102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2105

 

Introduced 2/26/2021, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/5-167.1  from Ch. 108 1/2, par. 5-167.1
40 ILCS 5/5-238
30 ILCS 805/8.45 new

    Amends the Chicago Police Article of the Illinois Pension Code. Removes a birthdate restriction on eligibility at age 55 for a 3% automatic annual increase in retirement annuity that is not subject to a maximum increase of 30%. Provides that for Tier 2 policemen, "final average salary" is the greater of: (i) the average monthly salary obtained by dividing the total salary of the policeman during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest; or (ii) the average monthly salary obtained by dividing the total salary of the policeman during the 48 consecutive months of service within the last 60 months of service in which the total salary was the highest. Provides that the Tier 2 limitation on salary shall annually be increased by the lesser of 3% or the annual (instead of one-half of the annual) unadjusted percentage increase in the consumer price index-u. Provides that the surviving spouse's annuity for certain Tier 2 policemen shall be 54% of the policeman's monthly salary. Makes changes to the benefits paid to the guardian or surviving spouse of a deceased Tier 2 policeman if the policeman was the parent of a child. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB102 12572 RPS 17910 b

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

 

 

A BILL FOR

 

SB2105LRB102 12572 RPS 17910 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 Sections 5-167.1 and 5-238 as follows:
 
6    (40 ILCS 5/5-167.1)  (from Ch. 108 1/2, par. 5-167.1)
7    Sec. 5-167.1. Automatic increase in annuity; retirement
8from service after September 1, 1967.
9    (a) A policeman who retires from service after September
101, 1967 with at least 20 years of service credit shall, upon
11either the first of the month following the first anniversary
12of his date of retirement if he is age 55 60 (age 55 if born
13before January 1, 1966) or over on that anniversary date, or
14upon the first of the month following his attainment of age 55
1560 (age 55 if born before January 1, 1966) if it occurs after
16the first anniversary of his retirement date, have his then
17fixed and payable monthly annuity increased by 3% 1 1/2% and
18such first fixed annuity as granted at retirement increased by
19an additional 3% 1 1/2% in January of each year thereafter up
20to a maximum increase of 30%. Beginning January 1, 1983 for
21policemen born before January 1, 1930, and beginning January
221, 1988 for policemen born on or after January 1, 1930 but
23before January 1, 1940, and beginning January 1, 1996 for

 

 

SB2105- 2 -LRB102 12572 RPS 17910 b

1policemen born on or after January 1, 1940 but before January
21, 1945, and beginning January 1, 2000 for policemen born on or
3after January 1, 1945 but before January 1, 1950, and
4beginning January 1, 2005 for policemen born on or after
5January 1, 1950 but before January 1, 1955, and beginning
6January 1, 2017 for policemen born on or after January 1, 1955
7but before January 1, 1966, such increases shall be 3% and such
8policemen shall not be subject to the 30% maximum increase.
9    Any policeman born before January 1, 1945 who qualifies
10for a minimum annuity and retires after September 1, 1967 but
11has not received the initial increase under this subsection
12before January 1, 1996 is entitled to receive the initial
13increase under this subsection on (1) January 1, 1996, (2) the
14first anniversary of the date of retirement, or (3) attainment
15of age 55, whichever occurs last. The changes to this Section
16made by Public Act 89-12 apply beginning January 1, 1996 and
17without regard to whether the policeman or annuitant
18terminated service before the effective date of that Act.
19    Any policeman born before January 1, 1950 who qualifies
20for a minimum annuity and retires after September 1, 1967 but
21has not received the initial increase under this subsection
22before January 1, 2000 is entitled to receive the initial
23increase under this subsection on (1) January 1, 2000, (2) the
24first anniversary of the date of retirement, or (3) attainment
25of age 55, whichever occurs last. The changes to this Section
26made by this amendatory Act of the 92nd General Assembly apply

 

 

