102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB4007

 

Introduced 1/21/2022, by Sen. Dan McConchie

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/3  from Ch. 127, par. 523
5 ILCS 375/10  from Ch. 127, par. 530
40 ILCS 5/1-160
40 ILCS 5/1-161
40 ILCS 5/14-103.05  from Ch. 108 1/2, par. 14-103.05
40 ILCS 5/14-103.41
40 ILCS 5/14-152.1
40 ILCS 5/14-155.5 new
40 ILCS 5/20-121  from Ch. 108 1/2, par. 20-121
40 ILCS 5/20-123  from Ch. 108 1/2, par. 20-123
40 ILCS 5/20-124  from Ch. 108 1/2, par. 20-124
40 ILCS 5/20-125  from Ch. 108 1/2, par. 20-125

    Amends the Illinois Pension Code. Requires the State Employees' Retirement System of Illinois to prepare and implement a defined contribution plan by July 1, 2024 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the defined contribution plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the defined contribution plan. Provides that a person who first becomes an employee after the effective date of the amendatory Act is not required to participate in the System as a condition of employment. Provides that an employee may elect not to participate in the System by notifying the System in writing in a manner specified by the System. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming and other changes. Makes related changes in the State Employees Group Insurance Act of 1971. Effective immediately.


LRB102 25823 RPS 35166 b

 

 

A BILL FOR

 

SB4007LRB102 25823 RPS 35166 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 State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
 
6    (5 ILCS 375/3)  (from Ch. 127, par. 523)
7    Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose
11of implementing specific programs providing benefits under
12this Act.
13    (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18    (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Article Articles 2, 14 (including an
21employee who has elected to receive an alternative retirement
22cancellation payment under Section 14-108.5 of the Illinois
23Pension Code in lieu of an annuity; an employee who, in lieu of

 

 

SB4007- 2 -LRB102 25823 RPS 35166 b

1receiving an annuity under that Article, has retired under the
2defined contribution plan established under Section 14-155.5
3of that Article; or an employee who meets the criteria for
4retirement, but in lieu of receiving an annuity under that
5Article has elected to receive an accelerated pension benefit
6payment under Section 14-147.5 of that Article), or 15
7(including an employee who has retired under the optional
8retirement program established under Section 15-158.2 or who
9meets the criteria for retirement but in lieu of receiving an
10annuity under that Article has elected to receive an
11accelerated pension benefit payment under Section 15-185.5 of
12the Article), paragraph paragraphs (2), (3), or (5) of Section
1316-106 (including an employee who meets the criteria for
14retirement, but in lieu of receiving an annuity under that
15Article has elected to receive an accelerated pension benefit
16payment under Section 16-190.5 of the Illinois Pension Code),
17or Article 18 of the Illinois Pension Code; (2) any person who
18was receiving group insurance coverage under this Act as of
19March 31, 1978 by reason of his status as an annuitant, even
20though the annuity in relation to which such coverage was
21provided is a proportional annuity based on less than the
22minimum period of service required for a retirement annuity in
23the system involved; (3) any person not otherwise covered by
24this Act who has retired as a participating member under
25Article 2 of the Illinois Pension Code but is ineligible for
26the retirement annuity under Section 2-119 of the Illinois

 

 

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1Pension Code; (4) the spouse of any person who is receiving a
2retirement annuity under Article 18 of the Illinois Pension
3Code and who is covered under a group health insurance program
4sponsored by a governmental employer other than the State of
5Illinois and who has irrevocably elected to waive his or her
6coverage under this Act and to have his or her spouse
7considered as the "annuitant" under this Act and not as a
8"dependent"; or (5) an employee who retires, or has retired,
9from a qualified position, as determined according to rules
10promulgated by the Director, under a qualified local
11government, a qualified rehabilitation facility, a qualified
12domestic violence shelter or service, or a qualified child
13advocacy center. (For definition of "retired employee", see
14(p) post).
15    (b-5) (Blank).
16    (b-6) (Blank).
17    (b-7) (Blank).
18    (c) "Carrier" means (1) an insurance company, a
19corporation organized under the Limited Health Service
20Organization Act or the Voluntary Health Services Plans Act, a
21partnership, or other nongovernmental organization, which is
22authorized to do group life or group health insurance business
23in Illinois, or (2) the State of Illinois as a self-insurer.
24    (d) "Compensation" means salary or wages payable on a
25regular payroll by the State Treasurer on a warrant of the
26State Comptroller out of any State, trust or federal fund, or

 

 

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1by the Governor of the State through a disbursing officer of
2the State out of a trust or out of federal funds, or by any
3Department out of State, trust, federal or other funds held by
4the State Treasurer or the Department, to any person for
5personal services currently performed, and ordinary or
6accidental disability benefits under Articles 2, 14, 15
7(including ordinary or accidental disability benefits under
8the optional retirement program established under Section
915-158.2), paragraph paragraphs (2), (3), or (5) of Section
1016-106, or Article 18 of the Illinois Pension Code, for
11disability incurred after January 1, 1966, or benefits payable
12under the Workers' Compensation or Occupational Diseases Act
13or benefits payable under a sick pay plan established in
14accordance with Section 36 of the State Finance Act.
15"Compensation" also means salary or wages paid to an employee
16of any qualified local government, qualified rehabilitation
17facility, qualified domestic violence shelter or service, or
18qualified child advocacy center.
19    (e) "Commission" means the State Employees Group Insurance
20Advisory Commission authorized by this Act. Commencing July 1,
211984, "Commission" as used in this Act means the Commission on
22Government Forecasting and Accountability as established by
23the Legislative Commission Reorganization Act of 1984.
24    (f) "Contributory", when referred to as contributory
25coverage, shall mean optional coverages or benefits elected by
26the member toward the cost of which such member makes

 

 

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1contribution, or which are funded in whole or in part through
2the acceptance of a reduction in earnings or the foregoing of
3an increase in earnings by an employee, as distinguished from
4noncontributory coverage or benefits which are paid entirely
5by the State of Illinois without reduction of the member's
6salary.
7    (g) "Department" means any department, institution, board,
8commission, officer, court or any agency of the State
9government receiving appropriations and having power to
10certify payrolls to the Comptroller authorizing payments of
11salary and wages against such appropriations as are made by
12the General Assembly from any State fund, or against trust
13funds held by the State Treasurer and includes boards of
14trustees of the retirement systems created by Articles 2, 14,
1515, 16, and 18 of the Illinois Pension Code. "Department" also
16includes the Illinois Comprehensive Health Insurance Board,
17the Board of Examiners established under the Illinois Public
18Accounting Act, and the Illinois Finance Authority.
19    (h) "Dependent", when the term is used in the context of
20the health and life plan, means a member's spouse and any child
21(1) from birth to age 26 including an adopted child, a child
22who lives with the member from the time of the placement for
23adoption until entry of an order of adoption, a stepchild or
24adjudicated child, or a child who lives with the member if such
25member is a court appointed guardian of the child or (2) age 19
26or over who has a mental or physical disability from a cause

 

 

SB4007- 6 -LRB102 25823 RPS 35166 b

1originating prior to the age of 19 (age 26 if enrolled as an
2adult child dependent). For the health plan only, the term
3"dependent" also includes (1) any person enrolled prior to the
4effective date of this Section who is dependent upon the
5member to the extent that the member may claim such person as a
6dependent for income tax deduction purposes and (2) any person
7who has received after June 30, 2000 an organ transplant and
8who is financially dependent upon the member and eligible to
9be claimed as a dependent for income tax purposes. A member
10requesting to cover any dependent must provide documentation
11as requested by the Department of Central Management Services
12and file with the Department any and all forms required by the
13Department.
14    (i) "Director" means the Director of the Illinois
15Department of Central Management Services.
16    (j) "Eligibility period" means the period of time a member
17has to elect enrollment in programs or to select benefits
18without regard to age, sex or health.
19    (k) "Employee" means and includes each officer or employee
20in the service of a department who (1) receives his
21compensation for service rendered to the department on a
22warrant issued pursuant to a payroll certified by a department
23or on a warrant or check issued and drawn by a department upon
24a trust, federal or other fund or on a warrant issued pursuant
25to a payroll certified by an elected or duly appointed officer
26of the State or who receives payment of the performance of

 

 

SB4007- 7 -LRB102 25823 RPS 35166 b

1personal services on a warrant issued pursuant to a payroll
2certified by a Department and drawn by the Comptroller upon
3the State Treasurer against appropriations made by the General
4Assembly from any fund or against trust funds held by the State
5Treasurer, and (2) is employed full-time or part-time in a
6position normally requiring actual performance of duty during
7not less than 1/2 of a normal work period, as established by
8the Director in cooperation with each department, except that
9persons elected by popular vote will be considered employees
10during the entire term for which they are elected regardless
11of hours devoted to the service of the State, and (3) except
12that "employee" does not include any person who is not
13eligible by reason of such person's employment to participate
14in one of the State retirement systems under Articles 2, 14, 15
15(either the regular Article 15 system or the optional
16retirement program established under Section 15-158.2), or 18,
17or under paragraph (2), (3), or (5) of Section 16-106, of the
18Illinois Pension Code, but such term does include persons who
19are employed during the 6-month 6 month qualifying period
20under Article 14 of the Illinois Pension Code. Such term also
21includes any person who (1) after January 1, 1966, is
22receiving ordinary or accidental disability benefits under
23Articles 2, 14, 15 (including ordinary or accidental
24disability benefits under the optional retirement program
25established under Section 15-158.2), paragraph paragraphs (2),
26(3), or (5) of Section 16-106, or Article 18 of the Illinois

 

 

SB4007- 8 -LRB102 25823 RPS 35166 b

1Pension Code, for disability incurred after January 1, 1966,
2(2) receives total permanent or total temporary disability
3under the Workers' Compensation Act or Occupational Disease
4Act as a result of injuries sustained or illness contracted in
5the course of employment with the State of Illinois, or (3) is
6not otherwise covered under this Act and has retired as a
7participating member under Article 2 of the Illinois Pension
8Code but is ineligible for the retirement annuity under
9Section 2-119 of the Illinois Pension Code. However, a person
10who satisfies the criteria of the foregoing definition of
11"employee" except that such person is made ineligible to
12participate in the State Universities Retirement System by
13clause (4) of subsection (a) of Section 15-107 of the Illinois
14Pension Code is also an "employee" for the purposes of this
15Act. "Employee" also includes any person receiving or eligible
16for benefits under a sick pay plan established in accordance
17with Section 36 of the State Finance Act. "Employee" also
18includes (i) each officer or employee in the service of a
19qualified local government, including persons appointed as
20trustees of sanitary districts regardless of hours devoted to
21the service of the sanitary district, (ii) each employee in
22the service of a qualified rehabilitation facility, (iii) each
23full-time employee in the service of a qualified domestic
24violence shelter or service, and (iv) each full-time employee
25in the service of a qualified child advocacy center, as
26determined according to rules promulgated by the Director.

