102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4320

 

Introduced 1/5/2022, by Rep. Michael Halpin

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
30 ILCS 805/8.46 new

    Amends the State Universities Article of the Illinois Pension Code. In a provision that requires an employer to make an additional contribution to the State Universities Retirement System for certain salary increases greater than 6%, provides that the System shall exclude any earnings increase paid in an academic year beginning on or after July 1, 2020 (instead of any earnings increase) resulting from overload work performed in an academic year subsequent to an academic year in which the employer was unable to offer or allow to be conducted overload work due to an emergency declaration limiting such activities. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB102 20083 RPS 28930 b

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

 

 

A BILL FOR

 

HB4320LRB102 20083 RPS 28930 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 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
16contributions required for each fiscal year on the basis of
17the actuarial tables and other assumptions adopted by the
18Board and the recommendations of the actuary, using the
19formula in subsection (a-1).
20    (a-1) For State fiscal years 2012 through 2045, the
21minimum contribution to the System to be made by the State for
22each fiscal year shall be an amount determined by the System to
23be sufficient to bring the total assets of the System up to 90%

 

 

HB4320- 2 -LRB102 20083 RPS 28930 b

1of the 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
9equal to 2% of the total payroll of each employee who is deemed
10to have elected the benefits under Section 1-161 or who has
11made the 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

 

 

HB4320- 3 -LRB102 20083 RPS 28930 b

1    thereafter, by calculating the change in equal annual
2    amounts over that 5-year period and then implementing it
3    at the resulting annual rate in each of the remaining
4    fiscal 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
8increments so that by State fiscal year 2011, the State is
9contributing at the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006
12is $166,641,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007
15is $252,064,100.
16    For each of State fiscal years 2008 through 2009, the
17State contribution to the System, as a percentage of the
18applicable employee payroll, shall be increased in equal
19annual increments from the required State contribution for
20State fiscal year 2007, so that by State fiscal year 2011, the
21State is contributing at the rate otherwise required under
22this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010
25is $702,514,000 and shall be made from the State Pensions Fund
26and proceeds of bonds sold in fiscal year 2010 pursuant to

 

 

HB4320- 4 -LRB102 20083 RPS 28930 b

1Section 7.2 of the General Obligation Bond Act, less (i) the
2pro rata share of bond sale expenses determined by the
3System's share of total bond proceeds, (ii) any amounts
4received from the General Revenue Fund in fiscal year 2010,
5(iii) any reduction in bond proceeds due to the issuance of
6discounted bonds, if applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011
9is the amount recertified by the System on or before April 1,
102011 pursuant to Section 15-165 and shall be made from the
11State Pensions Fund and proceeds of bonds sold in fiscal year
122011 pursuant to Section 7.2 of the General Obligation Bond
13Act, less (i) the pro rata share of bond sale expenses
14determined by the System's share of total bond proceeds, (ii)
15any amounts received from the General Revenue Fund in fiscal
16year 2011, and (iii) any reduction in bond proceeds due to the
17issuance of discounted bonds, if applicable.
18    Beginning in State fiscal year 2046, the minimum State
19contribution for each fiscal year shall be the amount needed
20to maintain the total assets of the System at 90% of the total
21actuarial liabilities of the System.
22    Amounts received by the System pursuant to Section 25 of
23the Budget Stabilization Act or Section 8.12 of the State
24Finance Act in any fiscal year do not reduce and do not
25constitute payment of any portion of the minimum State
26contribution required under this Article in that fiscal year.

 

 

HB4320- 5 -LRB102 20083 RPS 28930 b

1Such amounts shall not reduce, and shall not be included in the
2calculation of, the required State contributions under this
3Article in any future year until the System has reached a
4funding ratio of at least 90%. A reference in this Article to
5the "required State contribution" or any substantially similar
6term does not include or apply to any amounts payable to the
7System under Section 25 of the Budget Stabilization Act.
8    Notwithstanding any other provision of this Section, the
9required State contribution for State fiscal year 2005 and for
10fiscal year 2008 and each fiscal year thereafter, as
11calculated under this Section and certified under Section
1215-165, shall not exceed an amount equal to (i) the amount of
13the required State contribution that would have been
14calculated under this Section for that fiscal year if the
15System had not received any payments under subsection (d) of
16Section 7.2 of the General Obligation Bond Act, minus (ii) the
17portion of the State's total debt service payments for that
18fiscal year on the bonds issued in fiscal year 2003 for the
19purposes of that Section 7.2, as determined and certified by
20the Comptroller, that is the same as the System's portion of
21the total moneys distributed under subsection (d) of Section
227.2 of the General Obligation Bond Act. In determining this
23maximum for State fiscal years 2008 through 2010, however, the
24amount referred to in item (i) shall be increased, as a
25percentage of the applicable employee payroll, in equal
26increments calculated from the sum of the required State

 

 

