101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2338

 

Introduced 1/8/2020, by Sen. Dan McConchie

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Downstate Teacher Article of the Illinois Pension Code. Provides that beginning in school year 2021 and each year thereafter, the System shall calculate the projected amount of the increase in the employer normal cost of benefits, expressed as a percentage of salary and reflecting separate amounts for Tier 1 and Tier 2 benefits, resulting from any increase in salary over the preceding school year, expressed as a percentage of salary. Provides that except for a teacher who first becomes a teacher on or after the implementation date of certain benefits and except for salary increases paid to a teacher under a contract or collective bargaining agreement entered into, amended, or renewed before July 1, 2021, if the amount of a teacher's salary for any school year beginning on or after July 1, 2021 exceeds the teacher's annual full-time salary rate with the same employer for the previous school year, then the teacher's employer shall pay to the System the projected amount of the increase in the employer normal cost of benefits, as determined by the System and reflecting whether the teacher will receive Tier 1 or Tier 2 benefits, resulting from the increase in the teacher's salary over the previous school year. Excludes earning increases paid to members who first become members on or after the implementation date of certain benefits. Defines "Tier 1 benefits" and "Tier 2 benefits". Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB101 14439 RPS 63328 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

SB2338LRB101 14439 RPS 63328 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 adding
5Sections 16-106.4a and 16-106.4b and by changing Section 16-158
6as follows:
 
7    (40 ILCS 5/16-106.4a new)
8    Sec. 16-106.4a. Tier 1 benefits. "Tier 1 benefits": The
9benefits applicable to a member under this Article who first
10became a member or participant before January 1, 2011 under any
11reciprocal retirement system or pension fund established under
12this Code other than a retirement system or pension fund
13established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
14    (40 ILCS 5/16-106.4b new)
15    Sec. 16-106.4b. Tier 2 benefits. "Tier 2 benefits": The
16benefits applicable to a member of the System (i) who first
17becomes a member under this Article on or after January 1, 2011
18and before the implementation date, as defined under Section
191-161 and determined by the Board, and who is not eligible for
20Tier 1 benefits or (ii) who made the election under subsection
21(b) of Section 1-161.
 

 

 

SB2338- 2 -LRB101 14439 RPS 63328 b

1    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
2    Sec. 16-158. Contributions by State and other employing
3units.
4    (a) The State shall make contributions to the System by
5means of appropriations from the Common School Fund and other
6State funds of amounts which, together with other employer
7contributions, employee contributions, investment income, and
8other income, will be sufficient to meet the cost of
9maintaining and administering the System on a 90% funded basis
10in accordance with actuarial recommendations.
11    The Board shall determine the amount of State contributions
12required for each fiscal year on the basis of the actuarial
13tables and other assumptions adopted by the Board and the
14recommendations of the actuary, using the formula in subsection
15(b-3).
16    (a-1) Annually, on or before November 15 until November 15,
172011, the Board shall certify to the Governor the amount of the
18required State contribution for the coming fiscal year. The
19certification under this subsection (a-1) shall include a copy
20of the actuarial recommendations upon which it is based and
21shall specifically identify the System's projected State
22normal cost for that fiscal year.
23    On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking
26into account the amounts appropriated to and received by the

 

 

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

 

 

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1shall certify to the Governor and the General Assembly the
2amount of the required State contribution for the next fiscal
3year. The Board's certification must note any deviations from
4the State Actuary's recommended changes, the reason or reasons
5for not following the State Actuary's recommended changes, and
6the fiscal impact of not following the State Actuary's
7recommended changes on the required State contribution.
8    (a-10) By November 1, 2017, the Board shall recalculate and
9recertify to the State Actuary, the Governor, and the General
10Assembly the amount of the State contribution to the System for
11State fiscal year 2018, taking into account the changes in
12required State contributions made by Public Act 100-23. The
13State Actuary shall review the assumptions and valuations
14underlying the Board's revised certification and issue a
15preliminary report concerning the proposed recertification and
16identifying, if necessary, recommended changes in actuarial
17assumptions that the Board must consider before finalizing its
18certification of the required State contributions. The Board's
19final certification must note any deviations from the State
20Actuary's recommended changes, the reason or reasons for not
21following the State Actuary's recommended changes, and the
22fiscal impact of not following the State Actuary's recommended
23changes on the required State contribution.
24    (a-15) On or after June 15, 2019, but no later than June
2530, 2019, the Board shall recalculate and recertify to the
26Governor and the General Assembly the amount of the State