SB2105- 3 -LRB102 12572 RPS 17910 b

1without regard to whether the policeman or annuitant
2terminated service before the effective date of this
3amendatory Act.
4    Any policeman born before January 1, 1955 who qualifies
5for a minimum annuity and retires after September 1, 1967 but
6has not received the initial increase under this subsection
7before January 1, 2005 is entitled to receive the initial
8increase under this subsection on (1) January 1, 2005, (2) the
9first anniversary of the date of retirement, or (3) attainment
10of age 55, whichever occurs last. The changes to this Section
11made by this amendatory Act of the 94th General Assembly apply
12without regard to whether the policeman or annuitant
13terminated service before the effective date of this
14amendatory Act.
15    Any policeman born before January 1, 1966 who qualifies
16for a minimum annuity and retires after September 1, 1967 but
17has not received the initial increase under this subsection
18before January 1, 2017 is entitled to receive an initial
19increase under this subsection on (1) January 1, 2017, (2) the
20first anniversary of the date of retirement, or (3) attainment
21of age 55, whichever occurs last, in an amount equal to 3% for
22each complete year following the date of retirement or
23attainment of age 55, whichever occurs later. The changes to
24this subsection made by this amendatory Act of the 99th
25General Assembly apply without regard to whether the policeman
26or annuitant terminated service before the effective date of

 

 

SB2105- 4 -LRB102 12572 RPS 17910 b

1this amendatory Act.
2    Any policeman born after January 1, 1966 who qualifies for
3a minimum annuity and retires after September 1, 1967 but has
4not received the initial increase under this subsection before
5January 1, 2021 is entitled to receive the initial increase
6under this subsection on (1) January 1, 2021, (2) the first
7anniversary of the date of retirement, or (3) attainment of
8age 55, whichever occurs last. The changes to this Section
9made by this amendatory Act of the 102nd General Assembly
10apply without regard to whether the policeman or annuitant
11terminated service before the effective date of this
12amendatory Act.
13    (b) Subsection (a) of this Section is not applicable to an
14employee receiving a term annuity.
15    (c) To help defray the cost of such increases in annuity,
16there shall be deducted, beginning September 1, 1967, from
17each payment of salary to a policeman, 1/2 of 1% of each salary
18payment concurrently with and in addition to the salary
19deductions otherwise made for annuity purposes.
20    The city, in addition to the contributions otherwise made
21by it for annuity purposes under other provisions of this
22Article, shall make matching contributions concurrently with
23such salary deductions.
24    Each such 1/2 of 1% deduction from salary and each such
25contribution by the city of 1/2 of 1% of salary shall be
26credited to the Automatic Increase Reserve, to be used to

 

 

SB2105- 5 -LRB102 12572 RPS 17910 b

1defray the cost of the annuity increase provided by this
2Section. Any balance in such reserve as of the beginning of
3each calendar year shall be credited with interest at the rate
4of 3% per annum.
5    Such deductions from salary and city contributions shall
6continue while the policeman is in service.
7    The salary deductions provided in this Section are not
8subject to refund, except to the policeman himself, in any
9case in which: (i) the policeman withdraws prior to
10qualification for minimum annuity or Tier 2 monthly retirement
11annuity and applies for refund, (ii) the policeman applies for
12an annuity of a type that is not subject to annual increases
13under this Section, or (iii) a term annuity becomes payable.
14In such cases, the total of such salary deductions shall be
15refunded to the policeman, without interest, and charged to
16the Automatic Increase Reserve.
17    (d) Notwithstanding any other provision of this Article,
18the Tier 2 monthly retirement annuity of a person who first
19becomes a policeman under this Article on or after the
20effective date of this amendatory Act of the 97th General
21Assembly shall be increased on the January 1 occurring either
22on or after (i) the attainment of age 60 or (ii) the first
23anniversary of the annuity start date, whichever is later.
24Each annual increase shall be calculated at 3% or one-half the
25annual unadjusted percentage increase (but not less than zero)
26in the consumer price index-u for the 12 months ending with the