HB4320- 6 -LRB102 20083 RPS 28930 b

1contribution for State fiscal year 2007 plus the applicable
2portion of the State's total debt service payments for fiscal
3year 2007 on the bonds issued in fiscal year 2003 for the
4purposes of Section 7.2 of the General Obligation Bond Act, so
5that, by State fiscal year 2011, the State is contributing at
6the rate otherwise required under this Section.
7    (a-2) Beginning in fiscal year 2018, each employer under
8this Article shall pay to the System a required contribution
9determined as a percentage of projected payroll and sufficient
10to produce an annual amount equal to:
11        (i) for each of fiscal years 2018, 2019, and 2020, the
12    defined benefit normal cost of the defined benefit plan,
13    less the employee contribution, for each employee of that
14    employer who has elected or who is deemed to have elected
15    the benefits under Section 1-161 or who has made the
16    election under subsection (c) of Section 1-161; for fiscal
17    year 2021 and each fiscal year thereafter, the defined
18    benefit normal cost of the defined benefit plan, less the
19    employee contribution, plus 2%, 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 (c) of Section 1-161; plus
23        (ii) the amount required for that fiscal year to
24    amortize any unfunded actuarial accrued liability
25    associated with the present value of liabilities
26    attributable to the employer's account under Section

 

 

HB4320- 7 -LRB102 20083 RPS 28930 b

1    15-155.2, determined as a level percentage of payroll over
2    a 30-year rolling amortization period.
3    In determining contributions required under item (i) of
4this subsection, the System shall determine an aggregate rate
5for all employers, expressed as a percentage of projected
6payroll.
7    In determining the contributions required under item (ii)
8of this subsection, the amount shall be computed by the System
9on the basis of the actuarial assumptions and tables used in
10the most recent actuarial valuation of the System that is
11available at the time of the computation.
12    The contributions required under this subsection (a-2)
13shall be paid by an employer concurrently with that employer's
14payroll payment period. The State, as the actual employer of
15an employee, shall make the required contributions under this
16subsection.
17    As used in this subsection, "academic year" means the
1812-month period beginning September 1.
19    (b) If an employee is paid from trust or federal funds, the
20employer shall pay to the Board contributions from those funds
21which are sufficient to cover the accruing normal costs on
22behalf of the employee. However, universities having employees
23who are compensated out of local auxiliary funds, income
24funds, or service enterprise funds are not required to pay
25such contributions on behalf of those employees. The local
26auxiliary funds, income funds, and service enterprise funds of

 

 

HB4320- 8 -LRB102 20083 RPS 28930 b

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

 

 

HB4320- 9 -LRB102 20083 RPS 28930 b

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

 

 

HB4320- 10 -LRB102 20083 RPS 28930 b

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

 

 

HB4320- 11 -LRB102 20083 RPS 28930 b

1application for recalculation, the System shall review the
2application and, if appropriate, recalculate the amount due.
3    The employer contributions required under this subsection
4(g) may be paid in the form of a lump sum within 90 days after
5receipt of the bill. If the employer contributions are not
6paid within 90 days after receipt of the bill, then interest
7will be charged at a rate equal to the System's annual
8actuarially assumed rate of return on investment compounded
9annually from the 91st day after receipt of the bill. Payments
10must be concluded within 3 years after the employer's receipt
11of the bill.
12    When assessing payment for any amount due under this
13subsection (g), the System shall include earnings, to the
14extent not established by a participant under Section
1515-113.11 or 15-113.12, that would have been paid to the
16participant had the participant not taken (i) periods of
17voluntary or involuntary furlough occurring on or after July
181, 2015 and on or before June 30, 2017 or (ii) periods of
19voluntary pay reduction in lieu of furlough occurring on or
20after July 1, 2015 and on or before June 30, 2017. Determining
21earnings that would have been paid to a participant had the
22participant not taken periods of voluntary or involuntary
23furlough or periods of voluntary pay reduction shall be the
24responsibility of the employer, and shall be reported in a
25manner prescribed by the System.
26    This subsection (g) does not apply to (1) Tier 2 hybrid

 

 

HB4320- 12 -LRB102 20083 RPS 28930 b

1plan members and (2) Tier 2 defined benefit members who first
2participate under this Article on or after the implementation
3date of the Optional Hybrid Plan.
4    (g-1) (Blank).
5    (h) This subsection (h) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to
12participants under contracts or collective bargaining
13agreements entered into, amended, or renewed before June 1,
142005.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases paid to a
17participant at a time when the participant is 10 or more years
18from retirement eligibility under Section 15-135.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases resulting
21from overload work, including a contract for summer teaching,
22or overtime when the employer has certified to the System, and
23the System has approved the certification, that: (i) in the
24case of overloads (A) the overload work is for the sole purpose
25of academic instruction in excess of the standard number of
26instruction hours for a full-time employee occurring during

 

 