 

 

SB2338- 5 -LRB101 14439 RPS 63328 b

1contribution to the System for State fiscal year 2019, taking
2into account the changes in required State contributions made
3by Public Act 100-587. The recalculation shall be made using
4assumptions adopted by the Board for the original fiscal year
52019 certification. The monthly voucher for the 12th month of
6fiscal year 2019 shall be paid by the Comptroller after the
7recertification required pursuant to this subsection is
8submitted to the Governor, Comptroller, and General Assembly.
9The recertification submitted to the General Assembly shall be
10filed with the Clerk of the House of Representatives and the
11Secretary of the Senate in electronic form only, in the manner
12that the Clerk and the Secretary shall direct.
13    (b) Through State fiscal year 1995, the State contributions
14shall be paid to the System in accordance with Section 18-7 of
15the School Code.
16    (b-1) Beginning in State fiscal year 1996, on the 15th day
17of each month, or as soon thereafter as may be practicable, the
18Board shall submit vouchers for payment of State contributions
19to the System, in a total monthly amount of one-twelfth of the
20required annual State contribution certified under subsection
21(a-1). From March 5, 2004 (the effective date of Public Act
2293-665) through June 30, 2004, the Board shall not submit
23vouchers for the remainder of fiscal year 2004 in excess of the
24fiscal year 2004 certified contribution amount determined
25under this Section after taking into consideration the transfer
26to the System under subsection (a) of Section 6z-61 of the

 

 

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1State Finance Act. These vouchers shall be paid by the State
2Comptroller and Treasurer by warrants drawn on the funds
3appropriated to the System for that fiscal year.
4    If in any month the amount remaining unexpended from all
5other appropriations to the System for the applicable fiscal
6year (including the appropriations to the System under Section
78.12 of the State Finance Act and Section 1 of the State
8Pension Funds Continuing Appropriation Act) is less than the
9amount lawfully vouchered under this subsection, the
10difference shall be paid from the Common School Fund under the
11continuing appropriation authority provided in Section 1.1 of
12the State Pension Funds Continuing Appropriation Act.
13    (b-2) Allocations from the Common School Fund apportioned
14to school districts not coming under this System shall not be
15diminished or affected by the provisions of this Article.
16    (b-3) For State fiscal years 2012 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2045 and shall be determined under the
25projected unit credit actuarial cost method.
26    For each of State fiscal years 2018, 2019, and 2020, the

 

 

SB2338- 7 -LRB101 14439 RPS 63328 b

1State shall make an additional contribution to the System equal
2to 2% of the total payroll of each employee who is deemed to
3have elected the benefits under Section 1-161 or who has made
4the election under subsection (c) of Section 1-161.
5    A change in an actuarial or investment assumption that
6increases or decreases the required State contribution and
7first applies in State fiscal year 2018 or thereafter shall be
8implemented in equal annual amounts over a 5-year period
9beginning in the State fiscal year in which the actuarial
10change first applies to the required State contribution.
11    A change in an actuarial or investment assumption that
12increases or decreases the required State contribution and
13first applied to the State contribution in fiscal year 2014,
142015, 2016, or 2017 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

 

 

SB2338- 8 -LRB101 14439 RPS 63328 b

1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section; except that in the
3following specified State fiscal years, the State contribution
4to the System shall not be less than the following indicated
5percentages of the applicable employee payroll, even if the
6indicated percentage will produce a State contribution in
7excess of the amount otherwise required under this subsection
8and subsection (a), and notwithstanding any contrary
9certification made under subsection (a-1) before May 27, 1998
10(the effective date of Public Act 90-582): 10.02% in FY 1999;
1110.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86%
12in FY 2003; and 13.56% in FY 2004.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2006 is
15$534,627,700.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2007 is
18$738,014,500.
19    For each of State fiscal years 2008 through 2009, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22from the required State contribution for State fiscal year
232007, so that by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2010 is

 

 

