SB1235 EnrolledLRB103 25499 RPS 51848 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 15-112, 15-134.1, and 15-198 as follows:
 
6    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
7    Sec. 15-112. Final rate of earnings. "Final rate of
8earnings":
9    (a) This subsection (a) applies only to a Tier 1 member.
10    For an employee who is paid on an hourly basis or who
11receives an annual salary in installments during 12 months of
12each academic year, the average annual earnings during the 48
13consecutive calendar month period ending with the last day of
14final termination of employment or the 4 consecutive academic
15years of service in which the employee's earnings were the
16highest, whichever is greater. For any other employee, the
17average annual earnings during the 4 consecutive academic
18years of service in which his or her earnings were the highest.
19For an employee with less than 48 months or 4 consecutive
20academic years of service, the average earnings during his or
21her entire period of service. The earnings of an employee with
22more than 36 months of service under item (a) of Section
2315-113.1 prior to the date of becoming a participant are, for

 

 

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1such period, considered equal to the average earnings during
2the last 36 months of such service.
3    (b) This subsection (b) applies to a Tier 2 member.
4    For an employee who is paid on an hourly basis or who
5receives an annual salary in installments during 12 months of
6each academic year, the average annual earnings obtained by
7dividing by 8 the total earnings of the employee during the 96
8consecutive months in which the total earnings were the
9highest within the last 120 months prior to termination.
10    For any other employee, the average annual earnings during
11the 8 consecutive academic years within the 10 years prior to
12termination in which the employee's earnings were the highest.
13For an employee with less than 96 consecutive months or 8
14consecutive academic years of service, whichever is necessary,
15the average earnings during his or her entire period of
16service.
17    (c) For an employee on leave of absence with pay, or on
18leave of absence without pay who makes contributions during
19such leave, earnings are assumed to be equal to the basic
20compensation on the date the leave began.
21    (d) For an employee on disability leave, earnings are
22assumed to be equal to the basic compensation on the date
23disability occurs or the average earnings during the 24 months
24immediately preceding the month in which disability occurs,
25whichever is greater.
26    (e) For a Tier 1 member who retires on or after the

 

 

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1effective date of this amendatory Act of 1997 with at least 20
2years of service as a firefighter or police officer under this
3Article, the final rate of earnings shall be the annual rate of
4earnings received by the participant on his or her last day as
5a firefighter or police officer under this Article, if that is
6greater than the final rate of earnings as calculated under
7the other provisions of this Section.
8    (f) If a Tier 1 member is an employee for at least 6 months
9during the academic year in which his or her employment is
10terminated, the annual final rate of earnings shall be 25% of
11the sum of (1) the annual basic compensation for that year, and
12(2) the amount earned during the 36 months immediately
13preceding that year, if this is greater than the final rate of
14earnings as calculated under the other provisions of this
15Section.
16    (g) In the determination of the final rate of earnings for
17an employee, that part of an employee's earnings for any
18academic year beginning after June 30, 1997, which exceeds the
19employee's earnings with that employer for the preceding year
20by more than 20 percent shall be excluded; in the event that an
21employee has more than one employer this limitation shall be
22calculated separately for the earnings with each employer. In
23making such calculation, only the basic compensation of
24employees shall be considered, without regard to vacation or
25overtime or to contracts for summer employment. Beginning
26September 1, 2024, this subsection (g) also applies to an

 

 

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1employee who has been employed at 1/2 time or less for 3 or
2more years.
3    (h) The following are not considered as earnings in
4determining final rate of earnings: (1) severance or
5separation pay, (2) retirement pay, (3) payment for unused
6sick leave, and (4) payments from an employer for the period
7used in determining final rate of earnings for any purpose
8other than (i) services rendered, (ii) leave of absence or
9vacation granted during that period, and (iii) vacation of up
10to 56 work days allowed upon termination of employment; except
11that, if the benefit has been collectively bargained between
12the employer and the recognized collective bargaining agent
13pursuant to the Illinois Educational Labor Relations Act,
14payment received during a period of up to 2 academic years for
15unused sick leave may be considered as earnings in accordance
16with the applicable collective bargaining agreement, subject
17to the 20% increase limitation of this Section. Any unused
18sick leave considered as earnings under this Section shall not
19be taken into account in calculating service credit under
20Section 15-113.4.
21    (i) Intermittent periods of service shall be considered as
22consecutive in determining final rate of earnings.
23(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
24    (40 ILCS 5/15-134.1)  (from Ch. 108 1/2, par. 15-134.1)
25    Sec. 15-134.1. Service calculation and adjustment.

