103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3073

 

Introduced 2/2/2024, 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, 2026 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.


LRB103 37686 RPS 67813 b

 

 

A BILL FOR

 

SB3073LRB103 37686 RPS 67813 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

 

 

SB3073- 2 -LRB103 37686 RPS 67813 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 (2), (3), or (5) of Section 16-106
13(including an employee who meets the criteria for retirement,
14but in lieu of receiving an annuity under that Article has
15elected to receive an accelerated pension benefit payment
16under Section 16-190.5 of the Illinois Pension Code), or
17Article 18 of the Illinois Pension Code; (2) any person who was
18receiving group insurance coverage under this Act as of March
1931, 1978 by reason of his status as an annuitant, even though
20the annuity in relation to which such coverage was provided is
21a proportional annuity based on less than the minimum period
22of service required for a retirement annuity in the system
23involved; (3) any person not otherwise covered by this Act who
24has retired as a participating member under Article 2 of the
25Illinois Pension Code but is ineligible for the retirement
26annuity under Section 2-119 of the Illinois Pension Code; (4)

 

 

SB3073- 3 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 4 -LRB103 37686 RPS 67813 b

1the State out of a trust or out of federal funds, or by any
2Department out of State, trust, federal or other funds held by
3the State Treasurer or the Department, to any person for
4personal services currently performed, and ordinary or
5accidental disability benefits under Articles 2, 14, or 15
6(including ordinary or accidental disability benefits under
7the optional retirement program established under Section
815-158.2), paragraph (2), (3), or (5) of Section 16-106, or
9Article 18 of the Illinois Pension Code, for disability
10incurred after January 1, 1966, or benefits payable under the
11Workers' Compensation or Occupational Diseases Act or benefits
12payable under a sick pay plan established in accordance with
13Section 36 of the State Finance Act. "Compensation" also means
14salary or wages paid to an employee of any qualified local
15government, qualified rehabilitation facility, qualified
16domestic violence shelter or service, or qualified child
17advocacy center.
18    (e) "Commission" means the State Employees Group Insurance
19Advisory Commission authorized by this Act. Commencing July 1,
201984, "Commission" as used in this Act means the Commission on
21Government Forecasting and Accountability as established by
22the Legislative Commission Reorganization Act of 1984.
23    (f) "Contributory", when referred to as contributory
24coverage, shall mean optional coverages or benefits elected by
25the member toward the cost of which such member makes
26contribution, or which are funded in whole or in part through

 

 

SB3073- 5 -LRB103 37686 RPS 67813 b

1the acceptance of a reduction in earnings or the foregoing of
2an increase in earnings by an employee, as distinguished from
3noncontributory coverage or benefits which are paid entirely
4by the State of Illinois without reduction of the member's
5salary.
6    (g) "Department" means any department, institution, board,
7commission, officer, court or any agency of the State
8government receiving appropriations and having power to
9certify payrolls to the Comptroller authorizing payments of
10salary and wages against such appropriations as are made by
11the General Assembly from any State fund, or against trust
12funds held by the State Treasurer and includes boards of
13trustees of the retirement systems created by Articles 2, 14,
1415, 16, and 18 of the Illinois Pension Code. "Department" also
15includes the Illinois Comprehensive Health Insurance Board,
16the Board of Examiners established under the Illinois Public
17Accounting Act, and the Illinois Finance Authority.
18    (h) "Dependent", when the term is used in the context of
19the health and life plan, means a member's spouse and any child
20(1) from birth to age 26 including an adopted child, a child
21who lives with the member from the time of the placement for
22adoption until entry of an order of adoption, a stepchild or
23adjudicated child, or a child who lives with the member if such
24member is a court appointed guardian of the child or (2) age 19
25or over who has a mental or physical disability from a cause
26originating prior to the age of 19 (age 26 if enrolled as an

 

 

SB3073- 6 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 7 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 8 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 9 -LRB103 37686 RPS 67813 b

1employee, or survivor. In the case of an annuitant or retired
2employee who first becomes an annuitant or retired employee on
3or after January 13, 2012 (the effective date of Public Act
497-668), the individual must meet the minimum vesting
5requirements of the applicable retirement system in order to
6be eligible for group insurance benefits under that system. In
7the case of a survivor who is not entitled to occupational
8death benefits pursuant to an applicable retirement system or
9death benefits pursuant to the Illinois Workers' Compensation
10Act, and who first becomes a survivor on or after January 13,
112012 (the effective date of Public Act 97-668), the deceased
12employee, annuitant, or retired employee upon whom the annuity
13is based must have been eligible to participate in the group
14insurance system under the applicable retirement system in
15order for the survivor to be eligible for group insurance
16benefits under that system.
17    In the case of a survivor who is entitled to occupational
18death benefits pursuant to the deceased employee's applicable
19retirement system or death benefits pursuant to the Illinois
20Workers' Compensation Act, and first becomes a survivor on or
21after January 1, 2022, the survivor is eligible for group
22health insurance benefits regardless of the deceased
23employee's minimum vesting requirements under the applicable
24retirement system, with a State contribution rate of 100%,
25until an unmarried child dependent reaches the age of 18, or
26the age of 22 if the dependent child is a full-time student, or

 

 