 

 

SB4007- 9 -LRB102 25823 RPS 35166 b

1    (l) "Member" means an employee, annuitant, retired
2employee, or survivor. In the case of an annuitant or retired
3employee who first becomes an annuitant or retired employee on
4or after January 13, 2012 (the effective date of Public Act
597-668), the individual must meet the minimum vesting
6requirements of the applicable retirement system in order to
7be eligible for group insurance benefits under that system. In
8the case of a survivor who first becomes a survivor on or after
9January 13, 2012 (the effective date of Public Act 97-668),
10the deceased employee, annuitant, or retired employee upon
11whom the annuity is based must have been eligible to
12participate in the group insurance system under the applicable
13retirement system in order for the survivor to be eligible for
14group insurance benefits under that system.
15    (m) "Optional coverages or benefits" means those coverages
16or benefits available to the member on his or her voluntary
17election, and at his or her own expense.
18    (n) "Program" means the group life insurance, health
19benefits and other employee benefits designed and contracted
20for by the Director under this Act.
21    (o) "Health plan" means a health benefits program offered
22by the State of Illinois for persons eligible for the plan.
23    (p) "Retired employee" means any person who would be an
24annuitant as that term is defined herein but for the fact that
25such person retired prior to January 1, 1966. Such term also
26includes any person formerly employed by the University of

 

 

SB4007- 10 -LRB102 25823 RPS 35166 b

1Illinois in the Cooperative Extension Service who would be an
2annuitant but for the fact that such person was made
3ineligible to participate in the State Universities Retirement
4System by clause (4) of subsection (a) of Section 15-107 of the
5Illinois Pension Code.
6    (q) "Survivor" means a person receiving an annuity as a
7survivor of an employee or of an annuitant. "Survivor" also
8includes: (1) the surviving dependent of a person who
9satisfies the definition of "employee" except that such person
10is made ineligible to participate in the State Universities
11Retirement System by clause (4) of subsection (a) of Section
1215-107 of the Illinois Pension Code; (2) the surviving
13dependent of any person formerly employed by the University of
14Illinois in the Cooperative Extension Service who would be an
15annuitant except for the fact that such person was made
16ineligible to participate in the State Universities Retirement
17System by clause (4) of subsection (a) of Section 15-107 of the
18Illinois Pension Code; (3) the surviving dependent of a person
19who was an annuitant under this Act by virtue of receiving an
20alternative retirement cancellation payment under Section
2114-108.5 of the Illinois Pension Code; and (4) a person who
22would be receiving an annuity as a survivor of an annuitant
23except that the annuitant elected on or after June 4, 2018 to
24receive an accelerated pension benefit payment under Section
2514-147.5, 15-185.5, or 16-190.5 of the Illinois Pension Code
26in lieu of receiving an annuity.

 

 

SB4007- 11 -LRB102 25823 RPS 35166 b

1    (q-2) "SERS" means the State Employees' Retirement System
2of Illinois, created under Article 14 of the Illinois Pension
3Code.
4    (q-3) "SURS" means the State Universities Retirement
5System, created under Article 15 of the Illinois Pension Code.
6    (q-4) "TRS" means the Teachers' Retirement System of the
7State of Illinois, created under Article 16 of the Illinois
8Pension Code.
9    (q-5) (Blank).
10    (q-6) (Blank).
11    (q-7) (Blank).
12    (r) "Medical services" means the services provided within
13the scope of their licenses by practitioners in all categories
14licensed under the Medical Practice Act of 1987.
15    (s) "Unit of local government" means any county,
16municipality, township, school district (including a
17combination of school districts under the Intergovernmental
18Cooperation Act), special district or other unit, designated
19as a unit of local government by law, which exercises limited
20governmental powers or powers in respect to limited
21governmental subjects, any not-for-profit association with a
22membership that primarily includes townships and township
23officials, that has duties that include provision of research
24service, dissemination of information, and other acts for the
25purpose of improving township government, and that is funded
26wholly or partly in accordance with Section 85-15 of the

 

 

SB4007- 12 -LRB102 25823 RPS 35166 b

1Township Code; any not-for-profit corporation or association,
2with a membership consisting primarily of municipalities, that
3operates its own utility system, and provides research,
4training, dissemination of information, or other acts to
5promote cooperation between and among municipalities that
6provide utility services and for the advancement of the goals
7and purposes of its membership; the Southern Illinois
8Collegiate Common Market, which is a consortium of higher
9education institutions in Southern Illinois; the Illinois
10Association of Park Districts; and any hospital provider that
11is owned by a county that has 100 or fewer hospital beds and
12has not already joined the program. "Qualified local
13government" means a unit of local government approved by the
14Director and participating in a program created under
15subsection (i) of Section 10 of this Act.
16    (t) "Qualified rehabilitation facility" means any
17not-for-profit organization that is accredited by the
18Commission on Accreditation of Rehabilitation Facilities or
19certified by the Department of Human Services (as successor to
20the Department of Mental Health and Developmental
21Disabilities) to provide services to persons with disabilities
22and which receives funds from the State of Illinois for
23providing those services, approved by the Director and
24participating in a program created under subsection (j) of
25Section 10 of this Act.
26    (u) "Qualified domestic violence shelter or service" means

 

 

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1any Illinois domestic violence shelter or service and its
2administrative offices funded by the Department of Human
3Services (as successor to the Illinois Department of Public
4Aid), approved by the Director and participating in a program
5created under subsection (k) of Section 10.
6    (v) "TRS benefit recipient" means a person who:
7        (1) is not a "member" as defined in this Section; and
8        (2) is receiving a monthly benefit or retirement
9    annuity under Article 16 of the Illinois Pension Code or
10    would be receiving such monthly benefit or retirement
11    annuity except that the benefit recipient elected on or
12    after June 4, 2018 to receive an accelerated pension
13    benefit payment under Section 16-190.5 of the Illinois
14    Pension Code in lieu of receiving an annuity; and
15        (3) either (i) has at least 8 years of creditable
16    service under Article 16 of the Illinois Pension Code, or
17    (ii) was enrolled in the health insurance program offered
18    under that Article on January 1, 1996, or (iii) is the
19    survivor of a benefit recipient who had at least 8 years of
20    creditable service under Article 16 of the Illinois
21    Pension Code or was enrolled in the health insurance
22    program offered under that Article on June 21, 1995 (the
23    effective date of Public Act 89-25), or (iv) is a
24    recipient or survivor of a recipient of a disability
25    benefit under Article 16 of the Illinois Pension Code.
26    (w) "TRS dependent beneficiary" means a person who:

 

 

SB4007- 14 -LRB102 25823 RPS 35166 b

1        (1) is not a "member" or "dependent" as defined in
2    this Section; and
3        (2) is a TRS benefit recipient's: (A) spouse, (B)
4    dependent parent who is receiving at least half of his or
5    her support from the TRS benefit recipient, or (C)
6    natural, step, adjudicated, or adopted child who is (i)
7    under age 26, (ii) was, on January 1, 1996, participating
8    as a dependent beneficiary in the health insurance program
9    offered under Article 16 of the Illinois Pension Code, or
10    (iii) age 19 or over who has a mental or physical
11    disability from a cause originating prior to the age of 19
12    (age 26 if enrolled as an adult child).
13    "TRS dependent beneficiary" does not include, as indicated
14under paragraph (2) of this subsection (w), a dependent of the
15survivor of a TRS benefit recipient who first becomes a
16dependent of a survivor of a TRS benefit recipient on or after
17January 13, 2012 (the effective date of Public Act 97-668)
18unless that dependent would have been eligible for coverage as
19a dependent of the deceased TRS benefit recipient upon whom
20the survivor benefit is based.
21    (x) "Military leave" refers to individuals in basic
22training for reserves, special/advanced training, annual
23training, emergency call up, activation by the President of
24the United States, or any other training or duty in service to
25the United States Armed Forces.
26    (y) (Blank).

 

 

SB4007- 15 -LRB102 25823 RPS 35166 b

1    (z) "Community college benefit recipient" means a person
2who:
3        (1) is not a "member" as defined in this Section; and
4        (2) is receiving a monthly survivor's annuity or
5    retirement annuity under Article 15 of the Illinois
6    Pension Code or would be receiving such monthly survivor's
7    annuity or retirement annuity except that the benefit
8    recipient elected on or after June 4, 2018 to receive an
9    accelerated pension benefit payment under Section 15-185.5
10    of the Illinois Pension Code in lieu of receiving an
11    annuity; and
12        (3) either (i) was a full-time employee of a community
13    college district or an association of community college
14    boards created under the Public Community College Act
15    (other than an employee whose last employer under Article
16    15 of the Illinois Pension Code was a community college
17    district subject to Article VII of the Public Community
18    College Act) and was eligible to participate in a group
19    health benefit plan as an employee during the time of
20    employment with a community college district (other than a
21    community college district subject to Article VII of the
22    Public Community College Act) or an association of
23    community college boards, or (ii) is the survivor of a
24    person described in item (i).
25    (aa) "Community college dependent beneficiary" means a
26person who:

 

 

SB4007- 16 -LRB102 25823 RPS 35166 b

1        (1) is not a "member" or "dependent" as defined in
2    this Section; and
3        (2) is a community college benefit recipient's: (A)
4    spouse, (B) dependent parent who is receiving at least
5    half of his or her support from the community college
6    benefit recipient, or (C) natural, step, adjudicated, or
7    adopted child who is (i) under age 26, or (ii) age 19 or
8    over and has a mental or physical disability from a cause
9    originating prior to the age of 19 (age 26 if enrolled as
10    an adult child).
11    "Community college dependent beneficiary" does not
12include, as indicated under paragraph (2) of this subsection
13(aa), a dependent of the survivor of a community college
14benefit recipient who first becomes a dependent of a survivor
15of a community college benefit recipient on or after January
1613, 2012 (the effective date of Public Act 97-668) unless that
17dependent would have been eligible for coverage as a dependent
18of the deceased community college benefit recipient upon whom
19the survivor annuity is based.
20    (bb) "Qualified child advocacy center" means any Illinois
21child advocacy center and its administrative offices funded by
22the Department of Children and Family Services, as defined by
23the Children's Advocacy Center Act (55 ILCS 80/), approved by
24the Director and participating in a program created under
25subsection (n) of Section 10.
26    (cc) "Placement for adoption" means the assumption and

 

 

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1retention by a member of a legal obligation for total or
2partial support of a child in anticipation of adoption of the
3child. The child's placement with the member terminates upon
4the termination of such legal obligation.
5(Source: P.A. 101-242, eff. 8-9-19; 102-558, eff. 8-20-21;
6revised 12-2-21.)
 
7    (5 ILCS 375/10)  (from Ch. 127, par. 530)
8    Sec. 10. Contributions by the State and members.
9    (a) The State shall pay the cost of basic non-contributory
10group life insurance and, subject to member paid contributions
11set by the Department or required by this Section and except as
12provided in this Section, the basic program of group health
13benefits on each eligible member, except a member, not
14otherwise covered by this Act, who has retired as a
15participating member under Article 2 of the Illinois Pension
16Code but is ineligible for the retirement annuity under
17Section 2-119 of the Illinois Pension Code, and part of each
18eligible member's and retired member's premiums for health
19insurance coverage for enrolled dependents as provided by
20Section 9. The State shall pay the cost of the basic program of
21group health benefits only after benefits are reduced by the
22amount of benefits covered by Medicare for all members and
23dependents who are eligible for benefits under Social Security
24or the Railroad Retirement system or who had sufficient
25Medicare-covered government employment, except that such

 

 

SB4007- 18 -LRB102 25823 RPS 35166 b

1reduction in benefits shall apply only to those members and
2dependents who (1) first become eligible for such Medicare
3coverage on or after July 1, 1992; or (2) are
4Medicare-eligible members or dependents of a local government
5unit which began participation in the program on or after July
61, 1992; or (3) remain eligible for, but no longer receive
7Medicare coverage which they had been receiving on or after
8July 1, 1992. The Department may determine the aggregate level
9of the State's contribution on the basis of actual cost of
10medical services adjusted for age, sex or geographic or other
11demographic characteristics which affect the costs of such
12programs.
13    The cost of participation in the basic program of group
14health benefits for the dependent or survivor of a living or
15deceased retired employee who was formerly employed by the
16University of Illinois in the Cooperative Extension Service
17and would be an annuitant but for the fact that he or she was
18made ineligible to participate in the State Universities
19Retirement System by clause (4) of subsection (a) of Section
2015-107 of the Illinois Pension Code shall not be greater than
21the cost of participation that would otherwise apply to that
22dependent or survivor if he or she were the dependent or
23survivor of an annuitant under the State Universities
24Retirement System.
25    (a-1) (Blank).
26    (a-2) (Blank).