 

 

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1    (a) For the purposes of computing service for academic
2years for any participant, In computing service, the following
3schedule shall govern: one month of service means a calendar
4month during which a participant (i) qualifies as an employee
5under Section 15-107 for at least 15 or more days, and (ii)
6receives any earnings as an employee; 8 or more months of
7service during an academic year shall constitute a year of
8service; 6 or more but less than 8 months of service during an
9academic year shall constitute 3/4 of a year of service; 3 or
10more but less than 6 months of service during an academic year
11shall constitute 1/2 of a year of service; and one or more but
12less than 3 months of service during an academic year shall
13constitute 1/4 of a year of service. No more than one year of
14service may be granted per academic year, regardless of the
15number of hours or percentage of time worked. This subsection
16(a) does not apply to service periods to which subsection
17(a-5) applies.
18    (a-5) For the purposes of computing service for academic
19years for any participant, the following schedule shall
20govern: one month of service means a calendar month during
21which a participant (i) qualifies as an employee under Section
2215-107 and contributes to the System, and (ii) receives any
23earnings as an employee; 8 or more months of service during an
24academic year shall constitute a year of service; 6 or more but
25less than 8 months of service during an academic year shall
26constitute 3/4 of a year of service; 3 or more but less than 6

 

 

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1months of service during an academic year shall constitute 1/2
2of a year of service; and one or more but less than 3 months of
3service during an academic year shall constitute 1/4 of a year
4of service. No more than one year of service may be granted per
5academic year, regardless of the number of hours or percentage
6of time worked.
7    This subsection (a-5) applies to all service periods of a
8member who is a participant on or after September 1, 2024;
9except that such changes shall not apply to service periods
10that were subject to: (1) a purchase under subsection (i) of
11Section 15-107, subsection (c) of Section 15-113.1, or Section
1215-113.2, 15-113.3, 15-113.5, 15-113.6, 15-113.7, or
1315-113.11; (2) a repayment of a refund under subsection (b) of
14Section 15-154 or a distribution under subsection (j) of
15Section 15-158.2; or (3) a transfer under Section 15-113.10,
1615-134.2, or 15-134.4 if payment for such purchase, repayment,
17or transfer commenced prior to September 1, 2024.
18    (b) In calculating a retirement annuity, if a participant
19has been employed at 1/2 time or less for 3 or more years after
20September 1, 1959, service shall be granted for such
21employment in excess of 3 years, in the proportion that the
22percentage of time employed for each such year of employment
23bears to the average annual percentage of time employed during
24the period on which the final rate of earnings is based. This
25adjustment shall not be made, however, in determining the
26eligibility for a retirement annuity, disability benefits,

 

 

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1additional death benefits, or survivors' insurance. The
2percentage of time employed shall be as reported by the
3employer. This subsection (b) shall not apply to a member who
4is a participant on or after September 1, 2024.
5(Source: P.A. 87-8.)
 
6    (40 ILCS 5/15-198)
7    Sec. 15-198. Application and expiration of new benefit
8increases.
9    (a) As used in this Section, "new benefit increase" means
10an increase in the amount of any benefit provided under this
11Article, or an expansion of the conditions of eligibility for
12any benefit under this Article, that results from an amendment
13to this Code that takes effect after June 1, 2005 (the
14effective date of Public Act 94-4). "New benefit increase",
15however, does not include any benefit increase resulting from
16the changes made to Article 1 or this Article by Public Act
17100-23, Public Act 100-587, Public Act 100-769, Public Act
18101-10, Public Act 101-610, Public Act 102-16, or this
19amendatory Act of the 103rd General Assembly or this
20amendatory Act of the 102nd General Assembly.
21    (b) Notwithstanding any other provision of this Code or
22any subsequent amendment to this Code, every new benefit
23increase is subject to this Section and shall be deemed to be
24granted only in conformance with and contingent upon
25compliance with the provisions of this Section.

 

 

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

 

 

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1    (e) Except as otherwise provided in the language creating
2the new benefit increase, a new benefit increase that expires
3under this Section continues to apply to persons who applied
4and qualified for the affected benefit while the new benefit
5increase was in effect and to the affected beneficiaries and
6alternate payees of such persons, but does not apply to any
7other person, including, without limitation, a person who
8continues in service after the expiration date and did not
9apply and qualify for the affected benefit while the new
10benefit increase was in effect.
11(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
12101-610, eff. 1-1-20; 102-16, eff. 6-17-21.)
 
13    Section 97. Inseverability. The changes made to existing
14statutory law by this Act are mutually dependent and
15inseverable. If any change made to existing statutory law by
16this Act is held invalid other than as applied to a particular
17person or circumstance, then all changes made to existing
18statutory law by this Act are invalid in their entirety.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.