SB3073- 10 -LRB103 37686 RPS 67813 b

1until the adult survivor becomes eligible for benefits under
2the federal Medicare health insurance program (Title XVIII of
3the Social Security Act, as added by Public Law 89-97). In the
4case of a survivor currently receiving occupational death
5benefits pursuant to the deceased employee's applicable
6retirement system or has received death benefits pursuant to
7the Illinois Workers' Compensation Act, who first became a
8survivor prior to January 1, 2022, the survivor is eligible
9for group health insurance benefits regardless of the deceased
10employee's minimum vesting requirements under the applicable
11retirement system, with a State contribution rate of 100%,
12until an unmarried child dependent reaches the age of 18, or
13the age of 22 if the dependent child is a full-time student, or
14until the adult survivor becomes eligible for benefits under
15the federal Medicare health insurance program (Title XVIII of
16the Social Security Act, as added by Public Law 89-97). The
17changes made by this amendatory Act of the 102nd General
18Assembly with respect to survivors who first became survivors
19prior to January 1, 2022 shall apply upon request of the
20survivor on or after the effective date of this amendatory Act
21of the 102nd General Assembly.
22    (m) "Optional coverages or benefits" means those coverages
23or benefits available to the member on his or her voluntary
24election, and at his or her own expense.
25    (n) "Program" means the group life insurance, health
26benefits and other employee benefits designed and contracted

 

 

SB3073- 11 -LRB103 37686 RPS 67813 b

1for by the Director under this Act.
2    (o) "Health plan" means a health benefits program offered
3by the State of Illinois for persons eligible for the plan.
4    (p) "Retired employee" means any person who would be an
5annuitant as that term is defined herein but for the fact that
6such person retired prior to January 1, 1966. Such term also
7includes any person formerly employed by the University of
8Illinois in the Cooperative Extension Service who would be an
9annuitant but for the fact that such person was made
10ineligible to participate in the State Universities Retirement
11System by clause (4) of subsection (a) of Section 15-107 of the
12Illinois Pension Code.
13    (q) "Survivor" means a person receiving an annuity as a
14survivor of an employee or of an annuitant. "Survivor" also
15includes: (1) the surviving dependent of a person who
16satisfies the definition of "employee" except that such person
17is made ineligible to participate in the State Universities
18Retirement System by clause (4) of subsection (a) of Section
1915-107 of the Illinois Pension Code; (2) the surviving
20dependent of any person formerly employed by the University of
21Illinois in the Cooperative Extension Service who would be an
22annuitant except for the fact that such person was made
23ineligible to participate in the State Universities Retirement
24System by clause (4) of subsection (a) of Section 15-107 of the
25Illinois Pension Code; (3) the surviving dependent of a person
26who was an annuitant under this Act by virtue of receiving an

 

 

SB3073- 12 -LRB103 37686 RPS 67813 b

1alternative retirement cancellation payment under Section
214-108.5 of the Illinois Pension Code; and (4) a person who
3would be receiving an annuity as a survivor of an annuitant
4except that the annuitant elected on or after June 4, 2018 to
5receive an accelerated pension benefit payment under Section
614-147.5, 15-185.5, or 16-190.5 of the Illinois Pension Code
7in lieu of receiving an annuity.
8    (q-2) "SERS" means the State Employees' Retirement System
9of Illinois, created under Article 14 of the Illinois Pension
10Code.
11    (q-3) "SURS" means the State Universities Retirement
12System, created under Article 15 of the Illinois Pension Code.
13    (q-4) "TRS" means the Teachers' Retirement System of the
14State of Illinois, created under Article 16 of the Illinois
15Pension Code.
16    (q-5) (Blank).
17    (q-6) (Blank).
18    (q-7) (Blank).
19    (r) "Medical services" means the services provided within
20the scope of their licenses by practitioners in all categories
21licensed under the Medical Practice Act of 1987.
22    (s) "Unit of local government" means any county,
23municipality, township, school district (including a
24combination of school districts under the Intergovernmental
25Cooperation Act), special district or other unit, designated
26as a unit of local government by law, which exercises limited

 

 

SB3073- 13 -LRB103 37686 RPS 67813 b

1governmental powers or powers in respect to limited
2governmental subjects, any not-for-profit association with a
3membership that primarily includes townships and township
4officials, that has duties that include provision of research
5service, dissemination of information, and other acts for the
6purpose of improving township government, and that is funded
7wholly or partly in accordance with Section 85-15 of the
8Township Code; any not-for-profit corporation or association,
9with a membership consisting primarily of municipalities, that
10operates its own utility system, and provides research,
11training, dissemination of information, or other acts to
12promote cooperation between and among municipalities that
13provide utility services and for the advancement of the goals
14and purposes of its membership; the Southern Illinois
15Collegiate Common Market, which is a consortium of higher
16education institutions in Southern Illinois; the Illinois
17Association of Park Districts; and any hospital provider that
18is owned by a county that has 100 or fewer hospital beds and
19has not already joined the program. "Qualified local
20government" means a unit of local government approved by the
21Director and participating in a program created under
22subsection (i) of Section 10 of this Act.
23    (t) "Qualified rehabilitation facility" means any
24not-for-profit organization that is accredited by the
25Commission on Accreditation of Rehabilitation Facilities or
26certified by the Department of Human Services (as successor to

 

 

SB3073- 14 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 15 -LRB103 37686 RPS 67813 b

