HB1428 EnrolledLRB102 03444 RPS 13457 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
5changing Section 22-101B as follows:
 
6    (40 ILCS 5/22-101B)
7    Sec. 22-101B. Health Care Benefits.
8    (a) The Chicago Transit Authority (hereinafter referred to
9in this Section as the "Authority") shall take all actions
10lawfully available to it to separate the funding of health
11care benefits for retirees and their dependents and survivors
12from the funding for its retirement system. The Authority
13shall endeavor to achieve this separation as soon as possible,
14and in any event no later than July 1, 2009.
15    (b) Effective 90 days after the effective date of this
16amendatory Act of the 95th General Assembly, a Retiree Health
17Care Trust is established for the purpose of providing health
18care benefits to eligible retirees and their dependents and
19survivors in accordance with the terms and conditions set
20forth in this Section 22-101B. The Retiree Health Care Trust
21shall be solely responsible for providing health care benefits
22to eligible retirees and their dependents and survivors upon
23the exhaustion of the account established by the Retirement

 

 

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1Plan for Chicago Transit Authority Employees pursuant to
2Section 401(h) of the Internal Revenue Code of 1986, but no
3earlier than January 1, 2009 and no later than July 1, 2009.
4        (1) The Board of Trustees shall consist of 7 members
5    appointed as follows: (i) 3 trustees shall be appointed by
6    the Chicago Transit Board; (ii) one trustee shall be
7    appointed by an organization representing the highest
8    number of Chicago Transit Authority participants; (iii)
9    one trustee shall be appointed by an organization
10    representing the second-highest number of Chicago Transit
11    Authority participants; (iv) one trustee shall be
12    appointed by the recognized coalition representatives of
13    participants who are not represented by an organization
14    with the highest or second-highest number of Chicago
15    Transit Authority participants; and (v) one trustee shall
16    be selected by the Regional Transportation Authority Board
17    of Directors, and the trustee shall be a professional
18    fiduciary who has experience in the area of collectively
19    bargained retiree health plans. Trustees shall serve until
20    a successor has been appointed and qualified, or until
21    resignation, death, incapacity, or disqualification.
22        Any person appointed as a trustee of the board shall
23    qualify by taking an oath of office that he or she will
24    diligently and honestly administer the affairs of the
25    system, and will not knowingly violate or willfully permit
26    the violation of any of the provisions of law applicable

 

 

HB1428 Enrolled- 3 -LRB102 03444 RPS 13457 b

1    to the Plan, including Sections 1-109, 1-109.1, 1-109.2,
2    1-110, 1-111, 1-114, and 1-115 of Article 1 of the
3    Illinois Pension Code.
4        Each trustee shall cast individual votes, and a
5    majority vote shall be final and binding upon all
6    interested parties, provided that the Board of Trustees
7    may require a supermajority vote with respect to the
8    investment of the assets of the Retiree Health Care Trust,
9    and may set forth that requirement in the trust agreement
10    or by-laws of the Board of Trustees. Each trustee shall
11    have the rights, privileges, authority and obligations as
12    are usual and customary for such fiduciaries.
13        (2) The Board of Trustees shall establish and
14    administer a health care benefit program for eligible
15    retirees and their dependents and survivors. Any health
16    care benefit program established by the Board of Trustees
17    for eligible retirees and their dependents and survivors
18    effective on or after July 1, 2009 shall not contain any
19    plan which provides for more than 90% coverage for
20    in-network services or 70% coverage for out-of-network
21    services after any deductible has been paid, except that
22    coverage through a health maintenance organization ("HMO")
23    may be provided at 100%.
24        (2.5) The Board of Trustees may also establish and
25    administer a health reimbursement arrangement for retirees
26    and for former employees of the Authority or the

 

 

HB1428 Enrolled- 4 -LRB102 03444 RPS 13457 b

1    Retirement Plan, and their survivors, who have contributed
2    to the Retiree Health Care Trust but do not satisfy the
3    years of service requirement of subdivision (b)(4) and the
4    terms of the retiree health care plan; or for those who do
5    satisfy the requirements of subdivision (b)(4) and the
6    terms of the retiree health care plan but who decline
7    coverage under the plan prior to retirement. Any such
8    health reimbursement arrangement may provide that: the
9    retirees or former employees of the Authority or the
10    Retirement Plan, and their survivors, must have reached
11    age 65 to be eligible to participate in the health
12    reimbursement arrangement; contributions by the retirees
13    or former employees of the Authority or the Retirement
14    Plan to the Retiree Health Care Trust shall be considered
15    assets of the Retiree Health Care Trust only;
16    contributions shall not accrue interest for the benefit of
17    the retiree or former employee of the Authority or the
18    Retirement Plan or survivor; benefits shall be payable in
19    accordance with the Internal Revenue Code of 1986; the
20    amounts paid to or on account of the retiree or former
21    employee of the Authority or the Retirement Plan or
22    survivor shall not exceed the total amount which the
23    retiree or former employee of the Authority or the
24    Retirement Plan contributed to the Retiree Health Care
25    Trust; the Retiree Health Care Trust may charge a
26    reasonable administrative fee for processing the benefits.