SB2338- 9 -LRB101 14439 RPS 63328 b

1$2,089,268,000 and shall be made from the proceeds of bonds
2sold in fiscal year 2010 pursuant to Section 7.2 of the General
3Obligation Bond Act, less (i) the pro rata share of bond sale
4expenses determined by the System's share of total bond
5proceeds, (ii) any amounts received from the Common School Fund
6in fiscal year 2010, and (iii) any reduction in bond proceeds
7due to the issuance of discounted bonds, if applicable.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2011 is
10the amount recertified by the System on or before April 1, 2011
11pursuant to subsection (a-1) of this Section and shall be made
12from the proceeds of bonds sold in fiscal year 2011 pursuant to
13Section 7.2 of the General Obligation Bond Act, less (i) the
14pro rata share of bond sale expenses determined by the System's
15share of total bond proceeds, (ii) any amounts received from
16the Common School Fund in fiscal year 2011, and (iii) any
17reduction in bond proceeds due to the issuance of discounted
18bonds, if applicable. This amount shall include, in addition to
19the amount certified by the System, an amount necessary to meet
20employer contributions required by the State as an employer
21under paragraph (e) of this Section, which may also be used by
22the System for contributions required by paragraph (a) of
23Section 16-127.
24    Beginning in State fiscal year 2046, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 90% of the total

 

 

SB2338- 10 -LRB101 14439 RPS 63328 b

1actuarial liabilities of the System.
2    Amounts received by the System pursuant to Section 25 of
3the Budget Stabilization Act or Section 8.12 of the State
4Finance Act in any fiscal year do not reduce and do not
5constitute payment of any portion of the minimum State
6contribution required under this Article in that fiscal year.
7Such amounts shall not reduce, and shall not be included in the
8calculation of, the required State contributions under this
9Article in any future year until the System has reached a
10funding ratio of at least 90%. A reference in this Article to
11the "required State contribution" or any substantially similar
12term does not include or apply to any amounts payable to the
13System under Section 25 of the Budget Stabilization Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter, as calculated
17under this Section and certified under subsection (a-1), shall
18not exceed an amount equal to (i) the amount of the required
19State contribution that would have been calculated under this
20Section for that fiscal year if the System had not received any
21payments under subsection (d) of Section 7.2 of the General
22Obligation Bond Act, minus (ii) the portion of the State's
23total debt service payments for that fiscal year on the bonds
24issued in fiscal year 2003 for the purposes of that Section
257.2, as determined and certified by the Comptroller, that is
26the same as the System's portion of the total moneys

 

 

SB2338- 11 -LRB101 14439 RPS 63328 b

1distributed under subsection (d) of Section 7.2 of the General
2Obligation Bond Act. In determining this maximum for State
3fiscal years 2008 through 2010, however, the amount referred to
4in item (i) shall be increased, as a percentage of the
5applicable employee payroll, in equal increments calculated
6from the sum of the required State contribution for State
7fiscal year 2007 plus the applicable portion of the State's
8total debt service payments for fiscal year 2007 on the bonds
9issued in fiscal year 2003 for the purposes of Section 7.2 of
10the General Obligation Bond Act, so that, by State fiscal year
112011, the State is contributing at the rate otherwise required
12under this Section.
13    (b-4) Beginning in fiscal year 2018, each employer under
14this Article shall pay to the System a required contribution
15determined as a percentage of projected payroll and sufficient
16to produce an annual amount equal to:
17        (i) for each of fiscal years 2018, 2019, and 2020, the
18    defined benefit normal cost of the defined benefit plan,
19    less the employee contribution, for each employee of that
20    employer who has elected or who is deemed to have elected
21    the benefits under Section 1-161 or who has made the
22    election under subsection (b) of Section 1-161; for fiscal
23    year 2021 and each fiscal year thereafter, the defined
24    benefit normal cost of the defined benefit plan, less the
25    employee contribution, plus 2%, for each employee of that
26    employer who has elected or who is deemed to have elected

 

 

SB2338- 12 -LRB101 14439 RPS 63328 b

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

 

 

SB2338- 13 -LRB101 14439 RPS 63328 b

1thereof, are obligations of the State.
2    If members are paid from special trust or federal funds
3which are administered by the employing unit, whether school
4district or other unit, the employing unit shall pay to the
5System from such funds the full accruing retirement costs based
6upon that service, which, beginning July 1, 2017, shall be at a
7rate, expressed as a percentage of salary, equal to the total
8employer's normal cost, expressed as a percentage of payroll,
9as determined by the System. Employer contributions, based on
10salary paid to members from federal funds, may be forwarded by
11the distributing agency of the State of Illinois to the System
12prior to allocation, in an amount determined in accordance with
13guidelines established by such agency and the System. Any
14contribution for fiscal year 2015 collected as a result of the
15change made by Public Act 98-674 shall be considered a State
16contribution under subsection (b-3) of this Section.
17    (d) Effective July 1, 1986, any employer of a teacher as
18defined in paragraph (8) of Section 16-106 shall pay the
19employer's normal cost of benefits based upon the teacher's
20service, in addition to employee contributions, as determined
21by the System. Such employer contributions shall be forwarded
22monthly in accordance with guidelines established by the
23System.
24    However, with respect to benefits granted under Section
2516-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
26of Section 16-106, the employer's contribution shall be 12%