1    creditable service under Article 16 of the Illinois
2    Pension Code or was enrolled in the health insurance
3    program offered under that Article on June 21, 1995 (the
4    effective date of Public Act 89-25), or (iv) is a
5    recipient or survivor of a recipient of a disability
6    benefit under Article 16 of the Illinois Pension Code.
7    (w) "TRS dependent beneficiary" means a person who:
8        (1) is not a "member" or "dependent" as defined in
9    this Section; and
10        (2) is a TRS benefit recipient's: (A) spouse, (B)
11    dependent parent who is receiving at least half of his or
12    her support from the TRS benefit recipient, or (C)
13    natural, step, adjudicated, or adopted child who is (i)
14    under age 26, (ii) was, on January 1, 1996, participating
15    as a dependent beneficiary in the health insurance program
16    offered under Article 16 of the Illinois Pension Code, or
17    (iii) age 19 or over who has a mental or physical
18    disability from a cause originating prior to the age of 19
19    (age 26 if enrolled as an adult child).
20    "TRS dependent beneficiary" does not include, as indicated
21under paragraph (2) of this subsection (w), a dependent of the
22survivor of a TRS benefit recipient who first becomes a
23dependent of a survivor of a TRS benefit recipient on or after
24January 13, 2012 (the effective date of Public Act 97-668)
25unless that dependent would have been eligible for coverage as
26a dependent of the deceased TRS benefit recipient upon whom

 

 

SB3073- 16 -LRB103 37686 RPS 67813 b

1the survivor benefit is based.
2    (x) "Military leave" refers to individuals in basic
3training for reserves, special/advanced training, annual
4training, emergency call up, activation by the President of
5the United States, or any other training or duty in service to
6the United States Armed Forces.
7    (y) (Blank).
8    (z) "Community college benefit recipient" means a person
9who:
10        (1) is not a "member" as defined in this Section; and
11        (2) is receiving a monthly survivor's annuity or
12    retirement annuity under Article 15 of the Illinois
13    Pension Code or would be receiving such monthly survivor's
14    annuity or retirement annuity except that the benefit
15    recipient elected on or after June 4, 2018 to receive an
16    accelerated pension benefit payment under Section 15-185.5
17    of the Illinois Pension Code in lieu of receiving an
18    annuity; and
19        (3) either (i) was a full-time employee of a community
20    college district or an association of community college
21    boards created under the Public Community College Act
22    (other than an employee whose last employer under Article
23    15 of the Illinois Pension Code was a community college
24    district subject to Article VII of the Public Community
25    College Act) and was eligible to participate in a group
26    health benefit plan as an employee during the time of

 

 

SB3073- 17 -LRB103 37686 RPS 67813 b

1    employment with a community college district (other than a
2    community college district subject to Article VII of the
3    Public Community College Act) or an association of
4    community college boards, or (ii) is the survivor of a
5    person described in item (i).
6    (aa) "Community college dependent beneficiary" means a
7person who:
8        (1) is not a "member" or "dependent" as defined in
9    this Section; and
10        (2) is a community college benefit recipient's: (A)
11    spouse, (B) dependent parent who is receiving at least
12    half of his or her support from the community college
13    benefit recipient, or (C) natural, step, adjudicated, or
14    adopted child who is (i) under age 26, or (ii) age 19 or
15    over and has a mental or physical disability from a cause
16    originating prior to the age of 19 (age 26 if enrolled as
17    an adult child).
18    "Community college dependent beneficiary" does not
19include, as indicated under paragraph (2) of this subsection
20(aa), a dependent of the survivor of a community college
21benefit recipient who first becomes a dependent of a survivor
22of a community college benefit recipient on or after January
2313, 2012 (the effective date of Public Act 97-668) unless that
24dependent would have been eligible for coverage as a dependent
25of the deceased community college benefit recipient upon whom
26the survivor annuity is based.

 

 

SB3073- 18 -LRB103 37686 RPS 67813 b

1    (bb) "Qualified child advocacy center" means any Illinois
2child advocacy center and its administrative offices funded by
3the Department of Children and Family Services, as defined by
4the Children's Advocacy Center Act (55 ILCS 80/), approved by
5the Director and participating in a program created under
6subsection (n) of Section 10.
7    (cc) "Placement for adoption" means the assumption and
8retention by a member of a legal obligation for total or
9partial support of a child in anticipation of adoption of the
10child. The child's placement with the member terminates upon
11the termination of such legal obligation.
12(Source: P.A. 101-242, eff. 8-9-19; 102-558, eff. 8-20-21;
13102-714, eff. 4-29-22; 102-813, eff 5-13-22.)
 
14    (5 ILCS 375/10)  (from Ch. 127, par. 530)
15    Sec. 10. Contributions by the State and members.
16    (a) The State shall pay the cost of basic non-contributory
17group life insurance and, subject to member paid contributions
18set by the Department or required by this Section and except as
19provided in this Section, the basic program of group health
20benefits on each eligible member, except a member, not
21otherwise covered by this Act, who has retired as a
22participating member under Article 2 of the Illinois Pension
23Code but is ineligible for the retirement annuity under
24Section 2-119 of the Illinois Pension Code, and part of each
25eligible member's and retired member's premiums for health

 

 