 

 

SB4007- 19 -LRB102 25823 RPS 35166 b

1    (a-3) (Blank).
2    (a-4) (Blank).
3    (a-5) (Blank).
4    (a-6) (Blank).
5    (a-7) (Blank).
6    (a-8) Any annuitant, survivor, or retired employee may
7waive or terminate coverage in the program of group health
8benefits. Any such annuitant, survivor, or retired employee
9who has waived or terminated coverage may enroll or re-enroll
10in the program of group health benefits only during the annual
11benefit choice period, as determined by the Director; except
12that in the event of termination of coverage due to nonpayment
13of premiums, the annuitant, survivor, or retired employee may
14not re-enroll in the program.
15    (a-8.5) Beginning on the effective date of this amendatory
16Act of the 97th General Assembly, the Director of Central
17Management Services shall, on an annual basis, determine the
18amount that the State shall contribute toward the basic
19program of group health benefits on behalf of annuitants
20(including individuals who (i) participated in the General
21Assembly Retirement System, the State Employees' Retirement
22System of Illinois, the State Universities Retirement System,
23the Teachers' Retirement System of the State of Illinois, or
24the Judges Retirement System of Illinois and (ii) qualify as
25annuitants under subsection (b) of Section 3 of this Act),
26survivors (including individuals who (i) receive an annuity as

 

 

SB4007- 20 -LRB102 25823 RPS 35166 b

1a survivor of an individual who participated in the General
2Assembly Retirement System, the State Employees' Retirement
3System of Illinois, the State Universities Retirement System,
4the Teachers' Retirement System of the State of Illinois, or
5the Judges Retirement System of Illinois and (ii) qualify as
6survivors under subsection (q) of Section 3 of this Act), and
7retired employees (as defined in subsection (p) of Section 3
8of this Act). The remainder of the cost of coverage for each
9annuitant, survivor, or retired employee, as determined by the
10Director of Central Management Services, shall be the
11responsibility of that annuitant, survivor, or retired
12employee.
13    Contributions required of annuitants, survivors, and
14retired employees shall be the same for all retirement systems
15and shall also be based on whether an individual has made an
16election under Section 15-135.1 of the Illinois Pension Code.
17Contributions may be based on annuitants', survivors', or
18retired employees' Medicare eligibility, but may not be based
19on Social Security eligibility.
20    (a-9) No later than May 1 of each calendar year, the
21Director of Central Management Services shall certify in
22writing to the Executive Secretary of the State Employees'
23Retirement System of Illinois the amounts of the Medicare
24supplement health care premiums and the amounts of the health
25care premiums for all other retirees who are not Medicare
26eligible.

 

 

SB4007- 21 -LRB102 25823 RPS 35166 b

1    A separate calculation of the premiums based upon the
2actual cost of each health care plan shall be so certified.
3    The Director of Central Management Services shall provide
4to the Executive Secretary of the State Employees' Retirement
5System of Illinois such information, statistics, and other
6data as he or she may require to review the premium amounts
7certified by the Director of Central Management Services.
8    The Department of Central Management Services, or any
9successor agency designated to procure healthcare contracts
10pursuant to this Act, is authorized to establish funds,
11separate accounts provided by any bank or banks as defined by
12the Illinois Banking Act, or separate accounts provided by any
13savings and loan association or associations as defined by the
14Illinois Savings and Loan Act of 1985 to be held by the
15Director, outside the State treasury, for the purpose of
16receiving the transfer of moneys from the Local Government
17Health Insurance Reserve Fund. The Department may promulgate
18rules further defining the methodology for the transfers. Any
19interest earned by moneys in the funds or accounts shall inure
20to the Local Government Health Insurance Reserve Fund. The
21transferred moneys, and interest accrued thereon, shall be
22used exclusively for transfers to administrative service
23organizations or their financial institutions for payments of
24claims to claimants and providers under the self-insurance
25health plan. The transferred moneys, and interest accrued
26thereon, shall not be used for any other purpose including,

 

 

SB4007- 22 -LRB102 25823 RPS 35166 b

1but not limited to, reimbursement of administration fees due
2the administrative service organization pursuant to its
3contract or contracts with the Department.
4    (a-10) To the extent that participation, benefits, or
5premiums under this Act are based on a person's service credit
6under an Article of the Illinois Pension Code, service credit
7terminated in exchange for an accelerated pension benefit
8payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
9Code shall be included in determining a person's service
10credit for the purposes of this Act.
11    (a-15) For purposes of determining State contributions
12under this Section, service established under a defined
13contribution plan under Section 14-155.5 of the Illinois
14Pension Code shall be included in determining an employee's
15creditable service. Any credit terminated as part of a
16transfer of contributions to a defined contribution plan under
17Section 14-155.5 of the Illinois Pension Code shall also be
18included in determining an employee's creditable service.
19    (b) State employees who become eligible for this program
20on or after January 1, 1980 in positions normally requiring
21actual performance of duty not less than 1/2 of a normal work
22period but not equal to that of a normal work period, shall be
23given the option of participating in the available program. If
24the employee elects coverage, the State shall contribute on
25behalf of such employee to the cost of the employee's benefit
26and any applicable dependent supplement, that sum which bears

 

 

SB4007- 23 -LRB102 25823 RPS 35166 b

1the same percentage as that percentage of time the employee
2regularly works when compared to normal work period.
3    (c) The basic non-contributory coverage from the basic
4program of group health benefits shall be continued for each
5employee not in pay status or on active service by reason of
6(1) leave of absence due to illness or injury, (2) authorized
7educational leave of absence or sabbatical leave, or (3)
8military leave. This coverage shall continue until expiration
9of authorized leave and return to active service, but not to
10exceed 24 months for leaves under item (1) or (2). This
1124-month limitation and the requirement of returning to active
12service shall not apply to persons receiving ordinary or
13accidental disability benefits or retirement benefits through
14the appropriate State retirement system or benefits under the
15Workers' Compensation or Occupational Disease Act.
16    (d) The basic group life insurance coverage shall
17continue, with full State contribution, where such person is
18(1) absent from active service by reason of disability arising
19from any cause other than self-inflicted, (2) on authorized
20educational leave of absence or sabbatical leave, or (3) on
21military leave.
22    (e) Where the person is in non-pay status for a period in
23excess of 30 days or on leave of absence, other than by reason
24of disability, educational or sabbatical leave, or military
25leave, such person may continue coverage only by making
26personal payment equal to the amount normally contributed by

 

 

SB4007- 24 -LRB102 25823 RPS 35166 b

1the State on such person's behalf. Such payments and coverage
2may be continued: (1) until such time as the person returns to
3a status eligible for coverage at State expense, but not to
4exceed 24 months or (2) until such person's employment or
5annuitant status with the State is terminated (exclusive of
6any additional service imposed pursuant to law).
7    (f) The Department shall establish by rule the extent to
8which other employee benefits will continue for persons in
9non-pay status or who are not in active service.
10    (g) The State shall not pay the cost of the basic
11non-contributory group life insurance, program of health
12benefits and other employee benefits for members who are
13survivors as defined by paragraphs (1) and (2) of subsection
14(q) of Section 3 of this Act. The costs of benefits for these
15survivors shall be paid by the survivors or by the University
16of Illinois Cooperative Extension Service, or any combination
17thereof. However, the State shall pay the amount of the
18reduction in the cost of participation, if any, resulting from
19the amendment to subsection (a) made by this amendatory Act of
20the 91st General Assembly.
21    (h) Those persons occupying positions with any department
22as a result of emergency appointments pursuant to Section 8b.8
23of the Personnel Code who are not considered employees under
24this Act shall be given the option of participating in the
25programs of group life insurance, health benefits and other
26employee benefits. Such persons electing coverage may

 

 

SB4007- 25 -LRB102 25823 RPS 35166 b

1participate only by making payment equal to the amount
2normally contributed by the State for similarly situated
3employees. Such amounts shall be determined by the Director.
4Such payments and coverage may be continued until such time as
5the person becomes an employee pursuant to this Act or such
6person's appointment is terminated.
7    (i) Any unit of local government within the State of
8Illinois may apply to the Director to have its employees,
9annuitants, and their dependents provided group health
10coverage under this Act on a non-insured basis. To
11participate, a unit of local government must agree to enroll
12all of its employees, who may select coverage under any group
13health benefits plan made available by the Department under
14the health benefits program established under this Section or
15a health maintenance organization that has contracted with the
16State to be available as a health care provider for employees
17as defined in this Act. A unit of local government must remit
18the entire cost of providing coverage under the health
19benefits program established under this Section or, for
20coverage under a health maintenance organization, an amount
21determined by the Director based on an analysis of the sex,
22age, geographic location, or other relevant demographic
23variables for its employees, except that the unit of local
24government shall not be required to enroll those of its
25employees who are covered spouses or dependents under the
26State group health benefits plan or another group policy or

 

 

SB4007- 26 -LRB102 25823 RPS 35166 b

1plan providing health benefits as long as (1) an appropriate
2official from the unit of local government attests that each
3employee not enrolled is a covered spouse or dependent under
4this plan or another group policy or plan, and (2) at least 50%
5of the employees are enrolled and the unit of local government
6remits the entire cost of providing coverage to those
7employees, except that a participating school district must
8have enrolled at least 50% of its full-time employees who have
9not waived coverage under the district's group health plan by
10participating in a component of the district's cafeteria plan.
11A participating school district is not required to enroll a
12full-time employee who has waived coverage under the
13district's health plan, provided that an appropriate official
14from the participating school district attests that the
15full-time employee has waived coverage by participating in a
16component of the district's cafeteria plan. For the purposes
17of this subsection, "participating school district" includes a
18unit of local government whose primary purpose is education as
19defined by the Department's rules.
20    Employees of a participating unit of local government who
21are not enrolled due to coverage under another group health
22policy or plan may enroll in the event of a qualifying change
23in status, special enrollment, special circumstance as defined
24by the Director, or during the annual Benefit Choice Period. A
25participating unit of local government may also elect to cover
26its annuitants. Dependent coverage shall be offered on an

 

 

SB4007- 27 -LRB102 25823 RPS 35166 b

1optional basis, with the costs paid by the unit of local
2government, its employees, or some combination of the two as
3determined by the unit of local government. The unit of local
4government shall be responsible for timely collection and
5transmission of dependent premiums.
6    The Director shall annually determine monthly rates of
7payment, subject to the following constraints:
8        (1) In the first year of coverage, the rates shall be
9    equal to the amount normally charged to State employees
10    for elected optional coverages or for enrolled dependents
11    coverages or other contributory coverages, or contributed
12    by the State for basic insurance coverages on behalf of
13    its employees, adjusted for differences between State
14    employees and employees of the local government in age,
15    sex, geographic location or other relevant demographic
16    variables, plus an amount sufficient to pay for the
17    additional administrative costs of providing coverage to
18    employees of the unit of local government and their
19    dependents.
20        (2) In subsequent years, a further adjustment shall be
21    made to reflect the actual prior years' claims experience
22    of the employees of the unit of local government.
23    In the case of coverage of local government employees
24under a health maintenance organization, the Director shall
25annually determine for each participating unit of local
26government the maximum monthly amount the unit may contribute

 

 

SB4007- 28 -LRB102 25823 RPS 35166 b

1toward that coverage, based on an analysis of (i) the age, sex,
2geographic location, and other relevant demographic variables
3of the unit's employees and (ii) the cost to cover those
4employees under the State group health benefits plan. The
5Director may similarly determine the maximum monthly amount
6each unit of local government may contribute toward coverage
7of its employees' dependents under a health maintenance
8organization.
9    Monthly payments by the unit of local government or its
10employees for group health benefits plan or health maintenance
11organization coverage shall be deposited in the Local
12Government Health Insurance Reserve Fund.
13    The Local Government Health Insurance Reserve Fund is
14hereby created as a nonappropriated trust fund to be held
15outside the State Treasury, with the State Treasurer as
16custodian. The Local Government Health Insurance Reserve Fund
17shall be a continuing fund not subject to fiscal year
18limitations. The Local Government Health Insurance Reserve
19Fund is not subject to administrative charges or charge-backs,
20including but not limited to those authorized under Section 8h
21of the State Finance Act. All revenues arising from the
22administration of the health benefits program established
23under this Section shall be deposited into the Local
24Government Health Insurance Reserve Fund. Any interest earned
25on moneys in the Local Government Health Insurance Reserve
26Fund shall be deposited into the Fund. All expenditures from

 

 

