SB2954 EngrossedLRB100 17269 RPS 32428 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Section 15-155 as follows:
 
6    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
7    Sec. 15-155. Employer contributions.
8    (a) The State of Illinois shall make contributions by
9appropriations of amounts which, together with the other
10employer contributions from trust, federal, and other funds,
11employee contributions, income from investments, and other
12income of this System, will be sufficient to meet the cost of
13maintaining and administering the System on a 90% funded basis
14in accordance with actuarial recommendations.
15    The Board shall determine the amount of State contributions
16required for each fiscal year on the basis of the actuarial
17tables and other assumptions adopted by the Board and the
18recommendations of the actuary, using the formula in subsection
19(a-1).
20    (a-1) For State fiscal years 2012 through 2045, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23sufficient to bring the total assets of the System up to 90% of

 

 

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1the total actuarial liabilities of the System by the end of
2State fiscal year 2045. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of payroll over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7    For each of State fiscal years 2018, 2019, and 2020, the
8State shall make an additional contribution to the System equal
9to 2% of the total payroll of each employee who is deemed to
10have elected the benefits under Section 1-161 or who has made
11the election under subsection (c) of Section 1-161.
12    A change in an actuarial or investment assumption that
13increases or decreases the required State contribution and
14first applies in State fiscal year 2018 or thereafter shall be
15implemented in equal annual amounts over a 5-year period
16beginning in the State fiscal year in which the actuarial
17change first applies to the required State contribution.
18    A change in an actuarial or investment assumption that
19increases or decreases the required State contribution and
20first applied to the State contribution in fiscal year 2014,
212015, 2016, or 2017 shall be implemented:
22        (i) as already applied in State fiscal years before
23    2018; and
24        (ii) in the portion of the 5-year period beginning in
25    the State fiscal year in which the actuarial change first
26    applied that occurs in State fiscal year 2018 or

 

 

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1    thereafter, by calculating the change in equal annual
2    amounts over that 5-year period and then implementing it at
3    the resulting annual rate in each of the remaining fiscal
4    years in that 5-year period.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$166,641,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$252,064,100.
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$702,514,000 and shall be made from the State Pensions Fund and
25proceeds of bonds sold in fiscal year 2010 pursuant to Section
267.2 of the General Obligation Bond Act, less (i) the pro rata

 

 

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1share of bond sale expenses determined by the System's share of
2total bond proceeds, (ii) any amounts received from the General
3Revenue Fund in fiscal year 2010, (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 15-165 and shall be made from the State
10Pensions Fund and proceeds of bonds sold in fiscal year 2011
11pursuant to Section 7.2 of the General Obligation Bond Act,
12less (i) the pro rata share of bond sale expenses determined by
13the System's share of total bond proceeds, (ii) any amounts
14received from the General Revenue Fund in fiscal year 2011, and
15(iii) any reduction in bond proceeds due to the issuance of
16discounted bonds, if applicable.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 90% of the total
20actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

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1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 90%. A reference in this Article to
4the "required State contribution" or any substantially similar
5term does not include or apply to any amounts payable to the
6System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter, as calculated
10under this Section and certified under Section 15-165, shall
11not exceed an amount equal to (i) the amount of the required
12State contribution that would have been calculated under this
13Section for that fiscal year if the System had not received any
14payments under subsection (d) of Section 7.2 of the General
15Obligation Bond Act, minus (ii) the portion of the State's
16total debt service payments for that fiscal year on the bonds
17issued in fiscal year 2003 for the purposes of that Section
187.2, as determined and certified by the Comptroller, that is
19the same as the System's portion of the total moneys
20distributed under subsection (d) of Section 7.2 of the General
21Obligation Bond Act. In determining this maximum for State
22fiscal years 2008 through 2010, however, the amount referred to
23in item (i) shall be increased, as a percentage of the
24applicable employee payroll, in equal increments calculated
25from the sum of the required State contribution for State
26fiscal year 2007 plus the applicable portion of the State's

 

 

