HB3161 EnrolledLRB103 30865 RPS 57378 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by
5changing Sections 8-137 and 8-137.1 as follows:
 
6    (40 ILCS 5/8-137)   (from Ch. 108 1/2, par. 8-137)
7    (Text of Section WITHOUT the changes made by P.A. 98-641,
8which has been held unconstitutional)
9    Sec. 8-137. Automatic increase in annuity.
10    (a) An employee who retired or retires from service after
11December 31, 1959 and before January 1, 1987, having attained
12age 60 or more, shall, in January of the year after the year in
13which the first anniversary of retirement occurs, have the
14amount of his then fixed and payable monthly annuity increased
15by 1 1/2%, and such first fixed annuity as granted at
16retirement increased by a further 1 1/2% in January of each
17year thereafter. Beginning with January of the year 1972, such
18increases shall be at the rate of 2% in lieu of the aforesaid
19specified 1 1/2%, and beginning with January of the year 1984
20such increases shall be at the rate of 3%. Beginning in January
21of 1999, such increases shall be at the rate of 3% of the
22currently payable monthly annuity, including any increases
23previously granted under this Article. An employee who retires

 

 

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1on annuity after December 31, 1959 and before January 1, 1987,
2but before age 60, shall receive such increases beginning in
3January of the year after the year in which he attains age 60.
4    An employee who retires from service on or after January
51, 1987 shall, upon the first annuity payment date following
6the first anniversary of the date of retirement, or upon the
7first annuity payment date following attainment of age 60,
8whichever occurs later, have his then fixed and payable
9monthly annuity increased by 3%, and such annuity shall be
10increased by an additional 3% of the original fixed annuity on
11the same date each year thereafter. Beginning in January of
121999, such increases shall be at the rate of 3% of the
13currently payable monthly annuity, including any increases
14previously granted under this Article.
15    (a-5) Notwithstanding the provisions of subsection (a),
16upon the first annuity payment date following (1) the third
17anniversary of retirement, (2) the attainment of age 53, or
18(3) January 1, 2002, whichever occurs latest, the monthly
19annuity of an employee who retires on annuity prior to the
20attainment of age 60 and has not received an increase under
21subsection (a) shall be increased by 3%, and the annuity shall
22be increased by an additional 3% of the current payable
23monthly annuity, including any increases previously granted
24under this Article, on the same date each year thereafter. The
25increases provided under this subsection are in lieu of the
26increases provided in subsection (a).

 

 

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1    (a-6) Notwithstanding the provisions of subsections (a)
2and (a-5), for all calendar years following the year in which
3this amendatory Act of the 93rd General Assembly takes effect,
4an increase in annuity under this Section that would otherwise
5take effect at any time during the year shall instead take
6effect in January of that year.
7    (b) Subsections (a), (a-5), and (a-6) are not applicable
8to an employee retiring and receiving a term annuity, as
9herein defined, nor to any otherwise qualified employee who
10retires before he makes employee contributions (at the 1/2 of
111% rate as provided in this Act) for this additional annuity
12for not less than the equivalent of one full year. Such
13employee, however, shall make arrangement to pay to the fund a
14balance of such 1/2 of 1% contributions, based on his final
15salary, as will bring such 1/2 of 1% contributions, computed
16without interest, to the equivalent of or completion of one
17year's contributions.
18    Beginning with January, 1960, each employee shall
19contribute by means of salary deductions 1/2 of 1% of each
20salary payment, concurrently with and in addition to the
21employee contributions otherwise made for annuity purposes.
22    Each such additional contribution shall be credited to an
23account in the prior service annuity reserve, to be used,
24together with city contributions, to defray the cost of the
25specified annuity increments. Any balance in such account at
26the beginning of each calendar year shall be credited with

 

 

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1interest at the rate of 3% per annum.
2    Such additional employee contributions are not refundable,
3except to an employee who withdraws and applies for refund
4under this Article, and in cases where a term annuity becomes
5payable. In such cases his contributions shall be refunded,
6without interest, and charged to such account in the prior
7service annuity reserve.
8(Source: P.A. 92-599, eff. 6-28-02; 92-609, eff. 7-1-02;
993-654, eff. 1-16-04.)
 
