Rep. Robert Martwick

Filed: 11/6/2017

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 779

2    AMENDMENT NO. ______. Amend Senate Bill 779, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Pension Code is amended by
6changing Sections 1-160, 14-103.10, 14-103.12, 14-104,
714-104.3, 14-107, 14-108, 14-114, 14-121, 14-130, 14-133,
814-133.1, 14-135.08, 15-108.2, 15-111, 15-112, 15-113, 15-118,
915-134.5, 15-135, 15-136, 15-136.3, 15-139, 15-139.1,
1015-145.1, 15-146, 15-154, 15-155, 15-157, 15-157.1, 15-158.2,
1115-165, 16-111, 16-111.1, 16-127, 16-136, 16-136.2, 16-136.4,
1216-143.2, 16-152, 16-152.1, 16-154, 16-155, 16-158, 16-189.1,
1316-191, and 16-197 and by adding Sections 14-103.40a,
1414-103.41, 14-103.42, 14-103.43, 14-103.44, 14-155.1,
1514-155.2, 15-103.4, 15-108.3, 15-134.6, 15-154.3, 15-155.1,
1615-158.24, 15-158.25, 16-106.4a, 16-106.7, and 16-139 as
17follows:
 

 

 

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1    (40 ILCS 5/1-160)
2    Sec. 1-160. Provisions applicable to new hires.
3    (a) The provisions of this Section apply to a person who,
4on or after January 1, 2011, first becomes a member or a
5participant under any reciprocal retirement system or pension
6fund established under this Code, other than a retirement
7system or pension fund established under Article 2, 3, 4, 5, 6,
815 or 18 of this Code, notwithstanding any other provision of
9this Code to the contrary, but do not apply to any self-managed
10plan established under this Code, to any person with respect to
11service as a sheriff's law enforcement employee under Article
127, or to any participant of the retirement plan established
13under Section 22-101. Notwithstanding anything to the contrary
14in this Section, for purposes of this Section, a person who
15participated in a retirement system under Article 15 prior to
16January 1, 2011 shall be deemed a person who first became a
17member or participant prior to January 1, 2011 under any
18retirement system or pension fund subject to this Section. The
19changes made to this Section by Public Act 98-596 are a
20clarification of existing law and are intended to be
21retroactive to January 1, 2011 (the effective date of Public
22Act 96-889), notwithstanding the provisions of Section 1-103.1
23of this Code.
24    This Section does not apply to a person who participates in
25the Hybrid Plan under Article 14 with respect to his or her

 

 

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1participation in the Hybrid Plan under that Article first
2becomes a member or participant under Article 14 on or after
3the implementation date of the plan created under Section 1-161
4for that Article, unless that person elects under subsection
5(b) of Section 1-161 to instead receive the benefits provided
6under this Section and the applicable provisions of that
7Article.
8    This Section does not apply to a person who participates in
9the Optional Hybrid Plan under Article 16 with respect to his
10or her participation in the Optional Hybrid Plan under that
11Article first becomes a member or participant under Article 16
12on or after the implementation date of the plan created under
13Section 1-161 for that Article, unless that person elects under
14subsection (b) of Section 1-161 to instead receive the benefits
15provided under this Section and the applicable provisions of
16that Article.
17    This Section does not apply to a person who elects under
18subsection (c-5) of Section 1-161 to receive the benefits under
19Section 1-161.
20    This Section does not apply to a person who first becomes a
21member or participant of an affected pension fund on or after 6
22months after the resolution or ordinance date, as defined in
23Section 1-162, unless that person elects under subsection (c)
24of Section 1-162 to receive the benefits provided under this
25Section and the applicable provisions of the Article under
26which he or she is a member or participant.

 

 

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1    (b) "Final average salary" means the average monthly (or
2annual) salary obtained by dividing the total salary or
3earnings calculated under the Article applicable to the member
4or participant during the 96 consecutive months (or 8
5consecutive years) of service within the last 120 months (or 10
6years) of service in which the total salary or earnings
7calculated under the applicable Article was the highest by the
8number of months (or years) of service in that period. For the
9purposes of a person who first becomes a member or participant
10of any retirement system or pension fund to which this Section
11applies on or after January 1, 2011, in this Code, "final
12average salary" shall be substituted for the following:
13        (1) In Article 7 (except for service as sheriff's law
14    enforcement employees), "final rate of earnings".
15        (2) In Articles 8, 9, 10, 11, and 12, "highest average
16    annual salary for any 4 consecutive years within the last
17    10 years of service immediately preceding the date of
18    withdrawal".
19        (3) In Article 13, "average final salary".
20        (4) In Article 14, "final average compensation".
21        (5) In Article 17, "average salary".
22        (6) In Section 22-207, "wages or salary received by him
23    at the date of retirement or discharge".
24    (b-5) Beginning on January 1, 2011, for all purposes under
25this Code (including without limitation the calculation of
26benefits and employee contributions), the annual earnings,

 

 

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1salary, or wages (based on the plan year) of a member or
2participant to whom this Section applies shall not exceed
3$106,800; however, that amount shall annually thereafter be
4increased by the lesser of (i) 3% of that amount, including all
5previous adjustments, or (ii) one-half the annual unadjusted
6percentage increase (but not less than zero) in the consumer
7price index-u for the 12 months ending with the September
8preceding each November 1, including all previous adjustments.
9    For the purposes of this Section, "consumer price index-u"
10means the index published by the Bureau of Labor Statistics of
11the United States Department of Labor that measures the average
12change in prices of goods and services purchased by all urban
13consumers, United States city average, all items, 1982-84 =
14100. The new amount resulting from each annual adjustment shall
15be determined by the Public Pension Division of the Department
16of Insurance and made available to the boards of the retirement
17systems and pension funds by November 1 of each year.
18    (c) A member or participant is entitled to a retirement
19annuity upon written application if he or she has attained age
2067 (beginning January 1, 2015, age 65 with respect to service
21under Article 12 of this Code that is subject to this Section)
22and has at least 10 years of service credit and is otherwise
23eligible under the requirements of the applicable Article.
24    A member or participant who has attained age 62 (beginning
25January 1, 2015, age 60 with respect to service under Article
2612 of this Code that is subject to this Section) and has at

 

 

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1least 10 years of service credit and is otherwise eligible
2under the requirements of the applicable Article may elect to
3receive the lower retirement annuity provided in subsection (d)
4of this Section. The option prescribed by the preceding
5sentence shall not apply to a noncovered employee who made the
6election under subsection (c) of Section 14-155.1.
7    (c-5) A person who first becomes a member or a participant
8under Article 8 or Article 11 of this Code on or after the
9effective date of this amendatory Act of the 100th General
10Assembly, notwithstanding any other provision of this Code to
11the contrary, is entitled to a retirement annuity upon written
12application if he or she has attained age 65 and has at least
1310 years of service credit under Article 8 or Article 11 of
14this Code and is otherwise eligible under the requirements of
15Article 8 or Article 11 of this Code, whichever is applicable.
16    (d) The retirement annuity of a member or participant who
17is retiring after attaining age 62 (beginning January 1, 2015,
18age 60 with respect to service under Article 12 of this Code
19that is subject to this Section) with at least 10 years of
20service credit shall be reduced by one-half of 1% for each full
21month that the member's age is under age 67 (beginning January
221, 2015, age 65 with respect to service under Article 12 of
23this Code that is subject to this Section).
24    (d-5) The retirement annuity of a person who first becomes
25a member or a participant under Article 8 or Article 11 of this
26Code on or after the effective date of this amendatory Act of

 

 

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1the 100th General Assembly who is retiring at age 60 with at
2least 10 years of service credit under Article 8 or Article 11
3shall be reduced by one-half of 1% for each full month that the
4member's age is under age 65.
5    (d-10) Each person who first became a member or participant
6under Article 8 or Article 11 of this Code on or after January
71, 2011 and prior to the effective date of this amendatory Act
8of the 100th General Assembly shall make an irrevocable
9election either:
10        (i) to be eligible for the reduced retirement age
11    provided in subsections (c-5) and (d-5) of this Section,
12    the eligibility for which is conditioned upon the member or
13    participant agreeing to the increases in employee
14    contributions for age and service annuities provided in
15    subsection (a-5) of Section 8-174 of this Code (for service
16    under Article 8) or subsection (a-5) of Section 11-170 of
17    this Code (for service under Article 11); or
18        (ii) to not agree to item (i) of this subsection
19    (d-10), in which case the member or participant shall
20    continue to be subject to the retirement age provisions in
21    subsections (c) and (d) of this Section and the employee
22    contributions for age and service annuity as provided in
23    subsection (a) of Section 8-174 of this Code (for service
24    under Article 8) or subsection (a) of Section 11-170 of
25    this Code (for service under Article 11).
26    The election provided for in this subsection shall be made

 

 

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1between October 1, 2017 and November 15, 2017. A person subject
2to this subsection who makes the required election shall remain
3bound by that election. A person subject to this subsection who
4fails for any reason to make the required election within the
5time specified in this subsection shall be deemed to have made
6the election under item (ii).
7    (e) Any retirement annuity or supplemental annuity shall be
8subject to annual increases on the January 1 occurring either
9on or after the attainment of age 67 (beginning January 1,
102015, age 65 with respect to service under Article 12 of this
11Code that is subject to this Section and beginning on the
12effective date of this amendatory Act of the 100th General
13Assembly, age 65 with respect to persons who: (i) first became
14members or participants under Article 8 or Article 11 of this
15Code on or after the effective date of this amendatory Act of
16the 100th General Assembly; or (ii) first became members or
17participants under Article 8 or Article 11 of this Code on or
18after January 1, 2011 and before the effective date of this
19amendatory Act of the 100th General Assembly and made the
20election under item (i) of subsection (d-10) of this Section)
21or the first anniversary of the annuity start date, whichever
22is later. Each annual increase shall be calculated at 3% or
23one-half the annual unadjusted percentage increase (but not
24less than zero) in the consumer price index-u for the 12 months
25ending with the September preceding each November 1, whichever
26is less, of the originally granted retirement annuity. If the

 

 

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1annual unadjusted percentage change in the consumer price
2index-u for the 12 months ending with the September preceding
3each November 1 is zero or there is a decrease, then the
4annuity shall not be increased.
5    For the purposes of Section 1-103.1 of this Code, the
6changes made to this Section by this amendatory Act of the
7100th General Assembly are applicable without regard to whether
8the employee was in active service on or after the effective
9date of this amendatory Act of the 100th General Assembly.
10    (f) The initial survivor's or widow's annuity of an
11otherwise eligible survivor or widow of a retired member or
12participant who first became a member or participant on or
13after January 1, 2011 shall be in the amount of 66 2/3% of the
14retired member's or participant's retirement annuity at the
15date of death. In the case of the death of a member or
16participant who has not retired and who first became a member
17or participant on or after January 1, 2011, eligibility for a
18survivor's or widow's annuity shall be determined by the
19applicable Article of this Code. The initial benefit shall be
2066 2/3% of the earned annuity without a reduction due to age. A
21child's annuity of an otherwise eligible child shall be in the
22amount prescribed under each Article if applicable. Any
23survivor's or widow's annuity shall be increased (1) on each
24January 1 occurring on or after the commencement of the annuity
25if the deceased member died while receiving a retirement
26annuity or (2) in other cases, on each January 1 occurring

 

 

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1after the first anniversary of the commencement of the annuity.
2Each annual increase shall be calculated at 3% or one-half the
3annual unadjusted percentage increase (but not less than zero)
4in the consumer price index-u for the 12 months ending with the
5September preceding each November 1, whichever is less, of the
6originally granted survivor's annuity. If the annual
7unadjusted percentage change in the consumer price index-u for
8the 12 months ending with the September preceding each November
91 is zero or there is a decrease, then the annuity shall not be
10increased.
11    (g) The benefits in Section 14-110 apply only if the person
12is a State policeman, a fire fighter in the fire protection
13service of a department, or a security employee of the
14Department of Corrections or the Department of Juvenile
15Justice, as those terms are defined in subsection (b) of
16Section 14-110. A person who meets the requirements of this
17Section is entitled to an annuity calculated under the
18provisions of Section 14-110, in lieu of the regular or minimum
19retirement annuity, only if the person has withdrawn from
20service with not less than 20 years of eligible creditable
21service and has attained age 60, regardless of whether the
22attainment of age 60 occurs while the person is still in
23service.
24    (h) If a person who first becomes a member or a participant
25of a retirement system or pension fund subject to this Section
26on or after January 1, 2011 is receiving a retirement annuity

 

 

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1or retirement pension under that system or fund and becomes a
2member or participant under any other system or fund created by
3this Code and is employed on a full-time basis, except for
4those members or participants exempted from the provisions of
5this Section under subsection (a) of this Section, then the
6person's retirement annuity or retirement pension under that
7system or fund shall be suspended during that employment. Upon
8termination of that employment, the person's retirement
9annuity or retirement pension payments shall resume and be
10recalculated if recalculation is provided for under the
11applicable Article of this Code.
12    If a person who first becomes a member of a retirement
13system or pension fund subject to this Section on or after
14January 1, 2012 and is receiving a retirement annuity or
15retirement pension under that system or fund and accepts on a
16contractual basis a position to provide services to a
17governmental entity from which he or she has retired, then that
18person's annuity or retirement pension earned as an active
19employee of the employer shall be suspended during that
20contractual service. A person receiving an annuity or
21retirement pension under this Code shall notify the pension
22fund or retirement system from which he or she is receiving an
23annuity or retirement pension, as well as his or her
24contractual employer, of his or her retirement status before
25accepting contractual employment. A person who fails to submit
26such notification shall be guilty of a Class A misdemeanor and

 

 

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1required to pay a fine of $1,000. Upon termination of that
2contractual employment, the person's retirement annuity or
3retirement pension payments shall resume and, if appropriate,
4be recalculated under the applicable provisions of this Code.
5    (i) (Blank).
6    (j) In the case of a conflict between the provisions of
7this Section and any other provision of this Code, the
8provisions of this Section shall control.
9    (k) All earnings credits for a noncovered employee under
10Article 14 of this Code who makes the election under subsection
11(c) of Section 14-155.1 shall be considered in the
12determination of final average salary for any benefits payable
13under this Section.
14(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17.)
 
15    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
16    (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18    Sec. 14-103.10. Compensation.
19    (a) For periods of service prior to January 1, 1978, the
20full rate of salary or wages payable to an employee for
21personal services performed if he worked the full normal
22working period for his position, subject to the following
23maximum amounts: (1) prior to July 1, 1951, $400 per month or
24$4,800 per year; (2) between July 1, 1951 and June 30, 1957
25inclusive, $625 per month or $7,500 per year; (3) beginning

 

 

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1July 1, 1957, no limitation.
2    In the case of service of an employee in a position
3involving part-time employment, compensation shall be
4determined according to the employees' earnings record.
5    (b) For periods of service on and after January 1, 1978,
6all remuneration for personal services performed defined as
7"wages" under the Social Security Enabling Act, including that
8part of such remuneration which is in excess of any maximum
9limitation provided in such Act, and including any benefits
10received by an employee under a sick pay plan in effect before
11January 1, 1981, but excluding lump sum salary payments:
12        (1) for vacation,
13        (2) for accumulated unused sick leave,
14        (3) upon discharge or dismissal,
15        (4) for approved holidays.
16    (c) For periods of service on or after December 16, 1978,
17compensation also includes any benefits, other than lump sum
18salary payments made at termination of employment, which an
19employee receives or is eligible to receive under a sick pay
20plan authorized by law.
21    (d) For periods of service after September 30, 1985,
22compensation also includes any remuneration for personal
23services not included as "wages" under the Social Security
24Enabling Act, which is deducted for purposes of participation
25in a program established pursuant to Section 125 of the
26Internal Revenue Code or its successor laws.

 

 

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1    (e) For members for which Section 1-160 applies for periods
2of service on and after January 1, 2011, all remuneration for
3personal services performed defined as "wages" under the Social
4Security Enabling Act, excluding remuneration that is in excess
5of the annual earnings, salary, or wages of a member or
6participant, as provided in subsection (b-5) of Section 1-160,
7but including any benefits received by an employee under a sick
8pay plan in effect before January 1, 1981. Compensation shall
9exclude lump sum salary payments:
10        (1) for vacation;
11        (2) for accumulated unused sick leave;
12        (3) upon discharge or dismissal; and
13        (4) for approved holidays.
14    (f) Notwithstanding the other provisions of this Section,
15for service on or after July 1, 2013, "compensation" does not
16include any stipend payable to an employee for service on a
17board or commission.
18    (g) For all purposes under this Code (including without
19limitation the calculation of benefits and employee
20contributions), beginning on the effective date of
21participation in the Hybrid Plan, the compensation of a Hybrid
22Plan member shall not at any time exceed the federal Social
23Security Wage Base then in effect.
24(Source: P.A. 98-449, eff. 8-16-13.)
 
25    (40 ILCS 5/14-103.12)  (from Ch. 108 1/2, par. 14-103.12)

 

 

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1    Sec. 14-103.12. Final average compensation.
2    (a) For retirement and survivor annuities, "final average
3compensation" means the monthly compensation obtained by
4dividing the total compensation of an employee during the
5period of: (1) the 48 consecutive months of service within the
6last 120 months of service in which the total compensation was
7the highest, or (2) the total period of service, if less than
848 months, by the number of months of service in such period;
9provided that for purposes of a retirement annuity the average
10compensation for the last 12 months of the 48-month period
11shall not exceed the final average compensation by more than
1225%.
13    (b) For death and disability benefits, in the case of a
14full-time employee, "final average compensation" means the
15greater of (1) the rate of compensation of the employee at the
16date of death or disability multiplied by 1 in the case of a
17salaried employee, by 174 in the case of an hourly employee,
18and by 22 in the case of a per diem employee, or (2) for
19benefits commencing on or after January 1, 1991, final average
20compensation as determined under subsection (a).
21    For purposes of this paragraph, full or part-time status
22shall be certified by the employing agency. Final rate of
23compensation for a part-time employee shall be the total
24compensation earned during the last full calendar month prior
25to the date of death or disability.
26    (c) Notwithstanding the provisions of subsection (a), for

 

 

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1the purpose of calculating retirement and survivor annuities of
2persons with at least 20 years of eligible creditable service
3as defined in Section 14-110, "final average compensation"
4means the monthly rate of compensation received by the person
5on the last day of eligible creditable service (but not to
6exceed 115% of the average monthly compensation received by the
7person for the last 24 months of service, unless the person was
8in service as a State policeman before the effective date of
9this amendatory Act of 1997), or the average monthly
10compensation received by the person for the last 48 months of
11service prior to retirement, whichever is greater.
12    (d) Notwithstanding the provisions of subsection (a), for a
13person who was receiving, on the date of retirement or death, a
14disability benefit calculated under subdivision (b)(2) of this
15Section, the final average compensation used to calculate the
16disability benefit may be used for purposes of calculating the
17retirement and survivor annuities.
18    (e) In computing the final average compensation, periods of
19military leave shall not be considered.
20    (f) The changes to this Section made by this amendatory Act
21of 1997 (redefining final average compensation for members
22under the alternative formula) apply to members who retire on
23or after January 1, 1998, without regard to whether employment
24terminated before the effective date of this amendatory Act of
251997.
26    (g) For a member on leave of absence without pay who

 

 

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1purchases service credit for such period of leave pursuant to
2subsection (l) of Section 14-104, earnings are assumed to be
3equal to the rate of compensation in effect immediately prior
4to the leave. If no contributions are required to establish
5service credit for the period of leave, the member may elect to
6establish earnings credit for the leave period within 48 months
7after returning to work by making the employee and employer
8contributions required by subsection (l) of Section 14-104,
9based on the rate of compensation in effect immediately prior
10to the leave, plus interest at the actuarially assumed rate. In
11determining the contributions required for establishing
12service credit under this subsection (g), the interest shall be
13calculated from the beginning of the leave of absence to the
14date of payment.
15    (h) For a Hybrid Plan member, "final average compensation"
16means the monthly compensation obtained by dividing the total
17compensation of a Hybrid Plan member during the period of (1)
18the final 120 consecutive months of service or (2) the total
19period of service, if less than 120 months, by the number of
20months of service in such period.
21(Source: P.A. 96-525, eff. 8-14-09.)
 
22    (40 ILCS 5/14-103.40a new)
23    Sec. 14-103.40a. Tier 1 member. "Tier 1 member": A member
24of this System who first became a member or participant before
25January 1, 2011 under any reciprocal retirement system or

 

 

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1pension fund established under this Code other than a
2retirement system or pension fund established under Article 2,
33, 4, 5, 6, or 18 of this Code.
 
4    (40 ILCS 5/14-103.41 new)
5    Sec. 14-103.41. Hybrid Plan. "Hybrid Plan": The defined
6benefit and defined contribution retirement program maintained
7under the System as referenced in Section 14-155.1 of the Code.
 
8    (40 ILCS 5/14-103.42 new)
9    Sec. 14-103.42. Hybrid Plan member. "Hybrid Plan member": A
10noncovered employee who elects to participate in the Hybrid
11Plan. "Hybrid Plan member" also includes a noncovered employee
12who begins participation in the Hybrid Plan in the manner
13prescribed by subsection (d) of Section 14-155.1.
 
14    (40 ILCS 5/14-103.43 new)
15    Sec. 14-103.43. Consumer price index-w. "Consumer price
16index-w": The index published by the Bureau of Labor Statistics
17of the United States Department of Labor that measures the
18average change in prices of goods and services purchased by
19Urban Wage Earners and Clerical Workers, United States city
20average, all items, 1982-84 = 100. The new amount resulting
21from each annual adjustment shall be determined by the Public
22Pension Division of the Department of Insurance and made
23available to the boards of the retirement systems and pension

 

 

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1funds by November 1 of each year.
 
2    (40 ILCS 5/14-103.44 new)
3    Sec. 14-103.44. Hybrid Plan total normal cost rate. "Hybrid
4Plan total normal cost rate": The total normal cost of the
5benefits of all members of the System making contributions to
6the defined benefit portion of the Hybrid Plan, expressed as a
7percentage of pensionable payroll.
 
8    (40 ILCS 5/14-104)  (from Ch. 108 1/2, par. 14-104)
9    Sec. 14-104. Service for which contributions permitted.
10The provisions of this Section shall not apply to a Hybrid Plan
11member.
12    Contributions provided for in this Section shall cover the
13period of service granted. Except as otherwise provided in this
14Section, the contributions shall be based upon the employee's
15compensation and contribution rate in effect on the date he
16last became a member of the System; provided that for all
17employment prior to January 1, 1969 the contribution rate shall
18be that in effect for a noncovered employee on the date he last
19became a member of the System. Except as otherwise provided in
20this Section, contributions permitted under this Section shall
21include regular interest from the date an employee last became
22a member of the System to the date of payment.
23    These contributions must be paid in full before retirement
24either in a lump sum or in installment payments in accordance

 

 

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1with such rules as may be adopted by the board.
2    (a) Any member may make contributions as required in this
3Section for any period of service, subsequent to the date of
4establishment, but prior to the date of membership.
5    (b) Any employee who had been previously excluded from
6membership because of age at entry and subsequently became
7eligible may elect to make contributions as required in this
8Section for the period of service during which he was
9ineligible.
10    (c) An employee of the Department of Insurance who, after
11January 1, 1944 but prior to becoming eligible for membership,
12received salary from funds of insurance companies in the
13process of rehabilitation, liquidation, conservation or
14dissolution, may elect to make contributions as required in
15this Section for such service.
16    (d) Any employee who rendered service in a State office to
17which he was elected, or rendered service in the elective
18office of Clerk of the Appellate Court prior to the date he
19became a member, may make contributions for such service as
20required in this Section. Any member who served by appointment
21of the Governor under the Civil Administrative Code of Illinois
22and did not participate in this System may make contributions
23as required in this Section for such service.
24    (e) Any person employed by the United States government or
25any instrumentality or agency thereof from January 1, 1942
26through November 15, 1946 as the result of a transfer from

 

 

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1State service by executive order of the President of the United
2States shall be entitled to prior service credit covering the
3period from January 1, 1942 through December 31, 1943 as
4provided for in this Article and to membership service credit
5for the period from January 1, 1944 through November 15, 1946
6by making the contributions required in this Section. A person
7so employed on January 1, 1944 but whose employment began after
8January 1, 1942 may qualify for prior service and membership
9service credit under the same conditions.
10    (f) An employee of the Department of Labor of the State of
11Illinois who performed services for and under the supervision
12of that Department prior to January 1, 1944 but who was
13compensated for those services directly by federal funds and
14not by a warrant of the Auditor of Public Accounts paid by the
15State Treasurer may establish credit for such employment by
16making the contributions required in this Section. An employee
17of the Department of Agriculture of the State of Illinois, who
18performed services for and under the supervision of that
19Department prior to June 1, 1963, but was compensated for those
20services directly by federal funds and not paid by a warrant of
21the Auditor of Public Accounts paid by the State Treasurer, and
22who did not contribute to any other public employee retirement
23system for such service, may establish credit for such
24employment by making the contributions required in this
25Section.
26    (g) Any employee who executed a waiver of membership within

 

 

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160 days prior to January 1, 1944 may, at any time while in the
2service of a department, file with the board a rescission of
3such waiver. Upon making the contributions required by this
4Section, the member shall be granted the creditable service
5that would have been received if the waiver had not been
6executed.
7    (h) Until May 1, 1990, an employee who was employed on a
8full-time basis by a regional planning commission for at least
95 continuous years may establish creditable service for such
10employment by making the contributions required under this
11Section, provided that any credits earned by the employee in
12the commission's retirement plan have been terminated.
13    (i) Any person who rendered full time contractual services
14to the General Assembly as a member of a legislative staff may
15establish service credit for up to 8 years of such services by
16making the contributions required under this Section, provided
17that application therefor is made not later than July 1, 1991.
18    (j) By paying the contributions otherwise required under
19this Section, plus an amount determined by the Board to be
20equal to the employer's normal cost of the benefit plus
21interest, but with all of the interest calculated from the date
22the employee last became a member of the System or November 19,
231991, whichever is later, to the date of payment, an employee
24may establish service credit for a period of up to 4 years
25spent in active military service for which he does not qualify
26for credit under Section 14-105, provided that (1) he was not

 

 

10000SB0779ham002- 23 -LRB100 06789 RPS 30562 a

1dishonorably discharged from such military service, and (2) the
2amount of service credit established by a member under this
3subsection (j), when added to the amount of military service
4credit granted to the member under subsection (b) of Section
514-105, shall not exceed 5 years. The change in the manner of
6calculating interest under this subsection (j) made by this
7amendatory Act of the 92nd General Assembly applies to credit
8purchased by an employee on or after its effective date and
9does not entitle any person to a refund of contributions or
10interest already paid. In compliance with Section 14-152.1 of
11this Act concerning new benefit increases, any new benefit
12increase as a result of the changes to this subsection (j) made
13by Public Act 95-483 is funded through the employee
14contributions provided for in this subsection (j). Any new
15benefit increase as a result of the changes made to this
16subsection (j) by Public Act 95-483 is exempt from the
17provisions of subsection (d) of Section 14-152.1.
18    (k) An employee who was employed on a full-time basis by
19the Illinois State's Attorneys Association Statewide Appellate
20Assistance Service LEAA-ILEC grant project prior to the time
21that project became the State's Attorneys Appellate Service
22Commission, now the Office of the State's Attorneys Appellate
23Prosecutor, an agency of State government, may establish
24creditable service for not more than 60 months service for such
25employment by making contributions required under this
26Section.