 

 

SB2105- 6 -LRB102 12572 RPS 17910 b

1September preceding each November 1, whichever is less, of the
2originally granted retirement annuity. If the annual
3unadjusted percentage change in the consumer price index-u for
4a 12-month period ending in September is zero or, when
5compared with the preceding period, decreases, then the
6annuity shall not be increased.
7    For the purposes of this subsection (d), "consumer price
8index-u" means the index published by the Bureau of Labor
9Statistics of the United States Department of Labor that
10measures the average change in prices of goods and services
11purchased by all urban consumers, United States city average,
12all items, 1982-84 = 100. The new amount resulting from each
13annual adjustment shall be determined by the Public Pension
14Division of the Department of Insurance and made available to
15the boards of the pension funds by November 1 of each year.
16(Source: P.A. 99-905, eff. 11-29-16.)
 
17    (40 ILCS 5/5-238)
18    Sec. 5-238. Provisions applicable to new hires; Tier 2.
19    (a) Notwithstanding any other provision of this Article,
20the provisions of this Section apply to a person who first
21becomes a policeman under this Article on or after January 1,
222011, and to certain qualified survivors of such a policeman.
23Such persons, and the benefits and restrictions that apply
24specifically to them under this Article, may be referred to as
25"Tier 2".

 

 

SB2105- 7 -LRB102 12572 RPS 17910 b

1    (b) A policeman who has withdrawn from service, has
2attained age 50 or more, and has 10 or more years of service in
3that capacity shall be entitled, upon proper application being
4received by the Fund, to receive a Tier 2 monthly retirement
5annuity for his service as a police officer. The Tier 2 monthly
6retirement annuity shall be computed by multiplying 2.5% for
7each year of such service by his or her final average salary,
8subject to an annuity reduction factor of one-half of 1% for
9each month that the police officer's age at retirement is
10under age 55. The Tier 2 monthly retirement annuity is in lieu
11of any age and service annuity or other form of retirement
12annuity under this Article.
13    The maximum retirement annuity under this subsection (b)
14shall be 75% of final average salary.
15    For the purposes of this subsection (b), "final average
16salary" means the greater of: (i) the average monthly salary
17obtained by dividing the total salary of the policeman during
18the 96 consecutive months of service within the last 120
19months of service in which the total salary was the highest by
20the number of months of service in that period; or (ii) the
21average monthly salary obtained by dividing the total salary
22of the policeman during the 48 consecutive months of service
23within the last 60 months of service in which the total salary
24was the highest by the number of months of service in that
25period.
26    Beginning on January 1, 2011, for all purposes under this

 

 

SB2105- 8 -LRB102 12572 RPS 17910 b

1Code (including without limitation the calculation of benefits
2and employee contributions), the annual salary based on the
3plan year of a member or participant to whom this Section
4applies shall not exceed $106,800; however, that amount shall
5annually thereafter be increased by the lesser of (i) 3% of
6that amount, including all previous adjustments, or (ii)
7one-half the annual unadjusted percentage increase (but not
8less than zero) in the consumer price index-u for the 12 months
9ending with the September preceding each November 1, including
10all previous adjustments.
11    Nothing in this amendatory Act of the 102nd General
12Assembly shall cause or otherwise result in any retroactive
13adjustment of any employee contributions.
14    (c) Notwithstanding any other provision of this Article,
15for a person who first becomes a policeman under this Article
16on or after January 1, 2011, eligibility for and the amount of
17the annuity to which the qualified surviving spouse, children,
18and parents are entitled under this subsection (c) shall be
19determined as follows:
20        (1) The surviving spouse of a deceased policeman to
21    whom this Section applies shall be deemed qualified to
22    receive a Tier 2 surviving spouse's annuity under this
23    paragraph (1) if: (i) the deceased policeman meets the
24    requirements specified under subdivision (A), (B), (C), or
25    (D) of this paragraph (1); and (ii) the surviving spouse
26    would not otherwise be excluded from receiving a widow's