10    (40 ILCS 5/8-137.1)  (from Ch. 108 1/2, par. 8-137.1)
11    (Text of Section WITHOUT the changes made by P.A. 98-641,
12which has been held unconstitutional)
13    Sec. 8-137.1. Automatic increases in annuity for certain
14heretofore retired participants. A retired municipal employee
15who (a) is receiving annuity based on a service credit of 20 or
16more years regardless of age at retirement or based on a
17service credit of 15 or more years with retirement at age 55 or
18over, and (b) does not qualify for the automatic increases in
19annuity provided for in Section 8-137 of this Article, and (c)
20elects to make a contribution to the Fund at a time and manner
21prescribed by the Retirement Board, of a sum equal to 1% of the
22amount of final monthly salary times the number of full years
23of service on which the annuity was based in those cases where
24the annuity was computed on the money purchase formula and in
25those cases in which the annuity was computed under the

 

 

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1minimum annuity formula provisions of this Article a sum equal
2to 1% of the average monthly salary on which the annuity was
3based times such number of full years of service, shall have
4his original fixed and payable monthly amount of annuity
5increased in January of the year following the year in which he
6attains the age of 65 years, if such age of 65 years is
7attained in the year 1969 or later, by an amount equal to
81-1/2%, and by an equal additional 1-1/2% in January of each
9year thereafter. Beginning with January of the year 1972, such
10increases shall be at the rate of 2% in lieu of the aforesaid
11specified 1 1/2%, and beginning January of the year 1984 such
12increases shall be at the rate of 3%. Beginning in January of
131999, such increases shall be at the rate of 3% of the
14currently payable monthly annuity, including any increases
15previously granted under this Article.
16    Whenever the retired municipal employee receiving annuity
17has attained the age of 66 or more in 1969, he shall have such
18annuity increased in January, 1970 by an amount equal to
191-1/2% multiplied by the number equal to the number of months
20of January elapsing from and including January of the year
21immediately following the year he attained the age of 65 if
22retired at or before age 65, or from and including January of
23the year immediately following the year of retirement if
24retired at an age greater than 65, to and including January,
251970, and by an equal additional 1-1/2% in January of each year
26thereafter. Beginning with January of the year 1972, such

 

 

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1increases shall be at the rate of 2% in lieu of the aforesaid
2specified 1 1/2%, and beginning January of the year 1984 such
3increases shall be at the rate of 3%. Beginning in January of
41999, such increases shall be at the rate of 3% of the
5currently payable monthly annuity, including any increases
6previously granted under this Article.
7    To defray the annual cost of such increases, the annual
8interest income of the Fund, accruing from investments held by
9the Fund, exclusive of gains or losses on sales or exchanges of
10assets during the year, over and above 4% a year, shall be used
11to the extent necessary and available to finance the cost of
12such increases for the following year, and such amount shall
13be transferred as of the end of each year, beginning with the
14year 1969, to a Fund account designated as the Supplementary
15Payment Reserve from the Investment and Interest Reserve set
16forth in Section 8-221. The sums contributed by annuitants as
17provided for in this Section shall also be placed in the
18aforesaid Supplementary Payment Reserve and shall be applied
19and used for the purposes of such Fund account, together with
20the aforesaid interest.
21    In the event the monies in the Supplementary Payment
22Reserve in any year arising from: (1) the available interest
23income as defined hereinbefore and accruing in the preceding
24year above 4% a year and (2) the contributions by retired
25persons, as set forth hereinbefore, are insufficient to make
26the total payments to all persons estimated to be entitled to

 

 

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1the annuity increases specified hereinbefore, then (3) any
2interest earnings over 4% a year beginning with the year 1969
3which were not previously used to finance such increases and
4which were transferred to the Prior Service Annuity Reserve
5may be used to the extent necessary and available to provide
6sufficient funds to finance such increases for the current
7year, and such sums shall be transferred from the Prior
8Service Annuity Reserve.
9    In the event the total monies available in the
10Supplementary Payment Reserve from the preceding indicated
11sources are insufficient to make the total payments to all
12persons entitled to such increases for the year, a
13proportionate amount computed as the ratio of the monies
14available to the total of the total payments for that year
15shall be paid to each person for that year.
16    The Fund shall be obligated for the payment of the
17increases in annuity as provided for in this Section only to
18the extent that the assets for such purpose, as specified
19herein, are available.
20(Source: P.A. 90-766, eff. 8-14-98.)
 
21    (40 ILCS 5/8-174.2 rep.)
22    Section 10. The Illinois Pension Code is amended by
23repealing Section 8-174.2.
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.