 

 

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1    (l) By paying the contributions otherwise required under
2this Section, plus an amount determined by the Board to be
3equal to the employer's normal cost of the benefit plus
4interest, a member may establish service credit for periods of
5less than one year spent on authorized leave of absence from
6service, provided that (1) the period of leave began on or
7after January 1, 1982 and (2) any credit established by the
8member for the period of leave in any other public employee
9retirement system has been terminated. A member may establish
10service credit under this subsection for more than one period
11of authorized leave, and in that case the total period of
12service credit established by the member under this subsection
13may exceed one year. In determining the contributions required
14for establishing service credit under this subsection, the
15interest shall be calculated from the beginning of the leave of
16absence to the date of payment.
17    (l-5) By paying the contributions otherwise required under
18this Section, plus an amount determined by the Board to be
19equal to the employer's normal cost of the benefit plus
20interest, a member may establish service credit for periods of
21up to 2 years spent on authorized leave of absence from
22service, provided that during that leave the member represented
23or was employed as an officer or employee of a statewide labor
24organization that represents members of this System. In
25determining the contributions required for establishing
26service credit under this subsection, the interest shall be

 

 

10000SB0779ham002- 25 -LRB100 06789 RPS 30562 a

1calculated from the beginning of the leave of absence to the
2date of payment.
3    (m) Any person who rendered contractual services to a
4member of the General Assembly as a worker in the member's
5district office may establish creditable service for up to 3
6years of those contractual services by making the contributions
7required under this Section. The System shall determine a
8full-time salary equivalent for the purpose of calculating the
9required contribution. To establish credit under this
10subsection, the applicant must apply to the System by March 1,
111998.
12    (n) Any person who rendered contractual services to a
13member of the General Assembly as a worker providing
14constituent services to persons in the member's district may
15establish creditable service for up to 8 years of those
16contractual services by making the contributions required
17under this Section. The System shall determine a full-time
18salary equivalent for the purpose of calculating the required
19contribution. To establish credit under this subsection, the
20applicant must apply to the System by March 1, 1998.
21    (o) A member who participated in the Illinois Legislative
22Staff Internship Program may establish creditable service for
23up to one year of that participation by making the contribution
24required under this Section. The System shall determine a
25full-time salary equivalent for the purpose of calculating the
26required contribution. Credit may not be established under this

 

 

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1subsection for any period for which service credit is
2established under any other provision of this Code.
3    (p) By paying the contributions otherwise required under
4this Section, plus an amount determined by the Board to be
5equal to the employer's normal cost of the benefit plus
6interest, a member may establish service credit for a period of
7up to 8 years during which he or she was employed by the
8Visually Handicapped Managers of Illinois in a vending program
9operated under a contractual agreement with the Department of
10Rehabilitation Services or its successor agency.
11    This subsection (p) applies without regard to whether the
12person was in service on or after the effective date of this
13amendatory Act of the 94th General Assembly. In the case of a
14person who is receiving a retirement annuity on that effective
15date, the increase, if any, shall begin to accrue on the first
16annuity payment date following receipt by the System of the
17contributions required under this subsection (p).
18    (q) By paying the required contributions under this
19Section, plus an amount determined by the Board to be equal to
20the employer's normal cost of the benefit plus interest, an
21employee who was laid off but returned to any State employment
22may establish creditable service for the period of the layoff,
23provided that (1) the applicant applies for the creditable
24service under this subsection (q) within 6 months after July
2527, 2010 (the effective date of Public Act 96-1320), (2) the
26applicant does not receive credit for that period under any

 

 

10000SB0779ham002- 27 -LRB100 06789 RPS 30562 a

1other provision of this Code, (3) at the time of the layoff,
2the applicant is not in an initial probationary status
3consistent with the rules of the Department of Central
4Management Services, and (4) the total amount of creditable
5service established by the applicant under this subsection (q)
6does not exceed 3 years. For service established under this
7subsection (q), the required employee contribution shall be
8based on the rate of compensation earned by the employee on the
9date of returning to employment after the layoff and the
10contribution rate then in effect, and the required interest
11shall be calculated at the actuarially assumed rate from the
12date of returning to employment after the layoff to the date of
13payment. Funding for any new benefit increase, as defined in
14Section 14-152.1 of this Act, that is created under this
15subsection (q) will be provided by the employee contributions
16required under this subsection (q).
17    (r) A member who participated in the University of Illinois
18Government Public Service Internship Program (GPSI) may
19establish creditable service for up to 2 years of that
20participation by making the contribution required under this
21Section, plus an amount determined by the Board to be equal to
22the employer's normal cost of the benefit plus interest. The
23System shall determine a full-time salary equivalent for the
24purpose of calculating the required contribution. Credit may
25not be established under this subsection for any period for
26which service credit is established under any other provision

 

 

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1of this Code.
2    (s) A member who worked as a nurse under a contractual
3agreement for the Department of Public Aid, or its successor
4agency, the Department of Human Services, in the Client
5Assessment Unit and was subsequently determined to be a State
6employee by the United States Internal Revenue Service and the
7Illinois Labor Relations Board may establish creditable
8service for those contractual services by making the
9contributions required under this Section. To establish credit
10under this subsection, the applicant must apply to the System
11by July 1, 2008.
12    The Department of Human Services shall pay an employer
13contribution based upon an amount determined by the Board to be
14equal to the employer's normal cost of the benefit, plus
15interest.
16    In compliance with Section 14-152.1 added by Public Act
1794-4, the cost of the benefits provided by Public Act 95-583
18are offset by the required employee and employer contributions.
19    (t) Any person who rendered contractual services on a
20full-time basis to the Illinois Institute of Natural Resources
21and the Illinois Department of Energy and Natural Resources may
22establish creditable service for up to 4 years of those
23contractual services by making the contributions required
24under this Section, plus an amount determined by the Board to
25be equal to the employer's normal cost of the benefit plus
26interest at the actuarially assumed rate from the first day of

 

 

10000SB0779ham002- 29 -LRB100 06789 RPS 30562 a

1the service for which credit is being established to the date
2of payment. To establish credit under this subsection (t), the
3applicant must apply to the System within 6 months after July
427, 2010 (the effective date of Public Act 96-1320).
5    (u) By paying the required contributions under this
6Section, plus an amount determined by the Board to be equal to
7the employer's normal cost of the benefit, plus interest, a
8member may establish creditable service and earnings credit for
9periods of furlough beginning on or after July 1, 2008. To
10receive this credit, the participant must (i) apply in writing
11to the System before December 31, 2011 and (ii) not receive
12compensation for the furlough period. For service established
13under this subsection, the required employee contribution
14shall be based on the rate of compensation earned by the
15employee immediately following the date of the first furlough
16day in the time period specified in this subsection (u), and
17the required interest shall be calculated at the actuarially
18assumed rate from the date of the furlough to the date of
19payment.
20    (v) Any member who rendered full-time contractual services
21to an Illinois Veterans Home operated by the Department of
22Veterans' Affairs may establish service credit for up to 8
23years of such services by making the contributions required
24under this Section, plus an amount determined by the Board to
25be equal to the employer's normal cost of the benefit, plus
26interest at the actuarially assumed rate. To establish credit

 

 

10000SB0779ham002- 30 -LRB100 06789 RPS 30562 a

1under this subsection, the applicant must apply to the System
2no later than 6 months after July 27, 2010 (the effective date
3of Public Act 96-1320).
4(Source: P.A. 96-97, eff. 7-27-09; 96-718, eff. 8-25-09;
596-775, eff. 8-28-09; 96-961, eff. 7-2-10; 96-1000, eff.
67-2-10; 96-1320, eff. 7-27-10; 96-1535, eff. 3-4-11; 97-333,
78-12-11.)
 
8    (40 ILCS 5/14-104.3)  (from Ch. 108 1/2, par. 14-104.3)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 14-104.3. Notwithstanding provisions contained in
12Section 14-103.10, any member who at the time of retirement and
13after December 6, 1983 receives compensation in a lump sum for
14accumulated vacation, sickness, or personal business may
15receive service credit for such periods by making contributions
16within 90 days of withdrawal, based on the rate of compensation
17in effect immediately prior to retirement and the contribution
18rate then in effect. Any Hybrid Plan member who receives
19compensation in a lump sum for accumulated vacation, sickness,
20or personal business may not receive service credit for such
21periods. Exercising the option provided in this Section shall
22not change a member's date of withdrawal or final average
23compensation for purposes of computing the amount or effective
24date of a retirement annuity. Any annuitant who establishes
25service credit as herein provided shall have his retirement

 

 

10000SB0779ham002- 31 -LRB100 06789 RPS 30562 a

1annuity adjusted retroactively to the date of retirement.
2(Source: P.A. 83-1362.)
 
3    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)
4    (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6    Sec. 14-107. Retirement annuity - service and age -
7conditions.
8    (a) A member is entitled to a retirement annuity after
9having at least 8 years of creditable service.
10    (b) A member who has at least 35 years of creditable
11service may claim his or her retirement annuity at any age. A
12member having at least 8 years of creditable service but less
13than 35 may claim his or her retirement annuity upon or after
14attainment of age 60 or, beginning January 1, 2001, any lesser
15age which, when added to the number of years of his or her
16creditable service, equals at least 85. A member upon or after
17attainment of age 55 having at least 25 years of creditable
18service (30 years if retirement is before January 1, 2001) may
19elect to receive the lower retirement annuity provided in
20paragraph (c) of Section 14-108 of this Code. For purposes of
21the rule of 85, portions of years shall be counted in whole
22months.
23    (c) Notwithstanding subsections (a) and (b) of this
24Section, a Hybrid Plan member is entitled to an unreduced
25retirement annuity upon application if he or she has attained

 

 

10000SB0779ham002- 32 -LRB100 06789 RPS 30562 a

1the normal retirement age determined by the Social Security
2Administration for that Hybrid Plan member's year of birth, but
3no earlier than 67 years of age, and has at least 10 years of
4service credit and is otherwise eligible under the requirements
5of this Code.
6    (d) A Hybrid Plan member that has at least 10 years of
7service credit and is otherwise eligible under the requirements
8of this Code may elect to receive a lower retirement annuity
9beginning at any time within the 60-month period preceding the
10attainment of his or her normal retirement age determined by
11the Social Security Administration for that Hybrid Plan
12member's year of birth, but no earlier than 62 years of age.
13The retirement annuity shall be reduced by one-half of 1% for
14each full month that the member's age is under the greater of
15age 67 or the normal retirement age determined by the Social
16Security Administration for that Hybrid Plan member's year of
17birth.
18    (e) The allowance shall begin with the first full calendar
19month specified in the member's application therefor, the first
20day of which shall not be before the date of withdrawal as
21approved by the board. Regardless of the date of withdrawal,
22the allowance need not begin within one year of application
23therefor.
24(Source: P.A. 91-927, eff. 12-14-00.)
 
25    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)

 

 

10000SB0779ham002- 33 -LRB100 06789 RPS 30562 a

1    (Text of Section WITHOUT the changes made by P.A. 98-599,
2which has been held unconstitutional)
3    Sec. 14-108. Amount of retirement annuity. A member who has
4contributed to the System for at least 12 months shall be
5entitled to a prior service annuity for each year of certified
6prior service credited to him, except that a member shall
7receive 1/3 of the prior service annuity for each year of
8service for which contributions have been made and all of such
9annuity shall be payable after the member has made
10contributions for a period of 3 years. Proportionate amounts
11shall be payable for service of less than a full year after
12completion of at least 12 months.
13    The total period of service to be considered in
14establishing the measure of prior service annuity shall include
15service credited in the Teachers' Retirement System of the
16State of Illinois and the State Universities Retirement System
17for which contributions have been made by the member to such
18systems; provided that at least 1 year of the total period of 3
19years prescribed for the allowance of a full measure of prior
20service annuity shall consist of membership service in this
21system for which credit has been granted.
22    (a) In the case of a member who retires on or after January
231, 1998 and is a noncovered employee, the retirement annuity
24for membership service and prior service shall be 2.2% of final
25average compensation for each year of service. Any service
26credit established as a covered employee shall be computed as

 

 

10000SB0779ham002- 34 -LRB100 06789 RPS 30562 a

1stated in paragraph (b).
2    (b) In the case of a member who retires on or after January
31, 1998 and is a covered employee, the retirement annuity for
4membership service and prior service shall be computed as
5stated in paragraph (a) for all service credit established as a
6noncovered employee; for service credit established as a
7covered employee it shall be 1.67% of final average
8compensation for each year of service.
9    (b-5) Notwithstanding Section 14-110 and subsection (a) of
10this Section, the amount of the retirement annuity to which a
11Hybrid Plan member is entitled shall be computed by multiplying
121.25% for each year of service credit by his or her final
13average compensation. This subsection (b-5) shall only apply to
14service accumulated on or after the Hybrid Plan member begins
15participating in the Hybrid Plan.
16    (b-6) A Hybrid Plan member who made the election under
17subsection (c) of Section 14-155.1 shall receive a retirement
18annuity from the System based on the sum of his or her total
19accrued service credit as follows:
20        (i) The applicable percentage rate of the final average
21    compensation multiplied by each year of service prior to
22    the member's election to participate in the Hybrid Plan.
23    The final average compensation for the purposes of this
24    item (i) shall be the amount specified in subsection (b) of
25    Section 1-160 and shall be limited as described under
26    subsection (b-5) of Section 1-160.

 

 

10000SB0779ham002- 35 -LRB100 06789 RPS 30562 a

1        (ii) 1.25% of the final average compensation
2    multiplied by each year of service as a Hybrid Plan member.
3    The final average compensation for the purposes of this
4    item (ii) shall be the amount specified in subsection (h)
5    of Section 14-103.12 and shall be limited as described
6    under subsection (g) of Section 14-103.10.
7    All compensation credits for a noncovered employee under
8this Code who makes the election under subsection (c) of
9Section 14-155.1 shall be considered in the determination of
10final average compensation for any benefits payable under this
11Code.
12    (b-7) The retirement annuity of a Hybrid Plan member that
13is a State policeman or a fire fighter in the fire protection
14service of a department, as those terms are defined in
15subsection (b) of Section 14-110 shall not exceed 80% of final
16average compensation.
17    (c) For a member retiring after attaining age 55 but before
18age 60 with at least 30 but less than 35 years of creditable
19service if retirement is before January 1, 2001, or with at
20least 25 but less than 30 years of creditable service if
21retirement is on or after January 1, 2001, the retirement
22annuity shall be reduced by 1/2 of 1% for each month that the
23member's age is under age 60 at the time of retirement.
24    (d) A retirement annuity shall not exceed 75% of final
25average compensation, subject to such extension as may result
26from the application of Section 14-114 or Section 14-115. This

 

 

10000SB0779ham002- 36 -LRB100 06789 RPS 30562 a

1subsection shall not apply to a Hybrid Plan member that is a
2State policeman or a fire fighter in the fire protection
3service of a department, as those terms are defined in
4subsection (b) of Section 14-110.
5    (e) The retirement annuity payable to any covered employee
6who is a member of the System and in service on January 1,
71969, or in service thereafter in 1969 as a result of
8legislation enacted by the Illinois General Assembly
9transferring the member to State employment from county
10employment in a county Department of Public Aid in counties of
113,000,000 or more population, under a plan of coordination with
12the Old Age, Survivors and Disability provisions thereof, if
13not fully insured for Old Age Insurance payments under the
14Federal Old Age, Survivors and Disability Insurance provisions
15at the date of acceptance of a retirement annuity, shall not be
16less than the amount for which the member would have been
17eligible if coordination were not applicable.
18    (f) The retirement annuity payable to any covered employee
19who is a member of the System and in service on January 1,
201969, or in service thereafter in 1969 as a result of the
21legislation designated in the immediately preceding paragraph,
22if fully insured for Old Age Insurance payments under the
23Federal Social Security Act at the date of acceptance of a
24retirement annuity, shall not be less than an amount which when
25added to the Primary Insurance Benefit payable to the member
26upon attainment of age 65 under such Federal Act, will equal

 

 

10000SB0779ham002- 37 -LRB100 06789 RPS 30562 a

1the annuity which would otherwise be payable if the coordinated
2plan of coverage were not applicable.
3    (g) In the case of a member who is a noncovered employee,
4the retirement annuity for membership service as a security
5employee of the Department of Corrections or security employee
6of the Department of Human Services shall be: if retirement
7occurs on or after January 1, 2001, 3% of final average
8compensation for each year of creditable service; or if
9retirement occurs before January 1, 2001, 1.9% of final average
10compensation for each of the first 10 years of service, 2.1%
11for each of the next 10 years of service, 2.25% for each year
12of service in excess of 20 but not exceeding 30, and 2.5% for
13each year in excess of 30; except that the annuity may be
14calculated under subsection (a) rather than this subsection (g)
15if the resulting annuity is greater.
16    (h) In the case of a member who is a covered employee, the
17retirement annuity for membership service as a security
18employee of the Department of Corrections or security employee
19of the Department of Human Services shall be: if retirement
20occurs on or after January 1, 2001, 2.5% of final average
21compensation for each year of creditable service; if retirement
22occurs before January 1, 2001, 1.67% of final average
23compensation for each of the first 10 years of service, 1.90%
24for each of the next 10 years of service, 2.10% for each year
25of service in excess of 20 but not exceeding 30, and 2.30% for
26each year in excess of 30.

 

 

10000SB0779ham002- 38 -LRB100 06789 RPS 30562 a

1    (i) For the purposes of this Section and Section 14-133 of
2this Act, the term "security employee of the Department of
3Corrections" and the term "security employee of the Department
4of Human Services" shall have the meanings ascribed to them in
5subsection (c) of Section 14-110.
6    (j) The retirement annuity computed pursuant to paragraphs
7(g) or (h) shall be applicable only to those security employees
8of the Department of Corrections and security employees of the
9Department of Human Services who have at least 20 years of
10membership service and who are not eligible for the alternative
11retirement annuity provided under Section 14-110. However,
12persons transferring to this System under Section 14-108.2 or
1314-108.2c who have service credit under Article 16 of this Code
14may count such service toward establishing their eligibility
15under the 20-year service requirement of this subsection; but
16such service may be used only for establishing such
17eligibility, and not for the purpose of increasing or
18calculating any benefit.
19    (k) (Blank).
20    (l) The changes to this Section made by this amendatory Act
21of 1997 (changing certain retirement annuity formulas from a
22stepped rate to a flat rate) apply to members who retire on or
23after January 1, 1998, without regard to whether employment
24terminated before the effective date of this amendatory Act of
251997. An annuity shall not be calculated in steps by using the
26new flat rate for some steps and the superseded stepped rate

 

 

10000SB0779ham002- 39 -LRB100 06789 RPS 30562 a

1for other steps of the same type of service.
2    (m) For the purposes of this Section, "applicable
3percentage rate" means the benefit formula rate applicable to a
4noncovered employee as determined by either subsection (b) of
5Section 14-108 or subsection (a) of Section 14-110 based upon
6the type of service performed by that noncovered employee prior
7to the date of the election.
8(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
 
9    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 14-114. Automatic increase in retirement annuity.
13    (a) Any person receiving a retirement annuity under this
14Article who retires having attained age 60, or who retires
15before age 60 having at least 35 years of creditable service,
16or who retires on or after January 1, 2001 at an age which,
17when added to the number of years of his or her creditable
18service, equals at least 85, shall, on January 1 next following
19the first full year of retirement, have the amount of the then
20fixed and payable monthly retirement annuity increased 3%. Any
21person receiving a retirement annuity under this Article who
22retires before attainment of age 60 and with less than (i) 35
23years of creditable service if retirement is before January 1,
242001, or (ii) the number of years of creditable service which,
25when added to the member's age, would equal 85, if retirement

 

 

10000SB0779ham002- 40 -LRB100 06789 RPS 30562 a

1is on or after January 1, 2001, shall have the amount of the
2fixed and payable retirement annuity increased by 3% on the
3January 1 occurring on or next following (1) attainment of age
460, or (2) the first anniversary of retirement, whichever
5occurs later. However, for persons who receive the alternative
6retirement annuity under Section 14-110, references in this
7subsection (a) to attainment of age 60 shall be deemed to refer
8to attainment of age 55. For a person receiving early
9retirement incentives under Section 14-108.3 whose retirement
10annuity began after January 1, 1992 pursuant to an extension
11granted under subsection (e) of that Section, the first
12anniversary of retirement shall be deemed to be January 1,
131993. For a person who retires on or after June 28, 2001 and on
14or before October 1, 2001, and whose retirement annuity is
15calculated, in whole or in part, under Section 14-110 or
16subsection (g) or (h) of Section 14-108, the first anniversary
17of retirement shall be deemed to be January 1, 2002.
18    On each January 1 following the date of the initial
19increase under this subsection, the employee's monthly
20retirement annuity shall be increased by an additional 3%.
21    Beginning January 1, 1990, all automatic annual increases
22payable under this Section shall be calculated as a percentage
23of the total annuity payable at the time of the increase,
24including previous increases granted under this Article.
25    (b) The provisions of subsection (a) of this Section shall
26be applicable to an employee only if the employee makes the

 

 

10000SB0779ham002- 41 -LRB100 06789 RPS 30562 a

1additional contributions required after December 31, 1969 for
2the purpose of the automatic increases for not less than the
3equivalent of one full year. If an employee becomes an
4annuitant before his additional contributions equal one full
5year's contributions based on his salary at the date of
6retirement, the employee may pay the necessary balance of the
7contributions to the system, without interest, and be eligible
8for the increasing annuity authorized by this Section.
9    (c) The provisions of subsection (a) of this Section shall
10not be applicable to any annuitant who is on retirement on
11December 31, 1969, and thereafter returns to State service,
12unless the member has established at least one year of
13additional creditable service following reentry into service.
14    (d) In addition to other increases which may be provided by
15this Section, on January 1, 1981 any annuitant who was
16receiving a retirement annuity on or before January 1, 1971
17shall have his retirement annuity then being paid increased $1
18per month for each year of creditable service. On January 1,
191982, any annuitant who began receiving a retirement annuity on
20or before January 1, 1977, shall have his retirement annuity
21then being paid increased $1 per month for each year of
22creditable service.
23    On January 1, 1987, any annuitant who began receiving a
24retirement annuity on or before January 1, 1977, shall have the
25monthly retirement annuity increased by an amount equal to 8
26per year of creditable service times the number of years that

 

 

10000SB0779ham002- 42 -LRB100 06789 RPS 30562 a

1have elapsed since the annuity began.
2    (e) Every person who receives the alternative retirement
3annuity under Section 14-110 and who is eligible to receive the
43% increase under subsection (a) on January 1, 1986, shall also
5receive on that date a one-time increase in retirement annuity
6equal to the difference between (1) his actual retirement
7annuity on that date, including any increases received under
8subsection (a), and (2) the amount of retirement annuity he
9would have received on that date if the amendments to
10subsection (a) made by Public Act 84-162 had been in effect
11since the date of his retirement.
12    (f) The retirement annuity of a Hybrid Plan member shall
13receive annual increases on the January 1 on or after the
14attainment of the applicable retirement age determined by the
15Social Security Administration (but no earlier than age 67) or
16the first anniversary of the annuity start date, whichever is
17later. Each annual increase shall be one-half the annual
18unadjusted percentage increase (but not less than zero) in the
19consumer price index-w for the 12 months ending with the
20September preceding each November 1 of the originally granted
21retirement annuity. If the annual unadjusted percentage change
22in the consumer price index-w for the 12 months ending with the
23September preceding each November 1 is zero or there is a
24decrease, then the annuity shall not be increased.
25(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
2692-651, eff. 7-11-02.)
 

 

 

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1    (40 ILCS 5/14-121)  (from Ch. 108 1/2, par. 14-121)
2    Sec. 14-121. Amount of survivors annuity. A survivors
3annuity beneficiary shall be entitled upon death of the member
4to a single sum payment of $1,000, payable pro rata among all
5persons entitled thereto, together with a survivors annuity
6payable at the rates and under the conditions specified in this
7Article.
8    (a) If the survivors annuity beneficiary is a spouse, the
9survivors annuity shall be 30% of final average compensation
10subject to a maximum payment of $400 per month.
11    (b) If an eligible child or children under the care of a
12spouse also survives the member, such spouse as natural
13guardian of the child or children shall receive, in addition to
14the foregoing annuity, 20% of final average compensation on
15account of each such child and 10% of final average
16compensation divided pro rata among such children, subject to a
17maximum payment on account of all survivor annuity
18beneficiaries of $600 per month, or 80% of the member's final
19average compensation, whichever is the lesser.
20    (c) If the survivors annuity beneficiary or beneficiaries
21consists of an unmarried child or children, the amount of
22survivors annuity shall be 20% of final average compensation to
23each child, and 10% of final average compensation divided pro
24rata among all such children entitled to such annuity, subject
25to a maximum payment to all children combined of $600 per month

 

 

10000SB0779ham002- 44 -LRB100 06789 RPS 30562 a

1or 80% of the member's final average compensation, whichever is
2the lesser.
3    (d) If the survivors annuity beneficiary is one or more
4dependent parents, the annuity shall be 20% of final average
5compensation to each parent and 10% of final average
6compensation divided pro rata among the parents who qualify for
7this annuity, subject to a maximum payment to both dependent
8parents of $400 per month.
9    (e) The survivors annuity to the spouse, children or
10dependent parents of a member whose death occurs after the date
11of last withdrawal, or after retirement, or while in service
12following reentry into service after retirement but before
13completing 1 1/2 years of additional creditable service, shall
14not exceed the lesser of 80% of the member's earned retirement
15annuity at the date of death or the maximum previously
16established in this Section.
17    (f) In applying the limitation prescribed on the combined
18payments to 2 or more survivors annuity beneficiaries, the
19annuity on account of each beneficiary shall be reduced pro
20rata until such time as the number of beneficiaries makes the
21reduction no longer applicable.
22    (g) Except as otherwise provided in this subsection (g), a
23survivors annuity payable on account of any covered employee
24who has been a covered employee for at least 18 months at date
25of death or last withdrawal, whichever is the later, shall be
26reduced by 1/2 of the survivors benefits to which his

 

 

10000SB0779ham002- 45 -LRB100 06789 RPS 30562 a

1beneficiaries are eligible under the federal Social Security
2Act, except that (1) the survivors annuity payable under this
3Article shall not be reduced by any increase under that Act
4which occurs after the offset required by this subsection is
5first applied to that annuity, (2) for benefits granted on or
6after January 1, 1992, the offset under this subsection (g)
7shall not exceed 50% of the amount of survivors annuity
8otherwise payable.
9    Beginning July 1, 2009, the offset under this subsection
10(g) shall no longer be applied to any survivors annuity of any
11person who began receiving retirement benefits or a survivors
12annuity prior to January 1, 1998.
13    Beginning July 1, 2009, the offset under this subsection
14(g) shall no longer be applied to the survivors annuity of any
15person who began receiving a survivors annuity on or after
16January 1, 1998 and before the effective date of this
17amendatory Act of the 95th General Assembly.
18    Any person who began receiving retirement benefits after
19January 1, 1998 and before the effective date of this
20amendatory Act of the 95th General Assembly may, during a
21one-time election period established by the System, elect to
22reduce his or her retirement annuity by 3.825% in exchange for
23not having the offset under this subsection (g) applied to his
24or her survivors annuity.
25    Any employee in service on the effective date of this
26amendatory Act of the 95th General Assembly may, at the time of

 

 

10000SB0779ham002- 46 -LRB100 06789 RPS 30562 a

1retirement, elect to reduce his or her retirement annuity by
23.825% in exchange for not having the offset under this
3subsection (g) applied to his or her survivors annuity.
4    If a survivors annuity is payable to the widow of an
5employee based on the employee's death in service, then the
6offset under this subsection (g) shall no longer be applied to
7the survivors annuity.
8    A retiree who elects to reduce his or her retirement
9annuity under this subsection (g) in exchange for not having
10the offset applied may make an irrevocable election to
11eliminate the reduction of his or her retirement annuity if
12there is a change in marital status due to death or divorce,
13but the retiree is not entitled to reimbursement of any benefit
14reduction prior to the election.
15    (h) The minimum payment to a beneficiary hereunder shall be
16$60 per month, which shall be reduced in accordance with the
17limitation prescribed on the combined payments to all
18beneficiaries of a member.
19    (i) Subject to the conditions set forth in Section 14-120,
20the minimum total survivors annuity benefit payable to the
21survivors annuity beneficiaries of a deceased member or
22annuitant whose death occurs on or after January 1, 1984, shall
23be 50% of the amount of retirement annuity that was or would
24have been payable to the deceased on the date of death,
25regardless of the age of the deceased on such date. If the
26minimum total benefit provided by this subsection exceeds the

 

 

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1maximum otherwise imposed by this Section, the minimum total
2benefit shall nevertheless be payable. Any increase in the
3total survivors annuity benefit resulting from the operation of
4this subsection shall be divided among the survivors annuity
5beneficiaries of the deceased in proportion to their shares of
6the total survivors annuity benefit otherwise payable under
7this Section.
8    (j) Any survivors annuity beneficiary whose annuity
9terminates due to any condition specified in this Article other
10than death shall be entitled to a refund of the excess, if any,
11of the accumulated contributions of the member plus credited
12interest over all payments to the member and beneficiary or
13beneficiaries, exclusive of the single sum payment of $1,000,
14provided no future survivors or reversionary annuity benefits
15are payable.
16    (k) Upon the death of the last eligible recipient of a
17survivors annuity the excess, if any, of the member's
18accumulated contributions plus credited interest over all
19annuity payments to the member and survivors exclusive of the
20single sum payment of $1000, shall be paid to the named
21beneficiary of the last eligible survivor, or if none has been
22named, to the estate of the last eligible survivor, provided no
23reversionary annuity is payable.
24    (l) On January 1, 1981, any survivor who was receiving a
25survivors annuity on or before January 1, 1971, shall have his
26survivors annuity then being paid increased by 1% for each full

 

 

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1year which has elapsed from the date the annuity began. On
2January 1, 1982, any survivor who began receiving a survivor's
3annuity after January 1, 1971, but before January 1, 1981,
4shall have his survivor's annuity then being paid increased by
51% for each full year that has elapsed from the date the
6annuity began. On January 1, 1987, any survivor who began
7receiving a survivor's annuity on or before January 1, 1977,
8shall have the monthly survivor's annuity increased by $1 for
9each full year which has elapsed since the date the survivor's
10annuity began.
11    (m) Beginning January 1, 1990, every survivor's annuity
12shall be increased (1) on each January 1 occurring on or after
13the commencement of the annuity if the deceased member died
14while receiving a retirement annuity, or (2) in other cases, on
15each January 1 occurring on or after the first anniversary of
16the commencement of the annuity, by an amount equal to 3% of
17the current amount of the annuity, including any previous
18increases under this Article. Such increases shall apply
19without regard to whether the deceased member was in service on
20or after the effective date of Public Act 86-1488, but shall
21not accrue for any period prior to January 1, 1990.
22    (n) Notwithstanding the provisions of this Section, the
23initial survivor's annuity of an eligible survivor of a Hybrid
24Plan member shall be calculated as provided under this
25subsection.
26        (1) In the case of the death of a member receiving a

 

 

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1    retirement annuity, the initial survivor's annuity shall
2    be in the amount of 66 2/3% of such retirement annuity.
3        (2) In the case of the death of a Hybrid Plan member
4    who has not retired, the initial survivor's annuity shall
5    be in the amount of 66 2/3% of the deceased Hybrid Plan
6    member's earned retirement annuity.
7    If 2 or more persons are eligible to receive survivor's
8annuities based on the same deceased Hybrid Plan member, the
9calculation of the survivor's benefits shall be based on the
10total calculation of the survivor's annuity and divided pro
11rata.
12    The initial survivor's annuity of an eligible survivor to
13whom this subsection (n) applies shall be increased on each
14January 1 occurring on or after the commencement of the
15annuity. Each annual increase shall be one-half the annual
16unadjusted percentage increase (but not less than zero) in the
17consumer price index-w for the 12 months ending with the
18September preceding each November 1 of the originally granted
19survivor's annuity. If the annual unadjusted percentage change
20in the consumer price index-w for the 12 months ending with the
21September preceding each November 1 is zero or there is a
22decrease, then the annuity shall not be increased.
23(Source: P.A. 95-1043, eff. 3-26-09.)
 
24    (40 ILCS 5/14-130)  (from Ch. 108 1/2, par. 14-130)
25    Sec. 14-130. Refunds; rules.

 

 

10000SB0779ham002- 50 -LRB100 06789 RPS 30562 a

1    (a) Upon withdrawal a member is entitled to receive, upon
2written request, a refund of the member's contributions,
3including credits granted while in receipt of disability
4benefits, without credited interest. The board, in its
5discretion may withhold payment of the refund of a member's
6contributions for a period not to exceed 1 year after the
7member has ceased to be an employee.
8    In the case of a Hybrid Plan member, this Section shall
9apply solely to the defined benefit portion of the Hybrid Plan.
10    For purposes of this Section, a member will be considered
11to have withdrawn from service if a change in, or transfer of,
12his position results in his becoming ineligible for continued
13membership in this System and eligible for membership in
14another public retirement system under this Act.
15    (b) A member receiving a refund forfeits and relinquishes
16all accrued rights in the System, including all accumulated
17creditable service. If the person again becomes a member of the
18System and establishes at least 2 years of creditable service,
19the member may repay all the moneys previously refunded or a
20portion of the moneys previously refunded representing
21contributions for one or more whole months of creditable
22service. If a member repays a portion of moneys previously
23refunded, he or she may later repay some or all of the
24remaining portion of those previously refunded moneys.
25However, a former member may restore credits previously
26forfeited by acceptance of a refund without returning to

 

 

10000SB0779ham002- 51 -LRB100 06789 RPS 30562 a

1service by applying in writing and repaying to the System, by
2April 1, 1993, the amount of the refund plus regular interest
3calculated from the date of refund to the date of repayment.
4    The repayment of refunds issued prior to January 1, 1984
5shall consist of the amount refunded plus 5% interest per annum
6compounded annually for the period from the date of the refund
7to the end of the month in which repayment is made. The
8repayment of refunds issued after January 1, 1984 shall consist
9of the amount refunded plus regular interest for the period
10from the date of refund to the end of the month in which
11repayment is made. The repayment of the refund of a person who
12accepts an alternative retirement cancellation payment under
13Section 14-108.5 shall consist of the entire amount paid to the
14person under subsection (c) of Section 14-108.5 plus regular
15interest for the period from the date of the refund to the end
16of the month in which repayment is made. However, in the case
17of a refund that is repaid in a lump sum between January 1,
181991 and July 1, 1991, repayment shall consist of the amount
19refunded plus interest at the rate of 2.5% per annum compounded
20annually from the date of the refund to the end of the month in
21which repayment is made.
22    Upon repayment, the member shall receive credit for the
23service for which the refund has been repaid, and the
24corresponding member contributions and regular interest that
25was forfeited by acceptance of the refund, as well as regular
26interest for the period of non-membership. Such repayment shall

 

 

10000SB0779ham002- 52 -LRB100 06789 RPS 30562 a

1be made in full before retirement either in a lump sum or in
2installment payments in accordance with such rules as may be
3adopted by the board.
4    For a Hybrid Plan member who made the election under
5subsection (c) of Section 14-155.1, the amount repaid shall be
6restored in the proportions attributable to service associated
7with the plan prescribed by Section 1-160 and as a Hybrid Plan
8member, respectively.
9    (b-5) The Board may adopt rules governing the repayment of
10refunds and establishment of credits in cases involving awards
11of back pay or reinstatement. The rules may authorize repayment
12of a refund in installment payments and may waive the payment
13of interest on refund amounts repaid in full within a specified
14period.
15    (c) A member no longer in service who is unmarried and does
16not have an eligible survivors annuity beneficiary on the date
17of application therefor is entitled to a refund of
18contributions for widow's annuity or survivors annuity
19purposes, or both, as the case may be, without interest. A
20widow's annuity or survivors annuity shall not be payable upon
21the death of a person who has received this refund, unless
22prior to that death the amount of the refund has been repaid to
23the System, together with regular interest from the date of the
24refund to the date of repayment.
25    (d) Any member who has service credit in any position for
26which an alternative retirement annuity is provided and in

 

 

10000SB0779ham002- 53 -LRB100 06789 RPS 30562 a

1relation to which an increase in the rate of employee
2contribution is required, shall be entitled to a refund,
3without interest, of that part of the member's employee
4contribution which results from that increase in the employee
5rate if the member does not qualify for that alternative
6retirement annuity at the time of retirement.
7(Source: P.A. 93-839, eff. 7-30-04; 94-455, eff. 8-4-05.)
 