SB4007- 29 -LRB102 25823 RPS 35166 b

1this Fund shall be used for payments for health care benefits
2for local government and rehabilitation facility employees,
3annuitants, and dependents, and to reimburse the Department or
4its administrative service organization for all expenses
5incurred in the administration of benefits. No other State
6funds may be used for these purposes.
7    A local government employer's participation or desire to
8participate in a program created under this subsection shall
9not limit that employer's duty to bargain with the
10representative of any collective bargaining unit of its
11employees.
12    (j) Any rehabilitation facility within the State of
13Illinois may apply to the Director to have its employees,
14annuitants, and their eligible dependents provided group
15health coverage under this Act on a non-insured basis. To
16participate, a rehabilitation facility must agree to enroll
17all of its employees and remit the entire cost of providing
18such coverage for its employees, except that the
19rehabilitation facility shall not be required to enroll those
20of its employees who are covered spouses or dependents under
21this plan or another group policy or plan providing health
22benefits as long as (1) an appropriate official from the
23rehabilitation facility attests that each employee not
24enrolled is a covered spouse or dependent under this plan or
25another group policy or plan, and (2) at least 50% of the
26employees are enrolled and the rehabilitation facility remits

 

 

SB4007- 30 -LRB102 25823 RPS 35166 b

1the entire cost of providing coverage to those employees.
2Employees of a participating rehabilitation facility who are
3not enrolled due to coverage under another group health policy
4or plan may enroll in the event of a qualifying change in
5status, special enrollment, special circumstance as defined by
6the Director, or during the annual Benefit Choice Period. A
7participating rehabilitation facility may also elect to cover
8its annuitants. Dependent coverage shall be offered on an
9optional basis, with the costs paid by the rehabilitation
10facility, its employees, or some combination of the 2 as
11determined by the rehabilitation facility. The rehabilitation
12facility shall be responsible for timely collection and
13transmission of dependent premiums.
14    The Director shall annually determine quarterly rates of
15payment, subject to the following constraints:
16        (1) In the first year of coverage, the rates shall be
17    equal to the amount normally charged to State employees
18    for elected optional coverages or for enrolled dependents
19    coverages or other contributory coverages on behalf of its
20    employees, adjusted for differences between State
21    employees and employees of the rehabilitation facility in
22    age, sex, geographic location or other relevant
23    demographic variables, plus an amount sufficient to pay
24    for the additional administrative costs of providing
25    coverage to employees of the rehabilitation facility and
26    their dependents.

 

 

SB4007- 31 -LRB102 25823 RPS 35166 b

1        (2) In subsequent years, a further adjustment shall be
2    made to reflect the actual prior years' claims experience
3    of the employees of the rehabilitation facility.
4    Monthly payments by the rehabilitation facility or its
5employees for group health benefits shall be deposited in the
6Local Government Health Insurance Reserve Fund.
7    (k) Any domestic violence shelter or service within the
8State of Illinois may apply to the Director to have its
9employees, annuitants, and their dependents provided group
10health coverage under this Act on a non-insured basis. To
11participate, a domestic violence shelter or service must agree
12to enroll all of its employees and pay the entire cost of
13providing such coverage for its employees. The domestic
14violence shelter shall not be required to enroll those of its
15employees who are covered spouses or dependents under this
16plan or another group policy or plan providing health benefits
17as long as (1) an appropriate official from the domestic
18violence shelter attests that each employee not enrolled is a
19covered spouse or dependent under this plan or another group
20policy or plan and (2) at least 50% of the employees are
21enrolled and the domestic violence shelter remits the entire
22cost of providing coverage to those employees. Employees of a
23participating domestic violence shelter who are not enrolled
24due to coverage under another group health policy or plan may
25enroll in the event of a qualifying change in status, special
26enrollment, or special circumstance as defined by the Director

 

 

SB4007- 32 -LRB102 25823 RPS 35166 b

1or during the annual Benefit Choice Period. A participating
2domestic violence shelter may also elect to cover its
3annuitants. Dependent coverage shall be offered on an optional
4basis, with employees, or some combination of the 2 as
5determined by the domestic violence shelter or service. The
6domestic violence shelter or service shall be responsible for
7timely collection and transmission of dependent premiums.
8    The Director shall annually determine rates of payment,
9subject to the following constraints:
10        (1) In the first year of coverage, the rates shall be
11    equal to the amount normally charged to State employees
12    for elected optional coverages or for enrolled dependents
13    coverages or other contributory coverages on behalf of its
14    employees, adjusted for differences between State
15    employees and employees of the domestic violence shelter
16    or service in age, sex, geographic location or other
17    relevant demographic variables, plus an amount sufficient
18    to pay for the additional administrative costs of
19    providing coverage to employees of the domestic violence
20    shelter or service and their dependents.
21        (2) In subsequent years, a further adjustment shall be
22    made to reflect the actual prior years' claims experience
23    of the employees of the domestic violence shelter or
24    service.
25    Monthly payments by the domestic violence shelter or
26service or its employees for group health insurance shall be

 

 

SB4007- 33 -LRB102 25823 RPS 35166 b

1deposited in the Local Government Health Insurance Reserve
2Fund.
3    (l) A public community college or entity organized
4pursuant to the Public Community College Act may apply to the
5Director initially to have only annuitants not covered prior
6to July 1, 1992 by the district's health plan provided health
7coverage under this Act on a non-insured basis. The community
8college must execute a 2-year contract to participate in the
9Local Government Health Plan. Any annuitant may enroll in the
10event of a qualifying change in status, special enrollment,
11special circumstance as defined by the Director, or during the
12annual Benefit Choice Period.
13    The Director shall annually determine monthly rates of
14payment subject to the following constraints: for those
15community colleges with annuitants only enrolled, first year
16rates shall be equal to the average cost to cover claims for a
17State member adjusted for demographics, Medicare
18participation, and other factors; and in the second year, a
19further adjustment of rates shall be made to reflect the
20actual first year's claims experience of the covered
21annuitants.
22    (l-5) The provisions of subsection (l) become inoperative
23on July 1, 1999.
24    (m) The Director shall adopt any rules deemed necessary
25for implementation of this amendatory Act of 1989 (Public Act
2686-978).

 

 

SB4007- 34 -LRB102 25823 RPS 35166 b

1    (n) Any child advocacy center within the State of Illinois
2may apply to the Director to have its employees, annuitants,
3and their dependents provided group health coverage under this
4Act on a non-insured basis. To participate, a child advocacy
5center must agree to enroll all of its employees and pay the
6entire cost of providing coverage for its employees. The child
7advocacy center shall not be required to enroll those of its
8employees who are covered spouses or dependents under this
9plan or another group policy or plan providing health benefits
10as long as (1) an appropriate official from the child advocacy
11center attests that each employee not enrolled is a covered
12spouse or dependent under this plan or another group policy or
13plan and (2) at least 50% of the employees are enrolled and the
14child advocacy center remits the entire cost of providing
15coverage to those employees. Employees of a participating
16child advocacy center who are not enrolled due to coverage
17under another group health policy or plan may enroll in the
18event of a qualifying change in status, special enrollment, or
19special circumstance as defined by the Director or during the
20annual Benefit Choice Period. A participating child advocacy
21center may also elect to cover its annuitants. Dependent
22coverage shall be offered on an optional basis, with the costs
23paid by the child advocacy center, its employees, or some
24combination of the 2 as determined by the child advocacy
25center. The child advocacy center shall be responsible for
26timely collection and transmission of dependent premiums.

 

 

SB4007- 35 -LRB102 25823 RPS 35166 b

1    The Director shall annually determine rates of payment,
2subject to the following constraints:
3        (1) In the first year of coverage, the rates shall be
4    equal to the amount normally charged to State employees
5    for elected optional coverages or for enrolled dependents
6    coverages or other contributory coverages on behalf of its
7    employees, adjusted for differences between State
8    employees and employees of the child advocacy center in
9    age, sex, geographic location, or other relevant
10    demographic variables, plus an amount sufficient to pay
11    for the additional administrative costs of providing
12    coverage to employees of the child advocacy center and
13    their dependents.
14        (2) In subsequent years, a further adjustment shall be
15    made to reflect the actual prior years' claims experience
16    of the employees of the child advocacy center.
17    Monthly payments by the child advocacy center or its
18employees for group health insurance shall be deposited into
19the Local Government Health Insurance Reserve Fund.
20(Source: P.A. 102-19, eff. 7-1-21.)
 
21    Section 10. The Illinois Pension Code is amended by
22changing Sections 1-160, 1-161, 14-103.05, 14-103.41,
2314-104.3, 14-152.1, 20-121, 20-123, 20-124, and 20-125 and by
24adding Section 14-155.5 as follows:
 

 

 

SB4007- 36 -LRB102 25823 RPS 35166 b

1    (40 ILCS 5/1-160)
2    Sec. 1-160. Provisions applicable to new hires.
3    (a) The provisions of this Section apply to a person who,
4on or after January 1, 2011, first becomes a member or a
5participant under any reciprocal retirement system or pension
6fund established under this Code, other than a retirement
7system or pension fund established under Article 2, 3, 4, 5, 6,
87, 15, or 18 of this Code, notwithstanding any other provision
9of this Code to the contrary, but do not apply to any
10self-managed plan established under this Code or to any
11participant of the retirement plan established under Section
1222-101; except that this Section applies to a person who
13elected to establish alternative credits by electing in
14writing after January 1, 2011, but before August 8, 2011,
15under Section 7-145.1 of this Code. Notwithstanding anything
16to the contrary in this Section, for purposes of this Section,
17a person who is a Tier 1 regular employee as defined in Section
187-109.4 of this Code or who participated in a retirement
19system under Article 15 prior to January 1, 2011 shall be
20deemed a person who first became a member or participant prior
21to January 1, 2011 under any retirement system or pension fund
22subject to this Section. The changes made to this Section by
23Public Act 98-596 are a clarification of existing law and are
24intended to be retroactive to January 1, 2011 (the effective
25date of Public Act 96-889), notwithstanding the provisions of
26Section 1-103.1 of this Code.

 

 

SB4007- 37 -LRB102 25823 RPS 35166 b

1    This Section does not apply to a person who first becomes a
2noncovered employee under Article 14 on or after the
3implementation date of the plan created under Section 1-161
4for that Article, unless that person elects under subsection
5(b) of Section 1-161 to instead receive the benefits provided
6under this Section and the applicable provisions of that
7Article.
8    This Section does not apply to a person who first becomes a
9member or participant under Article 16 on or after the
10implementation date of the plan created under Section 1-161
11for that Article, unless that person elects under subsection
12(b) of Section 1-161 to instead receive the benefits provided
13under this Section and the applicable provisions of that
14Article.
15    This Section does not apply to a person who elects under
16subsection (c-5) of Section 1-161 to receive the benefits
17under Section 1-161.
18    This Section does not apply to a person who first becomes a
19member or participant of an affected pension fund on or after 6
20months after the resolution or ordinance date, as defined in
21Section 1-162, unless that person elects under subsection (c)
22of Section 1-162 to receive the benefits provided under this
23Section and the applicable provisions of the Article under
24which he or she is a member or participant.
25    This Section does not apply to a person who participates
26in a defined contribution plan established under Section

 

 

SB4007- 38 -LRB102 25823 RPS 35166 b

114-155.5.
2    (b) "Final average salary" means, except as otherwise
3provided in this subsection, the average monthly (or annual)
4salary obtained by dividing the total salary or earnings
5calculated under the Article applicable to the member or
6participant during the 96 consecutive months (or 8 consecutive
7years) of service within the last 120 months (or 10 years) of
8service in which the total salary or earnings calculated under
9the applicable Article was the highest by the number of months
10(or years) of service in that period. For the purposes of a
11person who first becomes a member or participant of any
12retirement system or pension fund to which this Section
13applies on or after January 1, 2011, in this Code, "final
14average salary" shall be substituted for the following:
15        (1) (Blank).
16        (2) In Articles 8, 9, 10, 11, and 12, "highest average
17    annual salary for any 4 consecutive years within the last
18    10 years of service immediately preceding the date of
19    withdrawal".
20        (3) In Article 13, "average final salary".
21        (4) In Article 14, "final average compensation".
22        (5) In Article 17, "average salary".
23        (6) In Section 22-207, "wages or salary received by
24    him at the date of retirement or discharge".
25    A member of the Teachers' Retirement System of the State
26of Illinois who retires on or after June 1, 2021 and for whom

 

 

SB4007- 39 -LRB102 25823 RPS 35166 b

1the 2020-2021 school year is used in the calculation of the
2member's final average salary shall use the higher of the
3following for the purpose of determining the member's final
4average salary:
5        (A) the amount otherwise calculated under the first
6    paragraph of this subsection; or
7        (B) an amount calculated by the Teachers' Retirement
8    System of the State of Illinois using the average of the
9    monthly (or annual) salary obtained by dividing the total
10    salary or earnings calculated under Article 16 applicable
11    to the member or participant during the 96 months (or 8
12    years) of service within the last 120 months (or 10 years)
13    of service in which the total salary or earnings
14    calculated under the Article was the highest by the number
15    of months (or years) of service in that period.
16    (b-5) Beginning on January 1, 2011, for all purposes under
17this Code (including without limitation the calculation of
18benefits and employee contributions), the annual earnings,
19salary, or wages (based on the plan year) of a member or
20participant to whom this Section applies shall not exceed
21$106,800; however, that amount shall annually thereafter be
22increased by the lesser of (i) 3% of that amount, including all
23previous adjustments, or (ii) one-half the annual unadjusted
24percentage increase (but not less than zero) in the consumer
25price index-u for the 12 months ending with the September
26preceding each November 1, including all previous adjustments.