SB3073- 19 -LRB103 37686 RPS 67813 b

1insurance coverage for enrolled dependents as provided by
2Section 9. The State shall pay the cost of the basic program of
3group health benefits only after benefits are reduced by the
4amount of benefits covered by Medicare for all members and
5dependents who are eligible for benefits under Social Security
6or the Railroad Retirement system or who had sufficient
7Medicare-covered government employment, except that such
8reduction in benefits shall apply only to those members and
9dependents who (1) first become eligible for such Medicare
10coverage on or after July 1, 1992; or (2) are
11Medicare-eligible members or dependents of a local government
12unit which began participation in the program on or after July
131, 1992; or (3) remain eligible for, but no longer receive
14Medicare coverage which they had been receiving on or after
15July 1, 1992. The Department may determine the aggregate level
16of the State's contribution on the basis of actual cost of
17medical services adjusted for age, sex or geographic or other
18demographic characteristics which affect the costs of such
19programs.
20    The cost of participation in the basic program of group
21health benefits for the dependent or survivor of a living or
22deceased retired employee who was formerly employed by the
23University of Illinois in the Cooperative Extension Service
24and would be an annuitant but for the fact that he or she was
25made ineligible to participate in the State Universities
26Retirement System by clause (4) of subsection (a) of Section

 

 

SB3073- 20 -LRB103 37686 RPS 67813 b

115-107 of the Illinois Pension Code shall not be greater than
2the cost of participation that would otherwise apply to that
3dependent or survivor if he or she were the dependent or
4survivor of an annuitant under the State Universities
5Retirement System.
6    (a-1) (Blank).
7    (a-2) (Blank).
8    (a-3) (Blank).
9    (a-4) (Blank).
10    (a-5) (Blank).
11    (a-6) (Blank).
12    (a-7) (Blank).
13    (a-8) Any annuitant, survivor, or retired employee may
14waive or terminate coverage in the program of group health
15benefits. Any such annuitant, survivor, or retired employee
16who has waived or terminated coverage may enroll or re-enroll
17in the program of group health benefits only during the annual
18benefit choice period, as determined by the Director; except
19that in the event of termination of coverage due to nonpayment
20of premiums, the annuitant, survivor, or retired employee may
21not re-enroll in the program.
22    (a-8.5) Beginning on the effective date of this amendatory
23Act of the 97th General Assembly, the Director of Central
24Management Services shall, on an annual basis, determine the
25amount that the State shall contribute toward the basic
26program of group health benefits on behalf of annuitants

 

 

SB3073- 21 -LRB103 37686 RPS 67813 b

1(including individuals who (i) 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
6annuitants under subsection (b) of Section 3 of this Act),
7survivors (including individuals who (i) receive an annuity as
8a survivor of an individual who participated in the General
9Assembly Retirement System, the State Employees' Retirement
10System of Illinois, the State Universities Retirement System,
11the Teachers' Retirement System of the State of Illinois, or
12the Judges Retirement System of Illinois and (ii) qualify as
13survivors under subsection (q) of Section 3 of this Act), and
14retired employees (as defined in subsection (p) of Section 3
15of this Act). The remainder of the cost of coverage for each
16annuitant, survivor, or retired employee, as determined by the
17Director of Central Management Services, shall be the
18responsibility of that annuitant, survivor, or retired
19employee.
20    Contributions required of annuitants, survivors, and
21retired employees shall be the same for all retirement systems
22and shall also be based on whether an individual has made an
23election under Section 15-135.1 of the Illinois Pension Code.
24Contributions may be based on annuitants', survivors', or
25retired employees' Medicare eligibility, but may not be based
26on Social Security eligibility.

 

 

SB3073- 22 -LRB103 37686 RPS 67813 b

1    (a-9) No later than May 1 of each calendar year, the
2Director of Central Management Services shall certify in
3writing to the Executive Secretary of the State Employees'
4Retirement System of Illinois the amounts of the Medicare
5supplement health care premiums and the amounts of the health
6care premiums for all other retirees who are not Medicare
7eligible.
8    A separate calculation of the premiums based upon the
9actual cost of each health care plan shall be so certified.
10    The Director of Central Management Services shall provide
11to the Executive Secretary of the State Employees' Retirement
12System of Illinois such information, statistics, and other
13data as he or she may require to review the premium amounts
14certified by the Director of Central Management Services.
15    The Department of Central Management Services, or any
16successor agency designated to procure healthcare contracts
17pursuant to this Act, is authorized to establish funds,
18separate accounts provided by any bank or banks as defined by
19the Illinois Banking Act, or separate accounts provided by any
20savings and loan association or associations as defined by the
21Illinois Savings and Loan Act of 1985 to be held by the
22Director, outside the State treasury, for the purpose of
23receiving the transfer of moneys from the Local Government
24Health Insurance Reserve Fund. The Department may promulgate
25rules further defining the methodology for the transfers. Any
26interest earned by moneys in the funds or accounts shall inure

 

 

SB3073- 23 -LRB103 37686 RPS 67813 b

1to the Local Government Health Insurance Reserve Fund. The
2transferred moneys, and interest accrued thereon, shall be
3used exclusively for transfers to administrative service
4organizations or their financial institutions for payments of
5claims to claimants and providers under the self-insurance
6health plan. The transferred moneys, and interest accrued
7thereon, shall not be used for any other purpose including,
8but not limited to, reimbursement of administration fees due
9the administrative service organization pursuant to its
10contract or contracts with the Department.
11    (a-10) To the extent that participation, benefits, or
12premiums under this Act are based on a person's service credit
13under an Article of the Illinois Pension Code, service credit
14terminated in exchange for an accelerated pension benefit
15payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
16Code shall be included in determining a person's service
17credit for the purposes of this Act.
18    (a-15) For purposes of determining State contributions
19under this Section, service established under a defined
20contribution plan under Section 14-155.5 of the Illinois
21Pension Code shall be included in determining an employee's
22creditable service. Any credit terminated as part of a
23transfer of contributions to a defined contribution plan under
24Section 14-155.5 of the Illinois Pension Code shall also be
25included in determining an employee's creditable service.
26    (b) State employees who become eligible for this program