8    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 14-133. Contributions on behalf of members.
12    (a) Each participating employee shall make contributions
13to the System, based on the employee's compensation, as
14follows:
15        (1) Covered employees, except as indicated below, 3.5%
16    for retirement annuity, and 0.5% for a widow or survivors
17    annuity;
18        (2) Noncovered employees, except as indicated below,
19    7% for retirement annuity and 1% for a widow or survivors
20    annuity;
21        (3) Noncovered employees serving in a position in which
22    "eligible creditable service" as defined in Section 14-110
23    may be earned, 1% for a widow or survivors annuity plus the
24    following amount for retirement annuity: 8.5% through
25    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%

 

 

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1    in 2004 and thereafter;
2        (4) Covered employees serving in a position in which
3    "eligible creditable service" as defined in Section 14-110
4    may be earned, 0.5% for a widow or survivors annuity plus
5    the following amount for retirement annuity: 5% through
6    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
7    and thereafter;
8        (5) Each security employee of the Department of
9    Corrections or of the Department of Human Services who is a
10    covered employee, 0.5% for a widow or survivors annuity
11    plus the following amount for retirement annuity: 5%
12    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
13    in 2004 and thereafter;
14        (6) Each security employee of the Department of
15    Corrections or of the Department of Human Services who is
16    not a covered employee, 1% for a widow or survivors annuity
17    plus the following amount for retirement annuity: 8.5%
18    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
19    11.5% in 2004 and thereafter.
20    (a-5) Notwithstanding subsection (a), for the first plan
21year containing the implementation date of the Hybrid Plan, a
22Hybrid Plan member shall make contributions to the System at
235.4% of compensation for the retirement annuity, and 0.8% of
24compensation for the survivor's annuity. For each plan year
25thereafter, each Hybrid Plan member shall contribute the lesser
26of 5.4% of compensation or 87.1% of the total normal cost of

 

 

10000SB0779ham002- 55 -LRB100 06789 RPS 30562 a

1the defined benefit portion of the Hybrid Plan, rounded to the
2nearest tenth of a percent, for the retirement annuity.
3Additionally, for each plan year thereafter, each Hybrid Plan
4member shall contribute the lesser of 0.8% of compensation or
512.9% of the total normal cost of the defined benefit portion
6of the Hybrid Plan, rounded to the nearest tenth of a percent,
7for the survivor's annuity.
8    (a-10) Prior to the date of the plan election under Section
914-155.1, a noncovered employee eligible to make that election
10shall contribute at the applicable rates provided under
11subsection (a) of this Section. If a noncovered employee elects
12to participate in the Hybrid Plan, any excess employee
13contributions made prior to the date of the election shall be
14credited to the employee's defined contribution account under
15Section 14-155.2.
16    (a-15) By the January 15 occurring on or after the
17implementation date of the Hybrid Plan under Section 14-155.1,
18and by every January 15 thereafter, the Board must certify the
19Hybrid Plan total normal cost rate. By the January 15 occurring
20on or after the implementation date of the Hybrid Plan under
21Section 14-155.1, and by every January 15 thereafter, if the
22employee contribution rate differs from the certified Hybrid
23Plan total normal cost rate under subsection (c) of Section
2414-135.08, then the total employee contribution rate under
25subsection (a-10) shall be equal to the lesser of the certified
26Hybrid Plan total normal cost rate or 6.2%, but not less than

 

 

10000SB0779ham002- 56 -LRB100 06789 RPS 30562 a

10%, beginning July 1 of that year.
2    (a-20) A Hybrid Plan member shall not make contributions on
3compensation that exceeds the limitation prescribed under
4subsection (g) of Section 14-103.10.
5    (b) Contributions shall be in the form of a deduction from
6compensation and shall be made notwithstanding that the
7compensation paid in cash to the employee shall be reduced
8thereby below the minimum prescribed by law or regulation. Each
9member is deemed to consent and agree to the deductions from
10compensation provided for in this Article, and shall receipt in
11full for salary or compensation.
12(Source: P.A. 92-14, eff. 6-28-01.)
 
13    (40 ILCS 5/14-133.1)  (from Ch. 108 1/2, par. 14-133.1)
14    Sec. 14-133.1. Pickup of contributions.
15    (a) Each department shall pick up the employee
16contributions required by Section 14-133 and employee
17contributions required under subsection (b) of Section
1814-155.2 to the extent so designated under the defined
19contribution plan under that Section for all compensation
20earned after December 31, 1981, and the contributions so picked
21up shall be treated as employer contributions in determining
22tax treatment under the United States Internal Revenue Code;
23however, each department shall continue to withhold federal and
24State income taxes based upon these contributions until the
25Internal Revenue Service or the federal courts rule that

 

 

10000SB0779ham002- 57 -LRB100 06789 RPS 30562 a

1pursuant to Section 414(h) of the United States Internal
2Revenue Code, these contributions shall not be included as
3gross income of the employee until such time as they are
4distributed or made available.
5    The department shall pay these employee contributions from
6the same fund which is used in paying earnings to the employee.
7The department may pick up these contributions by a reduction
8in the cash salary of the employee or by an offset against a
9future salary increase or by a combination of a reduction in
10salary and offset against a future salary increase. If employee
11contributions are picked up they shall be treated for all
12purposes of this Article 14 in the same manner and to the same
13extent as employee contributions made prior to the date picked
14up.
15    (b) Subject to the requirements of federal law, an employee
16of a department may elect to have the department pick up
17optional contributions that the employee has elected to pay to
18the System, and the contributions so picked up shall be treated
19as employer contributions for the purposes of determining
20federal tax treatment. The department shall pick up the
21contributions by a reduction in the cash salary of the employee
22and shall pay the contributions from the same fund that is used
23to pay earnings to the employee. The election to have optional
24contributions picked up is irrevocable and the optional
25contributions may not thereafter be prepaid, by direct payment
26or otherwise. If the provision authorizing the optional

 

 

10000SB0779ham002- 58 -LRB100 06789 RPS 30562 a

1contribution requires payment by a stated date (rather than the
2date of withdrawal or retirement), that requirement shall be
3deemed to have been satisfied if (i) on or before the stated
4date the employee executes a valid irrevocable election to have
5the contributions picked up under this subsection, and (ii) the
6picked-up contributions are in fact paid to the System as
7provided in the election.
8(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)
 
9    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
10    Sec. 14-135.08. To certify required State contributions.
11    (a) To certify to the Governor and to each department, on
12or before November 15 of each year until November 15, 2011, the
13required rate for State contributions to the System for the
14next State fiscal year, as determined under subsection (b) of
15Section 14-131. The certification to the Governor under this
16subsection (a) shall include a copy of the actuarial
17recommendations upon which the rate is based and shall
18specifically identify the System's projected State normal cost
19for that fiscal year.
20    (a-5) On or before November 1 of each year, beginning
21November 1, 2012, the Board shall submit to the State Actuary,
22the Governor, and the General Assembly a proposed certification
23of the amount of the required State contribution to the System
24for the next fiscal year, along with all of the actuarial
25assumptions, calculations, and data upon which that proposed

 

 

10000SB0779ham002- 59 -LRB100 06789 RPS 30562 a

1certification is based. On or before January 1 of each year
2beginning January 1, 2013, the State Actuary shall issue a
3preliminary report concerning the proposed certification and
4identifying, if necessary, recommended changes in actuarial
5assumptions that the Board must consider before finalizing its
6certification of the required State contributions. On or before
7January 15, 2013 and each January 15 thereafter, the Board
8shall certify to the Governor and the General Assembly the
9amount of the required State contribution for the next fiscal
10year. The Board's certification must note any deviations from
11the State Actuary's recommended changes, the reason or reasons
12for not following the State Actuary's recommended changes, and
13the fiscal impact of not following the State Actuary's
14recommended changes on the required State contribution.
15    (b) The certifications under subsections (a) and (a-5)
16shall include an additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18the next fiscal year authorized by Section 7.2(a) of the
19General Obligation Bond Act and issued to provide the proceeds
20deposited by the State with the System in July 2003,
21representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act. For State
23fiscal year 2005, the Board shall make a supplemental
24certification of the additional amount necessary to pay all
25principal of and interest on those general obligation bonds due
26in State fiscal years 2004 and 2005 authorized by Section

 

 

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17.2(a) of the General Obligation Bond Act and issued to provide
2the proceeds deposited by the State with the System in July
32003, representing deposits other than amounts reserved under
4Section 7.2(c) of the General Obligation Bond Act, as soon as
5practical after the effective date of this amendatory Act of
6the 93rd General Assembly.
7    On or before May 1, 2004, the Board shall recalculate and
8recertify to the Governor and to each department the amount of
9the required State contribution to the System and the required
10rates for State contributions to the System for State fiscal
11year 2005, taking into account the amounts appropriated to and
12received by the System under subsection (d) of Section 7.2 of
13the General Obligation Bond Act.
14    On or before July 1, 2005, the Board shall recalculate and
15recertify to the Governor and to each department the amount of
16the required State contribution to the System and the required
17rates for State contributions to the System for State fiscal
18year 2006, taking into account the changes in required State
19contributions made by this amendatory Act of the 94th General
20Assembly.
21    On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor and to each department the amount of
23the required State contribution to the System for State fiscal
24year 2011, applying the changes made by Public Act 96-889 to
25the System's assets and liabilities as of June 30, 2009 as
26though Public Act 96-889 was approved on that date.

 

 

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1    By November 1, 2017, the Board shall submit recalculate and
2recertify to the State Actuary, the Governor, and the General
3Assembly a proposed recertification of the amount of the
4required State contribution to the System for State fiscal year
52018, taking into account the changes in the required State
6contributions made by Public Act 100-23 this amendatory Act of
7the 100th General Assembly. On or before January 1, 2018, the
8The State Actuary shall review the assumptions and valuations
9underlying the Board's revised certification and issue a
10preliminary report concerning the proposed recertification and
11identifying, if necessary, recommended changes in actuarial
12assumptions that the Board must consider before finalizing its
13recertification certification of the required State
14contributions. On or before January 15, 2018, the Board shall
15recertify to the Governor and the General Assembly the amount
16of the required State contribution for State fiscal year 2018.
17The Board's recertification final certification must note any
18deviations from the State Actuary's recommended changes, the
19reason or reasons for not following the State Actuary's
20recommended changes, and the fiscal impact of not following the
21State Actuary's recommended changes on the required State
22contribution.
23    (c) On or before November 1 of each year, beginning with
24the November 1 occurring after the implementation date of the
25Hybrid Plan, the Board shall submit to the State Actuary, the
26Governor, and the General Assembly a proposed certification of

 

 

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1the Hybrid Plan total normal cost rate as defined in Section
214-103.44, along with all of the actuarial assumptions,
3calculations, and data upon which the proposed certification is
4based. On or before January 1 of each year, beginning with the
5January 1 occurring after the implementation date of the Hybrid
6Plan, the State Actuary shall issue a preliminary report
7concerning the proposed certification and identifying, if
8necessary, recommended changes in actuarial assumptions that
9the Board must consider before finalizing its certification of
10the Hybrid Plan total normal cost rate. On or before the
11January 15 occurring after the implementation date of the
12Hybrid Plan and each January 15 thereafter, the Board shall
13certify to the Governor and the General Assembly the Hybrid
14Plan total normal cost rate as defined under Section 14-103.44.
15The Board's certification must note, any deviations from the
16State Actuary's recommended changes, the reason or reasons for
17not following the State Actuary's recommended changes, and the
18fiscal impact of not following the State Actuary's recommended
19changes on the required State contribution.
20(Source: P.A. 100-23, eff. 7-6-17.)
 
21    (40 ILCS 5/14-155.1 new)
22    Sec. 14-155.1. Hybrid Plan.
23    (a) Effective on the date of the implementation date of the
24Hybrid Plan, each eligible noncovered employee shall be given
25the choice to participate in the Hybrid Plan.

 

 

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1    Notwithstanding any other provision of this Code to the
2contrary, the provisions of this Section apply to a noncovered
3employee who first becomes a member on or after the
4implementation date of the Hybrid Plan and who does not make
5the election under subsection (b). The provisions of this
6Section also apply to service credit earned on or after the
7date of an election made under subsection (c) of this Section.
8However, the provisions of this Section do not apply to a
9covered employee or to a Tier 1 member.
10    As used in this Section and Section 1-160, "implementation
11date" means the earliest date upon which the Board authorizes
12members to begin participating in the Hybrid Plan. The Board
13shall endeavor to make such participation available as soon as
14possible after the effective date of this Section and shall
15establish an implementation date by Board resolution. The Board
16shall obtain a favorable ruling from the U.S. Internal Revenue
17Service prior to allowing any member to make an election under
18this Section.
19    (b) In lieu of the benefits provided under this Section, a
20member eligible for the plan under this Section may irrevocably
21elect the benefits under Section 1-160 and the benefits
22otherwise applicable to that member. The election must be made
23within 90 days after the System notifies the member of his or
24her participation in the System. The System shall establish
25procedures for making this election.
26    (c) A noncovered employee eligible to participate in the

 

 

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1Hybrid Plan who was a member of the System prior to the
2implementation date of the Hybrid Plan may irrevocably elect to
3begin participating in the Hybrid Plan effective on the
4beginning of the first payroll period immediately following his
5or her election. The election under this subsection must be
6made within 90 days after the plan's implementation date and in
7accordance with rules prescribed by the Board. For a noncovered
8employee eligible to participate in the Hybrid Plan that
9returns to service after the implementation date, the election
10must be made within 90 days after the System notifies the
11member of his or her eligibility to elect to participate in the
12Hybrid Plan. All service credit earned after the date of the
13election shall be calculated in accordance with the provisions
14of the Hybrid Plan. For a noncovered employee making the
15election under this subsection, all service completed under the
16System shall count for purposes of determining retirement
17eligibility and vesting under both the Hybrid Plan and the plan
18provided by Section 1-160.
19    For a noncovered employee who makes the election under this
20subsection (c), no period of service within a plan year shall
21result in more than one year of combined service credit. If
22service credit must be reduced to satisfy this subsection (c),
23then service credits established under the Hybrid Plan shall be
24forfeited first.
25    (d) A noncovered employee who first begins participating in
26the System on or after the implementation date of the Hybrid

 

 

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1Plan shall participate in the plan prescribed under Section
21-160 until he or she makes an election or is deemed to have
3made an election under this Section. If a member who first
4becomes a participant in the System on or after the
5implementation date of the Hybrid Plan does not make an
6election in accordance with the timeline prescribed under this
7Section, then he or she shall begin participation in the Hybrid
8Plan by default beginning on the first payroll period
9immediately following the event that caused him or her to
10default into the Hybrid Plan.
11    (e) A noncovered employee eligible to participate in the
12Hybrid Plan shall be provided with information prescribed by
13the System that describes the retirement program choices.
14    (f) The System shall obtain a favorable ruling from the
15U.S. Internal Revenue Service prior to allowing any member to
16make the election under this Section.
17    (g) The elections under subsections (b) and (c) of this
18Section are one-time, irrevocable elections. If an employee
19terminates employment after making an irrevocable election
20under either of those subsections, then upon his or her
21subsequent re-employment as a noncovered employee with a
22department covered by this Article, such election shall
23automatically apply to him or her.
24    If an employee is enrolled in the Hybrid Plan by default as
25provided in subsection (d) of this Section, such action shall
26be deemed an irrevocable election. If such employee terminates

 

 

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1employment after that deemed election, then upon his or her
2subsequent re-employment as a noncovered employee with a
3department covered by this Article, that election shall
4automatically apply to him or her.
5    (h) In no event shall the System, its staff, its authorized
6representatives, or the Board be liable for any election under
7this Article.
 
8    (40 ILCS 5/14-155.2 new)
9    Sec. 14-155.2. Defined contribution portion of the Hybrid
10Plan.
11    (a) The System shall prepare and implement a defined
12contribution program for individuals who elect to participate
13in the Hybrid Plan pursuant to Section 14-155.1. The defined
14contribution portion of the Hybrid Plan shall consist of one or
15more defined contribution plans (and may include existing plans
16maintained by other State entities) that each meet the
17definition of an "eligible retirement plan" as that term is
18defined under Section 402(c)(8)(B) of the Internal Revenue Code
19of 1986, as amended.
20    No person shall begin participating in the defined
21contribution program, except for a defined contribution plan
22under the defined contribution program that has received a
23determination letter before the effective date of this
24amendatory Act of the 100th General Assembly or, in the case of
25plans established after the effective date of this amendatory

 

 

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1Act of the 100th General Assembly, until such plan has been
2determined by the U.S. Internal Revenue Service to satisfy the
3applicable requirements of the Internal Revenue Code of 1986,
4as amended, for its type of eligible retirement plan (whether
5by determination letter, opinion letter, or private letter
6ruling); except that in the case of an arrangement of a type
7for which an Internal Revenue Service approval process is not
8available as of the implementation date (such as a plan
9described in Section 403(b) that is not a prototype or volume
10submitter plan as defined in Internal Revenue Service
11guidance), participants may commence participation in such
12plan as of the implementation date specified by the Board
13without regard to the fact that Internal Revenue Service
14approval of the arrangement cannot be obtained.
15    (b) Each participant shall contribute 4% of his or her
16compensation to the defined contribution plan.
17    (c) Employer contributions shall begin on the first pay
18period following the date the participant has been employed
19with the same employer for at least one year. For a Hybrid Plan
20member who has been employed with the same employer for at
21least one year on the date of his or her election, employer
22contributions shall begin on the first pay period that begins
23after the System receives notice of the member's election. The
24rate of employer contributions, expressed as a percentage of
25earnings, may be set for individual employees, but shall be no
26higher than 6% of earnings and shall be no lower than 2% of

 

 

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1earnings.
2    (d) Employer contributions shall vest when those
3contributions are paid into a participant's account.
4    (e) The defined contribution plan shall provide a variety
5of options for investments.
6    (f) The defined contribution plan shall provide a variety
7of options for payouts to retirees and their survivors.
8    (g) To the extent authorized under federal law and as
9authorized by the System, the defined contribution plan shall
10allow former participants in the plan to transfer or roll over
11employee and employer contributions, and the earnings thereon,
12into other "eligible retirement plans" as defined, and as
13permitted, under Section 402(c)(8) of the Internal Revenue Code
14of 1986, as amended.
15    (h) The System shall reduce the employee contributions
16credited to the participant's defined contribution plan
17account by an amount determined by the System to cover the cost
18of offering the benefits under this Section and any applicable
19administrative fees.
20    (i) The Board may delegate the administrative function of
21the defined contribution program to another State entity.
 
22    (40 ILCS 5/15-103.4 new)
23    Sec. 15-103.4. Optional Hybrid Plan. "Optional Hybrid
24Plan": The combined defined benefit and defined contribution
25retirement program maintained under the System as referenced in

 

 

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1Sections 15-158.24 and 15-158.25.
 
2    (40 ILCS 5/15-108.2)
3    Sec. 15-108.2. Tier 2 defined benefit member. "Tier 2
4defined benefit member": A person who first becomes a
5participant under this Article on or after January 1, 2011 and
6before 6 months after the effective date of this amendatory Act
7of the 100th General Assembly, other than a person in the
8self-managed plan or the Optional Hybrid Plan established under
9Section 15-158.2 or a person who makes the election under
10subsection (c) of Section 1-161, unless the person is otherwise
11a Tier 1 member. The changes made to this Section by Public Act
1298-596 this amendatory Act of the 98th General Assembly are a
13correction of existing law and are intended to be retroactive
14to January 1, 2011 (the effective date of Public Act 96-889),
15notwithstanding the provisions of Section 1-103.1 of this Code.
16(Source: P.A. 100-23, eff. 7-6-17.)
 
17    (40 ILCS 5/15-108.3 new)
18    Sec. 15-108.3. Tier 2 hybrid plan member. "Tier 2 hybrid
19plan member": A person who participates in the Optional Hybrid
20Plan.
 
21    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
22    Sec. 15-111. Earnings.
23    (a) "Earnings": Subject to Section 15-111.5, an amount paid

 

 

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1for personal services equal to the sum of the basic
2compensation plus extra compensation for summer teaching,
3overtime or other extra service. For periods for which an
4employee receives service credit under subsection (c) of
5Section 15-113.1 or Section 15-113.2, earnings are equal to the
6basic compensation on which contributions are paid by the
7employee during such periods. Compensation for employment
8which is irregular, intermittent and temporary shall not be
9considered earnings, unless the participant is also receiving
10earnings from the employer as an employee under Section 15-107.
11    With respect to transition pay paid by the University of
12Illinois to a person who was a participating employee employed
13in the fire department of the University of Illinois's
14Champaign-Urbana campus immediately prior to the elimination
15of that fire department:
16        (1) "Earnings" includes transition pay paid to the
17    employee on or after the effective date of this amendatory
18    Act of the 91st General Assembly.
19        (2) "Earnings" includes transition pay paid to the
20    employee before the effective date of this amendatory Act
21    of the 91st General Assembly only if (i) employee
22    contributions under Section 15-157 have been withheld from
23    that transition pay or (ii) the employee pays to the System
24    before January 1, 2001 an amount representing employee
25    contributions under Section 15-157 on that transition pay.
26    Employee contributions under item (ii) may be paid in a

 

 

10000SB0779ham002- 71 -LRB100 06789 RPS 30562 a

1    lump sum, by withholding from additional transition pay
2    accruing before January 1, 2001, or in any other manner
3    approved by the System. Upon payment of the employee
4    contributions on transition pay, the corresponding
5    employer contributions become an obligation of the State.
6    (b) For all purposes under this Article, for a Tier 2
7defined benefit member, the annual earnings shall not exceed
8$106,800; however, that amount shall annually thereafter be
9increased by the lesser of (i) 3% of that amount, including all
10previous adjustments, or (ii) one half the annual unadjusted
11percentage increase (but not less than zero) in the consumer
12price index-u for the 12 months ending with the September
13preceding each November 1, including all previous adjustments.
14    For the purposes of this Section, "consumer price index u"
15means the index published by the Bureau of Labor Statistics of
16the United States Department of Labor that measures the average
17change in prices of goods and services purchased by all urban
18consumers, United States city average, all items, 1982-84 =
19100. The new amount resulting from each annual adjustment shall
20be determined by the Public Pension Division of the Department
21of Insurance and made available to the boards of the retirement
22systems and pension funds by November 1 of each year.
23    (b-5) For all purposes under this Article, for a Tier 2
24hybrid plan member, the annual earnings shall not exceed the
25federal Social Security Wage base then in effect. The earnings
26limit under this subsection (b-5) shall begin on the first day

 

 

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1of the first pay period following the effective date of the
2employee's election or deemed election under subsection (g) of
3Section 15-134.5 or Section 15-134.6.
4    (c) With each submission of payroll information in the
5manner prescribed by the System, the employer shall certify
6that the payroll information is correct and complies with all
7applicable State and federal laws.
8(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
 
9    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
10    Sec. 15-112. Final rate of earnings. "Final rate of
11earnings":
12    (a) This subsection (a) applies only to a Tier 1 member.
13    For an employee who is paid on an hourly basis or who
14receives an annual salary in installments during 12 months of
15each academic year, the average annual earnings during the 48
16consecutive calendar month period ending with the last day of
17final termination of employment or the 4 consecutive academic
18years of service in which the employee's earnings were the
19highest, whichever is greater. For any other employee, the
20average annual earnings during the 4 consecutive academic years
21of service in which his or her earnings were the highest. For
22an employee with less than 48 months or 4 consecutive academic
23years of service, the average earnings during his or her entire
24period of service. The earnings of an employee with more than
2536 months of service under item (a) of Section 15-113.1 prior

 

 

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1to the date of becoming a participant are, for such period,
2considered equal to the average earnings during the last 36
3months of such service.
4    (b) This subsection (b) applies to a Tier 2 defined benefit
5member.
6    For an employee who is paid on an hourly basis or who
7receives an annual salary in installments during 12 months of
8each academic year, the average annual earnings obtained by
9dividing by 8 the total earnings of the employee during the 96
10consecutive months in which the total earnings were the highest
11within the last 120 consecutive calendar month period ending
12with the last day of final months prior to termination of
13employment or the 8 consecutive academic years of service in
14which the employee's earnings were the highest out of the last
1510 consecutive academic years prior to the last day of final
16termination of employment, whichever is greater.
17    For any other employee, the average annual earnings during
18the 8 consecutive academic years within the 10 years prior to
19termination in which the employee's earnings were the highest.
20For an employee with less than 96 consecutive months or 8
21consecutive academic years of service, whichever is necessary,
22the average earnings during his or her entire period of
23service.
24    (b-5) This subsection (b-5) applies to a Tier 2 hybrid plan
25member.
26    For an employee who is paid on an hourly basis or who

 

 

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1receives an annual salary in installments during 12 months of
2each academic year, the average annual earnings during the last
3120 consecutive calendar month period ending with the last day
4of final termination of employment or the last 10 consecutive
5academic years of service prior to the last day of final
6termination of employment, whichever is greater.
7    For any other employee, the average annual earnings during
8the 10 consecutive academic years of service prior to the last
9day of final termination of employment.
10    For an employee with less than 120 consecutive months or 10
11consecutive academic years of service, whichever is necessary,
12the average earnings during his or her entire period of
13service.
14    (c) For an employee on leave of absence with pay, or on
15leave of absence without pay who makes contributions during
16such leave, earnings are assumed to be equal to the basic
17compensation on the date the leave began.
18    (d) For an employee on disability leave, earnings are
19assumed to be equal to the basic compensation on the date
20disability occurs or the average earnings during the 24 months
21immediately preceding the month in which disability occurs,
22whichever is greater.
23    (e) For a Tier 1 member who retires on or after the
24effective date of this amendatory Act of 1997 with at least 20
25years of service as a firefighter or police officer under this
26Article, the final rate of earnings shall be the annual rate of

 

 

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1earnings received by the participant on his or her last day as
2a firefighter or police officer under this Article, if that is
3greater than the final rate of earnings as calculated under the
4other provisions of this Section.
5    (f) If a Tier 1 member is an employee for at least 6 months
6during the academic year in which his or her employment is
7terminated, the annual final rate of earnings shall be 25% of
8the sum of (1) the annual basic compensation for that year, and
9(2) the amount earned during the 36 months immediately
10preceding that year, if this is greater than the final rate of
11earnings as calculated under the other provisions of this
12Section.
13    (g) In the determination of the final rate of earnings for
14an employee, that part of an employee's earnings for any
15academic year beginning after June 30, 1997, which exceeds the
16employee's earnings with that employer for the preceding year
17by more than 20 percent shall be excluded; in the event that an
18employee has more than one employer this limitation shall be
19calculated separately for the earnings with each employer. In
20making such calculation, only the basic compensation of
21employees shall be considered, without regard to vacation or
22overtime or to contracts for summer employment.
23    (h) The following are not considered as earnings in
24determining final rate of earnings: (1) severance or separation
25pay, (2) retirement pay, (3) payment for unused sick leave, and
26(4) payments from an employer for the period used in

 

 

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1determining final rate of earnings for any purpose other than
2(i) services rendered, (ii) leave of absence or vacation
3granted during that period, and (iii) vacation of up to 56 work
4days allowed upon termination of employment; except that, if
5the benefit has been collectively bargained between the
6employer and the recognized collective bargaining agent
7pursuant to the Illinois Educational Labor Relations Act,
8payment received during a period of up to 2 academic years for
9unused sick leave may be considered as earnings in accordance
10with the applicable collective bargaining agreement, subject
11to the 20% increase limitation of this Section. Any unused sick
12leave considered as earnings under this Section shall not be
13taken into account in calculating service credit under Section
1415-113.4.
15    (i) Intermittent periods of service shall be considered as
16consecutive in determining final rate of earnings.
17(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
18    (40 ILCS 5/15-113)  (from Ch. 108 1/2, par. 15-113)
19    Sec. 15-113. Service. "Service":
20    (a) The periods defined in Sections 15-113.1 through
2115-113.9 and Sections Section 15-113.11 through 15-113.12.
22    (b) For Tier 2 hybrid plan members, service shall not
23include the periods defined in subsection (c) of Section
2415-113.1, Section 15-113.2, Section 15-113.3, and Sections
2515-113.5 through 15-113.12.

 

 

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1(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
2    (40 ILCS 5/15-118)  (from Ch. 108 1/2, par. 15-118)
3    Sec. 15-118. Annuity. "Annuity":
4    (a) For Tier 1 members and Tier 2 defined benefit members:
5A series of monthly payments, payable as of the first day of
6each calendar month during the annuity payment period, the
7first payment to be made as of the first day of the calendar
8month coincidental with or next following the first day of the
9annuity payment period and the last payment to be made as of
10the first day of the calendar month in which the annuitant dies
11or the annuity payment period ends. An annuitant may authorize
12the board to deduct from the annuity, premiums due under any
13group hospital-medical insurance program which is sponsored or
14approved by any employer.
15    (b) For Tier 2 hybrid plan members: A series of monthly
16payments, payable from the defined benefit portion of the
17Optional Hybrid Plan, as of the first day of each calendar
18month during the annuity payment period, the first payment to
19be made as of the first day of the calendar month coincidental
20with or next following the first day of the annuity payment
21period and the last payment to be made as of the first day of
22the calendar month in which the annuitant dies or the annuity
23payment period ends. An annuitant may authorize the board to
24deduct from the annuity, premiums due under any group
25hospital-medical insurance program which is sponsored or

 

 

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1approved by any employer.
2(Source: P.A. 83-1440.)
 