 

 

SB4007- 40 -LRB102 25823 RPS 35166 b

1    For the purposes of this Section, "consumer price index-u"
2means the index published by the Bureau of Labor Statistics of
3the United States Department of Labor that measures the
4average change in prices of goods and services purchased by
5all urban consumers, United States city average, all items,
61982-84 = 100. The new amount resulting from each annual
7adjustment shall be determined by the Public Pension Division
8of the Department of Insurance and made available to the
9boards of the retirement systems and pension funds by November
101 of each year.
11    (c) A member or participant is entitled to a retirement
12annuity upon written application if he or she has attained age
1367 (age 65, with respect to service under Article 12 that is
14subject to this Section, for a member or participant under
15Article 12 who first becomes a member or participant under
16Article 12 on or after January 1, 2022 or who makes the
17election under item (i) of subsection (d-15) of this Section)
18and has at least 10 years of service credit and is otherwise
19eligible under the requirements of the applicable Article.
20    A member or participant who has attained age 62 (age 60,
21with respect to service under Article 12 that is subject to
22this Section, for a member or participant under Article 12 who
23first becomes a member or participant under Article 12 on or
24after January 1, 2022 or who makes the election under item (i)
25of subsection (d-15) of this Section) and has at least 10 years
26of service credit and is otherwise eligible under the

 

 

SB4007- 41 -LRB102 25823 RPS 35166 b

1requirements of the applicable Article may elect to receive
2the lower retirement annuity provided in subsection (d) of
3this Section.
4    (c-5) A person who first becomes a member or a participant
5subject to this Section on or after July 6, 2017 (the effective
6date of Public Act 100-23), notwithstanding any other
7provision of this Code to the contrary, is entitled to a
8retirement annuity under Article 8 or Article 11 upon written
9application if he or she has attained age 65 and has at least
1010 years of service credit and is otherwise eligible under the
11requirements of Article 8 or Article 11 of this Code,
12whichever is applicable.
13    (d) The retirement annuity of a member or participant who
14is retiring after attaining age 62 (age 60, with respect to
15service under Article 12 that is subject to this Section, for a
16member or participant under Article 12 who first becomes a
17member or participant under Article 12 on or after January 1,
182022 or who makes the election under item (i) of subsection
19(d-15) of this Section) with at least 10 years of service
20credit shall be reduced by one-half of 1% for each full month
21that the member's age is under age 67 (age 65, with respect to
22service under Article 12 that is subject to this Section, for a
23member or participant under Article 12 who first becomes a
24member or participant under Article 12 on or after January 1,
252022 or who makes the election under item (i) of subsection
26(d-15) of this Section).

 

 

SB4007- 42 -LRB102 25823 RPS 35166 b

1    (d-5) The retirement annuity payable under Article 8 or
2Article 11 to an eligible person subject to subsection (c-5)
3of this Section who is retiring at age 60 with at least 10
4years of service credit shall be reduced by one-half of 1% for
5each full month that the member's age is under age 65.
6    (d-10) Each person who first became a member or
7participant under Article 8 or Article 11 of this Code on or
8after January 1, 2011 and prior to July 6, 2017 (the effective
9date of Public Act 100-23) this amendatory Act of the 100th
10General Assembly shall make an irrevocable election either:
11        (i) to be eligible for the reduced retirement age
12    provided in subsections (c-5) and (d-5) of this Section,
13    the eligibility for which is conditioned upon the member
14    or participant agreeing to the increases in employee
15    contributions for age and service annuities provided in
16    subsection (a-5) of Section 8-174 of this Code (for
17    service under Article 8) or subsection (a-5) of Section
18    11-170 of this Code (for service under Article 11); or
19        (ii) to not agree to item (i) of this subsection
20    (d-10), in which case the member or participant shall
21    continue to be subject to the retirement age provisions in
22    subsections (c) and (d) of this Section and the employee
23    contributions for age and service annuity as provided in
24    subsection (a) of Section 8-174 of this Code (for service
25    under Article 8) or subsection (a) of Section 11-170 of
26    this Code (for service under Article 11).

 

 

SB4007- 43 -LRB102 25823 RPS 35166 b

1    The election provided for in this subsection shall be made
2between October 1, 2017 and November 15, 2017. A person
3subject to this subsection who makes the required election
4shall remain bound by that election. A person subject to this
5subsection who fails for any reason to make the required
6election within the time specified in this subsection shall be
7deemed to have made the election under item (ii).
8    (d-15) Each person who first becomes a member or
9participant under Article 12 on or after January 1, 2011 and
10prior to January 1, 2022 shall make an irrevocable election
11either:
12        (i) to be eligible for the reduced retirement age
13    specified in subsections (c) and (d) of this Section, the
14    eligibility for which is conditioned upon the member or
15    participant agreeing to the increase in employee
16    contributions for service annuities specified in
17    subsection (b) of Section 12-150; or
18        (ii) to not agree to item (i) of this subsection
19    (d-15), in which case the member or participant shall not
20    be eligible for the reduced retirement age specified in
21    subsections (c) and (d) of this Section and shall not be
22    subject to the increase in employee contributions for
23    service annuities specified in subsection (b) of Section
24    12-150.
25    The election provided for in this subsection shall be made
26between January 1, 2022 and April 1, 2022. A person subject to

 

 

SB4007- 44 -LRB102 25823 RPS 35166 b

1this subsection who makes the required election shall remain
2bound by that election. A person subject to this subsection
3who fails for any reason to make the required election within
4the time specified in this subsection shall be deemed to have
5made the election under item (ii).
6    (e) Any retirement annuity or supplemental annuity shall
7be subject to annual increases on the January 1 occurring
8either on or after the attainment of age 67 (age 65, with
9respect to service under Article 12 that is subject to this
10Section, for a member or participant under Article 12 who
11first becomes a member or participant under Article 12 on or
12after January 1, 2022 or who makes the election under item (i)
13of subsection (d-15); and beginning on July 6, 2017 (the
14effective date of Public Act 100-23) this amendatory Act of
15the 100th General Assembly, age 65 with respect to service
16under Article 8 or Article 11 for eligible persons who: (i) are
17subject to subsection (c-5) of this Section; or (ii) made the
18election under item (i) of subsection (d-10) of this Section)
19or the first anniversary of the annuity start date, whichever
20is later. Each annual increase shall be calculated at 3% or
21one-half the annual unadjusted percentage increase (but not
22less than zero) in the consumer price index-u for the 12 months
23ending with the September preceding each November 1, whichever
24is less, of the originally granted retirement annuity. If the
25annual unadjusted percentage change in the consumer price
26index-u for the 12 months ending with the September preceding

 

 

SB4007- 45 -LRB102 25823 RPS 35166 b

1each November 1 is zero or there is a decrease, then the
2annuity shall not be increased.
3    For the purposes of Section 1-103.1 of this Code, the
4changes made to this Section by Public Act 102-263 this
5amendatory Act of the 102nd General Assembly are applicable
6without regard to whether the employee was in active service
7on or after August 6, 2021 (the effective date of Public Act
8102-263) this amendatory Act of the 102nd General Assembly.
9    For the purposes of Section 1-103.1 of this Code, the
10changes made to this Section by Public Act 100-23 this
11amendatory Act of the 100th General Assembly are applicable
12without regard to whether the employee was in active service
13on or after July 6, 2017 (the effective date of Public Act
14100-23) this amendatory Act of the 100th General Assembly.
15    (f) The initial survivor's or widow's annuity of an
16otherwise eligible survivor or widow of a retired member or
17participant who first became a member or participant on or
18after January 1, 2011 shall be in the amount of 66 2/3% of the
19retired member's or participant's retirement annuity at the
20date of death. In the case of the death of a member or
21participant who has not retired and who first became a member
22or participant on or after January 1, 2011, eligibility for a
23survivor's or widow's annuity shall be determined by the
24applicable Article of this Code. The initial benefit shall be
2566 2/3% of the earned annuity without a reduction due to age. A
26child's annuity of an otherwise eligible child shall be in the

 

 

SB4007- 46 -LRB102 25823 RPS 35166 b

1amount prescribed under each Article if applicable. Any
2survivor's or widow's annuity shall be increased (1) on each
3January 1 occurring on or after the commencement of the
4annuity if the deceased member died while receiving a
5retirement annuity or (2) in other cases, on each January 1
6occurring after the first anniversary of the commencement of
7the annuity. Each annual increase shall be calculated at 3% or
8one-half the annual unadjusted percentage increase (but not
9less than zero) in the consumer price index-u for the 12 months
10ending with the September preceding each November 1, whichever
11is less, of the originally granted survivor's annuity. If the
12annual unadjusted percentage change in the consumer price
13index-u for the 12 months ending with the September preceding
14each November 1 is zero or there is a decrease, then the
15annuity shall not be increased.
16    (g) The benefits in Section 14-110 apply only if the
17person is a State policeman, a fire fighter in the fire
18protection service of a department, a conservation police
19officer, an investigator for the Secretary of State, an arson
20investigator, a Commerce Commission police officer,
21investigator for the Department of Revenue or the Illinois
22Gaming Board, a security employee of the Department of
23Corrections or the Department of Juvenile Justice, or a
24security employee of the Department of Innovation and
25Technology, as those terms are defined in subsection (b) and
26subsection (c) of Section 14-110. A person who meets the

 

 

SB4007- 47 -LRB102 25823 RPS 35166 b

1requirements of this Section is entitled to an annuity
2calculated under the provisions of Section 14-110, in lieu of
3the regular or minimum retirement annuity, only if the person
4has withdrawn from service with not less than 20 years of
5eligible creditable service and has attained age 60,
6regardless of whether the attainment of age 60 occurs while
7the person is still in service.
8    (h) If a person who first becomes a member or a participant
9of a retirement system or pension fund subject to this Section
10on or after January 1, 2011 is receiving a retirement annuity
11or retirement pension under that system or fund and becomes a
12member or participant under any other system or fund created
13by this Code and is employed on a full-time basis, except for
14those members or participants exempted from the provisions of
15this Section under subsection (a) of this Section, then the
16person's retirement annuity or retirement pension under that
17system or fund shall be suspended during that employment. Upon
18termination of that employment, the person's retirement
19annuity or retirement pension payments shall resume and be
20recalculated if recalculation is provided for under the
21applicable Article of this Code.
22    If a person who first becomes a member of a retirement
23system or pension fund subject to this Section on or after
24January 1, 2012 and is receiving a retirement annuity or
25retirement pension under that system or fund and accepts on a
26contractual basis a position to provide services to a

 

 

SB4007- 48 -LRB102 25823 RPS 35166 b

1governmental entity from which he or she has retired, then
2that person's annuity or retirement pension earned as an
3active employee of the employer shall be suspended during that
4contractual service. A person receiving an annuity or
5retirement pension under this Code shall notify the pension
6fund or retirement system from which he or she is receiving an
7annuity or retirement pension, as well as his or her
8contractual employer, of his or her retirement status before
9accepting contractual employment. A person who fails to submit
10such notification shall be guilty of a Class A misdemeanor and
11required to pay a fine of $1,000. Upon termination of that
12contractual employment, the person's retirement annuity or
13retirement pension payments shall resume and, if appropriate,
14be recalculated under the applicable provisions of this Code.
15    (i) (Blank).
16    (j) In the case of a conflict between the provisions of
17this Section and any other provision of this Code, the
18provisions of this Section shall control.
19(Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
20102-210, eff. 1-1-22; 102-263, eff. 8-6-21; revised 9-28-21.)
 