 

 

SB3073- 24 -LRB103 37686 RPS 67813 b

1on or after January 1, 1980 in positions normally requiring
2actual performance of duty not less than 1/2 of a normal work
3period but not equal to that of a normal work period, shall be
4given the option of participating in the available program. If
5the employee elects coverage, the State shall contribute on
6behalf of such employee to the cost of the employee's benefit
7and any applicable dependent supplement, that sum which bears
8the same percentage as that percentage of time the employee
9regularly works when compared to normal work period.
10    (c) The basic non-contributory coverage from the basic
11program of group health benefits shall be continued for each
12employee not in pay status or on active service by reason of
13(1) leave of absence due to illness or injury, (2) authorized
14educational leave of absence or sabbatical leave, or (3)
15military leave. This coverage shall continue until expiration
16of authorized leave and return to active service, but not to
17exceed 24 months for leaves under item (1) or (2). This
1824-month limitation and the requirement of returning to active
19service shall not apply to persons receiving ordinary or
20accidental disability benefits or retirement benefits through
21the appropriate State retirement system or benefits under the
22Workers' Compensation or Occupational Disease Act.
23    (d) The basic group life insurance coverage shall
24continue, with full State contribution, where such person is
25(1) absent from active service by reason of disability arising
26from any cause other than self-inflicted, (2) on authorized

 

 

SB3073- 25 -LRB103 37686 RPS 67813 b

1educational leave of absence or sabbatical leave, or (3) on
2military leave.
3    (e) Where the person is in non-pay status for a period in
4excess of 30 days or on leave of absence, other than by reason
5of disability, educational or sabbatical leave, or military
6leave, such person may continue coverage only by making
7personal payment equal to the amount normally contributed by
8the State on such person's behalf. Such payments and coverage
9may be continued: (1) until such time as the person returns to
10a status eligible for coverage at State expense, but not to
11exceed 24 months or (2) until such person's employment or
12annuitant status with the State is terminated (exclusive of
13any additional service imposed pursuant to law).
14    (f) The Department shall establish by rule the extent to
15which other employee benefits will continue for persons in
16non-pay status or who are not in active service.
17    (g) The State shall not pay the cost of the basic
18non-contributory group life insurance, program of health
19benefits and other employee benefits for members who are
20survivors as defined by paragraphs (1) and (2) of subsection
21(q) of Section 3 of this Act. The costs of benefits for these
22survivors shall be paid by the survivors or by the University
23of Illinois Cooperative Extension Service, or any combination
24thereof. However, the State shall pay the amount of the
25reduction in the cost of participation, if any, resulting from
26the amendment to subsection (a) made by this amendatory Act of

 

 

SB3073- 26 -LRB103 37686 RPS 67813 b

1the 91st General Assembly.
2    (h) Those persons occupying positions with any department
3as a result of emergency appointments pursuant to Section 8b.8
4of the Personnel Code who are not considered employees under
5this Act shall be given the option of participating in the
6programs of group life insurance, health benefits and other
7employee benefits. Such persons electing coverage may
8participate only by making payment equal to the amount
9normally contributed by the State for similarly situated
10employees. Such amounts shall be determined by the Director.
11Such payments and coverage may be continued until such time as
12the person becomes an employee pursuant to this Act or such
13person's appointment is terminated.
14    (i) Any unit of local government within the State of
15Illinois may apply to the Director to have its employees,
16annuitants, and their dependents provided group health
17coverage under this Act on a non-insured basis. To
18participate, a unit of local government must agree to enroll
19all of its employees, who may select coverage under any group
20health benefits plan made available by the Department under
21the health benefits program established under this Section or
22a health maintenance organization that has contracted with the
23State to be available as a health care provider for employees
24as defined in this Act. A unit of local government must remit
25the entire cost of providing coverage under the health
26benefits program established under this Section or, for

 

 

SB3073- 27 -LRB103 37686 RPS 67813 b

1coverage under a health maintenance organization, an amount
2determined by the Director based on an analysis of the sex,
3age, geographic location, or other relevant demographic
4variables for its employees, except that the unit of local
5government shall not be required to enroll those of its
6employees who are covered spouses or dependents under the
7State group health benefits plan or another group policy or
8plan providing health benefits as long as (1) an appropriate
9official from the unit of local government attests that each
10employee not enrolled is a covered spouse or dependent under
11this plan or another group policy or plan, and (2) at least 50%
12of the employees are enrolled and the unit of local government
13remits the entire cost of providing coverage to those
14employees, except that a participating school district must
15have enrolled at least 50% of its full-time employees who have
16not waived coverage under the district's group health plan by
17participating in a component of the district's cafeteria plan.
18A participating school district is not required to enroll a
19full-time employee who has waived coverage under the
20district's health plan, provided that an appropriate official
21from the participating school district attests that the
22full-time employee has waived coverage by participating in a
23component of the district's cafeteria plan. For the purposes
24of this subsection, "participating school district" includes a
25unit of local government whose primary purpose is education as
26defined by the Department's rules.