3    (40 ILCS 5/15-134.5)
4    Sec. 15-134.5. Retirement program elections for Tier 1
5members and for individuals who first become participants prior
6to the implementation date of the Optional Hybrid Plan.
7    (a) All participating employees are participants under the
8traditional benefit package prior to January 1, 1998.
9    Effective as of the date that an employer elects, as
10described in Section 15-158.2, to offer to its employees the
11portable benefit package and the self-managed plan as
12alternatives to the traditional benefit package, each of that
13employer's eligible employees (as defined in subsection (b))
14shall be given the choice to elect which retirement program he
15or she wishes to participate in with respect to all periods of
16covered employment occurring on and after the effective date of
17the employee's election. The retirement program election made
18by an eligible employee must be made in writing, in the manner
19prescribed by the System, and within the time period described
20in subsection (d) or (d-1).
21    Subject to subsection (g) of this Section, the The employee
22election authorized by this Section is a one-time, irrevocable
23election. If an employee terminates employment after making the
24election provided under this subsection (a), then upon his or
25her subsequent re-employment with an employer the original

 

 

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1election shall automatically apply to him or her, provided that
2the employer is then a participating employer as described in
3Section 15-158.2.
4    An eligible employee who fails to make this election shall,
5by default, participate in the traditional benefit package.
6    (b) "Eligible employee" means an employee (as defined in
7Section 15-107) who is either a currently eligible employee or
8a newly eligible employee. For purposes of this Section, a
9"currently eligible employee" is an employee who is employed by
10an employer on the effective date on which the employer offers
11to its employees the portable benefit package and the
12self-managed plan as alternatives to the traditional benefit
13package. A "newly eligible employee" is an employee who first
14becomes employed by an employer after the effective date on
15which the employer offers its employees the portable benefit
16package and the self-managed plan as alternatives to the
17traditional benefit package. A newly eligible employee
18participates in the traditional benefit package until he or she
19makes an election to participate in the portable benefit
20package or the self-managed plan. If an employee does not elect
21to participate in the portable benefit package or the
22self-managed plan, he or she shall continue to participate in
23the traditional benefit package by default.
24    (c) An eligible employee who at the time he or she is first
25eligible to make the election described in subsection (a) does
26not have sufficient age and service to qualify for a retirement

 

 

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1annuity under Section 15-135 may elect to participate in the
2traditional benefit package, the portable benefit package, or
3the self-managed plan. An eligible employee who has sufficient
4age and service to qualify for a retirement annuity under
5Section 15-135 at the time he or she is first eligible to make
6the election described in subsection (a) may elect to
7participate in the traditional benefit package or the portable
8benefit package, but may not elect to participate in the
9self-managed plan.
10    (d) A currently eligible employee must make this election
11within one year after the effective date of the employer's
12adoption of the self-managed plan.
13    A newly eligible employee must make this election within 6
14months after the date on which the System receives the report
15of status certification from the employer. If an employee
16elects to participate in the self-managed plan, no employer
17contributions shall be remitted to the self-managed plan when
18the employee's account balance transfer is made. Employer
19contributions to the self-managed plan shall commence as of the
20first pay period that begins after the System receives the
21employee's election.
22    (d-1) A newly eligible employee who, prior to the effective
23date of this amendatory Act of the 91st General Assembly, fails
24to make the election within the period provided under
25subsection (d) and participates by default in the traditional
26benefit package may make a late election to participate in the

 

 

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1portable benefit package or the self-managed plan instead of
2the traditional benefit package at any time within 6 months
3after the effective date of this amendatory Act of the 91st
4General Assembly.
5    (e) If a currently eligible employee elects the portable
6benefit package, that election shall not become effective until
7the one-year anniversary of the date on which the election is
8filed with the System, provided the employee remains
9continuously employed by the employer throughout the one-year
10waiting period, and any benefits payable to or on account of
11the employee before such one-year waiting period has ended
12shall not be determined under the provisions applicable to the
13portable benefit package but shall instead be determined in
14accordance with the traditional benefit package. If a currently
15eligible employee who has elected the portable benefit package
16terminates employment covered by the System before the one-year
17waiting period has ended, then no benefits shall be determined
18under the portable benefit package provisions while he or she
19is inactive in the System and upon re-employment with an
20employer covered by the System he or she shall begin a new
21one-year waiting period before the provisions of the portable
22benefit package become effective.
23    (f) An eligible employee shall be provided with written
24information prepared or prescribed by the System which
25describes the employee's retirement program choices. The
26eligible employee shall be offered an opportunity to receive

 

 

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1counseling from the System prior to making his or her election.
2This counseling may consist of videotaped materials, group
3presentations, benefit estimators, individual consultation
4with an employee or authorized representative of the System in
5person or by telephone or other electronic means, or any
6combination of these methods.
7    (g) An employee who is a Tier 2 defined benefit member
8shall be given the choice to elect to participate in the
9Optional Hybrid Plan with respect to all periods of covered
10employment occurring on or after the effective date of the
11employee's election. The election must be made in writing, in
12the manner prescribed by the System, and shall occur under the
13deadlines and procedures established by the System. If an
14employee elects to participate in the Optional Hybrid Plan, no
15employer contributions shall be remitted to the defined
16contribution portion of the Optional Hybrid Plan when the
17employee's initial account balance transfer is made. Employer
18contributions under the defined benefit portion of the Optional
19Hybrid Plan shall commence as of the first pay period following
20the effective date of the employee's election under this
21subsection (g).
22        (1) The employee election authorized under this
23    subsection (g) is a one-time, irrevocable election. If an
24    employee terminates employment after making the election
25    provided under this subsection (g), then upon his or her
26    subsequent re-employment with an employer under this

 

 

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1    Article, the election made under this subsection (g) shall
2    continue to apply. An employee who fails to make this
3    election shall, by default, continue to be a Tier 2 defined
4    benefit member.
5        (2) Written information prepared by the System
6    describing the retirement program choices under this
7    subsection (g) shall be made available to employees. An
8    employee shall be offered an opportunity to receive
9    counseling from the System prior to making his or her
10    election. This counseling may consist of videotaped
11    materials, group presentations, benefit estimators,
12    individual consultation with an employee or authorized
13    representative of the System in person or by telephone or
14    other electronic means, or any combination of these
15    methods.
16        (3) The System shall obtain a favorable ruling from the
17    U.S. Internal Revenue Service prior to allowing any
18    participant to make the election under this subsection (g).
19        (4) In no event shall the System, its staff, its
20    authorized representatives, or the Board be liable for any
21    election under this Article.
22    (h) This Section applies to Tier 1 members and to
23individuals who first become participants of the System prior
24to the implementation date of the Optional Hybrid Plan.
25(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 

 

 

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1    (40 ILCS 5/15-134.6 new)
2    Sec. 15-134.6. Retirement program elections for
3individuals who are not otherwise Tier 1 members who first
4become participants on or after the implementation date of the
5Optional Hybrid Plan.
6    This Section shall apply to individuals who are not
7otherwise Tier 1 members who first become participants of the
8System on or after the implementation date of the Optional
9Hybrid Plan.
10    (a) An employee who first becomes a participant of the
11System on or after the implementation date of the Optional
12Hybrid Plan shall be given the choice to elect which retirement
13program he or she wishes to participate in with respect to all
14periods of covered employment occurring on or after the
15effective date of the employee's election. The retirement
16program election made by an employee must be made in writing,
17in the manner prescribed by the System, and within the time
18period described in subsection (b). Employees may have the
19choice among the following retirement programs:
20        (1) the Traditional Benefit Package as a Tier 2 defined
21    benefit member;
22        (2) the Portable Benefit Package as a Tier 2 defined
23    benefit member;
24        (3) the Self-Managed Plan; or
25        (4) the Optional Hybrid Plan.
26    (b) Employees who first become participants of the System

 

 

10000SB0779ham002- 85 -LRB100 06789 RPS 30562 a

1on or after the implementation date shall make an election
2within 90 calendar days from the date on which the System
3receives the report of status certification from the employer.
4If an employee elects to participate in the Self-Managed Plan
5or the Optional Hybrid Plan, no employer contributions shall be
6remitted to the Self-Managed Plan or the defined contribution
7portion of the Optional Hybrid Plan when the employee's initial
8account balance transfer is made. Employer contributions to the
9Self-Managed Plan or the defined benefit portion of the
10Optional Hybrid Plan shall commence as of the first pay period
11following the effective date of the employee's election or
12deemed election under subsection (a) of this Section.
13    (c) The employee election authorized under this Section is
14a one-time, irrevocable election. If an employee terminates
15employment after making the election provided under subsection
16(a), then upon his or her subsequent re-employment with an
17employer under this Article, the election or deemed election
18made under subsection (a) shall continue to apply. An employee
19who fails to make this election shall, by default, participate
20in the Optional Hybrid Plan as a Tier 2 hybrid plan member.
21    (d) Written information prepared by the System describing
22the retirement program choices under subsection (a) shall be
23made available to employees. An employee shall be offered an
24opportunity to receive counseling from the System prior to
25making his or her election. This counseling may consist of
26videotaped materials, group presentations, benefit estimators,

 

 

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1individual consultation with an employee or authorized
2representative of the System in person or by telephone or other
3electronic means, or any combination of these methods.
4    (e) If the employee elects to participate in the Optional
5Hybrid Plan under this Section, any portion of employee
6contributions made at a rate above the rate of employee
7contributions for Tier 2 hybrid plan members shall be
8transferred to the employee's defined contribution account
9under Section 15-158.25.
10    (f) For the period beginning with the date of employment
11until the first pay period following the effective date of the
12employee's election or deemed election under this Section, the
13rate of employer contributions for the employee shall be the
14employer normal cost rate for Tier 2 defined benefit plan
15members.
16    (g) The System shall obtain a favorable ruling from the
17U.S. Internal Revenue Service prior to allowing any participant
18to make the election under this Section.
19    (h) In no event shall the System, its staff, its authorized
20representatives, or the Board be liable for any election under
21this Article.
 
22    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25    Sec. 15-135. Retirement annuities - Conditions.

 

 

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1    (a) This subsection (a) applies only to a Tier 1 member. A
2participant who retires in one of the following specified years
3with the specified amount of service is entitled to a
4retirement annuity at any age under the retirement program
5applicable to the participant:
6        35 years if retirement is in 1997 or before;
7        34 years if retirement is in 1998;
8        33 years if retirement is in 1999;
9        32 years if retirement is in 2000;
10        31 years if retirement is in 2001;
11        30 years if retirement is in 2002 or later.
12    A participant with 8 or more years of service after
13September 1, 1941, is entitled to a retirement annuity on or
14after attainment of age 55.
15    A participant with at least 5 but less than 8 years of
16service after September 1, 1941, is entitled to a retirement
17annuity on or after attainment of age 62.
18    A participant who has at least 25 years of service in this
19system as a police officer or firefighter is entitled to a
20retirement annuity on or after the attainment of age 50, if
21Rule 4 of Section 15-136 is applicable to the participant.
22    (a-5) A Tier 2 defined benefit member is entitled to a
23retirement annuity upon written application if he or she has
24attained age 67 and has at least 10 years of service credit and
25is otherwise eligible under the requirements of this Article. A
26Tier 2 defined benefit member who has attained age 62 and has

 

 

10000SB0779ham002- 88 -LRB100 06789 RPS 30562 a

1at least 10 years of service credit and is otherwise eligible
2under the requirements of this Article may elect to receive the
3lower retirement annuity provided in subsection (b-5) of
4Section 15-136 of this Article.
5    (a-10) A Tier 2 hybrid plan member is entitled to a
6retirement annuity without an age reduction if he or she has
7attained the normal retirement age determined by the Social
8Security Administration for that member's year of birth, but no
9earlier than 67 years of age, and has at least 10 years of
10service credit and is otherwise eligible under the requirements
11of this Article. A Tier 2 hybrid plan member who is no more
12than 5 years away from the normal retirement age determined by
13the Social Security Administration for that member's year of
14birth, but is not younger than 62 years of age, and is
15otherwise eligible under the requirements of this Article may
16elect to receive the lower retirement annuity provided in
17subsection (b-10) of Section 15-136 of this Article.
18    (b) The annuity payment period shall begin on the date
19specified by the participant or the recipient of a disability
20retirement annuity submitting a written application. For a
21participant, the date on which the annuity payment period
22begins , which date shall not be prior to termination of
23employment or more than one year before the application is
24received by the board; however, if the participant is not an
25employee of an employer participating in this System or in a
26participating system as defined in Article 20 of this Code on

 

 

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1April 1 of the calendar year next following the calendar year
2in which the participant attains age 70 1/2, the annuity
3payment period shall begin on that date regardless of whether
4an application has been filed. For a recipient of a disability
5retirement annuity, the date on which the annuity payment
6period begins shall not be prior to the discontinuation of the
7disability retirement annuity under Section 15-153.2.
8    (c) An annuity is not payable if the amount provided under
9Section 15-136 is less than $10 per month.
10(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
1198-92, eff. 7-16-13.)
 
12    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
13    (Text of Section WITHOUT the changes made by P.A. 98-599,
14which has been held unconstitutional)
15    Sec. 15-136. Retirement annuities - Amount. The provisions
16of this Section 15-136 apply only to those participants who are
17participating in the traditional benefit package, or the
18portable benefit package, or the defined benefit portion of the
19Optional Hybrid Plan. The provisions of this Section do not
20apply to the defined contribution portion of the Optional
21Hybrid Plan and do not apply to participants who are
22participating in the self-managed plan.
23    (a) For Tier 1 members and Tier 2 defined benefit members,
24the The amount of the a participant's retirement annuity,
25expressed in the form of a single-life annuity, shall be

 

 

10000SB0779ham002- 90 -LRB100 06789 RPS 30562 a

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

 

 

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1    made by the participant under Section 15-113.3.
2    With respect to a police officer or firefighter who retires
3on or after August 14, 1998, the accumulated normal
4contributions taken into account under clauses (i) and (ii) of
5this Rule 2 shall include the additional normal contributions
6made by the police officer or firefighter under Section
715-157(a).
8    The amount of a retirement annuity calculated under this
9Rule 2 shall be computed solely on the basis of the
10participant's accumulated normal contributions, as specified
11in this Rule and defined in Section 15-116. Neither an employee
12or employer contribution for early retirement under Section
1315-136.2 nor any other employer contribution shall be used in
14the calculation of the amount of a retirement annuity under
15this Rule 2.
16    This amendatory Act of the 91st General Assembly is a
17clarification of existing law and applies to every participant
18and annuitant without regard to whether status as an employee
19terminates before the effective date of this amendatory Act.
20    This Rule 2 does not apply to a person who first becomes an
21employee under this Article on or after July 1, 2005.
22    Rule 3: The retirement annuity of a participant who is
23employed at least one-half time during the period on which his
24or her final rate of earnings is based, shall be equal to the
25participant's years of service not to exceed 30, multiplied by
26(1) $96 if the participant's final rate of earnings is less

 

 

10000SB0779ham002- 92 -LRB100 06789 RPS 30562 a

1than $3,500, (2) $108 if the final rate of earnings is at least
2$3,500 but less than $4,500, (3) $120 if the final rate of
3earnings is at least $4,500 but less than $5,500, (4) $132 if
4the final rate of earnings is at least $5,500 but less than
5$6,500, (5) $144 if the final rate of earnings is at least
6$6,500 but less than $7,500, (6) $156 if the final rate of
7earnings is at least $7,500 but less than $8,500, (7) $168 if
8the final rate of earnings is at least $8,500 but less than
9$9,500, and (8) $180 if the final rate of earnings is $9,500 or
10more, except that the annuity for those persons having made an
11election under Section 15-154(a-1) shall be calculated and
12payable under the portable retirement benefit program pursuant
13to the provisions of Section 15-136.4.
14    Rule 4: A participant who is at least age 50 and has 25 or
15more years of service as a police officer or firefighter, and a
16participant who is age 55 or over and has at least 20 but less
17than 25 years of service as a police officer or firefighter,
18shall be entitled to a retirement annuity of 2 1/4% of the
19final rate of earnings for each of the first 10 years of
20service as a police officer or firefighter, 2 1/2% for each of
21the next 10 years of service as a police officer or
22firefighter, and 2 3/4% for each year of service as a police
23officer or firefighter in excess of 20. The retirement annuity
24for all other service shall be computed under Rule 1. A Tier 2
25defined benefit member is eligible for a retirement annuity
26calculated under Rule 4 only if that Tier 2 defined benefit

 

 

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1member meets the service requirements for that benefit
2calculation as prescribed under this Rule 4 in addition to the
3applicable age requirement under subsection (a-5) of Section
415-135.
5    For purposes of this Rule 4, a participant's service as a
6firefighter shall also include the following:
7        (i) service that is performed while the person is an
8    employee under subsection (h) of Section 15-107; and
9        (ii) in the case of an individual who was a
10    participating employee employed in the fire department of
11    the University of Illinois's Champaign-Urbana campus
12    immediately prior to the elimination of that fire
13    department and who immediately after the elimination of
14    that fire department transferred to another job with the
15    University of Illinois, service performed as an employee of
16    the University of Illinois in a position other than police
17    officer or firefighter, from the date of that transfer
18    until the employee's next termination of service with the
19    University of Illinois.
20    (a-1) The retirement annuity for a Tier 2 hybrid plan
21member shall be 1.25% of final rate of earnings for each year
22of service.
23    (b) For a Tier 1 member, the retirement annuity provided
24under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
25month the participant is under age 60 at the time of
26retirement. However, this reduction shall not apply in the

 

 

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1following cases:
2        (1) For a disabled participant whose disability
3    benefits have been discontinued because he or she has
4    exhausted eligibility for disability benefits under clause
5    (6) of Section 15-152;
6        (2) For a participant who has at least the number of
7    years of service required to retire at any age under
8    subsection (a) of Section 15-135; or
9        (3) For that portion of a retirement annuity which has
10    been provided on account of service of the participant
11    during periods when he or she performed the duties of a
12    police officer or firefighter, if these duties were
13    performed for at least 5 years immediately preceding the
14    date the retirement annuity is to begin.
15    (b-5) The retirement annuity of a Tier 2 defined benefit
16member who is retiring after attaining age 62 with at least 10
17years of service credit shall be reduced by 1/2 of 1% for each
18full month that the member's age is under age 67.
19    (b-10) The retirement annuity of a Tier 2 hybrid plan
20member who is no more than 5 years away from the normal
21retirement age determined by the Social Security
22Administration for that member's year of birth, but is not
23younger than 62 years of age, with at least 10 years of service
24credit shall be reduced by 1/2 of 1% for each full month that
25the member's age is under the greater of age 67 or the normal
26retirement age determined by the Social Security

 

 

10000SB0779ham002- 95 -LRB100 06789 RPS 30562 a

1Administration for that member's year of birth.
2    (c) The maximum retirement annuity provided under Rules 1,
32, 4, and 5 shall be the lesser of (1) the annual limit of
4benefits as specified in Section 415 of the Internal Revenue
5Code of 1986, as such Section may be amended from time to time
6and as such benefit limits shall be adjusted by the
7Commissioner of Internal Revenue, and (2) 80% of final rate of
8earnings.
9    (d) A Tier 1 member whose status as an employee terminates
10after August 14, 1969 shall receive automatic increases in his
11or her retirement annuity as follows:
12    Effective January 1 immediately following the date the
13retirement annuity begins, the annuitant shall receive an
14increase in his or her monthly retirement annuity of 0.125% of
15the monthly retirement annuity provided under Rule 1, Rule 2,
16Rule 3, or Rule 4 contained in this Section, multiplied by the
17number of full months which elapsed from the date the
18retirement annuity payments began to January 1, 1972, plus
190.1667% of such annuity, multiplied by the number of full
20months which elapsed from January 1, 1972, or the date the
21retirement annuity payments began, whichever is later, to
22January 1, 1978, plus 0.25% of such annuity multiplied by the
23number of full months which elapsed from January 1, 1978, or
24the date the retirement annuity payments began, whichever is
25later, to the effective date of the increase.
26    The annuitant shall receive an increase in his or her

 

 

10000SB0779ham002- 96 -LRB100 06789 RPS 30562 a

1monthly retirement annuity on each January 1 thereafter during
2the annuitant's life of 3% of the monthly annuity provided
3under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
4Section. The change made under this subsection by P.A. 81-970
5is effective January 1, 1980 and applies to each annuitant
6whose status as an employee terminates before or after that
7date.
8    Beginning January 1, 1990, all automatic annual increases
9payable under this Section shall be calculated as a percentage
10of the total annuity payable at the time of the increase,
11including all increases previously granted under this Article.
12    The change made in this subsection by P.A. 85-1008 is
13effective January 26, 1988, and is applicable without regard to
14whether status as an employee terminated before that date.
15    (d-5) A retirement annuity of a Tier 2 defined benefit
16member shall receive annual increases on the January 1
17occurring either on or after the attainment of age 67 or the
18first anniversary of the annuity start date, whichever is
19later. Each annual increase shall be calculated at 3% or one
20half the annual unadjusted percentage increase (but not less
21than zero) in the consumer price index-u for the 12 months
22ending with the September preceding each November 1, whichever
23is less, of the originally granted retirement annuity. If the
24annual unadjusted percentage change in the consumer price
25index-u for the 12 months ending with the September preceding
26each November 1 is zero or there is a decrease, then the

 

 

10000SB0779ham002- 97 -LRB100 06789 RPS 30562 a

1annuity shall not be increased.
2    (d-10) A retirement annuity of a Tier 2 hybrid plan member
3shall receive annual increases on the January 1 occurring
4either on or after the attainment of the applicable retirement
5age (but no earlier than age 67) or the first anniversary of
6the annuity start date, whichever is later. Each annual
7increase shall be calculated at one-half the annual unadjusted
8percentage increase (but not less than zero) in the consumer
9price index-w for the 12 months ending with the September
10preceding each November 1 of the originally granted retirement
11annuity. If the annual unadjusted percentage change in the
12consumer price index-w for the 12 months ending with the
13September preceding each November 1 is zero or there is a
14decrease, then the annuity shall not be increased.
15    For the purposes of this subsection (d-10), "consumer price
16index-w" means the index published by the Bureau of Labor
17Statistics of the United States Department of Labor that
18measures the average change in prices of goods and services
19purchased by Urban Wage Earners and Clerical Workers, United
20States city average, all items, 1982-84 = 100. The new amount
21resulting from each annual adjustment shall be determined by
22the Public Pension Division of the Department of Insurance and
23made available to the board by November 1 of each year.
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

 

 

10000SB0779ham002- 98 -LRB100 06789 RPS 30562 a

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

 

 

10000SB0779ham002- 99 -LRB100 06789 RPS 30562 a

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 5/15-136.3)
2    Sec. 15-136.3. Minimum retirement annuity.
3    (a) Beginning January 1, 1997, any person who is receiving
4a monthly retirement annuity under this Article which, after
5inclusion of (1) all one-time and automatic annual increases to
6which the person is entitled, (2) any supplemental annuity
7payable under Section 15-136.1, and (3) any amount deducted
8under Section 15-138 or 15-140 to provide a reversionary
9annuity, is less than the minimum monthly retirement benefit
10amount specified in subsection (b) of this Section, shall be
11entitled to a monthly supplemental payment equal to the
12difference.
13    (b) For purposes of the calculation in subsection (a), the
14minimum monthly retirement benefit amount is the sum of $25 for
15each year of service credit, up to a maximum of 30 years of
16service.
17    (c) This Section applies to Tier 1 members and Tier 2
18defined benefit members all persons receiving a retirement
19annuity under this Article, without regard to whether or not
20employment terminated prior to the effective date of this
21Section.
22    (d) This Section does not apply to Tier 2 hybrid plan
23members.
24(Source: P.A. 98-92, eff. 7-16-13.)
 
25    (40 ILCS 5/15-139)  (from Ch. 108 1/2, par. 15-139)

 

 

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1    Sec. 15-139. Retirement annuities; cancellation; suspended
2during employment.
3    (a) If an annuitant returns to employment for an employer
4within 60 days after the beginning of the retirement annuity
5payment period, the retirement annuity shall be cancelled, and
6the annuitant shall refund to the System the total amount of
7the retirement annuity payments which he or she received. If
8the retirement annuity is cancelled, the participant shall
9continue to participate in the System.
10    (b) If an annuitant retires prior to age 60 and receives or
11becomes entitled to receive during any month compensation in
12excess of the monthly retirement annuity (including any
13automatic annual increases) for services performed after the
14date of retirement for any employer under this System, that
15portion of the monthly retirement annuity provided by employer
16contributions shall not be payable.
17    If an annuitant retires at age 60 or over and receives or
18becomes entitled to receive during any academic year
19compensation in excess of the difference between his or her
20highest annual earnings prior to retirement and his or her
21annual retirement annuity computed under Rule 1, Rule 2, Rule
223, or Rule 4 of subsection (a) of Section 15-136, under
23subsection (a-1) of Section 15-136, or under Section 15-136.4,
24for services performed after the date of retirement for any
25employer under this System, that portion of the monthly
26retirement annuity provided by employer contributions shall be

 

 

10000SB0779ham002- 102 -LRB100 06789 RPS 30562 a

1reduced by an amount equal to the compensation that exceeds
2such difference.
3    However, any remuneration received for serving as a member
4of the Illinois Educational Labor Relations Board shall be
5excluded from "compensation" for the purposes of this
6subsection (b), and serving as a member of the Illinois
7Educational Labor Relations Board shall not be deemed to be a
8return to employment for the purposes of this Section. This
9provision applies without regard to whether service was
10terminated prior to the effective date of this amendatory Act
11of 1991.
12    "Academic year", as used in this subsection (b), means the
1312-month period beginning September 1.
14    (c) If an employer certifies that an annuitant has been
15reemployed on a permanent and continuous basis or in a position
16in which the annuitant is expected to serve for at least 9
17months, the annuitant shall resume his or her status as a
18participating employee and shall be entitled to all rights
19applicable to participating employees upon filing with the
20board an election to forgo all annuity payments during the
21period of reemployment. Upon subsequent retirement, the
22retirement annuity shall consist of the annuity which was
23terminated by the reemployment, plus the additional retirement
24annuity based upon service granted during the period of
25reemployment, but the combined retirement annuity shall not
26exceed the maximum annuity applicable on the date of the last

 

 

10000SB0779ham002- 103 -LRB100 06789 RPS 30562 a

1retirement.
2    The total service and earnings credited before and after
3the initial date of retirement shall be considered in
4determining eligibility of the employee or the employee's
5beneficiary to benefits under this Article, and in calculating
6final rate of earnings.
7    In determining the death benefit payable to a beneficiary
8of an annuitant who again becomes a participating employee
9under this Section, accumulated normal and additional
10contributions shall be considered as the sum of the accumulated
11normal and additional contributions at the date of initial
12retirement and the accumulated normal and additional
13contributions credited after that date, less the sum of the
14annuity payments received by the annuitant.
15    The survivors insurance benefits provided under Section
1615-145 shall not be applicable to an annuitant who resumes his
17or her status as a participating employee, unless the
18annuitant, at the time of initial retirement, has a survivors
19insurance beneficiary who could qualify for such benefits or
20the annuitant repaid the survivors insurance contribution
21refund or additional annuity under subsection (c-5) of Section
2215-154.
23    If the participant's employment is terminated because of
24circumstances other than death before 9 months from the date of
25reemployment, the provisions of this Section regarding
26resumption of status as a participating employee shall not

 

 

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1apply. The normal and survivors insurance contributions which
2are deducted during this period shall be refunded to the
3annuitant without interest, and subsequent benefits under this
4Article shall be the same as those which were applicable prior
5to the date the annuitant resumed employment.
6    The amendments made to this Section by this amendatory Act
7of the 91st General Assembly apply without regard to whether
8the annuitant was in service on or after the effective date of
9this amendatory Act.
10(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13;
1199-682, eff. 7-29-16.)
 
12    (40 ILCS 5/15-139.1)
13    Sec. 15-139.1. Tier 2 defined benefit member and Tier 2
14hybrid plan member retirement annuities; suspended during
15employment. If a Tier 2 defined benefit member or a Tier 2
16hybrid plan member is receiving a retirement annuity under this
17System and becomes a member or participant under any other
18system or fund created by this Code and is employed on a
19full-time basis, then the person's retirement annuity shall be
20suspended during that employment. Upon termination of that
21employment, the person's retirement annuity shall resume and be
22recalculated if recalculation is provided for under this
23Article.
24(Source: P.A. 98-92, eff. 7-16-13.)
 