21    (40 ILCS 5/1-161)
22    Sec. 1-161. Optional benefits for certain Tier 2 members
23under Articles 14, 15, and 16.
24    (a) Notwithstanding any other provision of this Code to
25the contrary, the provisions of this Section apply to a person

 

 

SB4007- 49 -LRB102 25823 RPS 35166 b

1who first becomes a member or a participant under Article 14,
215, or 16 on or after the implementation date under this
3Section for the applicable Article and who does not make the
4election under subsection (b) or (c), whichever applies. The
5provisions of this Section also apply to a person who makes the
6election under subsection (c-5). However, the provisions of
7this Section do not apply to any participant in a self-managed
8plan or a defined contribution plan established under Section
914-155.5, nor to a covered employee under Article 14.
10    As used in this Section and Section 1-160, the
11"implementation date" under this Section means the earliest
12date upon which the board of a retirement system authorizes
13members of that system to begin participating in accordance
14with this Section, as determined by the board of that
15retirement system. Each of the retirement systems subject to
16this Section shall endeavor to make such participation
17available as soon as possible after the effective date of this
18Section and shall establish an implementation date by board
19resolution.
20    (b) In lieu of the benefits provided under this Section, a
21member or participant, except for a participant under Article
2215, may irrevocably elect the benefits under Section 1-160 and
23the benefits otherwise applicable to that member or
24participant. The election must be made within 30 days after
25becoming a member or participant. Each retirement system shall
26establish procedures for making this election.

 

 

SB4007- 50 -LRB102 25823 RPS 35166 b

1    (c) A participant under Article 15 may irrevocably elect
2the benefits otherwise provided to a Tier 2 member under
3Article 15. The election must be made within 30 days after
4becoming a member. The retirement system under Article 15
5shall establish procedures for making this election.
6    (c-5) A non-covered participant under Article 14 to whom
7Section 1-160 applies, a Tier 2 member under Article 15, or a
8participant under Article 16 to whom Section 1-160 applies may
9irrevocably elect to receive the benefits under this Section
10in lieu of the benefits under Section 1-160 or the benefits
11otherwise available to a Tier 2 member under Article 15,
12whichever is applicable. Each retirement System shall
13establish procedures for making this election.
14    (d) "Final average salary" means the average monthly (or
15annual) salary obtained by dividing the total salary or
16earnings calculated under the Article applicable to the member
17or participant during the last 120 months (or 10 years) of
18service in which the total salary or earnings calculated under
19the applicable Article was the highest by the number of months
20(or years) of service in that period. For the purposes of a
21person to whom this Section applies, in this Code, "final
22average salary" shall be substituted for "final average
23compensation" in Article 14.
24    (e) Beginning on the implementation date, for all purposes
25under this Code (including without limitation the calculation
26of benefits and employee contributions), the annual earnings,

 

 

SB4007- 51 -LRB102 25823 RPS 35166 b

1salary, compensation, or wages (based on the plan year) of a
2member or participant to whom this Section applies shall not
3at any time exceed the federal Social Security Wage Base then
4in effect.
5    (f) A member or participant is entitled to a retirement
6annuity upon written application if he or she has attained the
7normal retirement age determined by the Social Security
8Administration for that member or participant's year of birth,
9but no earlier than 67 years of age, and has at least 10 years
10of service credit and is otherwise eligible under the
11requirements of the applicable Article.
12    (g) The amount of the retirement annuity to which a member
13or participant is entitled shall be computed by multiplying
141.25% for each year of service credit by his or her final
15average salary.
16    (h) Any retirement annuity or supplemental annuity shall
17be subject to annual increases on the first anniversary of the
18annuity start date. Each annual increase shall be one-half the
19annual unadjusted percentage increase (but not less than zero)
20in the consumer price index-w for the 12 months ending with the
21September preceding each November 1 of the originally granted
22retirement annuity. If the annual unadjusted percentage change
23in the consumer price index-w for the 12 months ending with the
24September preceding each November 1 is zero or there is a
25decrease, then the annuity shall not be increased.
26    For the purposes of this Section, "consumer price index-w"

 

 

SB4007- 52 -LRB102 25823 RPS 35166 b

1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the
3average change in prices of goods and services purchased by
4Urban Wage Earners and Clerical Workers, United States city
5average, all items, 1982-84 = 100. The new amount resulting
6from each annual adjustment shall be determined by the Public
7Pension Division of the Department of Insurance and made
8available to the boards of the retirement systems and pension
9funds by November 1 of each year.
10    (i) The initial survivor's or widow's annuity of an
11otherwise eligible survivor or widow of a retired member or
12participant to whom this Section applies shall be in the
13amount of 66 2/3% of the retired member's or participant's
14retirement annuity at the date of death. In the case of the
15death of a member or participant who has not retired and to
16whom this Section applies, eligibility for a survivor's or
17widow's annuity shall be determined by the applicable Article
18of this Code. The benefit shall be 66 2/3% of the earned
19annuity without a reduction due to age. A child's annuity of an
20otherwise eligible child shall be in the amount prescribed
21under each Article if applicable.
22    (j) In lieu of any other employee contributions, except
23for the contribution to the defined contribution plan under
24subsection (k) of this Section, each employee shall contribute
256.2% of his her or salary to the retirement system. However,
26the employee contribution under this subsection shall not

 

 

SB4007- 53 -LRB102 25823 RPS 35166 b

1exceed the amount of the total normal cost of the benefits for
2all members making contributions under this Section (except
3for the defined contribution plan under subsection (k) of this
4Section), expressed as a percentage of payroll and certified
5on or before January 15 of each year by the board of trustees
6of the retirement system. If the board of trustees of the
7retirement system certifies that the 6.2% employee
8contribution rate exceeds the normal cost of the benefits
9under this Section (except for the defined contribution plan
10under subsection (k) of this Section), then on or before
11December 1 of that year, the board of trustees shall certify
12the amount of the normal cost of the benefits under this
13Section (except for the defined contribution plan under
14subsection (k) of this Section), expressed as a percentage of
15payroll, to the State Actuary and the Commission on Government
16Forecasting and Accountability, and the employee contribution
17under this subsection shall be reduced to that amount
18beginning July 1 of that year. Thereafter, if the normal cost
19of the benefits under this Section (except for the defined
20contribution plan under subsection (k) of this Section),
21expressed as a percentage of payroll and certified on or
22before January 1 of each year by the board of trustees of the
23retirement system, exceeds 6.2% of salary, then on or before
24January 15 of that year, the board of trustees shall certify
25the normal cost to the State Actuary and the Commission on
26Government Forecasting and Accountability, and the employee

 

 

SB4007- 54 -LRB102 25823 RPS 35166 b

1contributions shall revert back to 6.2% of salary beginning
2January 1 of the following year.
3    (k) In accordance with each retirement system's
4implementation date, each retirement system under Article 14,
515, or 16 shall prepare and implement a defined contribution
6plan for members or participants who are subject to this
7Section. The defined contribution plan developed under this
8subsection shall be a plan that aggregates employer and
9employee contributions in individual participant accounts
10which, after meeting any other requirements, are used for
11payouts after retirement in accordance with this subsection
12and any other applicable laws.
13        (1) Each member or participant shall contribute a
14    minimum of 4% of his or her salary to the defined
15    contribution plan.
16        (2) For each participant in the defined contribution
17    plan who has been employed with the same employer for at
18    least one year, employer contributions shall be paid into
19    that participant's accounts at a rate expressed as a
20    percentage of salary. This rate may be set for individual
21    employees, but shall be no higher than 6% of salary and
22    shall be no lower than 2% of salary.
23        (3) Employer contributions shall vest when those
24    contributions are paid into a member's or participant's
25    account.
26        (4) The defined contribution plan shall provide a

 

 

SB4007- 55 -LRB102 25823 RPS 35166 b

1    variety of options for investments. These options shall
2    include investments handled by the Illinois State Board of
3    Investment as well as private sector investment options.
4        (5) The defined contribution plan shall provide a
5    variety of options for payouts to retirees and their
6    survivors.
7        (6) To the extent authorized under federal law and as
8    authorized by the retirement system, the defined
9    contribution plan shall allow former participants in the
10    plan to transfer or roll over employee and employer
11    contributions, and the earnings thereon, into other
12    qualified retirement plans.
13        (7) Each retirement system shall reduce the employee
14    contributions credited to the member's defined
15    contribution plan account by an amount determined by that
16    retirement system to cover the cost of offering the
17    benefits under this subsection and any applicable
18    administrative fees.
19        (8) No person shall begin participating in the defined
20    contribution plan until it has attained qualified plan
21    status and received all necessary approvals from the U.S.
22    Internal Revenue Service.
23    (l) In the case of a conflict between the provisions of
24this Section and any other provision of this Code, the
25provisions of this Section shall control.
26(Source: P.A. 100-23, eff. 7-6-17.)
 

 

 

SB4007- 56 -LRB102 25823 RPS 35166 b

1    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
2    Sec. 14-103.05. Employee.
3    (a) Except as provided in subsection (e), any Any person
4employed by a Department who receives salary for personal
5services rendered to the Department on a warrant issued
6pursuant to a payroll voucher certified by a Department and
7drawn by the State Comptroller upon the State Treasurer,
8including an elected official described in subparagraph (d) of
9Section 14-104, shall become an employee for purpose of
10membership in the Retirement System on the first day of such
11employment.
12    A person entering service on or after January 1, 1972 and
13prior to January 1, 1984 shall become a member as a condition
14of employment and shall begin making contributions as of the
15first day of employment.
16    A person entering service on or after January 1, 1984
17shall, upon completion of 6 months of continuous service which
18is not interrupted by a break of more than 2 months, become a
19member as a condition of employment. Contributions shall begin
20the first of the month after completion of the qualifying
21period.
22    A person employed by the Chicago Metropolitan Agency for
23Planning on the effective date of this amendatory Act of the
2495th General Assembly who was a member of this System as an
25employee of the Chicago Area Transportation Study and makes an

 

 

SB4007- 57 -LRB102 25823 RPS 35166 b

1election under Section 14-104.13 to participate in this System
2for his or her employment with the Chicago Metropolitan Agency
3for Planning.
4    The qualifying period of 6 months of service is not
5applicable to: (1) a person who has been granted credit for
6service in a position covered by the State Universities
7Retirement System, the Teachers' Retirement System of the
8State of Illinois, the General Assembly Retirement System, or
9the Judges Retirement System of Illinois unless that service
10has been forfeited under the laws of those systems; (2) a
11person entering service on or after July 1, 1991 in a
12noncovered position; (3) a person to whom Section 14-108.2a or
1314-108.2b applies; or (4) a person to whom subsection (a-5) of
14this Section applies.
15    (a-5) Except as provided in subsection (e), a A person
16entering service on or after December 1, 2010 and before the
17effective date of this amendatory Act of the 102nd General
18Assembly shall become a member as a condition of employment
19and shall begin making contributions as of the first day of
20employment. A person serving in the qualifying period on
21December 1, 2010 will become a member on December 1, 2010 and
22shall begin making contributions as of December 1, 2010.
23    (b) The term "employee" does not include the following:
24        (1) members of the State Legislature, and persons
25    electing to become members of the General Assembly
26    Retirement System pursuant to Section 2-105;

 

 

SB4007- 58 -LRB102 25823 RPS 35166 b

1        (2) incumbents of offices normally filled by vote of
2    the people;
3        (3) except as otherwise provided in this Section, any
4    person appointed by the Governor with the advice and
5    consent of the Senate unless that person elects to
6    participate in this system;
7        (3.1) any person serving as a commissioner of an
8    ethics commission created under the State Officials and
9    Employees Ethics Act unless that person elects to
10    participate in this system with respect to that service as
11    a commissioner;
12        (3.2) any person serving as a part-time employee in
13    any of the following positions: Legislative Inspector
14    General, Special Legislative Inspector General, employee
15    of the Office of the Legislative Inspector General,
16    Executive Director of the Legislative Ethics Commission,
17    or staff of the Legislative Ethics Commission, regardless
18    of whether he or she is in active service on or after July
19    8, 2004 (the effective date of Public Act 93-685), unless
20    that person elects to participate in this System with
21    respect to that service; in this item (3.2), a "part-time
22    employee" is a person who is not required to work at least
23    35 hours per week;
24        (3.3) any person who has made an election under
25    Section 1-123 and who is serving either as legal counsel
26    in the Office of the Governor or as Chief Deputy Attorney