 

 

SB3073- 28 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 29 -LRB103 37686 RPS 67813 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 unit of local government.
4    In the case of coverage of local government employees
5under a health maintenance organization, the Director shall
6annually determine for each participating unit of local
7government the maximum monthly amount the unit may contribute
8toward that coverage, based on an analysis of (i) the age, sex,
9geographic location, and other relevant demographic variables
10of the unit's employees and (ii) the cost to cover those
11employees under the State group health benefits plan. The
12Director may similarly determine the maximum monthly amount
13each unit of local government may contribute toward coverage
14of its employees' dependents under a health maintenance
15organization.
16    Monthly payments by the unit of local government or its
17employees for group health benefits plan or health maintenance
18organization coverage shall be deposited in the Local
19Government Health Insurance Reserve Fund.
20    The Local Government Health Insurance Reserve Fund is
21hereby created as a nonappropriated trust fund to be held
22outside the State Treasury, with the State Treasurer as
23custodian. The Local Government Health Insurance Reserve Fund
24shall be a continuing fund not subject to fiscal year
25limitations. The Local Government Health Insurance Reserve
26Fund is not subject to administrative charges or charge-backs,

 

 

SB3073- 30 -LRB103 37686 RPS 67813 b

1including but not limited to those authorized under Section 8h
2of the State Finance Act. All revenues arising from the
3administration of the health benefits program established
4under this Section shall be deposited into the Local
5Government Health Insurance Reserve Fund. Any interest earned
6on moneys in the Local Government Health Insurance Reserve
7Fund shall be deposited into the Fund. All expenditures from
8this Fund shall be used for payments for health care benefits
9for local government and rehabilitation facility employees,
10annuitants, and dependents, and to reimburse the Department or
11its administrative service organization for all expenses
12incurred in the administration of benefits. No other State
13funds may be used for these purposes.
14    A local government employer's participation or desire to
15participate in a program created under this subsection shall
16not limit that employer's duty to bargain with the
17representative of any collective bargaining unit of its
18employees.
19    (j) Any rehabilitation facility within the State of
20Illinois may apply to the Director to have its employees,
21annuitants, and their eligible dependents provided group
22health coverage under this Act on a non-insured basis. To
23participate, a rehabilitation facility must agree to enroll
24all of its employees and remit the entire cost of providing
25such coverage for its employees, except that the
26rehabilitation facility shall not be required to enroll those

 

 

SB3073- 31 -LRB103 37686 RPS 67813 b

1of its employees who are covered spouses or dependents under
2this plan or another group policy or plan providing health
3benefits as long as (1) an appropriate official from the
4rehabilitation facility attests that each employee not
5enrolled is a covered spouse or dependent under this plan or
6another group policy or plan, and (2) at least 50% of the
7employees are enrolled and the rehabilitation facility remits
8the entire cost of providing coverage to those employees.
9Employees of a participating rehabilitation facility who are
10not enrolled due to coverage under another group health policy
11or plan may enroll in the event of a qualifying change in
12status, special enrollment, special circumstance as defined by
13the Director, or during the annual Benefit Choice Period. A
14participating rehabilitation facility may also elect to cover
15its annuitants. Dependent coverage shall be offered on an
16optional basis, with the costs paid by the rehabilitation
17facility, its employees, or some combination of the 2 as
18determined by the rehabilitation facility. The rehabilitation
19facility shall be responsible for timely collection and
20transmission of dependent premiums.
21    The Director shall annually determine quarterly rates of
22payment, subject to the following constraints:
23        (1) In the first year of coverage, the rates shall be
24    equal to the amount normally charged to State employees
25    for elected optional coverages or for enrolled dependents
26    coverages or other contributory coverages on behalf of its

 

 

SB3073- 32 -LRB103 37686 RPS 67813 b

1    employees, adjusted for differences between State
2    employees and employees of the rehabilitation facility in
3    age, sex, geographic location or other relevant
4    demographic variables, plus an amount sufficient to pay
5    for the additional administrative costs of providing
6    coverage to employees of the rehabilitation facility and
7    their dependents.
8        (2) In subsequent years, a further adjustment shall be
9    made to reflect the actual prior years' claims experience
10    of the employees of the rehabilitation facility.
11    Monthly payments by the rehabilitation facility or its
12employees for group health benefits shall be deposited in the
13Local Government Health Insurance Reserve Fund.
14    (k) Any domestic violence shelter or service within the
15State of Illinois may apply to the Director to have its
16employees, annuitants, and their dependents provided group
17health coverage under this Act on a non-insured basis. To
18participate, a domestic violence shelter or service must agree
19to enroll all of its employees and pay the entire cost of
20providing such coverage for its employees. The domestic
21violence shelter shall not be required to enroll those of its
22employees who are covered spouses or dependents under this
23plan or another group policy or plan providing health benefits
24as long as (1) an appropriate official from the domestic
25violence shelter attests that each employee not enrolled is a
26covered spouse or dependent under this plan or another group

 

 