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1total debt service payments for fiscal year 2007 on the bonds
2issued in fiscal year 2003 for the purposes of Section 7.2 of
3the General Obligation Bond Act, so that, by State fiscal year
42011, the State is contributing at the rate otherwise required
5under this Section.
6    (a-2) Beginning in fiscal year 2018, each employer under
7this Article shall pay to the System a required contribution
8determined as a percentage of projected payroll and sufficient
9to produce an annual amount equal to:
10        (i) for each of fiscal years 2018, 2019, and 2020, the
11    defined benefit normal cost of the defined benefit plan,
12    less the employee contribution, for each employee of that
13    employer who has elected or who is deemed to have elected
14    the benefits under Section 1-161 or who has made the
15    election under subsection (c) of Section 1-161; for fiscal
16    year 2021 and each fiscal year thereafter, the defined
17    benefit normal cost of the defined benefit plan, less the
18    employee contribution, plus 2%, for each employee of that
19    employer who has elected or who is deemed to have elected
20    the benefits under Section 1-161 or who has made the
21    election under subsection (c) of Section 1-161; plus
22        (ii) the amount required for that fiscal year to
23    amortize any unfunded actuarial accrued liability
24    associated with the present value of liabilities
25    attributable to the employer's account under Section
26    15-155.2, determined as a level percentage of payroll over

 

 

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1    a 30-year rolling amortization period.
2    In determining contributions required under item (i) of
3this subsection, the System shall determine an aggregate rate
4for all employers, expressed as a percentage of projected
5payroll.
6    In determining the contributions required under item (ii)
7of this subsection, the amount shall be computed by the System
8on the basis of the actuarial assumptions and tables used in
9the most recent actuarial valuation of the System that is
10available at the time of the computation.
11    The contributions required under this subsection (a-2)
12shall be paid by an employer concurrently with that employer's
13payroll payment period. The State, as the actual employer of an
14employee, shall make the required contributions under this
15subsection.
16    As used in this subsection, "academic year" means the
1712-month period beginning September 1.
18    (b) If an employee is paid from trust or federal funds, the
19employer shall pay to the Board contributions from those funds
20which are sufficient to cover the accruing normal costs on
21behalf of the employee. However, universities having employees
22who are compensated out of local auxiliary funds, income funds,
23or service enterprise funds are not required to pay such
24contributions on behalf of those employees. The local auxiliary
25funds, income funds, and service enterprise funds of
26universities shall not be considered trust funds for the

 

 

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1purpose of this Article, but funds of alumni associations,
2foundations, and athletic associations which are affiliated
3with the universities included as employers under this Article
4and other employers which do not receive State appropriations
5are considered to be trust funds for the purpose of this
6Article.
7    (b-1) The City of Urbana and the City of Champaign shall
8each make employer contributions to this System for their
9respective firefighter employees who participate in this
10System pursuant to subsection (h) of Section 15-107. The rate
11of contributions to be made by those municipalities shall be
12determined annually by the Board on the basis of the actuarial
13assumptions adopted by the Board and the recommendations of the
14actuary, and shall be expressed as a percentage of salary for
15each such employee. The Board shall certify the rate to the
16affected municipalities as soon as may be practical. The
17employer contributions required under this subsection shall be
18remitted by the municipality to the System at the same time and
19in the same manner as employee contributions.
20    (c) Through State fiscal year 1995: The total employer
21contribution shall be apportioned among the various funds of
22the State and other employers, whether trust, federal, or other
23funds, in accordance with actuarial procedures approved by the
24Board. State of Illinois contributions for employers receiving
25State appropriations for personal services shall be payable
26from appropriations made to the employers or to the System. The

 

 

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1contributions for Class I community colleges covering earnings
2other than those paid from trust and federal funds, shall be
3payable solely from appropriations to the Illinois Community
4College Board or the System for employer contributions.
5    (d) Beginning in State fiscal year 1996, the required State
6contributions to the System shall be appropriated directly to
7the System and shall be payable through vouchers issued in
8accordance with subsection (c) of Section 15-165, except as
9provided in subsection (g).
10    (e) The State Comptroller shall draw warrants payable to
11the System upon proper certification by the System or by the
12employer in accordance with the appropriation laws and this
13Code.
14    (f) Normal costs under this Section means liability for
15pensions and other benefits which accrues to the System because
16of the credits earned for service rendered by the participants
17during the fiscal year and expenses of administering the
18System, but shall not include the principal of or any
19redemption premium or interest on any bonds issued by the Board
20or any expenses incurred or deposits required in connection
21therewith.
22    (g) If the amount of a participant's earnings for any
23academic year used to determine the final rate of earnings,
24determined on a full-time equivalent basis, exceeds the amount
25of his or her earnings with the same employer for the previous
26academic year, determined on a full-time equivalent basis, by