 

 

SB2338- 14 -LRB101 14439 RPS 63328 b

1(rather than 20%) of the member's highest annual salary rate
2for each year of creditable service granted, and the employer
3shall also pay the required employee contribution on behalf of
4the teacher. For the purposes of Sections 16-133.4 and
516-133.5, a teacher as defined in paragraph (8) of Section
616-106 who is serving in that capacity while on leave of
7absence from another employer under this Article shall not be
8considered an employee of the employer from which the teacher
9is on leave.
10    (e) Beginning July 1, 1998, every employer of a teacher
11shall pay to the System an employer contribution computed as
12follows:
13        (1) Beginning July 1, 1998 through June 30, 1999, the
14    employer contribution shall be equal to 0.3% of each
15    teacher's salary.
16        (2) Beginning July 1, 1999 and thereafter, the employer
17    contribution shall be equal to 0.58% of each teacher's
18    salary.
19The school district or other employing unit may pay these
20employer contributions out of any source of funding available
21for that purpose and shall forward the contributions to the
22System on the schedule established for the payment of member
23contributions.
24    These employer contributions are intended to offset a
25portion of the cost to the System of the increases in
26retirement benefits resulting from Public Act 90-582.

 

 

SB2338- 15 -LRB101 14439 RPS 63328 b

1    Each employer of teachers is entitled to a credit against
2the contributions required under this subsection (e) with
3respect to salaries paid to teachers for the period January 1,
42002 through June 30, 2003, equal to the amount paid by that
5employer under subsection (a-5) of Section 6.6 of the State
6Employees Group Insurance Act of 1971 with respect to salaries
7paid to teachers for that period.
8    The additional 1% employee contribution required under
9Section 16-152 by Public Act 90-582 is the responsibility of
10the teacher and not the teacher's employer, unless the employer
11agrees, through collective bargaining or otherwise, to make the
12contribution on behalf of the teacher.
13    If an employer is required by a contract in effect on May
141, 1998 between the employer and an employee organization to
15pay, on behalf of all its full-time employees covered by this
16Article, all mandatory employee contributions required under
17this Article, then the employer shall be excused from paying
18the employer contribution required under this subsection (e)
19for the balance of the term of that contract. The employer and
20the employee organization shall jointly certify to the System
21the existence of the contractual requirement, in such form as
22the System may prescribe. This exclusion shall cease upon the
23termination, extension, or renewal of the contract at any time
24after May 1, 1998.
25    (f) For school years beginning before July 1, 2021 and for
26salary paid to a teacher under a contract or collective

 

 

SB2338- 16 -LRB101 14439 RPS 63328 b

1bargaining agreement entered into, amended, or renewed before
2July 1, 2021, if If June 4, 2018 (Public Act 100-587) the
3amount of a teacher's salary for any school year used to
4determine final average salary exceeds the member's annual
5full-time salary rate with the same employer for the previous
6school year by more than 6%, the teacher's employer shall pay
7to the System, in addition to all other payments required under
8this Section and in accordance with guidelines established by
9the System, the present value of the increase in benefits
10resulting from the portion of the increase in salary that is in
11excess of 6%. This present value shall be computed by the
12System on the basis of the actuarial assumptions and tables
13used in the most recent actuarial valuation of the System that
14is available at the time of the computation. If a teacher's
15salary for the 2005-2006 school year is used to determine final
16average salary under this subsection (f), then the changes made
17to this subsection (f) by Public Act 94-1057 shall apply in
18calculating whether the increase in his or her salary is in
19excess of 6%. For the purposes of this Section, change in
20employment under Section 10-21.12 of the School Code on or
21after June 1, 2005 shall constitute a change in employer. The
22System may require the employer to provide any pertinent
23information or documentation. The changes made to this
24subsection (f) by Public Act 94-1111 apply without regard to
25whether the teacher was in service on or after its effective
26date.