 

 

SB2105- 9 -LRB102 12572 RPS 17910 b

1    annuity under the eligibility requirements for a widow's
2    annuity set forth in Section 5-146. The Tier 2 surviving
3    spouse's annuity is in lieu of the widow's annuity
4    determined under any other Section of this Article and is
5    subject to the requirements of Section 5-147.1.
6        As used in this subsection (c), "earned annuity" means
7    a Tier 2 monthly retirement annuity determined under
8    subsection (b) of this Section, including any increases
9    the policeman had received pursuant to Section 5-167.1.
10            (A) If the deceased policeman was receiving an
11        earned annuity at the date of his or her death, the
12        Tier 2 surviving spouse's annuity under this paragraph
13        (1) shall be in the amount of 66 2/3% of the
14        policeman's earned annuity at the date of death.
15            If the deceased policeman was a parent of a child
16        or children, including any child who has been
17        conceived but not yet born, and there is a surviving
18        spouse, 12% of the policeman's earned annuity at the
19        date of death shall be granted to the guardian of any
20        such minor child or children for each such child until
21        attainment of age 18. Upon the death of the surviving
22        spouse leaving one or more children under the age of
23        18, or upon the death of a policeman leaving one or
24        more children under the age of 18 but no surviving
25        spouse, a monthly pension of 20% of the policeman's
26        monthly salary at the date of death shall be granted to

 

 

SB2105- 10 -LRB102 12572 RPS 17910 b

1        the duly appointed guardian of each such child for the
2        support and maintenance of each such child until the
3        child reaches age 18. The benefit in this paragraph is
4        in lieu of a benefit under paragraph (2) of this
5        subsection (c) but does not apply if the beneficiary
6        is entitled to receive a greater benefit under
7        paragraph (2) of this subsection (c).
8            (B) If the deceased policeman was not receiving an
9        earned annuity but had at least 10 years of service at
10        the time of death, the Tier 2 surviving spouse's
11        annuity under this paragraph (1) shall be the greater
12        of: (i) 30% of the annual maximum salary attached to
13        the classified civil service position of a first class
14        patrolman at the time of his death; (ii) 54% of the
15        policeman's monthly salary at the time of the
16        policeman's death; or (iii) (ii) 66 2/3% of the Tier 2
17        monthly retirement annuity that the deceased policeman
18        would have been eligible to receive under subsection
19        (b) of this Section, based upon the actual service
20        accrued through the day before the policeman's death,
21        but determined as though the policeman was at least
22        age 55 on the day before his or her death and retired
23        on that day.
24            If the deceased policeman was a parent of a child
25        or children, including any child who has been
26        conceived but not yet born, and there is a surviving

 

 

SB2105- 11 -LRB102 12572 RPS 17910 b

1        spouse, 12% of the policeman's monthly salary at the
2        date of death shall be granted to the guardian of any
3        such minor child or children for each such child until
4        attainment of age 18. Upon the death of the surviving
5        spouse leaving one or more children under the age of
6        18, or upon the death of a policeman leaving one or
7        more children under the age of 18 but no surviving
8        spouse, a monthly pension of 20% of the policeman's
9        monthly salary at the date of death shall be granted to
10        the duly appointed guardian of each such child for the
11        support and maintenance of each such child until the
12        child reaches age 18. The benefit in this paragraph is
13        in lieu of a benefit under paragraph (2) of this
14        subsection (c) but does not apply if the beneficiary
15        is entitled to receive a greater benefit under
16        paragraph (2) of this subsection (c).
17            (C) If the deceased policeman was an active
18        policeman with at least 1 1/2 but less than 10 years of
19        service at the time of death, the Tier 2 surviving
20        spouse's annuity under this paragraph (1) shall be the
21        greater of: (i) in the amount of 30% of the annual
22        maximum salary attached to the classified civil
23        service position of a first class patrolman at the
24        time of his death; or (ii) 54% of the policeman's
25        monthly salary at the time of the policeman's death.
26            If the deceased policeman was a parent of a child