 

 

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1more than 6%, the participant's employer shall pay to the
2System, in addition to all other payments required under this
3Section and in accordance with guidelines established by the
4System, the present value of the increase in benefits resulting
5from the portion of the increase in earnings that is in excess
6of 6%. This present value shall be computed by the System on
7the basis of the actuarial assumptions and tables used in the
8most recent actuarial valuation of the System that is available
9at the time of the computation. The System may require the
10employer to provide any pertinent information or
11documentation.
12    Whenever it determines that a payment is or may be required
13under this subsection (g), the System shall calculate the
14amount of the payment and bill the employer for that amount.
15The bill shall specify the calculations used to determine the
16amount due. If the employer disputes the amount of the bill, it
17may, within 30 days after receipt of the bill, apply to the
18System in writing for a recalculation. The application must
19specify in detail the grounds of the dispute and, if the
20employer asserts that the calculation is subject to subsection
21(h) or (i) of this Section, must include an affidavit setting
22forth and attesting to all facts within the employer's
23knowledge that are pertinent to the applicability of subsection
24(h) or (i). Upon receiving a timely application for
25recalculation, the System shall review the application and, if
26appropriate, recalculate the amount due.

 

 

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1    The employer contributions required under this subsection
2(g) may be paid in the form of a lump sum within 90 days after
3receipt of the bill. If the employer contributions are not paid
4within 90 days after receipt of the bill, then interest will be
5charged at a rate equal to the System's annual actuarially
6assumed rate of return on investment compounded annually from
7the 91st day after receipt of the bill. Payments must be
8concluded within 3 years after the employer's receipt of the
9bill.
10    When assessing payment for any amount due under this
11subsection (g), the System shall include earnings, to the
12extent not established by a participant under Section 15-113.11
13or 15-113.12, that would have been paid to the participant had
14the participant not taken (i) periods of voluntary or
15involuntary furlough occurring on or after July 1, 2015 and on
16or before June 30, 2017 or (ii) periods of voluntary pay
17reduction in lieu of furlough occurring on or after July 1,
182015 and on or before June 30, 2017. Determining earnings that
19would have been paid to a participant had the participant not
20taken periods of voluntary or involuntary furlough or periods
21of voluntary pay reduction shall be the responsibility of the
22employer, and shall be reported in a manner prescribed by the
23System.
24    (h) This subsection (h) applies only to payments made or
25salary increases given on or after June 1, 2005 but before July
261, 2011. The changes made by Public Act 94-1057 shall not

 

 

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1require the System to refund any payments received before July
231, 2006 (the effective date of Public Act 94-1057).
3    When assessing payment for any amount due under subsection
4(g), the System shall exclude earnings increases paid to
5participants under contracts or collective bargaining
6agreements entered into, amended, or renewed before June 1,
72005.
8    When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases paid to a
10participant at a time when the participant is 10 or more years
11from retirement eligibility under Section 15-135.
12    When assessing payment for any amount due under subsection
13(g), the System shall exclude earnings increases resulting from
14overload work, including a contract for summer teaching, or
15overtime when the employer has certified to the System, and the
16System has approved the certification, that: (i) in the case of
17overloads (A) the overload work is for the sole purpose of
18academic instruction in excess of the standard number of
19instruction hours for a full-time employee occurring during the
20academic year that the overload is paid and (B) the earnings
21increases are equal to or less than the rate of pay for
22academic instruction computed using the participant's current
23salary rate and work schedule; and (ii) in the case of
24overtime, the overtime was necessary for the educational
25mission.
26    When assessing payment for any amount due under subsection

 

 