 

 

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1    (40 ILCS 5/15-145.1)
2    Sec. 15-145.1. Survivor's insurance annuities and lump sum
3payments for Tier 2 defined benefit members and Tier 2 hybrid
4plan members Members; amount. Survivor eligibility, vesting,
5and conditions for a survivor's insurance annuity and lump sum
6payment amount payable to a survivor's insurance beneficiary of
7a deceased Tier 2 defined benefit member or Tier 2 hybrid plan
8member shall be determined under the provisions of this Article
9applicable to survivor's insurance beneficiaries of a deceased
10Tier 1 member; however, the amount of a survivor's insurance
11annuity, including the annual increases thereon, shall be
12calculated pursuant to this Section. The initial survivor's
13insurance annuity of a survivors insurance beneficiary of a
14Tier 2 defined benefit annuitant or Tier 2 hybrid plan
15annuitant shall be in the amount of 66 2/3% of the Tier 2
16defined benefit member or Tier 2 hybrid plan member's
17retirement annuity at the date of death. In the case of the
18death of a Tier 2 defined benefit member or Tier 2 hybrid plan
19member who has not retired, eligibility for a survivor's
20insurance benefit shall be determined by the applicable Section
21of this Article. The initial benefit shall be 66 2/3% of the
22earned annuity without a reduction due to age. A survivor's
23insurance annuity shall be increased (1) on each January 1
24occurring on or after the commencement of the annuity if the
25deceased Tier 2 defined benefit member or Tier 2 hybrid plan
26member died while receiving a retirement annuity or (2) in

 

 

10000SB0779ham002- 106 -LRB100 06789 RPS 30562 a

1other cases, on each January 1 occurring after the first
2anniversary of the commencement of the benefit. For a Tier 2
3defined benefit member, each Each annual increase shall be
4calculated at 3% or one half the annual unadjusted percentage
5increase (but not less than zero) in the consumer price index-u
6for the 12 months ending with the September preceding each
7November 1, whichever is less, of the originally granted
8survivor's insurance annuity. If the annual unadjusted
9percentage change in the consumer price index-u for the 12
10months ending with the September preceding each November 1 is
11zero or there is a decrease, then the survivor's insurance
12annuity shall not be increased.
13    For a Tier 2 hybrid plan member, each annual increase shall
14be calculated at one-half the annual unadjusted percentage
15increase (but not less than zero) in the consumer price index-w
16for the 12 months ending with the September preceding each
17November 1 of the originally granted survivor's insurance
18annuity. If the annual unadjusted percentage change in the
19consumer price index-w for the 12 months ending with the
20September preceding each November 1 is zero or there is a
21decrease, then the annuity shall not be increased.
22    A beneficiary of a Tier 2 defined benefit member or a Tier
232 hybrid plan member who elects the Portable Benefit Package
24provided under this Article shall not be eligible for the
25survivor's insurance annuity that is provided under this
26Section. If 2 or more persons are eligible to receive

 

 

10000SB0779ham002- 107 -LRB100 06789 RPS 30562 a

1survivor's insurance annuities as provided under this Section
2based on the same deceased Tier 2 defined benefit member or
3Tier 2 hybrid plan member, the calculation of the survivor's
4insurance annuities shall be based on the total calculation of
5the survivor's insurance annuity and divided pro rata. The
6changes made to this Section by Public Act 98-596 this
7amendatory Act of the 98th General Assembly are a clarification
8of existing law and are intended to be retroactive to January
91, 2011 (the effective date of Public Act 96-889),
10notwithstanding the provisions of Section 1-103.1 of this Code.
11(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 
12    (40 ILCS 5/15-146)  (from Ch. 108 1/2, par. 15-146)
13    Sec. 15-146. Survivors insurance benefits - Minimum
14amounts.
15    (a) The minimum total survivors annuity payable on account
16of the death of a participant shall be 50% of the retirement
17annuity which would have been provided under Rule 1, Rule 2, or
18Rule 3 of Section 15-136 upon the participant's attainment of
19the minimum age at which the penalty for early retirement would
20not be applicable or the date of the participant's death,
21whichever is later, on the basis of credits earned prior to the
22time of death.
23    (b) The minimum total survivors annuity payable on account
24of the death of an annuitant shall be 50% of the retirement
25annuity which is payable under Section 15-136 at the time of

 

 

10000SB0779ham002- 108 -LRB100 06789 RPS 30562 a

1death or 50% of the disability retirement annuity payable under
2Section 15-153.2. This minimum survivors annuity shall apply to
3each participant and annuitant who dies after September 16,
41979, whether or not his or her employee status terminates
5before or after that date.
6    (c) If an annuitant has elected a reversionary annuity, the
7retirement annuity referred to in this Section is that which
8would have been payable had such election not been filed.
9    (d) Beginning January 1, 2002, any person who is receiving
10a survivors annuity under this Article which, after inclusion
11of all one-time and automatic annual increases to which the
12person is entitled, is less than the sum of $17.50 for each
13year (up to a maximum of 30 years) of the deceased member's
14service credit, shall be entitled to a monthly supplemental
15payment equal to the difference.
16    If 2 or more persons are receiving survivors annuities
17based on the same deceased member, the calculation of the
18supplemental payment under this subsection shall be based on
19the total of those annuities and divided pro rata. The
20supplemental payment is not subject to any limitation on the
21maximum amount of the annuity and shall not be included in the
22calculation of any automatic annual increase under Section
2315-145.
24    (e) This Section only applies to Tier 1 members and Tier 2
25defined benefit members.
26(Source: P.A. 98-92, eff. 7-16-13.)
 

 

 

10000SB0779ham002- 109 -LRB100 06789 RPS 30562 a

1    (40 ILCS 5/15-154)  (from Ch. 108 1/2, par. 15-154)
2    Sec. 15-154. Refunds.
3    (a) A participant whose status as an employee is
4terminated, regardless of cause, or who has been on lay off
5status for more than 120 days, and who is not on leave of
6absence, is entitled to a refund of contributions upon
7application; except that not more than one such refund
8application may be made during any academic year. In the case
9of a Tier 2 hybrid plan member, this Section shall apply solely
10to the defined benefit portion of the Optional Hybrid Plan.
11    Except as set forth in subsections (a-1) and (a-2), the
12refund shall be the sum of the accumulated normal, additional,
13and survivors insurance contributions, plus the entire
14contribution made by the participant under Section 15-113.3,
15less the amount of interest credited on these contributions
16each year in excess of 4 1/2% of the amount on which interest
17was calculated.
18    (a-1) A person who elects, in accordance with the
19requirements of Section 15-134.5, to participate in the
20portable benefit package and who becomes a participating
21employee under that retirement program upon the conclusion of
22the one-year waiting period applicable to the portable benefit
23package election shall have his or her refund calculated in
24accordance with the provisions of subsection (a-2).
25    (a-2) The refund payable to a participant described in

 

 

10000SB0779ham002- 110 -LRB100 06789 RPS 30562 a

1subsection (a-1) shall be the sum of the participant's
2accumulated normal and additional contributions, as defined in
3Sections 15-116 and 15-117, plus the entire contribution made
4by the participant under Section 15-113.3. If the participant
5terminates with 5 or more years of service for employment as
6defined in Section 15-113.1, he or she shall also be entitled
7to a distribution of employer contributions in an amount equal
8to the sum of the accumulated normal and additional
9contributions, as defined in Sections 15-116 and 15-117.
10    (b) Upon acceptance of a refund, the participant forfeits
11all accrued rights and credits in the System, and if
12subsequently reemployed, the participant shall be considered a
13new employee subject to all the qualifying conditions for
14participation and eligibility for benefits applicable to new
15employees. If such person again becomes a participating
16employee and continues as such for 2 years, or is employed by
17an employer and participates for at least 2 years in the
18Federal Civil Service Retirement System, all such rights,
19credits, and previous status as a participant shall be restored
20upon repayment of the amount of the refund, together with
21compound interest thereon from the date the refund was issued
22to the date of repayment at the rate of 6% per annum through
23August 31, 1982, and at the effective rates after that date.
24When a participant in the portable benefit package who received
25a refund which included a distribution of employer
26contributions repays a refund pursuant to this Section,

 

 

10000SB0779ham002- 111 -LRB100 06789 RPS 30562 a

1one-half of the amount repaid shall be deemed the member's
2reinstated accumulated normal and additional contributions and
3the other half shall be allocated as an employer contribution
4to the System, except that any amount repaid for previously
5purchased military service credit under Section 15-113.3 shall
6be accounted for as such. For a Tier 2 hybrid plan member who
7made the election under subsection (g) of Section 15-134.5, the
8amount repaid shall be restored in the proportions attributable
9to service as a Tier 2 defined benefit member and a Tier 2
10hybrid plan member, respectively.
11    (c) Except as otherwise provided under subsection (c-5), if
12a participant covered under the traditional benefit package has
13made survivors insurance contributions, but has no survivors
14insurance beneficiary upon retirement, he or she shall be
15entitled to elect a refund of the accumulated survivors
16insurance contributions, or to elect an additional annuity the
17value of which is equal to the accumulated survivors insurance
18contributions. This election must be made prior to the date the
19person's retirement annuity is approved by the System.
20    (c-5) Notwithstanding subsection (c), an annuitant who
21retired prior to June 1, 2011 and made the election under
22subsection (c), and who thereafter became, and remains, either:
23        (1) a party to a civil union or a party to a legal
24    relationship that is recognized as a civil union or
25    marriage under the Illinois Religious Freedom Protection
26    and Civil Union Act on or after June 1, 2011; or

 

 

10000SB0779ham002- 112 -LRB100 06789 RPS 30562 a

1        (2) a party to a marriage under the Illinois Marriage
2    and Dissolution of Marriage Act on or after February 26,
3    2014; or
4        (3) a party to a marriage, civil union or other legal
5    relationship that, at the time it was formed, was not
6    legally recognized in Illinois but was subsequently
7    recognized as a civil union or marriage under the Illinois
8    Religious Freedom Protection and Civil Union Act on or
9    after June 1, 2011, a marriage under the Illinois Marriage
10    and Dissolution of Marriage Act on or after February 26,
11    2014, or both;
12may make a one-time, irrevocable election to repay the refund
13or additional annuity payments received under subsection (c),
14together with compound interest thereon at the actuarially
15assumed rate of return from the date the refund was issued or
16the date each additional annuity payment was issued to the date
17of repayment. The annuitant shall submit proof of party status
18for item (1), (2), or (3) in the form of a valid marriage
19certificate or a civil union certificate with any additional
20requirements the Board prescribes by rulemaking. The election
21must be received by the System (i) within a period of one year
22beginning 5 months after the effective date of this amendatory
23Act of the 99th General Assembly and (ii) prior to the date of
24death of the annuitant.
25    To the extent permitted under the Internal Revenue Code of
261986, as amended, the full repayment shall be made within a

 

 

10000SB0779ham002- 113 -LRB100 06789 RPS 30562 a

1period beginning on the date of the election and ending on the
2earlier of the 24th month thereafter or the date of the
3annuitant's death. If an annuitant fails to make the repayment
4within the required period, any payments made shall be
5returned, without interest, to the annuitant (or to the
6annuitant's estate if the payments ceased due to death), and
7survivors insurance benefits under Section 15-145 shall not be
8payable upon the annuitant's death.
9    Upon such repayment, all forfeited survivors insurance
10benefit rights and credits under Section 15-145 shall be
11restored. This repayment right shall not alter or modify any
12eligibility requirement for survivors insurance beneficiaries
13under this Article applicable upon the annuitant's death. The
14repayment shall be irrevocable. No person shall have a claim or
15right to the repaid amounts in a manner not otherwise provided
16for under this Article in the event that: the marriage, civil
17union, or other legal relationship described in this subsection
18is dissolved, annulled, or declared invalid by a court of
19competent jurisdiction; or the other party to the marriage,
20civil union, or other legal relationship predeceases the
21annuitant or otherwise fails to qualify as a survivors
22insurance beneficiary upon the annuitant's death.
23    For purposes of this subsection (c-5), the term "annuitant"
24shall include an annuitant who resumed his or her status as a
25participating employee under Section 15-139(c).
26    (d) A participant, upon application, is entitled to a

 

 

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1refund of his or her accumulated additional contributions
2attributable to the additional contributions described in the
3last sentence of subsection (c) of Section 15-157. Upon the
4acceptance of such a refund of accumulated additional
5contributions, the participant forfeits all rights and credits
6which may have accrued because of such contributions.
7    (e) A participant who terminates his or her employee status
8and elects to waive service credit under Section 15-154.2, is
9entitled to a refund of the accumulated normal, additional and
10survivors insurance contributions, if any, which were credited
11the participant for this service, or to an additional annuity
12the value of which is equal to the accumulated normal,
13additional and survivors insurance contributions, if any;
14except that not more than one such refund application may be
15made during any academic year. Upon acceptance of this refund,
16the participant forfeits all rights and credits accrued because
17of this service.
18    (f) If a police officer or firefighter receives a
19retirement annuity under Rule 1 or 3 of Section 15-136, he or
20she shall be entitled at retirement to a refund of the
21difference between his or her accumulated normal contributions
22and the normal contributions which would have accumulated had
23such person filed a waiver of the retirement formula provided
24by Rule 4 of Section 15-136.
25    (g) If, at the time of retirement, a participant would be
26entitled to a retirement annuity under Rule 1, 2, 3, 4, or 5 of

 

 

10000SB0779ham002- 115 -LRB100 06789 RPS 30562 a

1Section 15-136, or under Section 15-136.4, that exceeds the
2maximum specified in clause (1) of subsection (c) of Section
315-136, he or she shall be entitled to a refund of the employee
4contributions, if any, paid under Section 15-157 after the date
5upon which continuance of such contributions would have
6otherwise caused the retirement annuity to exceed this maximum,
7plus compound interest at the effective rates.
8(Source: P.A. 99-450, eff. 8-24-15; 99-682, eff. 7-29-16.)
 
9    (40 ILCS 5/15-154.3 new)
10    Sec. 15-154.3. Calculation of retirement benefits for Tier
112 defined benefit members who elect to participate in the
12Optional Hybrid Plan.
13    (a) A Tier 2 defined benefit member who elects under
14subsection (g) of Section 15-134.5 to participate in the
15Optional Hybrid Plan is entitled to a retirement annuity
16without an age reduction if he or she has attained the normal
17retirement age determined by the Social Security
18Administration for that member's year of birth, but no earlier
19than 67 years of age, and has at least 10 years of service
20credit with respect to all service accrued and is otherwise
21eligible under the requirements of this Article. A Tier 2
22defined benefit member who elects to participate in the
23Optional Hybrid Plan under subsection (g) of Section 15-134.5
24shall be eligible to retire within 5 years of the normal
25retirement age determined by the Social Security

 

 

10000SB0779ham002- 116 -LRB100 06789 RPS 30562 a

1Administration for that member's year of birth, but no earlier
2than age 62, with a reduced annuity as provided in subsection
3(b-10) of Section 15-136.
4    (b) No period of service within an academic year shall
5result in more than one year of combined service credit. If
6service credit must be reduced to satisfy this subsection (b),
7then service credits established under the Optional Hybrid Plan
8shall be forfeited first.
9    (c) A Tier 2 defined benefit member who elects under
10subsection (g) of Section 15-134.5 to participate in the
11Optional Hybrid Plan shall receive a combined retirement
12annuity from the System based on the sum of his or her total
13accrued service credit under this Article as follows:
14        (i) 2.2% of the final rate of earnings multiplied by
15    each year of service as a Tier 2 defined benefit member.
16    The final rate of earnings for purposes of this item (i) of
17    subsection (c) shall be the amount specified in subsection
18    (b) of Section 15-112, except the earnings taken into
19    account shall be limited as described under subsection (b)
20    of Section 15-111.
21        (ii) 1.25% of final rate of earnings multiplied by each
22    year of service as a Tier 2 hybrid plan member. The final
23    rate of earnings for purposes of this item (ii) of
24    subsection (c) shall be the amount specified in subsection
25    (b-5) of Section 15-112.
26    (d) The retirement annuity of a Tier 2 defined benefit

 

 

10000SB0779ham002- 117 -LRB100 06789 RPS 30562 a

1member who elects to participate in the Optional Hybrid Plan
2under subsection (g) of Section 15-134.5 shall receive annual
3increases on the January 1 occurring either on or after the
4attainment of the applicable retirement age (but no earlier
5than age 67) or the first anniversary of the annuity start
6date, whichever is later. Each annual increase shall be
7calculated at one-half the annual unadjusted percentage
8increase (but not less than zero) in the consumer price index-w
9for the 12 months ending with the September preceding each
10November 1 of the originally granted retirement annuity. If the
11annual unadjusted percentage change in the consumer price
12index-w for the 12 months ending with the September preceding
13each November 1 is zero or there is a decrease, then the
14annuity shall not be increased.
15    For the purposes of this subsection (d), "consumer price
16index-w" means the index published by the Bureau of Labor
17Statistics of the United States Department of Labor that
18measures the average change in prices of goods and services
19purchased by Urban Wage Earners and Clerical Workers, United
20States city average, all items, 1982-84 = 100. The new amount
21resulting from each annual adjustment shall be determined by
22the Public Pension Division of the Department of Insurance and
23made available to the board by November 1 of each year.
 
24    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
25    Sec. 15-155. Employer contributions.

 

 

10000SB0779ham002- 118 -LRB100 06789 RPS 30562 a

1    (a) The State of Illinois shall make contributions by
2appropriations of amounts which, together with the other
3employer contributions from trust, federal, and other funds,
4employee contributions, income from investments, and other
5income of this System, will be sufficient to meet the cost of
6maintaining and administering the System on a 90% funded basis
7in accordance with actuarial recommendations.
8    The Board shall determine the amount of State contributions
9required for each fiscal year on the basis of the actuarial
10tables and other assumptions adopted by the Board and the
11recommendations of the actuary, using the formula in subsection
12(a-1).
13    (a-1) For State fiscal years 2012 through 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 90% of
17the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of payroll over the years remaining to and
21including fiscal year 2045 and shall be determined under the
22projected unit credit actuarial cost method.
23    For each of State fiscal years 2018, 2019, and 2020, the
24State shall make an additional contribution to the System equal
25to 2% of the total payroll of each employee who is deemed to
26have elected the benefits under Section 1-161 or who has made

 

 

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1the election under subsection (c) of Section 1-161.
2    A change in the required State contribution based on an
3actuarial or investment assumption that increases or decreases
4the required State contribution and first applies to the
5required State contribution in State fiscal year 2018 or
6thereafter shall be implemented in equal annual amounts over a
75-year period beginning in the State fiscal year in which the
8actuarial change first applies to the required State
9contribution.
10    A change in the required State contribution based on an
11actuarial or investment assumption that increases or decreases
12the required State contribution and first applied to the
13required State contribution in fiscal year 2014, 2015, 2016, or
142017 shall be implemented:
15        (i) as already applied in State fiscal years before
16    2018; and
17        (ii) in the portion of the 5-year period beginning in
18    the State fiscal year in which the actuarial change first
19    applied that occurs in State fiscal year 2018 or
20    thereafter, by calculating the change in equal annual
21    amounts over that 5-year period and then implementing it at
22    the resulting annual rate in each of the remaining fiscal
23    years in that 5-year period.
24    For State fiscal years 1996 through 2005, 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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1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2006 is
5$166,641,900.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2007 is
8$252,064,100.
9    For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2010 is
17$702,514,000 and shall be made from the State Pensions Fund and
18proceeds of bonds sold in fiscal year 2010 pursuant to Section
197.2 of the General Obligation Bond Act, less (i) the pro rata
20share of bond sale expenses determined by the System's share of
21total bond proceeds, (ii) any amounts received from the General
22Revenue Fund in fiscal year 2010, (iii) any reduction in bond
23proceeds due to the issuance of discounted bonds, if
24applicable.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2011 is

 

 

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1the amount recertified by the System on or before April 1, 2011
2pursuant to Section 15-165 and shall be made from the State
3Pensions Fund and proceeds of bonds sold in fiscal year 2011
4pursuant to Section 7.2 of the General Obligation Bond Act,
5less (i) the pro rata share of bond sale expenses determined by
6the System's share of total bond proceeds, (ii) any amounts
7received from the General Revenue Fund in fiscal year 2011, and
8(iii) any reduction in bond proceeds due to the issuance of
9discounted bonds, if applicable.
10    Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

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1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 15-165, shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (a-1.5) For each of State fiscal years 2018, 2019, and
262020, the State shall make an additional contribution to the

 

 

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1System equal to 2% of the total payroll of (1) Tier 2 hybrid
2plan members and (2) Tier 2 defined benefit members who first
3participate under this Article on or after the implementation
4date of the Optional Hybrid Plan.
5    (a-2) Beginning in fiscal year 2018, each employer under
6this Article shall pay to the System a required contribution
7determined as a percentage of projected payroll and sufficient
8to produce an annual amount equal to:
9        (i) for each of fiscal years 2018, 2019, and 2020, the
10    defined benefit normal cost of the defined benefit plan,
11    less the employee contribution, for each employee of that
12    employer who is (1) a Tier 2 hybrid plan member or (2) a
13    Tier 2 defined benefit member who first participates under
14    this Article on or after the implementation date of the
15    Optional Hybrid Plan has elected or who is deemed to have
16    elected the benefits under Section 1-161 or who has made
17    the election under subsection (c) of Section 1-161; for
18    fiscal year 2021 and each fiscal year thereafter, the
19    defined benefit normal cost of the defined benefit plan,
20    less the employee contribution, plus 2%, for each employee
21    of that employer who is (1) a Tier 2 hybrid plan member or
22    (2) a Tier 2 defined benefit member who first participates
23    under this Article on or after the implementation date of
24    the Optional Hybrid Plan has elected or who is deemed to
25    have elected the benefits under Section 1-161 or who has
26    made the election under subsection (c) of Section 1-161;

 

 

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1    plus
2        (ii) the amount required for that fiscal year to
3    amortize any unfunded actuarial accrued liability
4    associated with the present value of liabilities
5    attributable to the defined benefits of (1) Tier 2 hybrid
6    plan members and (2) Tier 2 defined benefit members who
7    first participate under this Article on or after the
8    implementation date of the Optional Hybrid Plan employer's
9    account under Section 15-155.2, determined as a level
10    percentage of payroll over a 30-year rolling amortization
11    period.
12    In determining contributions required under item (i) of
13this subsection, the System shall determine an aggregate rate
14for all employers, expressed as a percentage of projected
15payroll.
16    In determining the contributions required under item (ii)
17of this subsection, the amount shall be computed by the System
18on the basis of the actuarial assumptions and tables used in
19the most recent actuarial valuation of the System that is
20available at the time of the computation. The System shall
21determine an aggregate rate for all employers, expressed as a
22percentage of projected payroll.
23    The contributions required under this subsection (a-2)
24shall be paid by an employer concurrently with that employer's
25payroll payment period. When the State is The State, as the
26actual employer of an employee, the State shall make the

 

 

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

 

 

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

 

 

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1    (f) Normal costs under this Section means liability for
2pensions and other benefits which accrues to the System because
3of the credits earned for service rendered by the participants
4during the fiscal year and expenses of administering the
5System, but shall not include the principal of or any
6redemption premium or interest on any bonds issued by the Board
7or any expenses incurred or deposits required in connection
8therewith.
9    (g) If the amount of a participant's earnings for any
10academic year used to determine the final rate of earnings,
11determined on a full-time equivalent basis, exceeds the amount
12of his or her earnings with the same employer for the previous
13academic year, determined on a full-time equivalent basis, by
14more than 6%, the participant's employer shall pay to the
15System, in addition to all other payments required under this
16Section and in accordance with guidelines established by the
17System, the present value of the increase in benefits resulting
18from the portion of the increase in earnings that is in excess
19of 6%. This present value shall be computed by the System on
20the basis of the actuarial assumptions and tables used in the
21most recent actuarial valuation of the System that is available
22at the 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 (g), the System shall calculate the

 

 

10000SB0779ham002- 128 -LRB100 06789 RPS 30562 a

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

 

 

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1the participant not taken (i) periods of voluntary or
2involuntary furlough occurring on or after July 1, 2015 and on
3or before June 30, 2017 or (ii) periods of voluntary pay
4reduction in lieu of furlough occurring on or after July 1,
52015 and on or before June 30, 2017. Determining earnings that
6would have been paid to a participant had the participant not
7taken periods of voluntary or involuntary furlough or periods
8of voluntary pay reduction shall be the responsibility of the
9employer, and shall be reported in a manner prescribed by the
10System.
11    (h) This subsection (h) applies only to payments made or
12salary increases given on or after June 1, 2005 but before July
131, 2011. The changes made by Public Act 94-1057 shall not
14require the System to refund any payments received before July
1531, 2006 (the effective date of Public Act 94-1057).
16    When assessing payment for any amount due under subsection
17(g), the System shall exclude earnings increases paid to
18participants under contracts or collective bargaining
19agreements entered into, amended, or renewed before June 1,
202005.
21    When assessing payment for any amount due under subsection
22(g), the System shall exclude earnings increases paid to a
23participant at a time when the participant is 10 or more years
24from retirement eligibility under Section 15-135.
25    When assessing payment for any amount due under subsection
26(g), the System shall exclude earnings increases resulting from

 

 

10000SB0779ham002- 130 -LRB100 06789 RPS 30562 a

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

 

 

10000SB0779ham002- 131 -LRB100 06789 RPS 30562 a

1    (i) When assessing payment for any amount due under
2subsection (g), the System shall exclude any salary increase
3described in subsection (h) of this Section given on or after
4July 1, 2011 but before July 1, 2014 under a contract or
5collective bargaining agreement entered into, amended, or
6renewed on or after June 1, 2005 but before July 1, 2011.
7Notwithstanding any other provision of this Section, any
8payments made or salary increases given after June 30, 2014
9shall be used in assessing payment for any amount due under
10subsection (g) of this Section.
11    (j) The System shall prepare a report and file copies of
12the report with the Governor and the General Assembly by
13January 1, 2007 that contains all of the following information:
14        (1) The number of recalculations required by the
15    changes made to this Section by Public Act 94-1057 for each
16    employer.
17        (2) The dollar amount by which each employer's
18    contribution to the System was changed due to
19    recalculations required by Public Act 94-1057.
20        (3) The total amount the System received from each
21    employer as a result of the changes made to this Section by
22    Public Act 94-4.
23        (4) The increase in the required State contribution
24    resulting from the changes made to this Section by Public
25    Act 94-1057.
26    (j-5) For State fiscal academic years beginning on or after

 

 

10000SB0779ham002- 132 -LRB100 06789 RPS 30562 a

1July 1, 2017, if the amount of a participant's earnings for any
2State fiscal school year, determined on a full-time equivalent
3basis, exceeds the amount of the salary set by law for the
4Governor as of July 1 of that fiscal year, the participant's
5employer shall pay to the System, in addition to all other
6payments required under this Section and in accordance with
7guidelines established by the System, an amount determined by
8the System to be equal to the employer normal cost, as
9established by the System and expressed as a total percentage
10of payroll, multiplied by the amount of earnings in excess of
11the amount of the salary set by law for the Governor. This
12amount shall be computed by the System on the basis of the
13actuarial assumptions and tables used in the most recent
14actuarial valuation of the System that is available at the time
15of the computation. The System may require the employer to
16provide any pertinent information or documentation. If there is
17no salary set by law for the Governor as of July 1 of that
18fiscal year, the most recent salary set by law for the Governor
19shall be used for purposes of this calculation.
20    Whenever it determines that a payment is or may be required
21under this subsection, the System shall calculate the amount of
22the payment and bill the employer for that amount. The bill
23shall specify the calculation calculations used to determine
24the amount due. If the employer disputes the amount of the
25bill, it may, within 30 days after receipt of the bill, apply
26to the System in writing for a recalculation. The application

 

 

10000SB0779ham002- 133 -LRB100 06789 RPS 30562 a

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

 

 

10000SB0779ham002- 134 -LRB100 06789 RPS 30562 a

1any earnings increases resulting from a promotion when the
2promotion was not submitted by a community college. Nothing in
3this subsection (k) shall require any community college to
4submit any information to the Community College Board.
5    (l) For purposes of determining the required State
6contribution to the System, the value of the System's assets
7shall be equal to the actuarial value of the System's assets,
8which shall be calculated as follows:
9    As of June 30, 2008, the actuarial value of the System's
10assets shall be equal to the market value of the assets as of
11that date. In determining the actuarial value of the System's
12assets for fiscal years after June 30, 2008, any actuarial
13gains or losses from investment return incurred in a fiscal
14year shall be recognized in equal annual amounts over the
155-year period following that fiscal year.
16    (m) For purposes of determining the required State
17contribution to the system for a particular year, the actuarial
18value of assets shall be assumed to earn a rate of return equal
19to the system's actuarially assumed rate of return.
20(Source: P.A. 99-897, eff. 1-1-17; 100-23, eff. 7-6-17.)
 
21    (40 ILCS 5/15-155.1 new)
22    Sec. 15-155.1. Actions to enforce payments by employers.
23    (a) Except as otherwise specified, if any employer fails to
24transmit to the System contributions required of it under this
25Article or contributions collected by it from its participating

 

 

10000SB0779ham002- 135 -LRB100 06789 RPS 30562 a

1employees for the purposes of this Article for more than 120
2days after the payment of those contributions is due, the
3Board, after giving notice to that employer, may certify to the
4State Comptroller the amounts of such delinquent payments in
5accordance with any applicable rules of the Comptroller, and
6the Comptroller shall deduct the amounts so certified or any
7part thereof from any payments of State funds to the employer
8involved and shall remit the amount so deducted to the System.
9If State funds from which such deductions may be made are not
10available or if deductions are delayed for longer than 120 days
11after the date of the certification to the Comptroller, the
12Board may proceed against the employer to recover the amounts
13of such delinquent payments in the appropriate circuit court.
14    (b) Except as otherwise specified, if any employer that is
15a community college district fails to transmit to the System
16contributions required of it under this Article or
17contributions collected by it from its participating employees
18for the purposes of this Article for more than 120 days after
19the payment of those contributions is due, the Board, after
20giving notice to that employer, may certify the fact of such
21delinquent payment to the county treasurer of the county in
22which that employer is located, who shall thereafter remit the
23amounts collected from any taxes levied by the employer
24directly to the System. If the funds from which such
25remittances may be made are not available or if the remittances
26are delayed for longer than 120 days after the date of the

 

 

10000SB0779ham002- 136 -LRB100 06789 RPS 30562 a

1certification to the county treasurer, the Board may proceed
2against the employer to recover the amounts of such delinquent
3payments in the appropriate circuit court.
4    (c) Nothing in this Section prohibits the Board from
5proceeding against an employer to recover the amounts of any
6delinquent payments in the appropriate circuit court.
 
7    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
8    Sec. 15-157. Employee Contributions.
9    (a) Each participating employee who is a Tier 1 member or a
10Tier 2 defined benefit member shall make contributions towards
11the retirement benefits payable under the retirement program
12applicable to the employee from each payment of earnings
13applicable to employment under this system on and after the
14date of becoming a participant as follows: Prior to September
151, 1949, 3 1/2% of earnings; from September 1, 1949 to August
1631, 1955, 5%; from September 1, 1955 to August 31, 1969, 6%;
17from September 1, 1969, 6 1/2%. These contributions are to be
18considered as normal contributions for purposes of this
19Article.
20    Each participating employee who is a Tier 2 hybrid plan
21member shall make contributions towards the retirement
22benefits payable under the Optional Hybrid Plan from each
23payment of earnings equal to 5% of earnings for the first plan
24year containing the implementation date of the Optional Hybrid
25Plan. For each plan year thereafter, each Tier 2 hybrid plan

 

 

10000SB0779ham002- 137 -LRB100 06789 RPS 30562 a

1member shall contribute the lesser of 5% of earnings or 81.25%
2of the Optional Hybrid Plan normal cost rate (but not less than
30%), rounded to the nearest tenth of a percent. These
4contributions are to be considered as normal contributions for
5purposes of this Article.
6    Each participant who is a police officer or firefighter who
7is a Tier 1 member or a Tier 2 defined benefit member shall
8make normal contributions of 8% of each payment of earnings
9applicable to employment as a police officer or firefighter
10under this system on or after September 1, 1981, unless he or
11she files with the board within 60 days after the effective
12date of this amendatory Act of 1991 or 60 days after the board
13receives notice that he or she is employed as a police officer
14or firefighter, whichever is later, a written notice waiving
15the retirement formula provided by Rule 4 of Section 15-136.
16This waiver shall be irrevocable. If a participant had met the
17conditions set forth in Section 15-132.1 prior to the effective
18date of this amendatory Act of 1991 but failed to make the
19additional normal contributions required by this paragraph, he
20or she may elect to pay the additional contributions plus
21compound interest at the effective rate. If such payment is
22received by the board, the service shall be considered as
23police officer service in calculating the retirement annuity
24under Rule 4 of Section 15-136. While performing service
25described in clause (i) or (ii) of Rule 4 of Section 15-136, a
26participating employee shall be deemed to be employed as a

 

 

10000SB0779ham002- 138 -LRB100 06789 RPS 30562 a

1firefighter for the purpose of determining the rate of employee
2contributions under this Section.
3    (b) Starting September 1, 1969, each participating
4employee who is a Tier 1 member or a Tier 2 defined benefit
5member shall make additional contributions of 1/2 of 1% of
6earnings to finance a portion of the cost of the annual
7increases in retirement annuity provided under Section 15-136,
8except that with respect to participants in the self-managed
9plan this additional contribution shall be used to finance the
10benefits obtained under that retirement program.
11    Each participating employee who is a Tier 2 hybrid plan
12member shall make additional contributions equal to 0.4% of
13earnings for the first plan year containing the implementation
14date of the Optional Hybrid Plan. For each plan year
15thereafter, each Tier 2 hybrid plan member shall contribute the
16lesser of 0.4% of earnings or 6.25% of the Optional Hybrid Plan
17normal cost rate (but not less than 0%), rounded to the nearest
18tenth of a percent, to finance a portion of the cost of the
19annual increases in retirement annuity provided under Section
2015-136.
21    (c) In addition to the amounts described in subsections (a)
22and (b) of this Section, each participating employee who is a
23Tier 1 member or a Tier 2 defined benefit member shall make
24contributions of 1% of earnings applicable under this system on
25and after August 1, 1959.
26     In addition to the amounts described in subsections (a)

 

 

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1and (b) of this Section, each participating employee who is a
2Tier 2 hybrid plan member shall make contributions equal to
30.8% of earnings for the first plan year containing the
4implementation date of the Optional Hybrid Plan. For each plan
5year thereafter, each Tier 2 hybrid plan member shall
6contribute the lesser of 0.8% of earnings or 12.5% of the
7Optional Hybrid Plan normal cost rate (but not less than 0%),
8rounded to the nearest tenth of a percent, under this System.
9    The contributions made under this subsection (c) shall be
10considered as survivor's insurance contributions for purposes
11of this Article if the employee is covered under the
12traditional benefit package, and such contributions shall be
13considered as additional contributions for purposes of this
14Article if the employee is participating in the self-managed
15plan or has elected to participate in the portable benefit
16package and has completed the applicable one-year waiting
17period. Contributions in excess of $80 during any fiscal year
18beginning before August 31, 1969 and in excess of $120 during
19any fiscal year thereafter until September 1, 1971 shall be
20considered as additional contributions for purposes of this
21Article.
22    (d) If the board by board rule so permits and subject to
23such conditions and limitations as may be specified in its
24rules, a participant may make other additional contributions of
25such percentage of earnings or amounts as the participant shall
26elect in a written notice thereof received by the board.