 

 

SB2105- 12 -LRB102 12572 RPS 17910 b

1        or children, including any child who has been
2        conceived but not yet born, and there is a surviving
3        spouse, 12% of the policeman's monthly salary at the
4        date of death shall be granted to the guardian of any
5        such minor child or children for each such child until
6        attainment of age 18. Upon the death of the surviving
7        spouse leaving one or more children under the age of
8        18, or upon the death of a policeman leaving one or
9        more children under the age of 18 but no surviving
10        spouse, a monthly pension of 20% of the policeman's
11        monthly salary at the date of death shall be granted to
12        the duly appointed guardian of each such child for the
13        support and maintenance of each such child until the
14        child reaches age 18. The benefit in this paragraph is
15        in lieu of a benefit under paragraph (2) of this
16        subsection (c) but does not apply if the beneficiary
17        is entitled to receive a greater benefit under
18        paragraph (2) of this subsection (c).
19            (D) If the performance of an act or acts of duty
20        results directly in the death of a policeman subject
21        to this Section, or prevents him from subsequently
22        resuming active service in the police department, and
23        if the policeman's Tier 2 surviving spouse would
24        otherwise meet the eligibility requirements for a
25        compensation annuity or supplemental annuity granted
26        under Section 5-144, then in addition to the Tier 2

 

 

SB2105- 13 -LRB102 12572 RPS 17910 b

1        surviving spouse's annuity provided under subdivision
2        (A), (B), or (C) of this paragraph (1), whichever
3        applies, the Tier 2 surviving spouse shall be
4        qualified to receive compensation annuity or
5        supplemental annuity, as would be provided under
6        Section 5-144, in order to bring the total benefit up
7        to the applicable 75% salary limitation provided in
8        that Section, but subject to the Tier 2 salary cap
9        provided under subsection (b) of this Section; except
10        that no such annuity shall be paid to the surviving
11        spouse of a policeman who dies while in receipt of
12        disability benefits when the policeman's death was
13        caused by an intervening illness or injury unrelated
14        to the illness or injury that had prevented him from
15        subsequently resuming active service in the police
16        department.
17            (E) Notwithstanding any other provision of this
18        Article, the monthly Tier 2 surviving spouse's annuity
19        under subdivision (A) or (B) of this paragraph (1)
20        shall be increased on the January 1 next occurring
21        after (i) attainment of age 60 by the recipient of the
22        Tier 2 surviving spouse's annuity or (ii) the first
23        anniversary of the Tier 2 surviving spouse's annuity
24        start date, whichever is later, and on each January 1
25        thereafter, by 3% or one-half the annual unadjusted
26        percentage increase (but not less than zero) in the

 

 

SB2105- 14 -LRB102 12572 RPS 17910 b

1        consumer price index-u for the 12 months ending with
2        the September preceding each November 1, whichever is
3        less, of the originally granted Tier 2 surviving
4        spouse's annuity. If the unadjusted percentage change
5        in the consumer price index-u for a 12-month period
6        ending in September is zero or, when compared with the
7        preceding period, decreases, then the annuity shall
8        not be increased.
9            For the purposes of this Section, "consumer price
10        index-u" means the index published by the Bureau of
11        Labor Statistics of the United States Department of
12        Labor that measures the average change in prices of
13        goods and services purchased by all urban consumers,
14        United States city average, all items, 1982-84 = 100.
15        The new amount resulting from each annual adjustment
16        shall be determined by the Public Pension Division of
17        the Department of Insurance and made available to the
18        boards of the pension funds.
19            (F) Notwithstanding the other provisions of this
20        paragraph (1), for a qualified surviving spouse who is
21        entitled to a Tier 2 surviving spouse's annuity under
22        subdivision (A), (B), (C), or (D) of this paragraph
23        (1), that Tier 2 surviving spouse's annuity shall not
24        be less than the amount of the minimum widow's annuity
25        established from time to time under Section 5-167.4.
26        (2) Surviving children of a deceased policeman subject