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1(g), the System shall exclude any earnings increase resulting
2from (i) a promotion for which the employee moves from one
3classification to a higher classification under the State
4Universities Civil Service System, (ii) a promotion in academic
5rank for a tenured or tenure-track faculty position, or (iii) a
6promotion that the Illinois Community College Board has
7recommended in accordance with subsection (k) of this Section.
8These earnings increases shall be excluded only if the
9promotion is to a position that has existed and been filled by
10a member for no less than one complete academic year and the
11earnings increase as a result of the promotion is an increase
12that results in an amount no greater than the average salary
13paid for other similar positions.
14    (i) When assessing payment for any amount due under
15subsection (g), the System shall exclude any salary increase
16described in subsection (h) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (g) of this Section.
24    (j) The System shall prepare a report and file copies of
25the report with the Governor and the General Assembly by
26January 1, 2007 that contains all of the following information:

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (j-5) For State fiscal academic years beginning on or after
14July 1, 2017, if the amount of a participant's earnings for any
15State fiscal school year, determined on a full-time equivalent
16basis, exceeds the amount of the salary set by law for the
17Governor that is in effect on July 1 of that fiscal year, the
18participant's employer shall pay to the System, in addition to
19all other payments required under this Section and in
20accordance with guidelines established by the System, an amount
21determined by the System to be equal to the employer normal
22cost, as established by the System and expressed as a total
23percentage of payroll, multiplied by the amount of earnings in
24excess of the amount of the salary set by law for the Governor.
25This amount shall be computed by the System on the basis of the
26actuarial assumptions and tables used in the most recent

 

 

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1actuarial valuation of the System that is available at the time
2of the computation. The System may require the employer to
3provide any pertinent information or documentation.
4    Whenever it determines that a payment is or may be required
5under this subsection, the System shall calculate the amount of
6the payment and bill the employer for that amount. The bill
7shall specify the calculation calculations used to determine
8the amount due. If the employer disputes the amount of the
9bill, it may, within 30 days after receipt of the bill, apply
10to the System in writing for a recalculation. The application
11must specify in detail the grounds of the dispute. Upon
12receiving a timely application for recalculation, the System
13shall review the application and, if appropriate, recalculate
14the amount due.
15    The employer contributions required under this subsection
16may be paid in the form of a lump sum within 90 days after
17issuance receipt of the bill. If the employer contributions are
18not paid within 90 days after issuance receipt of the bill,
19then interest will be charged at a rate equal to the System's
20annual actuarially assumed rate of return on investment
21compounded annually from the 91st day after issuance receipt of
22the bill. All payments Payments must be received concluded
23within 3 years after issuance the employer's receipt of the
24bill. If the employer fails to make complete payment, including
25applicable interest, within 3 years, then the System may, after
26giving notice to the employer, certify the delinquent amount to

 

 

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1the State Comptroller, and the Comptroller shall thereupon
2deduct the certified delinquent amount from State funds payable
3to the employer and pay them instead to the System.
4    This subsection (j-5) does not apply to a participant's
5earnings to the extent an employer pays the employer normal
6cost of such earnings.
7    The changes made to this subsection (j-5) by this
8amendatory Act of the 100th General Assembly are intended to
9apply retroactively to July 6, 2017 (the effective date of
10Public Act 100-23).
11    (k) The Illinois Community College Board shall adopt rules
12for recommending lists of promotional positions submitted to
13the Board by community colleges and for reviewing the
14promotional lists on an annual basis. When recommending
15promotional lists, the Board shall consider the similarity of
16the positions submitted to those positions recognized for State
17universities by the State Universities Civil Service System.
18The Illinois Community College Board shall file a copy of its
19findings with the System. The System shall consider the
20findings of the Illinois Community College Board when making
21determinations under this Section. The System shall not exclude
22any earnings increases resulting from a promotion when the
23promotion was not submitted by a community college. Nothing in
24this subsection (k) shall require any community college to
25submit any information to the Community College Board.
26    (l) For purposes of determining the required State

 

 

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1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (m) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15(Source: P.A. 99-897, eff. 1-1-17; 100-23, eff. 7-6-17.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.