 

 

SB2338- 17 -LRB101 14439 RPS 63328 b

1    Whenever it determines that a payment is or may be required
2under this subsection, the System shall calculate the amount of
3the payment and bill the employer for that amount. The bill
4shall specify the calculations used to determine the amount
5due. If the employer disputes the amount of the bill, it may,
6within 30 days after receipt of the bill, apply to the System
7in writing for a recalculation. The application must specify in
8detail the grounds of the dispute and, if the employer asserts
9that the calculation is subject to subsection (g) or (h) of
10this Section, must include an affidavit setting forth and
11attesting to all facts within the employer's knowledge that are
12pertinent to the applicability of that subsection. Upon
13receiving a timely application for recalculation, the System
14shall review the application and, if appropriate, recalculate
15the amount due.
16    The employer contributions required under this subsection
17(f) may be paid in the form of a lump sum within 90 days after
18receipt of the bill. If the employer contributions are not paid
19within 90 days after receipt of the bill, then interest will be
20charged at a rate equal to the System's annual actuarially
21assumed rate of return on investment compounded annually from
22the 91st day after receipt of the bill. Payments must be
23concluded within 3 years after the employer's receipt of the
24bill.
25    (f-1) (Blank). June 4, 2018 (Public Act 100-587)
26    (f-2) Beginning in school year 2022 and for each school

 

 

SB2338- 18 -LRB101 14439 RPS 63328 b

1year thereafter, the System shall calculate the projected
2amount of the increase in the employer normal cost of benefits,
3expressed as a percentage of salary and reflecting separate
4amounts for Tier 1 benefits and Tier 2 benefits, resulting from
5any increase in salary over the preceding school year,
6expressed as a percentage of salary. Except for a teacher who
7first becomes a teacher on or after the implementation date, as
8defined under Section 1-161 and determined by the Board and
9except for salary increases paid to a teacher under a contract
10or collective bargaining agreement entered into, amended, or
11renewed before July 1, 2021, if the amount of a teacher's
12salary for any school year beginning on or after July 1, 2021
13exceeds the teacher's annual full-time salary rate with the
14same employer for the previous school year, then the teacher's
15employer shall pay to the System the projected amount of the
16increase in the employer normal cost of benefits, as determined
17by the System and reflecting whether the teacher will receive
18Tier 1 benefits or Tier 2 benefits, resulting from the increase
19in the teacher's salary over the previous school year. The
20System may require the employer to provide any pertinent
21information or documentation.
22    Whenever it determines that a payment is or may be required
23under this subsection (f-2), the System shall calculate the
24amount of the payment and bill the employer for that amount.
25The bill shall specify the calculations used to determine the
26amount due. If the employer disputes the amount of the bill, it

 

 

SB2338- 19 -LRB101 14439 RPS 63328 b

1may, within 30 days after receipt of the bill, apply to the
2System in writing for a recalculation. The application must
3specify in detail the grounds of the dispute and, if the
4employer asserts that the calculation is subject to subsection
5(f) or (h-1) of this Section, must include an affidavit setting
6forth and attesting to all facts within the employer's
7knowledge that are pertinent to the applicability of subsection
8(f) or (h-1). Upon receiving a timely application for
9recalculation, the System shall review the application and, if
10appropriate, recalculate the amount due.
11    The employer contributions required under this subsection
12(f-2) may be paid in the form of a lump sum within 90 days after
13receipt of the bill. If the employer contributions are not paid
14within 90 days after receipt of the bill, then interest shall
15be charged at a rate equal to the System's annual actuarially
16assumed rate of return on investment compounded annually from
17the 91st day after receipt of the bill. Payments must be
18concluded within 3 years after the employer's receipt of the
19bill.
20    (g) This subsection (g) applies only to payments made or
21salary increases given on or after June 1, 2005 but before July
221, 2011. The changes made by Public Act 94-1057 shall not
23require the System to refund any payments received before July
2431, 2006 (the effective date of Public Act 94-1057).
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude salary increases paid to teachers

 

 

SB2338- 20 -LRB101 14439 RPS 63328 b

1under contracts or collective bargaining agreements entered
2into, amended, or renewed before June 1, 2005.
3    When assessing payment for any amount due under subsection
4(f), the System shall exclude salary increases paid to a
5teacher at a time when the teacher is 10 or more years from
6retirement eligibility under Section 16-132 or 16-133.2.
7    When assessing payment for any amount due under subsection
8(f), the System shall exclude salary increases resulting from
9overload work, including summer school, when the school
10district has certified to the System, and the System has
11approved the certification, that (i) the overload work is for
12the sole purpose of classroom instruction in excess of the
13standard number of classes for a full-time teacher in a school
14district during a school year and (ii) the salary increases are
15equal to or less than the rate of pay for classroom instruction
16computed on the teacher's current salary and work schedule.
17    When assessing payment for any amount due under subsection
18(f), the System shall exclude a salary increase resulting from
19a promotion (i) for which the employee is required to hold a
20certificate or supervisory endorsement issued by the State
21Teacher Certification Board that is a different certification
22or supervisory endorsement than is required for the teacher's
23previous position and (ii) to a position that has existed and
24been filled by a member for no less than one complete academic
25year and the salary increase from the promotion is an increase
26that results in an amount no greater than the lesser of the

