever is
4    applicable, and to have the amount of the automatic annual
5    increases in his or her retirement annuity and survivor
6    benefit that are otherwise provided for in this Article
7    calculated, instead, as provided in subsection (a-1) of
8    Section 16-133.1 or subsection (b-1) of Section 16-136.1,
9    whichever is applicable; or
10        (2) to not agree to paragraph (1) of this subsection.
11    The election required under this subsection (a) shall be
12made by each active Tier 1 employee no earlier than January 1,
132018 and no later than March 31, 2018, except that:
14        (i) a person who becomes a Tier 1 employee under this
15    Article on or after February 1, 2018 must make the election
16    under this subsection (a) within 60 days after becoming a
17    Tier 1 employee; and
18        (ii) a person who returns to active service as a Tier 1
19    employee under this Article on or after February 1, 2018
20    and has not yet made an election under this Section must
21    make the election under this subsection (a) within 60 days
22    after returning to active service as a Tier 1 employee.
23    If a Tier 1 employee fails for any reason to make a
24required election under this subsection within the time
25specified, then the employee shall be deemed to have made the
26election under paragraph (2) of this subsection.

 

 

SB0016 Engrossed- 220 -LRB100 05169 KTG 15179 b

1    (a-5) If this Section is enjoined or stayed by an Illinois
2court or a court of competent jurisdiction pending the entry of
3a final and unappealable decision, and this Section is
4determined to be constitutional or otherwise valid by a final
5unappealable decision of an Illinois court or a court of
6competent jurisdiction, then the election procedure set forth
7in subsection (a) of this Section shall commence on the 180th
8calendar day after the date of the issuance of the final
9unappealable decision and shall conclude at the end of the
10270th calendar day after that date.
11    (a-10) All elections under subsection (a) that are made or
12deemed to be made before July 1, 2018 shall take effect on July