 

 

SB4007- 59 -LRB102 25823 RPS 35166 b

1    General;
2        (4) except as provided in Section 14-108.2 or
3    14-108.2c, any person who is covered or eligible to be
4    covered by the Teachers' Retirement System of the State of
5    Illinois, the State Universities Retirement System, or the
6    Judges Retirement System of Illinois;
7        (5) an employee of a municipality or any other
8    political subdivision of the State;
9        (6) any person who becomes an employee after June 30,
10    1979 as a public service employment program participant
11    under the Federal Comprehensive Employment and Training
12    Act and whose wages or fringe benefits are paid in whole or
13    in part by funds provided under such Act;
14        (7) enrollees of the Illinois Young Adult Conservation
15    Corps program, administered by the Department of Natural
16    Resources, authorized grantee pursuant to Title VIII of
17    the "Comprehensive Employment and Training Act of 1973",
18    29 USC 993, as now or hereafter amended;
19        (8) enrollees and temporary staff of programs
20    administered by the Department of Natural Resources under
21    the Youth Conservation Corps Act of 1970;
22        (9) any person who is a member of any professional
23    licensing or disciplinary board created under an Act
24    administered by the Department of Professional Regulation
25    or a successor agency or created or re-created after the
26    effective date of this amendatory Act of 1997, and who

 

 

SB4007- 60 -LRB102 25823 RPS 35166 b

1    receives per diem compensation rather than a salary,
2    notwithstanding that such per diem compensation is paid by
3    warrant issued pursuant to a payroll voucher; such persons
4    have never been included in the membership of this System,
5    and this amendatory Act of 1987 (P.A. 84-1472) is not
6    intended to effect any change in the status of such
7    persons;
8        (10) any person who is a member of the Illinois Health
9    Care Cost Containment Council, and receives per diem
10    compensation rather than a salary, notwithstanding that
11    such per diem compensation is paid by warrant issued
12    pursuant to a payroll voucher; such persons have never
13    been included in the membership of this System, and this
14    amendatory Act of 1987 is not intended to effect any
15    change in the status of such persons;
16        (11) any person who is a member of the Oil and Gas
17    Board created by Section 1.2 of the Illinois Oil and Gas
18    Act, and receives per diem compensation rather than a
19    salary, notwithstanding that such per diem compensation is
20    paid by warrant issued pursuant to a payroll voucher;
21        (12) a person employed by the State Board of Higher
22    Education in a position with the Illinois Century Network
23    as of June 30, 2004, who remains continuously employed
24    after that date by the Department of Central Management
25    Services in a position with the Illinois Century Network
26    and participates in the Article 15 system with respect to

 

 

SB4007- 61 -LRB102 25823 RPS 35166 b

1    that employment;
2        (13) any person who first becomes a member of the
3    Civil Service Commission on or after January 1, 2012;
4        (14) any person, other than the Director of Employment
5    Security, who first becomes a member of the Board of
6    Review of the Department of Employment Security on or
7    after January 1, 2012;
8        (15) any person who first becomes a member of the
9    Civil Service Commission on or after January 1, 2012;
10        (16) any person who first becomes a member of the
11    Illinois Liquor Control Commission on or after January 1,
12    2012;
13        (17) any person who first becomes a member of the
14    Secretary of State Merit Commission on or after January 1,
15    2012;
16        (18) any person who first becomes a member of the
17    Human Rights Commission on or after January 1, 2012 unless
18    he or she is eligible to participate in accordance with
19    subsection (d) of this Section;
20        (19) any person who first becomes a member of the
21    State Mining Board on or after January 1, 2012;
22        (20) any person who first becomes a member of the
23    Property Tax Appeal Board on or after January 1, 2012;
24        (21) any person who first becomes a member of the
25    Illinois Racing Board on or after January 1, 2012;
26        (22) any person who first becomes a member of the

 

 

SB4007- 62 -LRB102 25823 RPS 35166 b

1    Illinois State Police Merit Board on or after January 1,
2    2012;
3        (23) any person who first becomes a member of the
4    Illinois State Toll Highway Authority on or after January
5    1, 2012; or
6        (24) any person who first becomes a member of the
7    Illinois State Board of Elections on or after January 1,
8    2012.
9    (c) An individual who represents or is employed as an
10officer or employee of a statewide labor organization that
11represents members of this System may participate in the
12System and shall be deemed an employee, provided that (1) the
13individual has previously earned creditable service under this
14Article, (2) the individual files with the System an
15irrevocable election to become a participant within 6 months
16after the effective date of this amendatory Act of the 94th
17General Assembly, and (3) the individual does not receive
18credit for that employment under any other provisions of this
19Code. An employee under this subsection (c) is responsible for
20paying to the System both (i) employee contributions based on
21the actual compensation received for service with the labor
22organization and (ii) employer contributions based on the
23percentage of payroll certified by the board; all or any part
24of these contributions may be paid on the employee's behalf or
25picked up for tax purposes (if authorized under federal law)
26by the labor organization.

 

 

SB4007- 63 -LRB102 25823 RPS 35166 b

1    A person who is an employee as defined in this subsection
2(c) may establish service credit for similar employment prior
3to becoming an employee under this subsection by paying to the
4System for that employment the contributions specified in this
5subsection, plus interest at the effective rate from the date
6of service to the date of payment. However, credit shall not be
7granted under this subsection (c) for any such prior
8employment for which the applicant received credit under any
9other provision of this Code or during which the applicant was
10on a leave of absence.
11    (d) A person appointed as a member of the Human Rights
12Commission on or after June 1, 2019 may elect to participate in
13the System and shall be deemed an employee. Service and
14contributions shall begin on the first payroll period
15immediately following the employee's election to participate
16in the System.
17    A person who is an employee as described in this
18subsection (d) may establish service credit for employment as
19a Human Rights Commissioner that occurred on or after June 1,
202019 and before establishing service under this subsection by
21paying to the System for that employment the contributions
22specified in paragraph (1) of subsection (a) of Section
2314-133, plus regular interest from the date of service to the
24date of payment.
25    (e) Notwithstanding any other provision of this Article, a
26person who first becomes an employee after the effective date

 

 

SB4007- 64 -LRB102 25823 RPS 35166 b

1of this amendatory Act of the 102nd General Assembly is not
2required, as a condition of employment or otherwise, to
3participate in this System. An employee may elect not to
4participate in this System by notifying the System in a manner
5specified by the System.
6(Source: P.A. 101-10, eff. 6-5-19; 102-538, eff. 8-20-21.)
 
7    (40 ILCS 5/14-103.41)
8    Sec. 14-103.41. Tier 1 member; Tier 2 member; defined
9contribution plan member. "Tier 1 member": A member of this
10System who first became a member or participant before January
111, 2011 under any reciprocal retirement system or pension fund
12established under this Code other than a retirement system or
13pension fund established under Article 2, 3, 4, 5, 6, or 18 of
14this Code.
15    In the case of a Tier 1 member who elects to participate in
16the defined contribution plan under Section 14-155.5 of this
17Code, that Tier 1 member shall be deemed a Tier 1 member only
18with respect to service performed or established before the
19effective date of that election.
20    "Tier 2 member": A member of this System who first becomes
21a member under this Article on or after January 1, 2011 and who
22is not a Tier 1 member.
23    In the case of a Tier 2 member who elects to participate in
24the defined contribution plan under Section 14-155.5 of this
25Code, that Tier 2 member shall be deemed a Tier 2 member only

 

 

SB4007- 65 -LRB102 25823 RPS 35166 b

1with respect to service performed or established before the
2effective date of that election.
3    "Defined contribution plan member": A Tier 1 or Tier 2
4member who elects to participate in the defined contribution
5plan under Section 14-155.5 of this Code, but only with
6respect to service performed on or after the effective date of
7that election.
8(Source: P.A. 100-587, eff. 6-4-18.)
 
9    (40 ILCS 5/14-152.1)
10    Sec. 14-152.1. Application and expiration of new benefit
11increases.
12    (a) As used in this Section, "new benefit increase" means
13an increase in the amount of any benefit provided under this
14Article, or an expansion of the conditions of eligibility for
15any benefit under this Article, that results from an amendment
16to this Code that takes effect after June 1, 2005 (the
17effective date of Public Act 94-4). "New benefit increase",
18however, does not include any benefit increase resulting from
19the changes made to Article 1 or this Article by Public Act
2096-37, Public Act 100-23, Public Act 100-587, Public Act
21100-611, Public Act 101-10, Public Act 101-610, Public Act
22102-210, or this amendatory Act of the 102nd General Assembly
23or this amendatory Act of the 102nd General Assembly.
24    (b) Notwithstanding any other provision of this Code or
25any subsequent amendment to this Code, every new benefit

 

 

SB4007- 66 -LRB102 25823 RPS 35166 b

1increase is subject to this Section and shall be deemed to be
2granted only in conformance with and contingent upon
3compliance with the provisions of this Section.
4    (c) The Public Act enacting a new benefit increase must
5identify and provide for payment to the System of additional
6funding at least sufficient to fund the resulting annual
7increase in cost to the System as it accrues.
8    Every new benefit increase is contingent upon the General
9Assembly providing the additional funding required under this
10subsection. The Commission on Government Forecasting and
11Accountability shall analyze whether adequate additional
12funding has been provided for the new benefit increase and
13shall report its analysis to the Public Pension Division of
14the Department of Insurance. A new benefit increase created by
15a Public Act that does not include the additional funding
16required under this subsection is null and void. If the Public
17Pension Division determines that the additional funding
18provided for a new benefit increase under this subsection is
19or has become inadequate, it may so certify to the Governor and
20the State Comptroller and, in the absence of corrective action
21by the General Assembly, the new benefit increase shall expire
22at the end of the fiscal year in which the certification is
23made.
24    (d) Every new benefit increase shall expire 5 years after
25its effective date or on such earlier date as may be specified
26in the language enacting the new benefit increase or provided

 

 

SB4007- 67 -LRB102 25823 RPS 35166 b

1under subsection (c). This does not prevent the General
2Assembly from extending or re-creating a new benefit increase
3by law.
4    (e) Except as otherwise provided in the language creating
5the new benefit increase, a new benefit increase that expires
6under this Section continues to apply to persons who applied
7and qualified for the affected benefit while the new benefit
8increase was in effect and to the affected beneficiaries and
9alternate payees of such persons, but does not apply to any
10other person, including, without limitation, a person who
11continues in service after the expiration date and did not
12apply and qualify for the affected benefit while the new
13benefit increase was in effect.
14(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
15101-610, eff. 1-1-20; 102-210, eff. 7-30-21.)
 