SB3073- 33 -LRB103 37686 RPS 67813 b

1policy or plan and (2) at least 50% of the employees are
2enrolled and the domestic violence shelter remits the entire
3cost of providing coverage to those employees. Employees of a
4participating domestic violence shelter who are not enrolled
5due to coverage under another group health policy or plan may
6enroll in the event of a qualifying change in status, special
7enrollment, or special circumstance as defined by the Director
8or during the annual Benefit Choice Period. A participating
9domestic violence shelter may also elect to cover its
10annuitants. Dependent coverage shall be offered on an optional
11basis, with employees, or some combination of the 2 as
12determined by the domestic violence shelter or service. The
13domestic violence shelter or service shall be responsible for
14timely collection and transmission of dependent premiums.
15    The Director shall annually determine rates of payment,
16subject to the following constraints:
17        (1) In the first year of coverage, the rates shall be
18    equal to the amount normally charged to State employees
19    for elected optional coverages or for enrolled dependents
20    coverages or other contributory coverages on behalf of its
21    employees, adjusted for differences between State
22    employees and employees of the domestic violence shelter
23    or service in age, sex, geographic location or other
24    relevant demographic variables, plus an amount sufficient
25    to pay for the additional administrative costs of
26    providing coverage to employees of the domestic violence

 

 

SB3073- 34 -LRB103 37686 RPS 67813 b

1    shelter or service and their dependents.
2        (2) In subsequent years, a further adjustment shall be
3    made to reflect the actual prior years' claims experience
4    of the employees of the domestic violence shelter or
5    service.
6    Monthly payments by the domestic violence shelter or
7service or its employees for group health insurance shall be
8deposited in the Local Government Health Insurance Reserve
9Fund.
10    (l) A public community college or entity organized
11pursuant to the Public Community College Act may apply to the
12Director initially to have only annuitants not covered prior
13to July 1, 1992 by the district's health plan provided health
14coverage under this Act on a non-insured basis. The community
15college must execute a 2-year contract to participate in the
16Local Government Health Plan. Any annuitant may enroll in the
17event of a qualifying change in status, special enrollment,
18special circumstance as defined by the Director, or during the
19annual Benefit Choice Period.
20    The Director shall annually determine monthly rates of
21payment subject to the following constraints: for those
22community colleges with annuitants only enrolled, first year
23rates shall be equal to the average cost to cover claims for a
24State member adjusted for demographics, Medicare
25participation, and other factors; and in the second year, a
26further adjustment of rates shall be made to reflect the

 

 

SB3073- 35 -LRB103 37686 RPS 67813 b

1actual first year's claims experience of the covered
2annuitants.
3    (l-5) The provisions of subsection (l) become inoperative
4on July 1, 1999.
5    (m) The Director shall adopt any rules deemed necessary
6for implementation of this amendatory Act of 1989 (Public Act
786-978).
8    (n) Any child advocacy center within the State of Illinois
9may apply to the Director to have its employees, annuitants,
10and their dependents provided group health coverage under this
11Act on a non-insured basis. To participate, a child advocacy
12center must agree to enroll all of its employees and pay the
13entire cost of providing coverage for its employees. The child
14advocacy center 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 child advocacy
18center attests that each employee not enrolled is a covered
19spouse or dependent under this plan or another group policy or
20plan and (2) at least 50% of the employees are enrolled and the
21child advocacy center remits the entire cost of providing
22coverage to those employees. Employees of a participating
23child advocacy center who are not enrolled due to coverage
24under another group health policy or plan may enroll in the
25event of a qualifying change in status, special enrollment, or
26special circumstance as defined by the Director or during the

 

 

SB3073- 36 -LRB103 37686 RPS 67813 b

1annual Benefit Choice Period. A participating child advocacy
2center may also elect to cover its annuitants. Dependent
3coverage shall be offered on an optional basis, with the costs
4paid by the child advocacy center, its employees, or some
5combination of the 2 as determined by the child advocacy
6center. The child advocacy center 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 child advocacy center in
16    age, sex, geographic location, or other relevant
17    demographic variables, plus an amount sufficient to pay
18    for the additional administrative costs of providing
19    coverage to employees of the child advocacy center and
20    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 child advocacy center.
24    Monthly payments by the child advocacy center or its
25employees for group health insurance shall be deposited into
26the Local Government Health Insurance Reserve Fund.

 

 

SB3073- 37 -LRB103 37686 RPS 67813 b

1(Source: P.A. 102-19, eff. 7-1-21.)
 
2    Section 10. The Illinois Pension Code is amended by
3changing Sections 1-160, 1-161, 14-103.05, 14-103.41,
414-152.1, 20-121, 20-123, 20-124, and 20-125 and by adding
5Section 14-155.5 as follows:
 
6    (40 ILCS 5/1-160)
7    (Text of Section from P.A. 102-719)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
147, 15, or 18 of this Code, notwithstanding any other provision
15of this Code to the contrary, but do not apply to any
16self-managed plan established under this Code or to any
17participant of the retirement plan established under Section
1822-101; except that this Section applies to a person who
19elected to establish alternative credits by electing in
20writing after January 1, 2011, but before August 8, 2011,
21under Section 7-145.1 of this Code. Notwithstanding anything
22to the contrary in this Section, for purposes of this Section,
23a person who is a Tier 1 regular employee as defined in Section
247-109.4 of this Code or who participated in a retirement

 

 