 

 

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1    (e) That fraction of a participant's total accumulated
2normal contributions, the numerator of which is equal to the
3number of years of service in excess of that which is required
4to qualify for the maximum retirement annuity, and the
5denominator of which is equal to the total service of the
6participant, shall be considered as accumulated additional
7contributions. The determination of the applicable maximum
8annuity and the adjustment in contributions required by this
9provision shall be made as of the date of the participant's
10retirement.
11    (f) Notwithstanding the foregoing, a participating
12employee shall not be required to make contributions under this
13Section after the date upon which continuance of such
14contributions would otherwise cause his or her retirement
15annuity to exceed the maximum retirement annuity as specified
16in clause (1) of subsection (c) of Section 15-136.
17    (g) A participant may make contributions for the purchase
18of service credit under this Article; however, only a
19participating employee may make optional contributions under
20subsection (b) of Section 15-157.1 of this Article.
21    (h) A Tier 2 defined benefit member shall not make
22contributions on earnings that exceed the limitation as
23prescribed under subsection (b) of Section 15-111 of this
24Article.
25    (i) A Tier 2 hybrid plan member shall not make
26contributions on earnings that exceed the limitation as

 

 

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1prescribed under subsection (b-5) of Section 15-111 of this
2Article. The contributions under this Section shall commence on
3the first pay period following the effective date of the
4employee's election or deemed election under subsection (g) of
5Section 15-134.5 or Section 15-134.6.
6    (j) A Tier 2 hybrid plan member may not make contributions
7for the purchase of service credit under this Article, unless
8the purchase is under Section 1-118 of this Code. However, a
9Tier 2 hybrid plan member may repay a refund under the
10provisions of Section 15-154.
11(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
12    (40 ILCS 5/15-157.1)  (from Ch. 108 1/2, par. 15-157.1)
13    Sec. 15-157.1. Pickup of employee contributions.
14    (a) Each employer shall pick up the employee contributions
15required under subsections (a), (b), and (c) of Section 15-157
16and employee contributions under subsection (b) of Section
1715-158.25 to the extent so designated under the defined
18contribution plan under that Section for all earnings payments
19made on and after January 1, 1981, and the contributions so
20picked up shall be treated as employer contributions in
21determining tax treatment under the United States Internal
22Revenue Code. These contributions shall not be included as
23gross income of the participant until such time as they are
24distributed or made available. The employer shall pay these
25employee contributions from the same source of funds which is

 

 

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1used in paying earnings to the employee. The employer may pick
2up these contributions by a reduction in the cash salary of the
3participants, or by an offset against a future salary increase,
4or by a combination of a reduction in salary and offset against
5a future salary increase.
6    (b) Subject to the requirements of federal law, a
7participating employee may elect to have the employer pick up
8optional contributions that the participant has elected to pay
9to the System under Section 15-157(g), and the contributions so
10picked up shall be treated as employer contributions for the
11purposes of determining federal tax treatment under the federal
12Internal Revenue Code of 1986. These contributions shall not be
13included as gross income of the participant until such time as
14they are distributed or made available. The employer shall pick
15up the contributions by a reduction in the cash salary of the
16participant and shall pay the contributions from the same
17source of funds that is used to pay earnings to the
18participant. The election to have optional contributions
19picked up is irrevocable.
20(Source: P.A. 90-32, eff. 6-27-97; 90-448, eff. 8-16-97.)
 
21    (40 ILCS 5/15-158.2)
22    Sec. 15-158.2. Self-managed plan.
23    (a) Purpose. The General Assembly finds that it is
24important for colleges and universities to be able to attract
25and retain the most qualified employees and that in order to

 

 

10000SB0779ham002- 143 -LRB100 06789 RPS 30562 a

1attract and retain these employees, colleges and universities
2should have the flexibility to provide a defined contribution
3plan as an alternative for eligible employees who elect not to
4participate in a defined benefit retirement program provided
5under this Article. Accordingly, the State Universities
6Retirement System is hereby authorized to establish and
7administer a self-managed plan, which shall offer
8participating employees the opportunity to accumulate assets
9for retirement through a combination of employee and employer
10contributions that may be invested in mutual funds, collective
11investment funds, or other investment products and used to
12purchase annuity contracts, either fixed or variable or a
13combination thereof. The plan must be qualified under the
14Internal Revenue Code of 1986.
15    (b) Adoption by employers. Each employer subject to this
16Article may elect to adopt the self-managed plan established
17under this Section; this election is irrevocable. An employer's
18election to adopt the self-managed plan makes available to the
19eligible employees of that employer the elections described in
20Section 15-134.5.
21    The State Universities Retirement System shall be the plan
22sponsor for the self-managed plan and shall prepare a plan
23document and prescribe such rules and procedures as are
24considered necessary or desirable for the administration of the
25self-managed plan. Consistent with its fiduciary duty to the
26participants and beneficiaries of the self-managed plan, the

 

 

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1Board of Trustees of the System may delegate aspects of plan
2administration as it sees fit to companies authorized to do
3business in this State, to the employers, or to a combination
4of both.
5    (c) Selection of service providers and funding vehicles.
6The System, in consultation with the employers, shall solicit
7proposals to provide administrative services and funding
8vehicles for the self-managed plan from insurance and annuity
9companies and mutual fund companies, banks, trust companies, or
10other financial institutions authorized to do business in this
11State. In reviewing the proposals received and approving and
12contracting with no fewer than 2 and no more than 7 companies,
13the Board of Trustees of the System shall consider, among other
14things, the following criteria:
15        (1) the nature and extent of the benefits that would be
16    provided to the participants;
17        (2) the reasonableness of the benefits in relation to
18    the premium charged;
19        (3) the suitability of the benefits to the needs and
20    interests of the participating employees and the employer;
21        (4) the ability of the company to provide benefits
22    under the contract and the financial stability of the
23    company; and
24        (5) the efficacy of the contract in the recruitment and
25    retention of employees.
26    The System, in consultation with the employers, shall

 

 

10000SB0779ham002- 145 -LRB100 06789 RPS 30562 a

1periodically review each approved company. A company may
2continue to provide administrative services and funding
3vehicles for the self-managed plan only so long as it continues
4to be an approved company under contract with the Board.
5    (d) Employee Direction. Employees who are participating in
6the program must be allowed to direct the transfer of their
7account balances among the various investment options offered,
8subject to applicable contractual provisions. The participant
9shall not be deemed a fiduciary by reason of providing such
10investment direction. A person who is a fiduciary shall not be
11liable for any loss resulting from such investment direction
12and shall not be deemed to have breached any fiduciary duty by
13acting in accordance with that direction. The System shall
14provide advance notice to the participant of the participant's
15obligation to direct the investment of employee and employer
16contributions into one or more investment funds selected by the
17System at the time he or she makes his or her initial
18retirement plan selection. If a participant fails to direct the
19investment of employee and employer contributions into the
20various investment options offered to the participant when
21making his or her initial retirement election choice, that
22failure shall require the System to invest the employee and
23employer contributions in a default investment fund on behalf
24of the participant, and the investment shall be deemed to have
25been made at the participant's investment direction. The
26participant has the right to transfer account balances out of

 

 

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1the default investment fund during time periods designated by
2the System. Neither the System nor the employer guarantees any
3of the investments in the employee's account balances.
4    (e) Participation. An employee eligible to participate in
5the self-managed plan must make a written election in
6accordance with the provisions of Section 15-134.5 and the
7procedures established by the System. Participation in the
8self-managed plan by an electing employee shall begin on the
9first day of the first pay period following the later of the
10date the employee's election is filed with the System or the
11effective date as of which the employee's employer begins to
12offer participation in the self-managed plan. Employers may not
13make the self-managed plan available earlier than January 1,
141998. An employee's participation in any other retirement
15program administered by the System under this Article shall
16terminate on the date that participation in the self-managed
17plan begins.
18    An employee who has elected to participate in the
19self-managed plan under this Section must continue
20participation while employed in an eligible position, and may
21not participate in any other retirement program administered by
22the System under this Article while employed by that employer
23or any other employer that has adopted the self-managed plan,
24unless the self-managed plan is terminated in accordance with
25subsection (i).
26    Notwithstanding any other provision of this Article, a Tier

 

 

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12 member shall have the option to enroll in the self-managed
2plan.
3    Participation in the self-managed plan under this Section
4shall constitute membership in the State Universities
5Retirement System.
6    A participant under this Section shall be entitled to the
7benefits of Article 20 of this Code.
8    (f) Establishment of Initial Account Balance. If at the
9time an employee elects to participate in the self-managed plan
10he or she has rights and credits in the System due to previous
11participation in the traditional benefit package, the System
12shall establish for the employee an opening account balance in
13the self-managed plan, equal to the amount of contribution
14refund that the employee would be eligible to receive under
15Section 15-154 if the employee terminated employment on that
16date and elected a refund of contributions, except that this
17hypothetical refund shall include interest at the effective
18rate for the respective years. The System shall transfer assets
19from the defined benefit retirement program to the self-managed
20plan, as a tax free transfer in accordance with Internal
21Revenue Service guidelines, for purposes of funding the
22employee's opening account balance.
23    (g) No Duplication of Service Credit. Notwithstanding any
24other provision of this Article, an employee may not purchase
25or receive service or service credit applicable to any other
26retirement program administered by the System under this

 

 

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1Article for any period during which the employee was a
2participant in the self-managed plan established under this
3Section.
4    (h) Contributions. The self-managed plan shall be funded by
5contributions from employees participating in the self-managed
6plan and employer contributions as provided in this Section.
7    The contribution rate for employees participating in the
8self-managed plan under this Section shall be equal to the
9employee contribution rate for Tier 1 members other
10participants in the System, as provided in Section 15-157. This
11required contribution shall be made as an "employer pick-up"
12under Section 414(h) of the Internal Revenue Code of 1986 or
13any successor Section thereof. Any employee participating in
14the System's traditional benefit package prior to his or her
15election to participate in the self-managed plan shall continue
16to have the employer pick up the contributions required under
17Section 15-157. However, the amounts picked up after the
18election of the self-managed plan shall be remitted to and
19treated as assets of the self-managed plan. In no event shall
20an employee have an option of receiving these amounts in cash.
21Employees may make additional contributions to the
22self-managed plan in accordance with procedures prescribed by
23the System, to the extent permitted under rules prescribed by
24the System.
25    The program shall provide for employer contributions to be
26credited to each self-managed plan participant at a rate of

 

 

10000SB0779ham002- 149 -LRB100 06789 RPS 30562 a

17.6% of the participating employee's salary, less the amount
2used by the System to provide disability benefits for the
3employee. The employer shall pay the employer contributions for
4employees of the employer who first participate in the
5self-managed plan on or after the implementation date of the
6Optional Hybrid Plan. The amounts so credited shall be paid
7into the participant's self-managed plan accounts in a manner
8to be prescribed by the System.
9    An amount of employer contribution, not exceeding 1% of the
10participating employee's salary, shall be used for the purpose
11of providing the disability benefits of the System to the
12employee. Prior to the beginning of each plan year under the
13self-managed plan, the Board of Trustees shall determine, as a
14percentage of salary, the amount of employer contributions to
15be allocated during that plan year for providing disability
16benefits for employees in the self-managed plan.
17    The State of Illinois shall make contributions by
18appropriations to the System of the employer contributions
19required for employees who participate in the self-managed plan
20under this Section. The amount required shall be certified by
21the Board of Trustees of the System and paid by the State in
22accordance with Section 15-165. The System shall not be
23obligated to remit the required employer contributions to any
24of the insurance and annuity companies, mutual fund companies,
25banks, trust companies, financial institutions, or other
26sponsors of any of the funding vehicles offered under the

 

 

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1self-managed plan until it has received the required employer
2contributions from the State. In the event of a deficiency in
3the amount of State contributions, the System shall implement
4those procedures described in subsection (c) of Section 15-165
5to obtain the required funding from the General Revenue Fund.
6    (i) Termination. The self-managed plan authorized under
7this Section may be terminated by the System, subject to the
8terms of any relevant contracts, and the System shall have no
9obligation to reestablish the self-managed plan under this
10Section. This Section does not create a right to continued
11participation in any self-managed plan set up by the System
12under this Section. If the self-managed plan is terminated, the
13participants shall have the right to participate in one of the
14other retirement programs offered by the System and receive
15service credit in such other retirement program for any years
16of employment following the termination.
17    (j) Vesting; Withdrawal; Return to Service. A participant
18in the self-managed plan becomes vested in the employer
19contributions credited to his or her accounts in the
20self-managed plan on the earliest to occur of the following:
21(1) completion of 5 years of service with an employer described
22in Section 15-106; (2) the death of the participating employee
23while employed by an employer described in Section 15-106, if
24the participant has completed at least 1 1/2 years of service;
25or (3) the participant's election to retire and apply the
26reciprocal provisions of Article 20 of this Code.

 

 

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1    A participant in the self-managed plan who receives a
2distribution of his or her vested amounts from the self-managed
3plan while not yet eligible for retirement under this Article
4(and Article 20, if applicable) shall forfeit all service
5credit and accrued rights in the System; if subsequently
6re-employed, the participant shall be considered a new
7employee. If a former participant again becomes a participating
8employee (or becomes employed by a participating system under
9Article 20 of this Code) and continues as such for at least 2
10years, all such rights, service credits, and previous status as
11a participant shall be restored upon repayment of the amount of
12the distribution, without interest.
13    (k) Benefit amounts. If an employee who is vested in
14employer contributions terminates employment, the employee
15shall be entitled to a benefit which is based on the account
16values attributable to both employer and employee
17contributions and any investment return thereon.
18    If an employee who is not vested in employer contributions
19terminates employment, the employee shall be entitled to a
20benefit based solely on the account values attributable to the
21employee's contributions and any investment return thereon,
22and the employer contributions and any investment return
23thereon shall be forfeited. Any employer contributions which
24are forfeited shall be held in escrow by the company investing
25those contributions and shall be used as directed by the System
26for future allocations of employer contributions or for the

 

 

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1restoration of amounts previously forfeited by former
2participants who again become participating employees.
3(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
 
4    (40 ILCS 5/15-158.24 new)
5    Sec. 15-158.24. Defined benefit portion of the Optional
6Hybrid Plan. The System shall offer one or more of the
7following retirement plans under the defined benefit portion of
8the Optional Hybrid Plan: (1) the Traditional Benefit Package
9under Section 15-103.1; and (2) the Portable Benefit Package
10under Section 15-103.2. The defined contribution provisions
11shall be governed by Section 15-158.25. The System shall
12endeavor to make such participation in the Optional Hybrid Plan
13available as soon as possible after July 6, 2017 (the effective
14date of Public Act 100-23) and shall establish an
15implementation date by board resolution. The implementation
16date of the Optional Hybrid Plan shall be the earliest date
17upon which the board authorizes members to begin participating
18in the Optional Hybrid Plan.
 
19    (40 ILCS 5/15-158.25 new)
20    Sec. 15-158.25. Defined contribution program.
21    (a) The System shall prepare and implement a defined
22contribution program.
23    The defined contribution program shall consist of one or
24more defined contribution plans (and may include existing plans

 

 

10000SB0779ham002- 153 -LRB100 06789 RPS 30562 a

1maintained by the System or one of its affiliates) that each
2meet the definition of an "eligible retirement plan" as that
3term is defined under Section 402(c)(8)(B)(iii), (iv), (v), or
4(vi) of the Internal Revenue Code of 1986, as amended. The
5defined contribution program shall be designed to permit
6participants to make elective deferrals, subject to the terms
7and conditions of the applicable plan and the requirements of
8the U.S. Internal Revenue Service.
9    To the extent authorized under federal law and as
10authorized by the System, the defined contribution program
11shall allow former participants in the plan to transfer or roll
12over employee and employer contributions, and the earnings
13thereon, into other "eligible retirement plans" as defined, and
14as permitted, under Section 402(c)(8) of the Internal Revenue
15Code of 1986, as amended.
16    The System shall reduce the employee contributions
17credited to the participant's defined contribution plan
18account by an amount determined by the System to cover the cost
19of offering the benefits under the defined contribution plan
20and any applicable administrative fees.
21    No person shall begin participating in the defined
22contribution program, unless a defined contribution plan under
23the defined contribution program as of the effective date of
24this amendatory Act of the 100th General Assembly has already
25received a determination letter or, in the case of plans
26established after the effective date of this amendatory Act of

 

 

10000SB0779ham002- 154 -LRB100 06789 RPS 30562 a

1the 100th General Assembly, until such plan has been determined
2by the U.S. Internal Revenue Service to satisfy the applicable
3requirements of the Internal Revenue Code of 1986, as amended,
4for its type of eligible retirement plan (whether by
5determination letter, opinion letter, or private letter
6ruling); except that in the case of an arrangement of a type
7for which an Internal Revenue Service approval process is not
8available as of the implementation date (such as a plan
9described in Section 403(b) that is not a prototype or volume
10submitter plan as defined in IRS guidance), participants may
11commence participation in such plan as of the implementation
12date specified by the Board without regard to the fact that
13Internal Revenue Service approval of the arrangement cannot be
14obtained.
15    (b) The defined contribution program under this Section
16shall be used to meet the requirements of the defined
17contribution portion of the Optional Hybrid Plan, subject to
18the following conditions:
19        (1) Each participant shall contribute a minimum of 4%
20    of his or her earnings to the defined contribution plan.
21        (2) Employer contributions shall commence as of the
22    first pay period following the date the participant has
23    been employed with the same employer for at least one year.
24    The rate of employer contributions, expressed as a
25    percentage of earnings, may be set for individual
26    employees, but shall be no higher than 6% of earnings and

 

 

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1    shall be no lower than 2% of earnings.
2        (3) Employer contributions shall vest when those
3    contributions are paid into a participant's account.
4        (4) The defined contribution plan shall provide a
5    variety of options for investments.
6        (5) The defined contribution plan shall provide a
7    variety of options for payouts for participants and their
8    beneficiaries.
 
9    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
10    Sec. 15-165. To certify amounts and submit vouchers.
11    (a) The Board shall certify to the Governor on or before
12November 15 of each year until November 15, 2011 the
13appropriation required from State funds for the purposes of
14this System for the following fiscal year. The certification
15under this subsection (a) shall include a copy of the actuarial
16recommendations upon which it is based and shall specifically
17identify the System's projected State normal cost for that
18fiscal year and the projected State cost for the self-managed
19plan for that fiscal year.
20    On or before May 1, 2004, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2005, taking
23into account the amounts appropriated to and received by the
24System under subsection (d) of Section 7.2 of the General
25Obligation Bond Act.

 

 

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

 

 

10000SB0779ham002- 157 -LRB100 06789 RPS 30562 a

1year. The Board's certification must note, in a written
2response to the State Actuary, any deviations from the State
3Actuary's recommended changes, the reason or reasons for not
4following the State Actuary's recommended changes, and the
5fiscal impact of not following the State Actuary's recommended
6changes on the required State contribution.
7    (a-10) By November 1, 2017, the Board shall submit
8recalculate and recertify to the State Actuary, the Governor,
9and the General Assembly a proposed recertification of the
10amount of the required State contribution to the System for
11State fiscal year 2018, taking into account the changes in the
12required State contribution contributions made by this
13amendatory Act of the 100th General Assembly. On or before
14January 1, 2018, the The State Actuary shall review the
15assumptions and valuations underlying the Board's revised
16certification and issue a preliminary report concerning the
17proposed recertification and identifying, if necessary,
18recommended changes in actuarial assumptions that the Board
19must consider before finalizing its recertification
20certification of the required State contributions. On or before
21January 15, 2018, the Board shall recertify to the Governor and
22the General Assembly the amount of the required State
23contribution for State fiscal year 2018. The Board's final
24recertification certification must note, in a written response
25to the State Actuary, any deviations from the State Actuary's
26recommended changes, the reason or reasons for not following

 

 

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1the State Actuary's recommended changes, and the fiscal impact
2of not following the State Actuary's recommended changes on the
3required State contribution.
4    (a-15) On or before November 1 of each year, beginning with
5the November 1 occurring after the implementation date of the
6Optional Hybrid Plan, the Board shall submit to the State
7Actuary, the Governor, and the General Assembly a proposed
8certification of the Optional Hybrid Plan normal cost rate,
9along with all of the actuarial assumptions, calculations, and
10data upon which the proposed certification is based. The
11"Optional Hybrid Plan normal cost rate" means the total normal
12cost of the benefits of all members of the System making
13contributions to the defined benefit portion of the Optional
14Hybrid Plan, expressed as a percentage of pensionable payroll.
15On or before January 1 of each year, beginning with the January
161 occurring after the implementation date of the Optional
17Hybrid Plan, the State Actuary shall issue a preliminary report
18concerning the proposed certification and identifying, if
19necessary, recommended changes in actuarial assumptions that
20the Board must consider before finalizing its certification of
21the Optional Hybrid Plan normal cost rate. On or before the
22January 15 occurring after the implementation date of the
23Optional Hybrid Plan and each January 15 thereafter, the Board
24shall certify to the Governor and the General Assembly the
25Optional Hybrid Plan normal cost rate to be effective July 1 of
26the following State fiscal year. The Board's certification must

 

 

10000SB0779ham002- 159 -LRB100 06789 RPS 30562 a

1note, in a written response to the State Actuary, any
2deviations from the State Actuary's recommended changes, the
3reason or reasons for not following the State Actuary's
4recommended changes, and the fiscal impact of not following the
5State Actuary's recommended changes on the required State
6contribution.
7    (b) The Board shall certify to the State Comptroller or
8employer, as the case may be, from time to time, by its
9chairperson and secretary, with its seal attached, the amounts
10payable to the System from the various funds.
11    (c) Beginning in State fiscal year 1996, on or as soon as
12possible after the 15th day of each month the Board shall
13submit vouchers for payment of State contributions to the
14System, in a total monthly amount of one-twelfth of the
15required annual State contribution certified under subsection
16(a). From the effective date of this amendatory Act of the 93rd
17General Assembly through June 30, 2004, the Board shall not
18submit vouchers for the remainder of fiscal year 2004 in excess
19of the fiscal year 2004 certified contribution amount
20determined under this Section after taking into consideration
21the transfer to the System under subsection (b) of Section
226z-61 of the State Finance Act. These vouchers shall be paid by
23the State Comptroller and Treasurer by warrants drawn on the
24funds appropriated to the System for that fiscal year.
25    If in any month the amount remaining unexpended from all
26other appropriations to the System for the applicable fiscal

 

 

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1year (including the appropriations to the System under Section
28.12 of the State Finance Act and Section 1 of the State
3Pension Funds Continuing Appropriation Act) is less than the
4amount lawfully vouchered under this Section, the difference
5shall be paid from the General Revenue Fund under the
6continuing appropriation authority provided in Section 1.1 of
7the State Pension Funds Continuing Appropriation Act.
8    (c-5) Beginning on the August 1 occurring on or after the
9implementation date of the Optional Hybrid Plan and for each
10August 1 thereafter through August 1, 2020, the Board shall
11submit vouchers for the payment of 2% of the total payroll of
12(1) Tier 2 hybrid plan members and (2) Tier 2 defined benefit
13members who first participate under this Article on or after
14the implementation date of the Optional Hybrid Plan. These
15vouchers shall be paid by the State Comptroller and Treasurer
16by August 31 of each year through August 31, 2020 by warrants
17drawn on the funds appropriated to the System for that fiscal
18year.
19    If in any month the amount remaining unexpended from all
20other appropriations to the System for the applicable fiscal
21year (including the appropriations to the System under Section
228.12 of the State Finance Act and Section 1 of the State
23Pension Funds Continuing Appropriation Act) is less than the
24amount lawfully vouchered under this subsection (c-5), the
25difference shall be paid from the General Revenue Fund under
26the continuing appropriation authority provided in Section 1.1

 

 

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1of the State Pension Funds Continuing Appropriation Act.
2    (d) So long as the payments received are the full amount
3lawfully vouchered under this Section, payments received by the
4System under this Section shall be applied first toward the
5employer contribution to the self-managed plan established
6under Section 15-158.2. Payments shall be applied second toward
7the employer's portion of the normal costs of the System, as
8defined in subsection (f) of Section 15-155. The balance shall
9be applied toward the unfunded actuarial liabilities of the
10System.
11    (e) In the event that the System does not receive, as a
12result of legislative enactment or otherwise, payments
13sufficient to fully fund the employer contribution to the
14self-managed plan established under Section 15-158.2 and to
15fully fund that portion of the employer's portion of the normal
16costs of the System, as calculated in accordance with Section
1715-155(a-1), then any payments received shall be applied
18proportionately to the optional retirement program established
19under Section 15-158.2 and to the employer's portion of the
20normal costs of the System, as calculated in accordance with
21Section 15-155(a-1).
22(Source: P.A. 100-23, eff. 7-6-17.)
 
23    (40 ILCS 5/16-106.4a new)
24    Sec. 16-106.4a. Tier 1 member; Tier 2 member. "Tier 1
25member": A member under this Article who first became a member

 

 

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1or participant before January 1, 2011 under any reciprocal
2retirement system or pension fund established under this Code
3other than a retirement system or pension fund established
4under Article 2, 3, 4, 5, 6, or 18 of this Code.
5    "Tier 2 member": A person who first becomes a member under
6this Article or a reciprocal system, other than a system
7created under Article 2, 3, 4, 5, 6, or 18, on or after January
81, 2011 unless the person is otherwise a Tier 1 member.
 
9    (40 ILCS 5/16-106.7 new)
10    Sec. 16-106.7. Traditional Tier 2 benefit. "Traditional
11Tier 2 benefit": The benefit provided for under Section 1-160
12and any related Sections as implemented by the System.
 
13    (40 ILCS 5/16-111)  (from Ch. 108 1/2, par. 16-111)
14    Sec. 16-111. Beneficiary. "Beneficiary": Any person,
15organization or other entity designated in writing to receive
16or any person receiving a survivor benefit or reversionary
17annuity provided by this system or granted under any superseded
18retirement fund or system, including anyone designated in
19writing to receive all or a portion of a defined contribution
20account established under Section 16-139, but not an individual
21who is in receipt of a defined contribution account but not an
22annuity as allowed by that Section.
23(Source: P.A. 83-1440.)
 

 

 

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1    (40 ILCS 5/16-111.1)  (from Ch. 108 1/2, par. 16-111.1)
2    Sec. 16-111.1. Annuitant. "Annuitant": Any person retired
3on a retirement annuity or disability retirement annuity under
4this system or any superseded retirement fund or system,
5including a person who is in receipt of benefits under Section
616-139.
7(Source: P.A. 83-1440.)
 