16    (40 ILCS 5/14-155.5 new)
17    Sec. 14-155.5. Defined contribution plan.
18    (a) As used in this Section, "defined benefit plan" means
19the retirement plan available under this Article to Tier 1 or
20Tier 2 members who have not made the election authorized under
21this Section.
22    (b) By July 1, 2024, the System shall prepare and
23implement a defined contribution plan. The defined
24contribution plan developed under this Section shall be a plan
25that aggregates State and employee contributions in individual

 

 

SB4007- 68 -LRB102 25823 RPS 35166 b

1participant accounts that, after meeting any other
2requirements, are used for payouts after retirement in
3accordance with this Section and any other applicable laws.
4        (1) Participation in the defined contribution plan for
5    persons who elect to participate shall begin on July 1,
6    2024.
7        (2) A participant in the defined contribution plan
8    shall pay employee contributions at a rate determined by
9    the participant, but not less than 3% of compensation and
10    not more than a percentage of compensation determined by
11    the board in accordance with the requirements of State and
12    federal law.
13        (3) State contributions shall be paid into the
14    accounts of all participants in the defined contribution
15    plan at a uniform rate, expressed as a percentage of
16    compensation and determined for each year. This rate shall
17    be no higher than 7.6% of compensation and shall be no
18    lower than 3% of compensation. The State shall adjust this
19    rate annually.
20        (4) The defined contribution plan shall require 5
21    years of participation in the defined contribution plan
22    before vesting in State contributions. If the participant
23    fails to vest in them, the State contributions, and the
24    earnings thereon, shall be forfeited.
25        (5) The defined contribution plan may provide for
26    participants in the plan to be eligible for the defined

 

 

SB4007- 69 -LRB102 25823 RPS 35166 b

1    disability benefits available to other participants under
2    this Article. If it does, the System shall reduce the
3    employee contributions credited to the member's defined
4    contribution plan account by an amount determined by the
5    System to cover the cost of offering such benefits.
6        (6) The defined contribution plan shall provide a
7    variety of options for investments. These options shall
8    include investments handled by the Illinois State Board of
9    Investment as well as private sector investment options.
10        (7) The defined contribution plan shall provide a
11    variety of options for payouts to participants in the
12    defined contribution plan who are no longer active in the
13    System and their survivors.
14        (8) To the extent authorized under federal law and as
15    authorized by the System, the plan shall allow former
16    participants in the plan to transfer or roll over employee
17    and vested State contributions, and the earnings thereon,
18    from the defined contribution plan into other qualified
19    retirement plans.
20        (9) The System shall reduce the employee contributions
21    credited to the member's defined contribution plan account
22    by an amount determined by the System to cover the cost of
23    offering these benefits and any applicable administrative
24    fees.
25    (b) Under the defined contribution plan, an active Tier 1
26or Tier 2 member of this System may elect, in writing, to cease

 

 

SB4007- 70 -LRB102 25823 RPS 35166 b

1accruing benefits in the defined benefit plan and begin
2accruing benefits for future service in the defined
3contribution plan. The election to participate in the defined
4contribution plan is voluntary and irrevocable and must be
5made on or before December 31, 2023.
6        (1) Service credit under the defined contribution plan
7    may be used for determining retirement eligibility under
8    the defined benefit plan.
9        (2) On or before December 31, 2022, the System shall
10    notify all active Tier 1 and Tier 2 members who are
11    eligible to participate in the defined contribution plan.
12    The System shall mail information describing the option to
13    join the defined contribution plan to each of these
14    employees to his or her last known address on file with the
15    System. If the employee is not responsive to other means
16    of contact, it is sufficient for the System to publish the
17    details of the option on its website.
18        (3) If a person becomes an active participant of this
19    System on or after January 1, 2023, the System shall
20    notify the participant within one month after he or she
21    became an active participant that he or she is eligible to
22    participate in the defined contribution plan. The notice
23    shall be provided in the manner specified in paragraph (2)
24    of this subsection.
25        (4) Upon request for further information describing
26    the option, the System shall provide employees with

 

 

SB4007- 71 -LRB102 25823 RPS 35166 b

1    information from the System before exercising the option
2    to join the plan, including information on the impact to
3    their benefits and service. The individual consultation
4    shall include projections of the member's defined benefits
5    at retirement or earlier termination of service and the
6    value of the member's account at retirement or earlier
7    termination of service. The System shall not provide
8    advice or counseling with respect to whether the employee
9    should exercise the option. The System shall inform Tier 1
10    and Tier 2 members who are eligible to participate in the
11    defined contribution plan that they may also wish to
12    obtain information and counsel relating to their option
13    from any other available source, including but not limited
14    to labor organizations, private counsel, and financial
15    advisors.
16    (c) A Tier 1 or Tier 2 member who elects to participate in
17the defined contribution plan may irrevocably elect to
18terminate all participation in the defined benefit plan. Upon
19that election, the System shall transfer to the member's
20individual account an amount equal to the amount of
21contribution refund that the member would be eligible to
22receive if the member terminated employment on that date and
23elected a refund of contributions, including regular interest
24for the respective years. The System shall make the transfer
25as a tax-free transfer in accordance with Internal Revenue
26Service guidelines, for purposes of funding the amount

 

 

SB4007- 72 -LRB102 25823 RPS 35166 b

1credited to the member's individual account.
2    (d) In no event shall the System, its staff, its
3authorized representatives, or the Board be liable for any
4information given to an employee under this Section. The
5System may coordinate with the Department of Central
6Management Services in accordance with this amendatory Act of
7the 102nd General Assembly to provide information concerning
8the impact of the defined contribution plan set forth in this
9Section.
10    (e) Notwithstanding any other provision of this Section,
11no person shall begin participating in the defined
12contribution plan until it has attained qualified plan status
13and received all necessary approvals from the U.S. Internal
14Revenue Service.
15    (f) The System shall report on its progress under this
16Section, including the available details of the defined
17contribution plan and the System's plans for informing
18eligible Tier 1 and Tier 2 members about the plan, to the
19Governor and the General Assembly on or before January 15,
202024.
21    (g) The Illinois State Board of Investment shall be the
22plan sponsor for the defined contribution plan established
23under this Section.
24    (h) The intent of this amendatory Act of the 102nd General
25Assembly is to ensure that the State's normal cost of
26participation in the defined contribution plan is similar, and

 

 

SB4007- 73 -LRB102 25823 RPS 35166 b

1if possible equal, to the State's normal cost of participation
2in the defined benefit plan, unless a lower State's normal
3cost is necessary to ensure cost neutrality.
 
4    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 20-121. Calculation of proportional retirement
8annuities.
9    (a) Upon retirement of the employee, a proportional
10retirement annuity shall be computed by each participating
11system in which pension credit has been established on the
12basis of pension credits under each system. The computation
13shall be in accordance with the formula or method prescribed
14by each participating system which is in effect at the date of
15the employee's latest withdrawal from service covered by any
16of the systems in which he has pension credits which he elects
17to have considered under this Article. However, the amount of
18any retirement annuity payable under the self-managed plan
19established under Section 15-158.2 of this Code depends solely
20on the value of the participant's vested account balances and
21is not subject to any proportional adjustment under this
22Section.
23    (a-5) For persons who participate in a defined
24contribution plan established under Article 14 of this Code to
25whom the provisions of this Article apply, the pension credits

 

 

SB4007- 74 -LRB102 25823 RPS 35166 b

1established under the defined contribution plan may be
2considered in determining eligibility for or the amount of the
3defined benefit retirement annuity that is payable by any
4other participating system.
5    (b) Combined pension credit under all retirement systems
6subject to this Article shall be considered in determining
7whether the minimum qualification has been met and the formula
8or method of computation which shall be applied, except as may
9be otherwise provided with respect to vesting in State or
10employer contributions in a defined contribution plan. If a
11system has a step-rate formula for calculation of the
12retirement annuity, pension credits covering previous service
13which have been established under another system shall be
14considered in determining which range or ranges of the
15step-rate formula are to be applicable to the employee.
16    (c) Interest on pension credit shall continue to
17accumulate in accordance with the provisions of the law
18governing the retirement system in which the same has been
19established during the time an employee is in the service of
20another employer, on the assumption such employee, for
21interest purposes for pension credit, is continuing in the
22service covered by such retirement system.
23(Source: P.A. 91-887, eff. 7-6-00.)
 
24    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
25    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

SB4007- 75 -LRB102 25823 RPS 35166 b

1which has been held unconstitutional)
2    Sec. 20-123. Survivor's annuity. The provisions governing
3a retirement annuity shall be applicable to a survivor's
4annuity. Appropriate credits shall be established for
5survivor's annuity purposes in those participating systems
6which provide survivor's annuities, according to the same
7conditions and subject to the same limitations and
8restrictions herein prescribed for a retirement annuity. If a
9participating system has no survivor's annuity benefit, or if
10the survivor's annuity benefit under that system is waived,
11pension credit established in that system shall not be
12considered in determining eligibility for or the amount of the
13survivor's annuity which may be payable by any other
14participating system.
15    For persons who participate in the self-managed plan
16established under Section 15-158.2 or the portable benefit
17package established under Section 15-136.4, pension credit
18established under Article 15 may be considered in determining
19eligibility for or the amount of the survivor's annuity that
20is payable by any other participating system, but pension
21credit established in any other system shall not result in any
22right to a survivor's annuity under the Article 15 system.
23    For persons who participate in a defined contribution plan
24established under Article 14 of this Code to whom the
25provisions of this Article apply, the pension credits
26established under the defined contribution plan may be

 

 

SB4007- 76 -LRB102 25823 RPS 35166 b

1considered in determining eligibility for or the amount of the
2defined benefit survivor's annuity that is payable by any
3other participating system, but pension credits established in
4any other system shall not result in any right to or increase
5in the value of a survivor's annuity under the defined
6contribution plan, which depends solely on the options chosen
7and the value of the participant's vested account balances and
8is not subject to any proportional adjustment under this
9Section.
10(Source: P.A. 91-887, eff. 7-6-00.)
 
11    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
12    (Text of Section WITHOUT the changes made by P.A. 98-599,
13which has been held unconstitutional)
14    Sec. 20-124. Maximum benefits.
15    (a) In no event shall the combined retirement or survivors
16annuities exceed the highest annuity which would have been
17payable by any participating system in which the employee has
18pension credits, if all of his pension credits had been
19validated in that system.
20    If the combined annuities should exceed the highest
21maximum as determined in accordance with this Section, the
22respective annuities shall be reduced proportionately
23according to the ratio which the amount of each proportional
24annuity bears to the aggregate of all such annuities.
25    (b) In the case of a participant in the self-managed plan

 

 

SB4007- 77 -LRB102 25823 RPS 35166 b

1established under Section 15-158.2 of this Code to whom the
2provisions of this Article apply:
3        (i) For purposes of calculating the combined
4    retirement annuity and the proportionate reduction, if
5    any, in a retirement annuity other than one payable under
6    the self-managed plan, the amount of the Article 15
7    retirement annuity shall be deemed to be the highest
8    annuity to which the annuitant would have been entitled if
9    he or she had participated in the traditional benefit
10    package as defined in Section 15-103.1 rather than the
11    self-managed plan.
12        (ii) For purposes of calculating the combined
13    survivor's annuity and the proportionate reduction, if
14    any, in a survivor's annuity other than one payable under
15    the self-managed plan, the amount of the Article 15
16    survivor's annuity shall be deemed to be the highest
17    survivor's annuity to which the survivor would have been
18    entitled if the deceased employee had participated in the
19    traditional benefit package as defined in Section 15-103.1
20    rather than the self-managed plan.
21        (iii) Benefits payable under the self-managed plan are
22    not subject to proportionate reduction under this Section.
23    (c) In the case of a participant in a defined contribution
24plan established under Article 14 of this Code to whom the
25provisions of this Article apply:
26        (i) For purposes of calculating the combined

 

 

SB4007- 78 -LRB102 25823 RPS 35166 b

1    retirement annuity and the proportionate reduction, if
2    any, in a defined benefit retirement annuity, any benefit
3    payable under the defined contribution plan shall not be
4    considered.
5        (ii) For purposes of calculating the combined
6    survivor's annuity and the proportionate reduction, if
7    any, in a defined benefit survivor's annuity, any benefit
8    payable under the defined contribution plan shall not be
9    considered.
10        (iii) Benefits payable under a defined contribution
11    plan established under Article 14 of this Code are not
12    subject to proportionate reduction under this Section.
13(Source: P.A. 91-887, eff. 7-6-00.)
 
14    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
15    (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17    Sec. 20-125. Return to employment - suspension of
18benefits. If a retired employee returns to employment which is
19covered by a system from which he is receiving a proportional
20annuity under this Article, his proportional annuity from all
21participating systems shall be suspended during the period of
22re-employment, except that this suspension does not apply to
23any distributions payable under the self-managed plan
24established under Section 15-158.2 of this Code or under a
25defined contribution plan established under Article 14 of this

 

 

SB4007- 79 -LRB102 25823 RPS 35166 b

1Code.
2    The provisions of the Article under which such employment
3would be covered shall govern the determination of whether the
4employee has returned to employment, and if applicable the
5exemption of temporary employment or employment not exceeding
6a specified duration or frequency, for all participating
7systems from which the retired employee is receiving a
8proportional annuity under this Article, notwithstanding any
9contrary provisions in the other Articles governing such
10systems.
11(Source: P.A. 91-887, eff. 7-6-00.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.