 

 

SB2105- 15 -LRB102 12572 RPS 17910 b

1    to this Section who would otherwise meet the eligibility
2    requirements for a child's annuity set forth in Sections
3    5-151 and 5-152 shall be deemed qualified to receive a
4    Tier 2 child's annuity under this subsection (c), which
5    shall be in lieu of, but in the same amount and paid in the
6    same manner as, the child's annuity provided under those
7    Sections; except that any salary used for computing a Tier
8    2 child's annuity shall be subject to the Tier 2 salary cap
9    provided under subsection (b) of this Section. For
10    purposes of determining any pro rata reduction in child's
11    annuities under this subsection (c), references in Section
12    5-152 to the combined annuities of the family shall be
13    deemed to refer to the combined Tier 2 surviving spouse's
14    annuity, if any, and the Tier 2 child's annuities payable
15    under this subsection (c).
16        (3) Surviving parents of a deceased policeman subject
17    to this Section who would otherwise meet the eligibility
18    requirements for a parent's annuity set forth in Section
19    5-152 shall be deemed qualified to receive a Tier 2
20    parent's annuity under this subsection (c), which shall be
21    in lieu of, but in the same amount and paid in the same
22    manner as, the parent's annuity provided under Section
23    5-152.1; except that any salary used for computing a Tier
24    2 parent's annuity shall be subject to the Tier 2 salary
25    cap provided under subsection (b) of this Section. For the
26    purposes of this Section, a reference to "annuity" in

 

 

SB2105- 16 -LRB102 12572 RPS 17910 b

1    Section 5-152.1 includes: (i) in the context of a widow, a
2    Tier 2 surviving spouse's annuity and (ii) in the context
3    of a child, a Tier 2 child's annuity.
4    Notwithstanding Section 1-103.1, the changes made to this
5subsection by this amendatory Act of the 102nd General
6Assembly apply without regard to whether the deceased
7policeman was in service on or after the effective date of this
8amendatory Act of the 102nd General Assembly. The changes made
9by this amendatory Act of the 102nd General Assembly shall not
10diminish the survivor's benefits described in this Section.
11    (d) The General Assembly finds and declares that the
12provisions of this Section, as enacted by Public Act 96-1495,
13require clarification relating to necessary eligibility
14standards and the manner of determining and paying the
15intended Tier 2 benefits and contributions in order to enable
16the Fund to unambiguously implement and administer benefits
17for Tier 2 members. The changes to this Section and the
18conforming changes to Sections 5-153, 5-155, 5-163, 5-167.1
19(except for the changes to subsection (a) of that Section),
205-169, and 5-170 made by this amendatory Act of the 99th
21General Assembly are enacted to clarify the provisions of this
22Section as enacted by Public Act 96-1495, and are hereby
23declared to represent and be consistent with the original and
24continuing intent of this Section and Public Act 96-1495.
25    (e) The changes to Sections 5-153, 5-155, 5-163, 5-167.1
26(except for the changes to subsection (a) of that Section),

 

 

SB2105- 17 -LRB102 12572 RPS 17910 b

15-169, and 5-170 made by this amendatory Act of the 99th
2General Assembly are intended to be retroactive to January 1,
32011 (the effective date of Public Act 96-1495) and, for the
4purposes of Section 1-103.1 of this Code, they apply without
5regard to whether the relevant policeman was in service on or
6after the effective date of this amendatory Act of the 99th
7General Assembly.
8(Source: P.A. 99-905, eff. 11-29-16.)
 
9    Section 90. The State Mandates Act is amended by adding
10Section 8.45 as follows:
 
11    (30 ILCS 805/8.45 new)
12    Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and
138 of this Act, no reimbursement by the State is required for
14the implementation of any mandate created by this amendatory
15Act of the 102nd General Assembly.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.