HB4320- 13 -LRB102 20083 RPS 28930 b

1the academic year that the overload is paid and (B) the
2earnings increases are equal to or less than the rate of pay
3for academic instruction computed using the participant's
4current salary rate and work schedule; and (ii) in the case of
5overtime, the overtime was necessary for the educational
6mission.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude any earnings increase resulting
9from (i) a promotion for which the employee moves from one
10classification to a higher classification under the State
11Universities Civil Service System, (ii) a promotion in
12academic rank for a tenured or tenure-track faculty position,
13or (iii) a promotion that the Illinois Community College Board
14has recommended in accordance with subsection (k) of this
15Section. These earnings increases shall be excluded only if
16the promotion is to a position that has existed and been filled
17by a member for no less than one complete academic year and the
18earnings increase as a result of the promotion is an increase
19that results in an amount no greater than the average salary
20paid for other similar positions.
21    (h-5) When assessing payment for any amount due under
22subsection (g), the System shall exclude any earnings increase
23paid in an academic year beginning on or after July 1, 2020
24resulting from overload work performed in an academic year
25subsequent to an academic year in which the employer was
26unable to offer or allow to be conducted overload work due to

 

 

HB4320- 14 -LRB102 20083 RPS 28930 b

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

 

 

HB4320- 15 -LRB102 20083 RPS 28930 b

1    resulting from the changes made to this Section by Public
2    Act 94-1057.
3    (j-5) For State fiscal years beginning on or after July 1,
42017, if the amount of a participant's earnings for any State
5fiscal year exceeds the amount of the salary set by law for the
6Governor that is in effect on July 1 of that fiscal year, the
7participant's employer shall pay to the System, in addition to
8all other payments required under this Section and in
9accordance with guidelines established by the System, an
10amount determined by the System to be equal to the employer
11normal cost, as established by the System and expressed as a
12total percentage of payroll, multiplied by the amount of
13earnings in excess of the amount of the salary set by law for
14the Governor. This amount shall be computed by the System on
15the basis of the actuarial assumptions and tables used in the
16most recent actuarial valuation of the System that is
17available at the time of the computation. The System may
18require the employer to provide any pertinent information or
19documentation.
20    Whenever it determines that a payment is or may be
21required under this subsection, the System shall calculate the
22amount of the payment and bill the employer for that amount.
23The bill shall specify the calculation used to determine the
24amount due. If the employer disputes the amount of the bill, it
25may, within 30 days after receipt of the bill, apply to the
26System in writing for a recalculation. The application must

 

 

HB4320- 16 -LRB102 20083 RPS 28930 b

1specify in detail the grounds of the dispute. Upon receiving a
2timely application for recalculation, the System shall review
3the application and, if appropriate, recalculate the amount
4due.
5    The employer contributions required under this subsection
6may be paid in the form of a lump sum within 90 days after
7issuance of the bill. If the employer contributions are not
8paid within 90 days after issuance of the bill, then interest
9will be charged at a rate equal to the System's annual
10actuarially assumed rate of return on investment compounded
11annually from the 91st day after issuance of the bill. All
12payments must be received within 3 years after issuance of the
13bill. If the employer fails to make complete payment,
14including applicable interest, within 3 years, then the System
15may, after giving notice to the employer, certify the
16delinquent amount to the State Comptroller, and the
17Comptroller shall thereupon deduct the certified delinquent
18amount from State funds payable to the employer and pay them
19instead to the System.
20    This subsection (j-5) does not apply to a participant's
21earnings to the extent an employer pays the employer normal
22cost of such earnings.
23    The changes made to this subsection (j-5) by Public Act
24100-624 are intended to apply retroactively to July 6, 2017
25(the effective date of Public Act 100-23).
26    (k) The Illinois Community College Board shall adopt rules

 

 

HB4320- 17 -LRB102 20083 RPS 28930 b

1for recommending lists of promotional positions submitted to
2the Board by community colleges and for reviewing the
3promotional lists on an annual basis. When recommending
4promotional lists, the Board shall consider the similarity of
5the positions submitted to those positions recognized for
6State universities by the State Universities Civil Service
7System. The Illinois Community College Board shall file a copy
8of its findings with the System. The System shall consider the
9findings of the Illinois Community College Board when making
10determinations under this Section. The System shall not
11exclude any earnings increases resulting from a promotion when
12the promotion was not submitted by a community college.
13Nothing in this subsection (k) shall require any community
14college to submit any information to the Community College
15Board.
16    (l) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

HB4320- 18 -LRB102 20083 RPS 28930 b

1    (m) For purposes of determining the required State
2contribution to the system for a particular year, the
3actuarial value of assets shall be assumed to earn a rate of
4return equal to the system's actuarially assumed rate of
5return.
6(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
7102-16, eff. 6-17-21; 102-558, eff. 8-20-21.)
 
8    Section 90. The State Mandates Act is amended by adding
9Section 8.46 as follows:
 
10    (30 ILCS 805/8.46 new)
11    Sec. 8.46. Exempt mandate. Notwithstanding Sections 6 and
128 of this Act, no reimbursement by the State is required for
13the implementation of any mandate created by this amendatory
14Act of the 102nd General Assembly.
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.