8    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 16-127. Computation of creditable service.
12    (a) Each member shall receive regular credit for all
13service as a teacher from the date membership begins, for which
14satisfactory evidence is supplied and all contributions have
15been paid.
16    (b) Except for a participant in the Optional Hybrid Plan
17under Section 16-139, the The following periods of service
18shall earn optional credit and each member shall receive credit
19for all such service for which satisfactory evidence is
20supplied and all contributions have been paid as of the date
21specified:
22        (1) Prior service as a teacher.
23        (2) Service in a capacity essentially similar or
24    equivalent to that of a teacher, in the public common
25    schools in school districts in this State not included

 

 

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1    within the provisions of this System, or of any other
2    State, territory, dependency or possession of the United
3    States, or in schools operated by or under the auspices of
4    the United States, or under the auspices of any agency or
5    department of any other State, and service during any
6    period of professional speech correction or special
7    education experience for a public agency within this State
8    or any other State, territory, dependency or possession of
9    the United States, and service prior to February 1, 1951 as
10    a recreation worker for the Illinois Department of Public
11    Safety, for a period not exceeding the lesser of 2/5 of the
12    total creditable service of the member or 10 years. The
13    maximum service of 10 years which is allowable under this
14    paragraph shall be reduced by the service credit which is
15    validated by other retirement systems under paragraph (i)
16    of Section 15-113 and paragraph 1 of Section 17-133. Credit
17    granted under this paragraph may not be used in
18    determination of a retirement annuity or disability
19    benefits unless the member has at least 5 years of
20    creditable service earned subsequent to this employment
21    with one or more of the following systems: Teachers'
22    Retirement System of the State of Illinois, State
23    Universities Retirement System, and the Public School
24    Teachers' Pension and Retirement Fund of Chicago. Whenever
25    such service credit exceeds the maximum allowed for all
26    purposes of this Article, the first service rendered in

 

 

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1    point of time shall be considered. The changes to this
2    subdivision (b)(2) made by Public Act 86-272 shall apply
3    not only to persons who on or after its effective date
4    (August 23, 1989) are in service as a teacher under the
5    System, but also to persons whose status as such a teacher
6    terminated prior to such effective date, whether or not
7    such person is an annuitant on that date.
8        (3) Any periods immediately following teaching
9    service, under this System or under Article 17, (or
10    immediately following service prior to February 1, 1951 as
11    a recreation worker for the Illinois Department of Public
12    Safety) spent in active service with the military forces of
13    the United States; periods spent in educational programs
14    that prepare for return to teaching sponsored by the
15    federal government following such active military service;
16    if a teacher returns to teaching service within one
17    calendar year after discharge or after the completion of
18    the educational program, a further period, not exceeding
19    one calendar year, between time spent in military service
20    or in such educational programs and the return to
21    employment as a teacher under this System; and a period of
22    up to 2 years of active military service not immediately
23    following employment as a teacher.
24        The changes to this Section and Section 16-128 relating
25    to military service made by P.A. 87-794 shall apply not
26    only to persons who on or after its effective date are in

 

 

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1    service as a teacher under the System, but also to persons
2    whose status as a teacher terminated prior to that date,
3    whether or not the person is an annuitant on that date. In
4    the case of an annuitant who applies for credit allowable
5    under this Section for a period of military service that
6    did not immediately follow employment, and who has made the
7    required contributions for such credit, the annuity shall
8    be recalculated to include the additional service credit,
9    with the increase taking effect on the date the System
10    received written notification of the annuitant's intent to
11    purchase the credit, if payment of all the required
12    contributions is made within 60 days of such notice, or
13    else on the first annuity payment date following the date
14    of payment of the required contributions. In calculating
15    the automatic annual increase for an annuity that has been
16    recalculated under this Section, the increase attributable
17    to the additional service allowable under P.A. 87-794 shall
18    be included in the calculation of automatic annual
19    increases accruing after the effective date of the
20    recalculation.
21        Credit for military service shall be determined as
22    follows: if entry occurs during the months of July, August,
23    or September and the member was a teacher at the end of the
24    immediately preceding school term, credit shall be granted
25    from July 1 of the year in which he or she entered service;
26    if entry occurs during the school term and the teacher was

 

 

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1    in teaching service at the beginning of the school term,
2    credit shall be granted from July 1 of such year. In all
3    other cases where credit for military service is allowed,
4    credit shall be granted from the date of entry into the
5    service.
6        The total period of military service for which credit
7    is granted shall not exceed 5 years for any member unless
8    the service: (A) is validated before July 1, 1964, and (B)
9    does not extend beyond July 1, 1963. Credit for military
10    service shall be granted under this Section only if not
11    more than 5 years of the military service for which credit
12    is granted under this Section is used by the member to
13    qualify for a military retirement allotment from any branch
14    of the armed forces of the United States. The changes to
15    this subdivision (b)(3) made by Public Act 86-272 shall
16    apply not only to persons who on or after its effective
17    date (August 23, 1989) are in service as a teacher under
18    the System, but also to persons whose status as such a
19    teacher terminated prior to such effective date, whether or
20    not such person is an annuitant on that date.
21        (4) Any periods served as a member of the General
22    Assembly.
23        (5)(i) Any periods for which a teacher, as defined in
24    Section 16-106, is granted a leave of absence, provided he
25    or she returns to teaching service creditable under this
26    System or the State Universities Retirement System

 

 

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1    following the leave; (ii) periods during which a teacher is
2    involuntarily laid off from teaching, provided he or she
3    returns to teaching following the lay-off; (iii) periods
4    prior to July 1, 1983 during which a teacher ceased covered
5    employment due to pregnancy, provided that the teacher
6    returned to teaching service creditable under this System
7    or the State Universities Retirement System following the
8    pregnancy and submits evidence satisfactory to the Board
9    documenting that the employment ceased due to pregnancy;
10    and (iv) periods prior to July 1, 1983 during which a
11    teacher ceased covered employment for the purpose of
12    adopting an infant under 3 years of age or caring for a
13    newly adopted infant under 3 years of age, provided that
14    the teacher returned to teaching service creditable under
15    this System or the State Universities Retirement System
16    following the adoption and submits evidence satisfactory
17    to the Board documenting that the employment ceased for the
18    purpose of adopting an infant under 3 years of age or
19    caring for a newly adopted infant under 3 years of age.
20    However, total credit under this paragraph (5) may not
21    exceed 3 years.
22        Any qualified member or annuitant may apply for credit
23    under item (iii) or (iv) of this paragraph (5) without
24    regard to whether service was terminated before the
25    effective date of this amendatory Act of 1997. In the case
26    of an annuitant who establishes credit under item (iii) or

 

 

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1    (iv), the annuity shall be recalculated to include the
2    additional service credit. The increase in annuity shall
3    take effect on the date the System receives written
4    notification of the annuitant's intent to purchase the
5    credit, if the required evidence is submitted and the
6    required contribution paid within 60 days of that
7    notification, otherwise on the first annuity payment date
8    following the System's receipt of the required evidence and
9    contribution. The increase in an annuity recalculated
10    under this provision shall be included in the calculation
11    of automatic annual increases in the annuity accruing after
12    the effective date of the recalculation.
13        Optional credit may be purchased under this subsection
14    (b)(5) for periods during which a teacher has been granted
15    a leave of absence pursuant to Section 24-13 of the School
16    Code. A teacher whose service under this Article terminated
17    prior to the effective date of P.A. 86-1488 shall be
18    eligible to purchase such optional credit. If a teacher who
19    purchases this optional credit is already receiving a
20    retirement annuity under this Article, the annuity shall be
21    recalculated as if the annuitant had applied for the leave
22    of absence credit at the time of retirement. The difference
23    between the entitled annuity and the actual annuity shall
24    be credited to the purchase of the optional credit. The
25    remainder of the purchase cost of the optional credit shall
26    be paid on or before April 1, 1992.

 

 

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1        The change in this paragraph made by Public Act 86-273
2    shall be applicable to teachers who retire after June 1,
3    1989, as well as to teachers who are in service on that
4    date.
5        (6) Any days of unused and uncompensated accumulated
6    sick leave earned by a teacher. The service credit granted
7    under this paragraph shall be the ratio of the number of
8    unused and uncompensated accumulated sick leave days to 170
9    days, subject to a maximum of 2 years of service credit.
10    Prior to the member's retirement, each former employer
11    shall certify to the System the number of unused and
12    uncompensated accumulated sick leave days credited to the
13    member at the time of termination of service. The period of
14    unused sick leave shall not be considered in determining
15    the effective date of retirement. A member is not required
16    to make contributions in order to obtain service credit for
17    unused sick leave.
18        Credit for sick leave shall, at retirement, be granted
19    by the System for any retiring regional or assistant
20    regional superintendent of schools at the rate of 6 days
21    per year of creditable service or portion thereof
22    established while serving as such superintendent or
23    assistant superintendent.
24        (7) Periods prior to February 1, 1987 served as an
25    employee of the Illinois Mathematics and Science Academy
26    for which credit has not been terminated under Section

 

 

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1    15-113.9 of this Code.
2        (8) Service as a substitute teacher for work performed
3    prior to July 1, 1990.
4        (9) Service as a part-time teacher for work performed
5    prior to July 1, 1990.
6        (10) Up to 2 years of employment with Southern Illinois
7    University - Carbondale from September 1, 1959 to August
8    31, 1961, or with Governors State University from September
9    1, 1972 to August 31, 1974, for which the teacher has no
10    credit under Article 15. To receive credit under this item
11    (10), a teacher must apply in writing to the Board and pay
12    the required contributions before May 1, 1993 and have at
13    least 12 years of service credit under this Article.
14    (b-1) A member may establish optional credit for up to 2
15years of service as a teacher or administrator employed by a
16private school recognized by the Illinois State Board of
17Education, provided that the teacher (i) was certified under
18the law governing the certification of teachers at the time the
19service was rendered, (ii) applies in writing on or after
20August 1, 2009 and on or before August 1, 2012, (iii) supplies
21satisfactory evidence of the employment, (iv) completes at
22least 10 years of contributing service as a teacher as defined
23in Section 16-106, and (v) pays the contribution required in
24subsection (d-5) of Section 16-128. The member may apply for
25credit under this subsection and pay the required contribution
26before completing the 10 years of contributing service required

 

 

10000SB0779ham002- 172 -LRB100 06789 RPS 30562 a

1under item (iv), but the credit may not be used until the item
2(iv) contributing service requirement has been met.
3    (c) The service credits specified in this Section shall be
4granted only if: (1) such service credits are not used for
5credit in any other statutory tax-supported public employee
6retirement system other than the federal Social Security
7program; and (2) the member makes the required contributions as
8specified in Section 16-128. Except as provided in subsection
9(b-1) of this Section, the service credit shall be effective as
10of the date the required contributions are completed.
11    Any service credits granted under this Section shall
12terminate upon cessation of membership for any cause.
13    Credit may not be granted under this Section covering any
14period for which an age retirement or disability retirement
15allowance has been paid.
16(Source: P.A. 96-546, eff. 8-17-09.)
 
17    (40 ILCS 5/16-136)  (from Ch. 108 1/2, par. 16-136)
18    Sec. 16-136. Reversionary annuity. Except for a
19participant in the Optional Hybrid Plan established under
20Section 16-139, a A member entitled to a retirement annuity may
21elect at the time of retirement to receive a reduced retirement
22annuity and provide with the actuarial value of the reduction,
23determined on an actuarial equivalent basis, a reversionary
24annuity for any person who is dependent upon the member at the
25time of retirement, as named in a written direction filed with

 

 

10000SB0779ham002- 173 -LRB100 06789 RPS 30562 a

1the system as a part of the application for the retirement
2annuity, provided that the reversionary annuity is not less
3than $10 per month, nor more than the reduced retirement
4annuity to which the member is entitled. The condition of
5dependency must be established and proved to the satisfaction
6of the system before the election becomes effective.
7    The reversionary annuity shall begin as of the first day of
8the month following the month in which the death of the
9annuitant occurs, provided, that the designated beneficiary is
10then living. If the designated beneficiary predeceases the
11annuitant, the reversionary annuity shall not be payable, and
12beginning the first of the month following notification of the
13designated beneficiary's death, the System shall pay the
14annuitant the retirement annuity he or she would have received
15but for the reversionary annuity election.
16(Source: P.A. 84-1028.)
 
17    (40 ILCS 5/16-136.2)  (from Ch. 108 1/2, par. 16-136.2)
18    Sec. 16-136.2. Minimum retirement annuity.
19    (a) Except for a participant in the Optional Hybrid Plan
20established under Section 16-139, any Any annuitant receiving a
21retirement annuity under this Article is entitled to such
22additional amount of retirement annuity under this Section, if
23necessary, that is sufficient to provide a minimum retirement
24annuity of $10 per month for each year of creditable service
25forming the basis of the retirement annuity, up to $300 per

 

 

10000SB0779ham002- 174 -LRB100 06789 RPS 30562 a

1month for 30 or more years of creditable service. Effective
2January 1, 1984, the minimum retirement annuity under this
3Section is $15 per month per year of service up to $450 per
4month. Beginning January 1, 1996, the minimum retirement
5annuity payable under this Section shall be $25 per month for
6each year of creditable service, up to a maximum of $750 per
7month for 30 or more years of creditable service.
8    An annuitant entitled to an increase in retirement annuity
9under this Section shall be entitled to such increase in
10retirement annuity effective the later of (1) September 1
11following attainment of age 60; (2) September 1 following the
12first anniversary in retirement; or (3) the first of the month
13following receipt of the required qualifying contribution from
14the annuitant.
15    (b) An annuitant who qualifies for an additional amount of
16retirement annuity under subsection (a) of this Section must
17make a one-time payment of 1% of the monthly average salary for
18each full year of the creditable service forming the basis of
19the retirement annuity or, if the retirement annuity was not
20computed using average salary, 1% of the original monthly
21retirement annuity for each full year of service forming the
22basis of the retirement annuity.
23    (c) The minimum retirement annuity provided under this
24Section shall continue to be paid only to the extent that funds
25are available in the minimum retirement annuity reserve
26established under Section 16-186.3.

 

 

10000SB0779ham002- 175 -LRB100 06789 RPS 30562 a

1    (d) The annual increase provided on and after September 1,
21977 under Section 16-136.1 and on and after January 1, 1978
3under Section 16-133.1 shall be paid in addition to the minimum
4retirement annuity. Where an initial increase is first payable
5on or after September 1, 1977, only that portion of the
6increase based on the period in retirement after August 31,
71976, under Section 16-136.1 and after December 31, 1976, under
8Section 16-133.1 may be added to the minimum retirement
9annuity.
10(Source: P.A. 89-21, eff. 6-6-95; 89-25, eff. 6-21-95.)
 
11    (40 ILCS 5/16-136.4)  (from Ch. 108 1/2, par. 16-136.4)
12    Sec. 16-136.4. Single-sum retirement benefit.
13    (a) Except for a participant in the Optional Hybrid Plan
14established under Section 16-139, a A member who has less than
155 years of creditable service shall be entitled, upon written
16application to the board, to receive a retirement benefit
17payable in a single sum upon or after the member's attainment
18of age 65. However, the benefit shall not be paid while the
19member is employed as a teacher in the schools included under
20this Article or Article 17, unless the System is required by
21federal law to make payment due to the member's age.
22    (b) The retirement benefit shall consist of a single sum
23that is the actuarial equivalent of a life annuity consisting
24of 1.67% of the member's final average salary for each year of
25creditable service. In determining the amount of the benefit, a

 

 

10000SB0779ham002- 176 -LRB100 06789 RPS 30562 a

1fractional year shall be granted proportional credit.
2    For the purposes of this Section, final average salary
3shall be the average salary of the member's highest 4
4consecutive years of service as determined under rules of the
5board. For a member with less than 4 consecutive years of
6service, final average salary shall be the average salary
7during the member's entire period of service. In the
8determination of final average salary for members other than
9elected officials and their appointees when such appointees are
10allowed by statute, that part of a member's salary which
11exceeds the member's annual full-time salary rate with the same
12employer for the preceding year by more than 20% shall be
13excluded. The exclusion shall not apply in any year in which
14the member's creditable earnings are less than 50% of the
15preceding year's mean salary for downstate teachers as
16determined by the survey of school district salaries provided
17in Section 2-3.103 of the School Code.
18    (c) The retirement benefit determined under this Section
19shall be available to all members who render teaching service
20after July 1, 1947 for which member contributions are required.
21    (d) Upon acceptance of the retirement benefit, all of the
22member's accrued rights and credits in the System are
23forfeited. Receipt of a single-sum retirement benefit under
24this Section does not make a person an "annuitant" for the
25purposes of this Article, nor a "benefit recipient" for the
26purposes of Sections 16-153.1 through 16-153.4.

 

 

10000SB0779ham002- 177 -LRB100 06789 RPS 30562 a

1(Source: P.A. 91-887, eff. 7-6-00.)
 
2    (40 ILCS 5/16-139 new)
3    Sec. 16-139. Optional Hybrid Plan.
4    (a) A Tier 2 member may elect to receive, in lieu of other
5benefits provided for under this Article or Article 1, benefits
6under an Optional Hybrid Plan. The Board shall establish the
7Optional Hybrid Plan after receiving all necessary rulings and
8approvals from the Internal Revenue Service and in a time frame
9established by the Board in the best interest of the
10membership. The System shall not provide advice or counseling
11with respect to the legal or tax circumstances of or
12consequences of making the election under this Section. In no
13event shall the System, its staff, or the Board be held liable
14for any information given to a member regarding the election
15options under this Section.
16    A Tier 2 member may elect to participate in the Optional
17Hybrid Plan with respect to service credit earned on or after
18the date established by the System as of the first date of
19enrollment by making an irrevocable election on forms provided
20by the System and otherwise in accordance with policies
21established by the System to make the election. Any service
22credit earned by a member on or after he or she has made the
23election and established in the Optional Hybrid Plan shall
24accrue a benefit and require employee and employer
25contributions in accordance with this Section. Any service

 

 

10000SB0779ham002- 178 -LRB100 06789 RPS 30562 a

1credit earned prior to the time of election and establishment
2in the Optional Hybrid Plan shall be credited to the member in
3accordance with the benefits provided to a Tier 2 member as
4those benefits existed at the time the Tier 2 service credit
5was earned.
6    Upon retirement, a Tier 2 member who made an election under
7this subsection shall have his or her annuity calculated (1)
8for the service credit earned prior to making the election and
9establishing participation in the Optional Hybrid Plan, using
10the calculations in place at the time that service credit was
11earned and (2) for the service credit earned after making the
12election and establishing participation in the Optional Hybrid
13Plan, using the calculations provided in this Section.
14    For purposes of determining an annuity under this Section,
15"final average salary" means the 10 highest salaried
16consecutive years, and the same 10-year period shall be used in
17calculating the annuity under both the Optional Hybrid Plan and
18the traditional Tier 2 benefit.
19    For purposes of any vesting requirement under the
20traditional Tier 2 benefit or the Optional Hybrid Plan, the
21total service credit in the System will be used.
22    (b) Members who first become members of the System on or
23after the establishment of the Optional Hybrid Plan shall make
24a one-time irrevocable election, through a process established
25by the System, to participate in either the traditional Tier 2
26benefit or the Optional Hybrid Plan. The member shall have 90

 

 

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1days after he or she first becomes a member to make this
2election. If the member fails to make an election under this
3Section, the member shall be deemed to have elected to
4participate in the Optional Hybrid Plan.
5    During the period prior to the member making an election,
6the employer shall collect the greater of employee
7contributions equal to (1) the contributions required for the
8traditional Tier 2 benefit or (2) the employee contributions
9required for the Optional Hybrid Plan. If the member elects the
10Optional Hybrid Plan and the employee contributions required
11under this Article were less than the employee contributions
12actually collected, the amount actually collected less the
13amount required to be collected shall be deposited into the
14employee's defined contribution account. During the period
15prior to the member making an election, no money shall be
16placed into the employee's defined contribution account.
17    (c) The Optional Hybrid Plan shall provide an annuity. The
18annuity shall be calculated as follows:
19        (1) Final average salary shall be equal to the total
20    salary allowed as pensionable by the System of the highest
21    paid consecutive 10 years, divided by 10.
22        (2) The pensionable salary for any year shall not
23    exceed the federal Social Security Wage Base in effect for
24    that year.
25        (3) The System shall multiply each year of service
26    credit by 1.25% which in no case shall result in a number

 

 

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1    higher than 75%.
2        (4) The annuity shall be equal to the final average
3    salary established under items (1) and (2) of this
4    subsection multiplied by the percentage number established
5    in item (3) of this subsection.
6        (5) The annuity shall be payable to any member who has
7    at least 10 years of service credit and who is at least age
8    67, except as provided under paragraph (6) of this
9    subsection. Any member who has less than 10 years of
10    service credit shall be entitled to a refund of employee
11    contributions under this subsection (c).
12        (6) Any member who retires before age 67, but after age
13    62 under this subsection (c) may make such an election by
14    reducing the amount calculated under paragraph (3) of
15    subsection (c) of Section 16-139 by an amount determined by
16    the board to be equal to 0.5% multiplied by the number of
17    months less than age 67 and expressed as a percentage and
18    subtracted from the total percentage under paragraph (3) of
19    this subsection.
20    (d) The Optional Hybrid Plan annuity, survivor annuity, or
21disability annuity shall be increased on an annual basis. An
22annuitant shall first be entitled to an initial increase under
23this subsection on the January 1 next following the first
24anniversary of retirement and shall be increased on each
25January 1 following the initial increase. The annual increase
26shall be one-half the annual unadjusted percentage increase in

 

 

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1the consumer price index-w for the 12 months ending with the
2September preceding each November 1 of the originally granted
3annuity. If the annual unadjusted percentage change in the
4consumer 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. The increase
7shall be applied to the total amount of the annuity for the
8previous year. The consumer price index-w for the 12 months
9ending with the September preceding each November 1 shall be
10the amount determined by the Public Pension Division of the
11Department of Insurance based on the index published by the
12Bureau of Labor Statistics of the United States Department of
13Labor that measures the average change in prices of goods and
14services purchased by Urban Wage Earners and Clerical Workers,
15United States city average, all items, 1982-84 = 100 and made
16available to the Board by the Division by November 1 of each
17year.
18    (e) The survivor, who otherwise meets the eligibility
19requirements established under this Article, of a member who
20made an election for the Optional Hybrid Plan shall be eligible
21to receive survivor benefits, as established for a Tier 2
22member who elected the traditional Tier 2 benefit, except that
23the annuity, salary, and any other applicable calculations
24shall be made in accordance with this Section.
25    (f) A member who elected the Optional Hybrid Plan is
26entitled to disability benefits, occupational disability

 

 

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1benefits, disability retirement annuity, and any increases
2otherwise allowable to a Tier 2 member who elected the
3traditional Tier 2 benefit, except that calculations of
4annuities, annual increases, salary and any other applicable
5calculations shall be made in accordance with this Section.
6    (g) On or before January 15 of each year, the Board shall
7determine an amount to be equal to the normal cost of benefits
8for the benefits described under this Section, expressed as a
9percentage of total salary associated with members who receive
10a benefit under this Section, and shall certify that amount to
11the State Actuary and the Commission on Government Forecasting
12and Accountability.
13    (h) A member making an election under this Section shall,
14in addition to any annuity granted under this Section, be
15entitled to a defined contribution account. The account shall
16be established and maintained by the System, in accordance with
17all applicable federal and State laws. The account shall
18aggregate employer and employee contributions. The account
19shall allow for a variety of investment options. The System may
20deduct from the account any costs associated with or fees for
21operating the account and the investment options of the
22account. The system shall establish rules and procedures that
23are in accordance with all applicable laws and established best
24practices for the creation and maintenance of the accounts. To
25the extent authorized under law and by the System, the account
26shall provide options for payouts to retirees and their

 

 

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1beneficiaries, including allowing the transfer of the balance
2of the account for former employees. In addition to the amounts
3stipulated by this Section, the System may allow the deposit or
4transfer of additional moneys into the account consistent with
5relevant laws.
6    (i) The member must contribute, as a contribution to the
7defined benefit portion of the Optional Hybrid Plan, the lesser
8of (1) the member's salary multiplied by the percentage
9established under subsection (g) of this Section or (2) 6.2% of
10the member's salary.
11    (j) In any year in which the amount established under
12subsection (g) of this Section is greater than 6.2%, the
13employer must contribute, in addition to any other required
14employer contribution, the difference between the amount
15established under subsection (g) of this Section and 6.2%
16multiplied by the total salary of all members who are employed
17by the employer.
18    (k) The member must contribute no less than 4% of salary,
19as otherwise determined under this Section, into his or her
20defined contribution account.
21    (l) The employer must contribute no less than 2% and no
22greater than 6% of the applicable member's salary, as otherwise
23determined under this Section, into the employee's defined
24contribution account. These contributions are not required
25from an employer for an employee who has been employed for less
26than one year.

 

 

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1    (m) The System shall establish procedures for collecting
2and depositing all moneys into the defined contribution
3account.
4    (n) The member shall designate a beneficiary for the amount
5in the defined contribution account who will receive the
6balance of the account upon the death of the member. In the
7case where no beneficiary is named, the balance of the account
8shall become the property of the deceased member's estate.
9    (o) The Board shall determine a number, expressed as a
10percentage of payroll, on an annual basis, equal to the cost
11attributable for survivor benefits and otherwise included in
12the employee contribution made under this Section. The System
13shall provide a refund to any participant of the Optional
14Hybrid Plan equal to the contributions from the employee made
15in accordance with this subsection (o) if the member makes an
16irrevocable election, in a manner prescribed by the System, to
17receive the refund and forfeit any survivor benefits provided
18under the Optional Hybrid Plan.
 
19    (40 ILCS 5/16-143.2)  (from Ch. 108 1/2, par. 16-143.2)
20    Sec. 16-143.2. Refund of contributions for survivor
21benefits at retirement.
22    (a) Except for a participant in the Optional Hybrid Plan
23established under Section 16-139, if If at the time of applying
24for a retirement annuity under Section 16-132, or while in
25receipt of such a retirement annuity, a member does not have a

 

 

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1dependent beneficiary as defined in paragraph (3) of Section
216-140, such member may be granted, upon written request, a
3refund of actual contributions for survivor benefits, without
4interest. Members will be eligible for a refund of
5contributions for survivor benefits as provided in the previous
6sentence notwithstanding the fact that they began receiving
7retirement benefits prior to this amendatory Act of 1985.
8Acceptance of the refund will forfeit all rights to survivor
9benefits under Sections 16-140 through 16-143.
10    (b) Except as provided under subsection (c), an annuitant
11who reestablishes membership following acceptance of refund of
12contributions for survivor benefits under subsection (a) of
13this Section may reinstate eligibility for benefits provided
14under Sections 16-140 through 16-143 only through: (1)
15repayment of such refund together with regular interest thereon
16from the date of the refund to the date of repayment, and (2)
17completion of one year of creditable service following
18acceptance of such refund. If membership is reestablished and
19the above conditions (1) and (2) are not met, an additional
20refund, representing contributions made following the previous
21refund will be provided upon the member's death or retirement,
22whichever is applicable.
23    (c) Notwithstanding subsection (b), an annuitant who has
24received a refund under subsection (a) may, during a period of
25one year beginning 5 months after the effective date of this
26amendatory Act of the 99th General Assembly, make an election

 

 

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1to reestablish rights to survivor benefits under Sections
216-140 through 16-143 by paying to the System:
3        (1) the total amount of the refund received for actual
4    contributions; and
5        (2) interest on the amount of the refund at the
6    actuarially assumed rate of return for the period starting
7    on the date of receipt of the refund and ending when the
8    annuitant has made an election under this subsection (c).
9    The System may allow an individual to repay this refund
10through: a tax-deferred lump sum payment in full; substantially
11equal monthly installments over a period of at least one but
12not more than 24 months by reducing the annuitant's monthly
13benefit over the established number of months by the amount of
14the otherwise applicable contribution; or a combination
15thereof. To the extent permitted under the Internal Revenue
16Code of 1986, as amended, for federal and State tax purposes,
17the monthly amount by which the annuitant's benefit is reduced
18shall not be treated as a contribution by the annuitant, but
19rather as a reduction of the annuitant's monthly benefit.
20    If a member makes an election under this subsection (c) and
21the contributions required in items (1) and (2) of this
22subsection (c) are not paid in full, an additional one-time
23lump sum refund representing contributions made following the
24previous refund shall be provided to the named beneficiary or
25beneficiaries on file with the System or, if none, to the
26member's estate, when the member dies.

 

 

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1(Source: P.A. 99-682, eff. 7-29-16.)
 
2    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
3    (Text of Section WITHOUT the changes made by P.A. 98-599,
4which has been held unconstitutional)
5    Sec. 16-152. Contributions by members.
6    (a) Each member shall make contributions for membership
7service to this System as follows:
8        (1) Effective July 1, 1998, contributions of 7.50% of
9    salary towards the cost of the retirement annuity. Such
10    contributions shall be deemed "normal contributions".
11        (2) Effective July 1, 1969, contributions of 1/2 of 1%
12    of salary toward the cost of the automatic annual increase
13    in retirement annuity provided under Section 16-133.1.
14        (3) Effective July 24, 1959, contributions of 1% of
15    salary towards the cost of survivor benefits. Such
16    contributions shall not be credited to the individual
17    account of the member and shall not be subject to refund
18    except as provided under Section 16-143.2.
19        (4) Effective July 1, 2005, contributions of 0.40% of
20    salary toward the cost of the early retirement without
21    discount option provided under Section 16-133.2. This
22    contribution shall cease upon termination of the early
23    retirement without discount option as provided in Section
24    16-133.2.
25    (b) The minimum required contribution for any year of

 

 

10000SB0779ham002- 188 -LRB100 06789 RPS 30562 a

1full-time teaching service shall be $192.
2    (c) Contributions shall not be required of any annuitant
3receiving a retirement annuity who is given employment as
4permitted under Section 16-118 or 16-150.1.
5    (d) A person who (i) was a member before July 1, 1998, (ii)
6retires with more than 34 years of creditable service, and
7(iii) does not elect to qualify for the augmented rate under
8Section 16-129.1 shall be entitled, at the time of retirement,
9to receive a partial refund of contributions made under this
10Section for service occurring after the later of June 30, 1998
11or attainment of 34 years of creditable service, in an amount
12equal to 1.00% of the salary upon which those contributions
13were based.
14    (e) A member's contributions toward the cost of early
15retirement without discount made under item (a)(4) of this
16Section shall not be refunded if the member has elected early
17retirement without discount under Section 16-133.2 and has
18begun to receive a retirement annuity under this Article
19calculated in accordance with that election. Otherwise, a
20member's contributions toward the cost of early retirement
21without discount made under item (a)(4) of this Section shall
22be refunded according to whichever one of the following
23circumstances occurs first:
24        (1) The contributions shall be refunded to the member,
25    without interest, within 120 days after the member's
26    retirement annuity commences, if the member does not elect

 

 

10000SB0779ham002- 189 -LRB100 06789 RPS 30562 a

1    early retirement without discount under Section 16-133.2.
2        (2) The contributions shall be included, without
3    interest, in any refund claimed by the member under Section
4    16-151.
5        (3) The contributions shall be refunded to the member's
6    designated beneficiary (or if there is no beneficiary, to
7    the member's estate), without interest, if the member dies
8    without having begun to receive a retirement annuity under
9    this Article.
10        (4) The contributions shall be refunded to the member,
11    without interest, if the early retirement without discount
12    option provided under subsection (d) of Section 16-133.2 is
13    terminated. In that event, the System shall provide to the
14    member, within 120 days after the option is terminated, an
15    application for a refund of those contributions.
16    (f) For a member who elects the Optional Hybrid Plan under
17Section 16-139, the employee shall make the contributions
18outlined in that Section in lieu of any other contributions
19under this Article.
20(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642,
21eff. 7-28-16.)
 
22    (40 ILCS 5/16-152.1)  (from Ch. 108 1/2, par. 16-152.1)
23    Sec. 16-152.1. Pickup of contributions.
24    (a) Each employer may pick up the member contributions
25required under Section 16-152 or Section 16-139 for all salary

 

 

10000SB0779ham002- 190 -LRB100 06789 RPS 30562 a

1earned after December 31, 1981. If an employer decides not to
2pick up the member contributions, the amount that would have
3been picked up shall continue to be deducted from salary. If
4contributions are picked up, they shall be treated as employer
5contributions in determining tax treatment under the United
6States Internal Revenue Code. The employer shall pay these
7member contributions from the same source of funds which is
8used in paying salary to the member. The employer may pick up
9these contributions by a reduction in the cash salary of the
10member or by an offset against a future salary increase or by a
11combination of a reduction in salary and offset against a
12future salary increase. If member contributions are picked up,
13they shall be treated for all purposes of this Article 16 in
14the same manner as member contributions made prior to the date
15the pick up began.
16    (b) The State Board of Education shall pick up the
17contributions of regional superintendents required under
18Section 16-152 or Section 16-139 for all salary earned for the
191982 calendar year and thereafter.
20    (c) Effective July 1, 1983, each employer shall pick up the
21member contributions required under Section 16-152 or Section
2216-139 for all salary earned after such date. Contributions so
23picked up shall be treated as employer contributions in
24determining tax treatment under the United States Internal
25Revenue Code. The employer shall pay these member contributions
26from the same source of funds which is used in paying salary to

 

 

10000SB0779ham002- 191 -LRB100 06789 RPS 30562 a

1the member. The employer may pick up these contributions by a
2reduction in the cash salary of the member or by an offset
3against a future salary increase or by a combination of a
4reduction in salary and offset against a future salary
5increase. Member contributions so picked up shall be treated
6for all purposes of this Article 16 in the same manner as
7member contributions made prior to the date the pick up began.
8    (d) Subject to the requirements of federal law and the
9rules of the board, beginning July 1, 1998 a member who is
10employed on a full-time basis may elect to have the employer
11pick up optional contributions that the member has elected to
12pay to the System, and the contributions so picked up shall be
13treated as employer contributions for the purposes of
14determining federal tax treatment. The election to have
15optional contributions picked up is irrevocable. At the time of
16making the election, the member shall execute a binding,
17irrevocable payroll deduction authorization. Upon receiving
18notice of the election, the employer shall pick up the
19contributions by a reduction in the cash salary of the member
20and shall pay the contributions from the same source of funds
21that is used to pay earnings to the member.
22(Source: P.A. 90-448, eff. 8-16-97.)
 