 

 

HB1428 Enrolled- 5 -LRB102 03444 RPS 13457 b

1    The Board of Trustees of the Retiree Health Care Trust may
2    establish such rules, limitations and requirements as the
3    Board of Trustees deems appropriate.
4        (3) The Retiree Health Care Trust shall be
5    administered by the Board of Trustees according to the
6    following requirements:
7            (i) The Board of Trustees may cause amounts on
8        deposit in the Retiree Health Care Trust to be
9        invested in those investments that are permitted
10        investments for the investment of moneys held under
11        any one or more of the pension or retirement systems of
12        the State, any unit of local government or school
13        district, or any agency or instrumentality thereof.
14        The Board, by a vote of at least two-thirds of the
15        trustees, may transfer investment management to the
16        Illinois State Board of Investment, which is hereby
17        authorized to manage these investments when so
18        requested by the Board of Trustees.
19            (ii) The Board of Trustees shall establish and
20        maintain an appropriate funding reserve level which
21        shall not be less than the amount of incurred and
22        unreported claims plus 12 months of expected claims
23        and administrative expenses.
24            (iii) The Board of Trustees shall make an annual
25        assessment of the funding levels of the Retiree Health
26        Care Trust and shall submit a report to the Auditor

 

 

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1        General at least 90 days prior to the end of the fiscal
2        year. The report shall provide the following:
3                (A) the actuarial present value of projected
4            benefits expected to be paid to current and future
5            retirees and their dependents and survivors;
6                (B) the actuarial present value of projected
7            contributions and trust income plus assets;
8                (C) the reserve required by subsection
9            (b)(3)(ii); and
10                (D) an assessment of whether the actuarial
11            present value of projected benefits expected to be
12            paid to current and future retirees and their
13            dependents and survivors exceeds or is less than
14            the actuarial present value of projected
15            contributions and trust income plus assets in
16            excess of the reserve required by subsection
17            (b)(3)(ii).
18            If the actuarial present value of projected
19        benefits expected to be paid to current and future
20        retirees and their dependents and survivors exceeds
21        the actuarial present value of projected contributions
22        and trust income plus assets in excess of the reserve
23        required by subsection (b)(3)(ii), then the report
24        shall provide a plan, to be implemented over a period
25        of not more than 10 years from each valuation date,
26        which would make the actuarial present value of

 

 

HB1428 Enrolled- 7 -LRB102 03444 RPS 13457 b

1        projected contributions and trust income plus assets
2        equal to or exceed the actuarial present value of
3        projected benefits expected to be paid to current and
4        future retirees and their dependents and survivors.
5        The plan may consist of increases in employee,
6        retiree, dependent, or survivor contribution levels,
7        decreases in benefit levels, or other plan changes or
8        any combination thereof. If the actuarial present
9        value of projected benefits expected to be paid to
10        current and future retirees and their dependents and
11        survivors is less than the actuarial present value of
12        projected contributions and trust income plus assets
13        in excess of the reserve required by subsection
14        (b)(3)(ii), then the report may provide a plan of
15        decreases in employee, retiree, dependent, or survivor
16        contribution levels, increases in benefit levels, or
17        other plan changes, or any combination thereof, to the
18        extent of the surplus.
19            (iv) The Auditor General shall review the report
20        and plan provided in subsection (b)(3)(iii) and issue
21        a determination within 90 days after receiving the
22        report and plan, with a copy of such determination
23        provided to the General Assembly and the Regional
24        Transportation Authority, as follows:
25                (A) In the event of a projected shortfall, if
26            the Auditor General determines that the

 

 

HB1428 Enrolled- 8 -LRB102 03444 RPS 13457 b

1            assumptions stated in the report are not
2            unreasonable in the aggregate and that the plan of
3            increases in employee, retiree, dependent, or
4            survivor contribution levels, decreases in benefit
5            levels, or other plan changes, or any combination
6            thereof, to be implemented over a period of not
7            more than 10 years from each valuation date, is
8            reasonably projected to make the actuarial present
9            value of projected contributions and trust income
10            plus assets equal to or in excess of the actuarial
11            present value of projected benefits expected to be
12            paid to current and future retirees and their
13            dependents and survivors, then the Board of
14            Trustees shall implement the plan. If the Auditor
15            General determines that the assumptions stated in
16            the report are unreasonable in the aggregate, or
17            that the plan of increases in employee, retiree,
18            dependent, or survivor contribution levels,
19            decreases in benefit levels, or other plan changes
20            to be implemented over a period of not more than 10
21            years from each valuation date, is not reasonably
22            projected to make the actuarial present value of
23            projected contributions and trust income plus
24            assets equal to or in excess of the actuarial
25            present value of projected benefits expected to be
26            paid to current and future retirees and their