 

 

SB2338- 21 -LRB101 14439 RPS 63328 b

1average salary paid for other similar positions in the district
2requiring the same certification or the amount stipulated in
3the collective bargaining agreement for a similar position
4requiring the same certification.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude any payment to the teacher from
7the State of Illinois or the State Board of Education over
8which the employer does not have discretion, notwithstanding
9that the payment is included in the computation of final
10average salary.
11    (h) When assessing payment for any amount due under
12subsection (f), the System shall exclude any salary increase
13described in subsection (g) of this Section given on or after
14July 1, 2011 but before July 1, 2014 under a contract or
15collective bargaining agreement entered into, amended, or
16renewed on or after June 1, 2005 but before July 1, 2011.
17Notwithstanding any other provision of this Section, any
18payments made or salary increases given after June 30, 2014
19shall be used in assessing payment for any amount due under
20subsection (f) of this Section.
21    (h-1) When assessing payment for any amount due under
22subsection (f-2), the System shall exclude earnings increases
23paid to teachers who first become teachers on or after the
24implementation date, as defined under Section 1-161 and
25determined by the Board.
26    (i) The System shall prepare a report and file copies of

 

 

SB2338- 22 -LRB101 14439 RPS 63328 b

1the report with the Governor and the General Assembly by
2January 1, 2007 that contains all of the following information:
3        (1) The number of recalculations required by the
4    changes made to this Section by Public Act 94-1057 for each
5    employer.
6        (2) The dollar amount by which each employer's
7    contribution to the System was changed due to
8    recalculations required by Public Act 94-1057.
9        (3) The total amount the System received from each
10    employer as a result of the changes made to this Section by
11    Public Act 94-4.
12        (4) The increase in the required State contribution
13    resulting from the changes made to this Section by Public
14    Act 94-1057.
15    (i-5) For school years beginning on or after July 1, 2017,
16if the amount of a participant's salary for any school year
17exceeds the amount of the salary set for the Governor, 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 salary in
24excess of the amount of the salary set for the Governor. This
25amount shall be computed by the System on the basis of the
26actuarial assumptions and tables used in the most recent

 

 

SB2338- 23 -LRB101 14439 RPS 63328 b

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 calculations used to determine the amount
8due. If the employer disputes the amount of the bill, it may,
9within 30 days after receipt of the bill, apply to the System
10in writing for a recalculation. The application must specify in
11detail the grounds of the dispute. Upon receiving a timely
12application for recalculation, the System shall review the
13application and, if appropriate, recalculate the amount due.
14    The employer contributions required under this subsection
15may be paid in the form of a lump sum within 90 days after
16receipt of the bill. If the employer contributions are not paid
17within 90 days after receipt of the bill, then interest will be
18charged at a rate equal to the System's annual actuarially
19assumed rate of return on investment compounded annually from
20the 91st day after receipt of the bill. Payments must be
21concluded within 3 years after the employer's receipt of the
22bill.
23    (j) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

 

 

SB2338- 24 -LRB101 14439 RPS 63328 b

1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (k) For purposes of determining the required State
9contribution to the system for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the system's actuarially assumed rate of return.
12(Source: P.A. 100-23, eff. 7-6-17; 100-340, eff. 8-25-17;
13100-587, eff. 6-4-18; 100-624, eff. 7-20-18; 100-863, eff.
148-14-18; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; revised
158-13-19.)
 
16    Section 90. The State Mandates Act is amended by adding
17Section 8.43 as follows:
 
18    (30 ILCS 805/8.43 new)
19    Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
20of this Act, no reimbursement by the State is required for the
21implementation of any mandate created by this amendatory Act of
22the 101st General Assembly.
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.

 

 

SB2338- 25 -LRB101 14439 RPS 63328 b

1 INDEX
2 Statutes amended in order of appearance
3    40 ILCS 5/16-106.4a new
4    40 ILCS 5/16-106.4b new
5    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
6    30 ILCS 805/8.43 new