23    (40 ILCS 5/16-154)  (from Ch. 108 1/2, par. 16-154)
24    Sec. 16-154. Deductions from salary.
25    (a) Required contributions. The governing body of each

 

 

10000SB0779ham002- 192 -LRB100 06789 RPS 30562 a

1school district and of each employing unit coming under this
2System, and the State Comptroller or other State officer
3certifying payroll vouchers, including payments of salary or
4wages to teachers, shall pick up or retain on every pay day the
5contributions required under Section 16-152 or Section 16-139
6of each member. Each governing body or officer shall furnish a
7statement to each member showing the amount picked up or
8retained from his or her salary.
9    (b) Optional contributions. For the purposes of this
10Section and Section 16-152.1, "optional contributions" means
11contributions that a member elects to make in order to
12establish optional service credit or to reinstate creditable
13service that was terminated upon payment of a refund.
14    The governing body of each school district and of each
15employing unit coming under this System and the State
16Comptroller or other State officer certifying payroll vouchers
17shall take the steps necessary to comply with the requirements
18of Section 414(h)(2) of the Internal Revenue Code of 1986, as
19amended, to permit the pickup of optional contributions on a
20tax-deferred basis. Beginning July 1, 1998, a school district
21or other employing unit shall not withhold optional
22contributions from the salary of any member on an after-tax
23basis.
24(Source: P.A. 90-448, eff. 8-16-97.)
 
25    (40 ILCS 5/16-155)  (from Ch. 108 1/2, par. 16-155)

 

 

10000SB0779ham002- 193 -LRB100 06789 RPS 30562 a

1    Sec. 16-155. Report to system and payment of deductions.
2    (a) The governing body of each school district shall make
3two deposits each month. The deposit for member contributions
4for salary paid between the first and the fifteenth of the
5month is due by the 25th of the month. The deposit of member
6contributions for salary paid between the sixteenth and last
7day of the month is due by the 10th of the following month. All
8required contributions for salary earned during a school term
9are due by July 10 next following the close of such school
10term.
11    The governing body of each State institution coming under
12this retirement system, the State Comptroller or other State
13officer certifying payroll vouchers including payments of
14salary or wages to teachers, and any other employer of
15teachers, shall, monthly, forward to the secretary of the
16retirement system the member contributions required under this
17Article.
18    Each employer specified above shall, prior to August 15 of
19each year, forward to the System a detailed statement, verified
20in all cases of school districts by the secretary or clerk of
21the district, of the amounts so contributed since the period
22covered by the last previous annual statement, together with
23required contributions not yet forwarded, such payments being
24payable to the System.
25    Each employer specified above shall forward all
26information necessary for the implementation and ongoing

 

 

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1management of the defined contribution accounts established
2under Section 16-139 in a manner and timeline established by
3the System.
4    The board may prescribe rules governing the form, content,
5investigation, control, and supervision of such statements and
6may establish additional interim employer reporting
7requirements as the Board deems necessary. If no teacher in a
8school district comes under the provisions of this Article, the
9governing body of the district shall so state under the oath of
10its secretary to this system, and shall at the same time
11forward a copy of the statement to the regional superintendent
12of schools.
13    (b) If the governing body of an employer that is not a
14State agency fails to forward such required contributions
15within the time permitted in subsection (a) above, the System
16shall notify the employer of an additional amount due, equal to
17the greater of the following: (1) an amount representing the
18interest lost by the system due to late forwarding of
19contributions, calculated for the number of days which the
20employer is late in forwarding contributions at a rate of
21interest prescribed by the board, based on its investment
22experience; or (2) $50.
23    (c) If the system, on August 15, is not in receipt of the
24detailed statements required under this Section of any school
25district or other employing unit, such school district or other
26employing unit shall pay to the system an amount equal to $250

 

 

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1for each day that elapses from August 15, until the day such
2statement is filed with the system.
3(Source: P.A. 99-450, eff. 8-24-15.)
 
4    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
5    Sec. 16-158. Contributions by State and other employing
6units.
7    (a) The State shall make contributions to the System by
8means of appropriations from the Common School Fund and other
9State funds of amounts which, together with other employer
10contributions, employee contributions, investment income, and
11other income, will be sufficient to meet the cost of
12maintaining and administering the System on a 90% funded basis
13in accordance with actuarial recommendations.
14    The Board shall determine the amount of State contributions
15required for each fiscal year on the basis of the actuarial
16tables and other assumptions adopted by the Board and the
17recommendations of the actuary, using the formula in subsection
18(b-3).
19    (a-1) Annually, on or before November 15 until November 15,
202011, the Board shall certify to the Governor the amount of the
21required State contribution for the coming fiscal year. The
22certification under this subsection (a-1) shall include a copy
23of the actuarial recommendations upon which it is based and
24shall specifically identify the System's projected State
25normal cost for that fiscal year.

 

 

10000SB0779ham002- 196 -LRB100 06789 RPS 30562 a

1    On or before May 1, 2004, the Board shall recalculate and
2recertify to the Governor the amount of the required State
3contribution to the System for State fiscal year 2005, taking
4into account the amounts appropriated to and received by the
5System under subsection (d) of Section 7.2 of the General
6Obligation Bond Act.
7    On or before July 1, 2005, the Board shall recalculate and
8recertify to the Governor the amount of the required State
9contribution to the System for State fiscal year 2006, taking
10into account the changes in required State contributions made
11by Public Act 94-4 this amendatory Act of the 94th General
12Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2011, applying
16the changes made by Public Act 96-889 to the System's assets
17and liabilities as of June 30, 2009 as though Public Act 96-889
18was approved on that date.
19    (a-5) On or before November 1 of each year, beginning
20November 1, 2012, the Board shall submit to the State Actuary,
21the Governor, and the General Assembly a proposed certification
22of the amount of the required State contribution to the System
23for the next fiscal year, along with all of the actuarial
24assumptions, calculations, and data upon which that proposed
25certification is based. On or before January 1 of each year,
26beginning January 1, 2013, the State Actuary shall issue a

 

 

10000SB0779ham002- 197 -LRB100 06789 RPS 30562 a

1preliminary report concerning the proposed certification and
2identifying, if necessary, recommended changes in actuarial
3assumptions that the Board must consider before finalizing its
4certification of the required State contributions. On or before
5January 15, 2013 and each January 15 thereafter, the Board
6shall certify to the Governor and the General Assembly the
7amount of the required State contribution for the next fiscal
8year. The Board's certification must note any deviations from
9the State Actuary's recommended changes, the reason or reasons
10for not following the State Actuary's recommended changes, and
11the fiscal impact of not following the State Actuary's
12recommended changes on the required State contribution.
13    (a-10) By November 1, 2017, the Board shall recalculate and
14recertify to the State Actuary, the Governor, and the General
15Assembly the amount of the State contribution to the System for
16State fiscal year 2018, taking into account the changes in
17required State contributions made by Public Act 100-23 this
18amendatory Act of the 100th General Assembly. The State Actuary
19shall review the assumptions and valuations underlying the
20Board's revised certification and issue a preliminary report
21concerning the proposed recertification and identifying, if
22necessary, recommended changes in actuarial assumptions that
23the Board must consider before finalizing its certification of
24the required State contributions. The Board's final
25certification must note any deviations from the State Actuary's
26recommended changes, the reason or reasons for not following

 

 

10000SB0779ham002- 198 -LRB100 06789 RPS 30562 a

1the State Actuary's recommended changes, and the fiscal impact
2of not following the State Actuary's recommended changes on the
3required State contribution.
4    (b) Through State fiscal year 1995, the State contributions
5shall be paid to the System in accordance with Section 18-7 of
6the School Code.
7    (b-1) Beginning in State fiscal year 1996, on the 15th day
8of each month, or as soon thereafter as may be practicable, the
9Board shall submit vouchers for payment of State contributions
10to the System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a-1). From March 5, 2004 (the effective date of Public Act
1393-665) this amendatory Act of the 93rd General Assembly
14through June 30, 2004, the Board shall not submit vouchers for
15the remainder of fiscal year 2004 in excess of the fiscal year
162004 certified contribution amount determined under this
17Section after taking into consideration the transfer to the
18System under subsection (a) of Section 6z-61 of the State
19Finance Act. These vouchers shall be paid by the State
20Comptroller and Treasurer by warrants drawn on the funds
21appropriated to the System for that fiscal year.
22    If in any month the amount remaining unexpended from all
23other appropriations to the System for the applicable fiscal
24year (including the appropriations to the System under Section
258.12 of the State Finance Act and Section 1 of the State
26Pension Funds Continuing Appropriation Act) is less than the

 

 

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1amount lawfully vouchered under this subsection, the
2difference shall be paid from the Common School Fund under the
3continuing appropriation authority provided in Section 1.1 of
4the State Pension Funds Continuing Appropriation Act.
5    (b-2) Allocations from the Common School Fund apportioned
6to school districts not coming under this System shall not be
7diminished or affected by the provisions of this Article.
8    (b-3) For State fiscal years 2012 through 2045, the minimum
9contribution to the System to be made by the State for each
10fiscal year shall be an amount determined by the System to be
11sufficient to bring the total assets of the System up to 90% of
12the total actuarial liabilities of the System by the end of
13State fiscal year 2045. In making these determinations, the
14required State contribution shall be calculated each year as a
15level percentage of payroll over the years remaining to and
16including fiscal year 2045 and shall be determined under the
17projected unit credit actuarial cost method.
18    For each of State fiscal years 2018, 2019, and 2020, the
19State shall make an additional contribution to the System equal
20to 2% of the total payroll of each employee who is a Tier 2
21member who is (1) hired on or after the date the Board
22establishes the Optional Hybrid Plan under Section 16-139 or
23(2) who has elected to participate in the Optional Hybrid Plan
24under Section 16-139 deemed to have elected the benefits under
25Section 1-161 or who has made the election under subsection (c)
26of Section 1-161.

 

 

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1    A change in an actuarial or investment assumption that
2increases or decreases the required State contribution and
3first applies in State fiscal year 2018 or thereafter shall be
4implemented in equal annual amounts over a 5-year period
5beginning in the State fiscal year in which the actuarial
6change first applies to the required State contribution.
7    A change in an actuarial or investment assumption that
8increases or decreases the required State contribution and
9first applied to the State contribution in fiscal year 2014,
102015, 2016, or 2017 shall be implemented:
11        (i) as already applied in State fiscal years before
12    2018; and
13        (ii) in the portion of the 5-year period beginning in
14    the State fiscal year in which the actuarial change first
15    applied that occurs in State fiscal year 2018 or
16    thereafter, by calculating the change in equal annual
17    amounts over that 5-year period and then implementing it at
18    the resulting annual rate in each of the remaining fiscal
19    years in that 5-year period.
20    For State fiscal years 1996 through 2005, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23so that by State fiscal year 2011, the State is contributing at
24the rate required under this Section; except that in the
25following specified State fiscal years, the State contribution
26to the System shall not be less than the following indicated

 

 

10000SB0779ham002- 201 -LRB100 06789 RPS 30562 a

1percentages of the applicable employee payroll, even if the
2indicated percentage will produce a State contribution in
3excess of the amount otherwise required under this subsection
4and subsection (a), and notwithstanding any contrary
5certification made under subsection (a-1) before May 27, 1998
6(the effective date of Public Act 90-582) this amendatory Act
7of 1998: 10.02% in FY 1999; 10.77% in FY 2000; 11.47% in FY
82001; 12.16% in FY 2002; 12.86% in FY 2003; and 13.56% in FY
92004.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$534,627,700.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$738,014,500.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$2,089,268,000 and shall be made from the proceeds of bonds
25sold in fiscal year 2010 pursuant to Section 7.2 of the General
26Obligation Bond Act, less (i) the pro rata share of bond sale

 

 

10000SB0779ham002- 202 -LRB100 06789 RPS 30562 a

1expenses determined by the System's share of total bond
2proceeds, (ii) any amounts received from the Common School Fund
3in fiscal year 2010, and (iii) any reduction in bond proceeds
4due to the issuance of discounted bonds, if applicable.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2011 is
7the amount recertified by the System on or before April 1, 2011
8pursuant to subsection (a-1) of this Section and shall be made
9from the proceeds of bonds sold in fiscal year 2011 pursuant to
10Section 7.2 of the General Obligation Bond Act, less (i) the
11pro rata share of bond sale expenses determined by the System's
12share of total bond proceeds, (ii) any amounts received from
13the Common School Fund in fiscal year 2011, and (iii) any
14reduction in bond proceeds due to the issuance of discounted
15bonds, if applicable. This amount shall include, in addition to
16the amount certified by the System, an amount necessary to meet
17employer contributions required by the State as an employer
18under paragraph (e) of this Section, which may also be used by
19the System for contributions required by paragraph (a) of
20Section 16-127.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

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1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 90%. A reference in this Article to
8the "required State contribution" or any substantially similar
9term does not include or apply to any amounts payable to the
10System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter, as calculated
14under this Section and certified under subsection (a-1), shall
15not exceed an amount equal to (i) the amount of the required
16State contribution that would have been calculated under this
17Section for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

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1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (b-4) Beginning in fiscal year 2018, each employer under
11this Article shall pay to the System a required contribution
12determined as a percentage of projected payroll and sufficient
13to produce an annual amount equal to:
14        (i) for each of fiscal years 2018, 2019, and 2020, the
15    defined benefit normal cost of the defined benefit plan,
16    less the employee contribution, for each employee of that
17    employer who is a Tier 2 member who is (1) hired on or
18    after the date the Board establishes the Optional Hybrid
19    Plan under Section 16-139 or (2) who has elected to
20    participate in the Optional Hybrid Plan under Section
21    16-139 has elected or who is deemed to have elected the
22    benefits under Section 1-161 or who has made the election
23    under subsection (b) of Section 1-161; for fiscal year 2021
24    and each fiscal year thereafter, the defined benefit normal
25    cost of the defined benefit plan, less the employee
26    contribution, plus 2%, for each employee of that employer

 

 

10000SB0779ham002- 205 -LRB100 06789 RPS 30562 a

1    who is a Tier 2 member who is (1) hired on or after the date
2    the Board establishes the Optional Hybrid Plan under
3    Section 16-139 or (2) who has elected to participate in the
4    Optional Hybrid Plan under Section 16-139 has elected or
5    who is deemed to have elected the benefits under Section
6    1-161 or who has made the election under subsection (b) of
7    Section 1-161; plus
8        (ii) the amount required for that fiscal year to
9    amortize any unfunded actuarial accrued liability
10    associated with the present value of liabilities
11    attributable to the employer's account under Section
12    16-158.3, determined as a level percentage of payroll over
13    a 30-year rolling amortization period.
14    In determining contributions required under item (i) of
15this subsection, the System shall determine an aggregate rate
16for all employers, expressed as a percentage of projected
17payroll.
18    In determining the contributions required under item (ii)
19of this subsection, the amount shall be computed by the System
20on the basis of the actuarial assumptions and tables used in
21the most recent actuarial valuation of the System that is
22available at the time of the computation.
23    The contributions required under this subsection (b-4)
24shall be paid by an employer concurrently with that employer's
25payroll payment period. The State, as the actual employer of an
26employee, shall make the required contributions under this

 

 

10000SB0779ham002- 206 -LRB100 06789 RPS 30562 a

1subsection.
2    (c) Payment of the required State contributions and of all
3pensions, retirement annuities, death benefits, refunds, and
4other benefits granted under or assumed by this System, and all
5expenses in connection with the administration and operation
6thereof, are obligations of the State.
7    If members are paid from special trust or federal funds
8which are administered by the employing unit, whether school
9district or other unit, the employing unit shall pay to the
10System from such funds the full accruing retirement costs based
11upon that service, which, beginning July 1, 2017, shall be at a
12rate, expressed as a percentage of salary, equal to the total
13employer's normal cost, expressed as a percentage of payroll,
14as determined by the System. Employer contributions, based on
15salary paid to members from federal funds, may be forwarded by
16the distributing agency of the State of Illinois to the System
17prior to allocation, in an amount determined in accordance with
18guidelines established by such agency and the System. Any
19contribution for fiscal year 2015 collected as a result of the
20change made by Public Act 98-674 this amendatory Act of the
2198th General Assembly shall be considered a State contribution
22under subsection (b-3) of this Section.
23    (d) Effective July 1, 1986, any employer of a teacher as
24defined in paragraph (8) of Section 16-106 shall pay the
25employer's normal cost of benefits based upon the teacher's
26service, in addition to employee contributions, as determined

 

 

10000SB0779ham002- 207 -LRB100 06789 RPS 30562 a

1by the System. Such employer contributions shall be forwarded
2monthly in accordance with guidelines established by the
3System.
4    However, with respect to benefits granted under Section
516-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
6of Section 16-106, the employer's contribution shall be 12%
7(rather than 20%) of the member's highest annual salary rate
8for each year of creditable service granted, and the employer
9shall also pay the required employee contribution on behalf of
10the teacher. For the purposes of Sections 16-133.4 and
1116-133.5, a teacher as defined in paragraph (8) of Section
1216-106 who is serving in that capacity while on leave of
13absence from another employer under this Article shall not be
14considered an employee of the employer from which the teacher
15is on leave.
16    (e) Beginning July 1, 1998, every employer of a teacher
17shall pay to the System an employer contribution computed as
18follows:
19        (1) Beginning July 1, 1998 through June 30, 1999, the
20    employer contribution shall be equal to 0.3% of each
21    teacher's salary.
22        (2) Beginning July 1, 1999 and thereafter, the employer
23    contribution shall be equal to 0.58% of each teacher's
24    salary.
25The school district or other employing unit may pay these
26employer contributions out of any source of funding available

 

 

10000SB0779ham002- 208 -LRB100 06789 RPS 30562 a

1for that purpose and shall forward the contributions to the
2System on the schedule established for the payment of member
3contributions.
4    These employer contributions are intended to offset a
5portion of the cost to the System of the increases in
6retirement benefits resulting from Public Act 90-582 this
7amendatory Act of 1998.
8    Each employer of teachers is entitled to a credit against
9the contributions required under this subsection (e) with
10respect to salaries paid to teachers for the period January 1,
112002 through June 30, 2003, equal to the amount paid by that
12employer under subsection (a-5) of Section 6.6 of the State
13Employees Group Insurance Act of 1971 with respect to salaries
14paid to teachers for that period.
15    The additional 1% employee contribution required under
16Section 16-152 by Public Act 90-582 this amendatory Act of 1998
17is the responsibility of the teacher and not the teacher's
18employer, unless the employer agrees, through collective
19bargaining or otherwise, to make the contribution on behalf of
20the teacher.
21    If an employer is required by a contract in effect on May
221, 1998 between the employer and an employee organization to
23pay, on behalf of all its full-time employees covered by this
24Article, all mandatory employee contributions required under
25this Article, then the employer shall be excused from paying
26the employer contribution required under this subsection (e)

 

 

10000SB0779ham002- 209 -LRB100 06789 RPS 30562 a

1for the balance of the term of that contract. The employer and
2the employee organization shall jointly certify to the System
3the existence of the contractual requirement, in such form as
4the System may prescribe. This exclusion shall cease upon the
5termination, extension, or renewal of the contract at any time
6after May 1, 1998.
7    (f) If the amount of a teacher's salary for any school year
8used to determine final average salary exceeds the member's
9annual full-time salary rate with the same employer for the
10previous school year by more than 6%, the teacher's employer
11shall pay to the System, in addition to all other payments
12required under this Section and in accordance with guidelines
13established by the System, the present value of the increase in
14benefits resulting from the portion of the increase in salary
15that is in excess of 6%. This present value shall be computed
16by the System on the basis of the actuarial assumptions and
17tables used in the most recent actuarial valuation of the
18System that is available at the time of the computation. If a
19teacher's salary for the 2005-2006 school year is used to
20determine final average salary under this subsection (f), then
21the changes made to this subsection (f) by Public Act 94-1057
22shall apply in calculating whether the increase in his or her
23salary is in excess of 6%. For the purposes of this Section,
24change in employment under Section 10-21.12 of the School Code
25on or after June 1, 2005 shall constitute a change in employer.
26The System may require the employer to provide any pertinent

 

 

10000SB0779ham002- 210 -LRB100 06789 RPS 30562 a

1information or documentation. The changes made to this
2subsection (f) by Public Act 94-1111 this amendatory Act of the
394th General Assembly apply without regard to whether the
4teacher was in service on or after its effective date.
5    Whenever it determines that a payment is or may be required
6under this subsection, the System shall calculate the amount of
7the payment and bill the employer for that amount. The bill
8shall specify the calculations used to determine the amount
9due. If the employer disputes the amount of the bill, it may,
10within 30 days after receipt of the bill, apply to the System
11in writing for a recalculation. The application must specify in
12detail the grounds of the dispute and, if the employer asserts
13that the calculation is subject to subsection (g) or (h) of
14this Section, must include an affidavit setting forth and
15attesting to all facts within the employer's knowledge that are
16pertinent to the applicability of that subsection. Upon
17receiving a timely application for recalculation, the System
18shall review the application and, if appropriate, recalculate
19the amount due.
20    The employer contributions required under this subsection
21(f) may be paid in the form of a lump sum within 90 days after
22receipt of the bill. If the employer contributions are not paid
23within 90 days after receipt of the bill, then interest will be
24charged at a rate equal to the System's annual actuarially
25assumed rate of return on investment compounded annually from
26the 91st day after receipt of the bill. Payments must be

 

 

10000SB0779ham002- 211 -LRB100 06789 RPS 30562 a

1concluded within 3 years after the employer's receipt of the
2bill.
3    (g) This subsection (g) applies only to payments made or
4salary increases given on or after June 1, 2005 but before July
51, 2011. The changes made by Public Act 94-1057 shall not
6require the System to refund any payments received before July
731, 2006 (the effective date of Public Act 94-1057).
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude salary increases paid to teachers
10under contracts or collective bargaining agreements entered
11into, amended, or renewed before June 1, 2005.
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude salary increases paid to a
14teacher at a time when the teacher is 10 or more years from
15retirement eligibility under Section 16-132 or 16-133.2.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases resulting from
18overload work, including summer school, when the school
19district has certified to the System, and the System has
20approved the certification, that (i) the overload work is for
21the sole purpose of classroom instruction in excess of the
22standard number of classes for a full-time teacher in a school
23district during a school year and (ii) the salary increases are
24equal to or less than the rate of pay for classroom instruction
25computed on the teacher's current salary and work schedule.
26    When assessing payment for any amount due under subsection

 

 

10000SB0779ham002- 212 -LRB100 06789 RPS 30562 a

1(f), the System shall exclude a salary increase resulting from
2a promotion (i) for which the employee is required to hold a
3certificate or supervisory endorsement issued by the State
4Teacher Certification Board that is a different certification
5or supervisory endorsement than is required for the teacher's
6previous position and (ii) to a position that has existed and
7been filled by a member for no less than one complete academic
8year and the salary increase from the promotion is an increase
9that results in an amount no greater than the lesser of the
10average salary paid for other similar positions in the district
11requiring the same certification or the amount stipulated in
12the collective bargaining agreement for a similar position
13requiring the same certification.
14    When assessing payment for any amount due under subsection
15(f), the System shall exclude any payment to the teacher from
16the State of Illinois or the State Board of Education over
17which the employer does not have discretion, notwithstanding
18that the payment is included in the computation of final
19average salary.
20    (h) When assessing payment for any amount due under
21subsection (f), the System shall exclude any salary increase
22described in subsection (g) of this Section given on or after
23July 1, 2011 but before July 1, 2014 under a contract or
24collective bargaining agreement entered into, amended, or
25renewed on or after June 1, 2005 but before July 1, 2011.
26Notwithstanding any other provision of this Section, any

 

 

10000SB0779ham002- 213 -LRB100 06789 RPS 30562 a

1payments made or salary increases given after June 30, 2014
2shall be used in assessing payment for any amount due under
3subsection (f) of this Section.
4    (i) The System shall prepare a report and file copies of
5the report with the Governor and the General Assembly by
6January 1, 2007 that contains all of the following information:
7        (1) The number of recalculations required by the
8    changes made to this Section by Public Act 94-1057 for each
9    employer.
10        (2) The dollar amount by which each employer's
11    contribution to the System was changed due to
12    recalculations required by Public Act 94-1057.
13        (3) The total amount the System received from each
14    employer as a result of the changes made to this Section by
15    Public Act 94-4.
16        (4) The increase in the required State contribution
17    resulting from the changes made to this Section by Public
18    Act 94-1057.
19    (i-5) For school years beginning on or after July 1, 2017,
20if the amount of a participant's salary for any school year,
21determined on a full-time equivalent basis, exceeds the amount
22of the salary set for the Governor, the participant's employer
23shall pay to the System, in addition to all other payments
24required under this Section and in accordance with guidelines
25established by the System, an amount determined by the System
26to be equal to the employer normal cost, as established by the

 

 

10000SB0779ham002- 214 -LRB100 06789 RPS 30562 a

1System and expressed as a total percentage of payroll,
2multiplied by the amount of salary in excess of the amount of
3the salary set for the Governor. This amount shall be computed
4by the System on the basis of the actuarial assumptions and
5tables used in the most recent actuarial valuation of the
6System that is available at the time of the computation. The
7System may require the employer to provide any pertinent
8information or documentation.
9    Whenever it determines that a payment is or may be required
10under this subsection, the System shall calculate the amount of
11the payment and bill the employer for that amount. The bill
12shall specify the calculations used to determine the amount
13due. If the employer disputes the amount of the bill, it may,
14within 30 days after receipt of the bill, apply to the System
15in writing for a recalculation. The application must specify in
16detail the grounds of the dispute. Upon receiving a timely
17application for recalculation, the System shall review the
18application and, if appropriate, recalculate the amount due.
19    The employer contributions required under this subsection
20may be paid in the form of a lump sum within 90 days after
21receipt of the bill. If the employer contributions are not paid
22within 90 days after receipt of the bill, then interest will be
23charged at a rate equal to the System's annual actuarially
24assumed rate of return on investment compounded annually from
25the 91st day after receipt of the bill. Payments must be
26concluded within 3 years after the employer's receipt of the

 

 

10000SB0779ham002- 215 -LRB100 06789 RPS 30562 a

1bill.
2    (j) For purposes of determining the required State
3contribution to the System, the value of the System's assets
4shall be equal to the actuarial value of the System's assets,
5which shall be calculated as follows:
6    As of June 30, 2008, the actuarial value of the System's
7assets shall be equal to the market value of the assets as of
8that date. In determining the actuarial value of the System's
9assets for fiscal years after June 30, 2008, any actuarial
10gains or losses from investment return incurred in a fiscal
11year shall be recognized in equal annual amounts over the
125-year period following that fiscal year.
13    (k) For purposes of determining the required State
14contribution to the system for a particular year, the actuarial
15value of assets shall be assumed to earn a rate of return equal
16to the system's actuarially assumed rate of return.
17(Source: P.A. 100-23, eff. 7-6-17; 100-340, eff. 8-25-17;
18revised 9-25-17.)
 
19    (40 ILCS 5/16-189.1)  (from Ch. 108 1/2, par. 16-189.1)
20    Sec. 16-189.1. Benefits payable monthly. Except for a
21defined contribution account balance created under Section
2216-139, retirement Retirement annuities and other benefits,
23unless otherwise specified in this Article, shall be paid in 12
24monthly installments as of the first day of each month and
25shall cover the preceding month or proportionate part thereof

 

 

10000SB0779ham002- 216 -LRB100 06789 RPS 30562 a

1then due. Provided, however, upon the death of a member in
2receipt of a benefit, an annuitant or a beneficiary, benefits
3shall be paid through the last day of the month in which death
4occurs.
5(Source: P.A. 84-1028.)
 
6    (40 ILCS 5/16-191)  (from Ch. 108 1/2, par. 16-191)
7    Sec. 16-191. No gain or profit on investments. No trustee
8or employee of the board shall have any interest in the gains
9or profits of any investment made by the board, or as such
10receive any pay or emolument for his or her services. No
11trustee or employee of the board shall, directly or indirectly,
12for himself or herself or as an agent, in any manner use such
13gains or profits except to make current and necessary payments
14authorized by the board. No trustee or employee of the board
15shall become an endorser or surety or in any manner an obligor
16for moneys loaned or borrowed from the board.
17    This Section does not apply to an individual's defined
18contribution account that he or she is otherwise entitled to by
19virtue of his or her membership in the system.
20    Any person violating any of the provisions of this section
21is guilty of a petty offense.
22(Source: P.A. 83-1440.)
 
23    (40 ILCS 5/16-197)  (from Ch. 108 1/2, par. 16-197)
24    Sec. 16-197. Undivided interest.

 

 

10000SB0779ham002- 217 -LRB100 06789 RPS 30562 a

1    All assets of the system shall be invested as one fund and
2no person, group of persons or entity shall have any right
3other than to an undivided interest in the whole, and all
4references to the reserves shall be construed as not requiring
5a segregation of assets but only the maintenance of a separate
6account indicating the equities in the assets as a whole.
7    This Section does not apply to defined contribution
8accounts.
9(Source: Laws 1963, p. 161.)
 
10    (40 ILCS 5/1-161 rep.)
11    (40 ILCS 5/14-103.40 rep.)
12    (40 ILCS 5/15-155.2 rep.)
13    (40 ILCS 5/16-106.4 rep.)
14    (40 ILCS 5/16-158.3 rep.)
15    Section 10. The Illinois Pension Code is amended by
16repealing Sections 1-161, 14-103.40, 15-155.2, 16-106.4, and
1716-158.3.
 
18    Section 90. The State Mandates Act is amended by adding
19Section 8.41 as follows:
 
20    (30 ILCS 805/8.41 new)
21    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
22of this Act, no reimbursement by the State is required for the
23implementation of any mandate created by this amendatory Act of

 

 

10000SB0779ham002- 218 -LRB100 06789 RPS 30562 a

1the 100th General Assembly.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.".