 

 

HB1428 Enrolled- 9 -LRB102 03444 RPS 13457 b

1            dependents and survivors, then the Board of
2            Trustees shall not implement the plan, the Auditor
3            General shall explain the basis for such
4            determination to the Board of Trustees, and the
5            Auditor General may make recommendations as to an
6            alternative report and plan.
7                (B) In the event of a projected surplus, if
8            the Auditor General determines that the
9            assumptions stated in the report are not
10            unreasonable in the aggregate and that the plan of
11            decreases in employee, retiree, dependent, or
12            survivor contribution levels, increases in benefit
13            levels, or both, is not unreasonable in the
14            aggregate, then the Board of Trustees shall
15            implement the plan. If the Auditor General
16            determines that the assumptions stated in the
17            report are unreasonable in the aggregate, or that
18            the plan of decreases in employee, retiree,
19            dependent, or survivor contribution levels,
20            increases in benefit levels, or both, is
21            unreasonable in the aggregate, then the Board of
22            Trustees shall not implement the plan, the Auditor
23            General shall explain the basis for such
24            determination to the Board of Trustees, and the
25            Auditor General may make recommendations as to an
26            alternative report and plan.

 

 

HB1428 Enrolled- 10 -LRB102 03444 RPS 13457 b

1                (C) The Board of Trustees shall submit an
2            alternative report and plan within 45 days after
3            receiving a rejection determination by the Auditor
4            General. A determination by the Auditor General on
5            any alternative report and plan submitted by the
6            Board of Trustees shall be made within 90 days
7            after receiving the alternative report and plan,
8            and shall be accepted or rejected according to the
9            requirements of this subsection (b)(3)(iv). The
10            Board of Trustees shall continue to submit
11            alternative reports and plans to the Auditor
12            General, as necessary, until a favorable
13            determination is made by the Auditor General.
14        (4) For any retiree who first retires effective on or
15    after January 18, 2008, to be eligible for retiree health
16    care benefits upon retirement, the retiree must be at
17    least 55 years of age, retire with 10 or more years of
18    continuous service and satisfy the preconditions
19    established by Public Act 95-708 in addition to any rules
20    or regulations promulgated by the Board of Trustees.
21    Notwithstanding the foregoing, any retiree hired on or
22    before September 5, 2001 who retires with 25 years or more
23    of continuous service shall be eligible for retiree health
24    care benefits upon retirement in accordance with any rules
25    or regulations adopted by the Board of Trustees; provided
26    he or she retires prior to the full execution of the

 

 

HB1428 Enrolled- 11 -LRB102 03444 RPS 13457 b

1    successor collective bargaining agreement to the
2    collective bargaining agreement that became effective
3    January 1, 2007 between the Authority and the
4    organizations representing the highest and second-highest
5    number of Chicago Transit Authority participants. This
6    paragraph (4) shall not apply to a disability allowance.
7        (5) Effective January 1, 2009, the aggregate amount of
8    retiree, dependent and survivor contributions to the cost
9    of their health care benefits shall not exceed more than
10    45% of the total cost of such benefits. The Board of
11    Trustees shall have the discretion to provide different
12    contribution levels for retirees, dependents and survivors
13    based on their years of service, level of coverage or
14    Medicare eligibility, provided that the total contribution
15    from all retirees, dependents, and survivors shall be not
16    more than 45% of the total cost of such benefits. The term
17    "total cost of such benefits" for purposes of this
18    subsection shall be the total amount expended by the
19    retiree health benefit program in the prior plan year, as
20    calculated and certified in writing by the Retiree Health
21    Care Trust's enrolled actuary to be appointed and paid for
22    by the Board of Trustees.
23        (6) Effective January 1, 2022 January 18, 2008, all
24    employees of the Authority shall contribute to the Retiree
25    Health Care Trust in an amount not less than 1% 3% of
26    compensation.

 

 

HB1428 Enrolled- 12 -LRB102 03444 RPS 13457 b

1        (7) No earlier than January 1, 2009 and no later than
2    July 1, 2009 as the Retiree Health Care Trust becomes
3    solely responsible for providing health care benefits to
4    eligible retirees and their dependents and survivors in
5    accordance with subsection (b) of this Section 22-101B,
6    the Authority shall not have any obligation to provide
7    health care to current or future retirees and their
8    dependents or survivors. Employees, retirees, dependents,
9    and survivors who are required to make contributions to
10    the Retiree Health Care Trust shall make contributions at
11    the level set by the Board of Trustees pursuant to the
12    requirements of this Section 22-101B.
13(Source: P.A. 98-1164, eff. 6-1-15.)