SB3073- 38 -LRB103 37686 RPS 67813 b

1system under Article 15 prior to January 1, 2011 shall be
2deemed a person who first became a member or participant prior
3to January 1, 2011 under any retirement system or pension fund
4subject to this Section. The changes made to this Section by
5Public Act 98-596 are a clarification of existing law and are
6intended to be retroactive to January 1, 2011 (the effective
7date of Public Act 96-889), notwithstanding the provisions of
8Section 1-103.1 of this Code.
9    This Section does not apply to a person who first becomes a
10noncovered employee under Article 14 on or after the
11implementation date of the plan created under Section 1-161
12for that Article, unless that person elects under subsection
13(b) of Section 1-161 to instead receive the benefits provided
14under this Section and the applicable provisions of that
15Article.
16    This Section does not apply to a person who first becomes a
17member or participant under Article 16 on or after the
18implementation date of the plan created under Section 1-161
19for that Article, unless that person elects under subsection
20(b) of Section 1-161 to instead receive the benefits provided
21under this Section and the applicable provisions of that
22Article.
23    This Section does not apply to a person who elects under
24subsection (c-5) of Section 1-161 to receive the benefits
25under Section 1-161.
26    This Section does not apply to a person who first becomes a

 

 

SB3073- 39 -LRB103 37686 RPS 67813 b

1member or participant of an affected pension fund on or after 6
2months after the resolution or ordinance date, as defined in
3Section 1-162, unless that person elects under subsection (c)
4of Section 1-162 to receive the benefits provided under this
5Section and the applicable provisions of the Article under
6which he or she is a member or participant.
7    This Section does not apply to a person who participates
8in a defined contribution plan established under Section
914-155.5.
10    (b) "Final average salary" means, except as otherwise
11provided in this subsection, the average monthly (or annual)
12salary obtained by dividing the total salary or earnings
13calculated under the Article applicable to the member or
14participant during the 96 consecutive months (or 8 consecutive
15years) of service within the last 120 months (or 10 years) of
16service in which the total salary or earnings calculated under
17the applicable Article was the highest by the number of months
18(or years) of service in that period. For the purposes of a
19person who first becomes a member or participant of any
20retirement system or pension fund to which this Section
21applies on or after January 1, 2011, in this Code, "final
22average salary" shall be substituted for the following:
23        (1) (Blank).
24        (2) In Articles 8, 9, 10, 11, and 12, "highest average
25    annual salary for any 4 consecutive years within the last
26    10 years of service immediately preceding the date of

 

 

SB3073- 40 -LRB103 37686 RPS 67813 b

1    withdrawal".
2        (3) In Article 13, "average final salary".
3        (4) In Article 14, "final average compensation".
4        (5) In Article 17, "average salary".
5        (6) In Section 22-207, "wages or salary received by
6    him at the date of retirement or discharge".
7    A member of the Teachers' Retirement System of the State
8of Illinois who retires on or after June 1, 2021 and for whom
9the 2020-2021 school year is used in the calculation of the
10member's final average salary shall use the higher of the
11following for the purpose of determining the member's final
12average salary:
13        (A) the amount otherwise calculated under the first
14    paragraph of this subsection; or
15        (B) an amount calculated by the Teachers' Retirement
16    System of the State of Illinois using the average of the
17    monthly (or annual) salary obtained by dividing the total
18    salary or earnings calculated under Article 16 applicable
19    to the member or participant during the 96 months (or 8
20    years) of service within the last 120 months (or 10 years)
21    of service in which the total salary or earnings
22    calculated under the Article was the highest by the number
23    of months (or years) of service in that period.
24    (b-5) Beginning on January 1, 2011, for all purposes under
25this Code (including without limitation the calculation of
26benefits and employee contributions), the annual earnings,

 

 

SB3073- 41 -LRB103 37686 RPS 67813 b

1salary, or wages (based on the plan year) of a member or
2participant to whom this Section applies shall not exceed
3$106,800; however, that amount shall annually thereafter be
4increased by the lesser of (i) 3% of that amount, including all
5previous adjustments, or (ii) one-half the annual unadjusted
6percentage increase (but not less than zero) in the consumer
7price index-u for the 12 months ending with the September
8preceding each November 1, including all previous adjustments.
9    For the purposes of this Section, "consumer price index-u"
10means the index published by the Bureau of Labor Statistics of
11the United States Department of Labor that measures the
12average change in prices of goods and services purchased by
13all urban consumers, United States city average, all items,
141982-84 = 100. The new amount resulting from each annual
15adjustment shall be determined by the Public Pension Division
16of the Department of Insurance and made available to the
17boards of the retirement systems and pension funds by November
181 of each year.
19    (b-10) Beginning on January 1, 2024, for all purposes
20under this Code (including, without limitation, the
21calculation of benefits and employee contributions), the
22annual earnings, salary, or wages (based on the plan year) of a
23member or participant under Article 9 to whom this Section
24applies shall include an annual earnings, salary, or wage cap
25that tracks the Social Security wage base. Maximum annual
26earnings, wages, or salary shall be the annual contribution

 

 

SB3073- 42 -LRB103 37686 RPS 67813 b

1and benefit base established for the applicable year by the
2Commissioner of the Social Security Administration under the
3federal Social Security Act.
4    However, in no event shall the annual earnings, salary, or
5wages for the purposes of this Article and Article 9 exceed any
6limitation imposed on annual earnings, salary, or wages under
7Section 1-117. Under no circumstances shall the maximum amount
8of annual earnings, salary, or wages be greater than the
9amount set forth in this subsection (b-10) as a result of
10reciprocal service or any provisions regarding reciprocal
11services, nor shall the Fund under Article 9 be required to pay
12any refund as a result of the application of this maximum
13annual earnings, salary, and wage cap.
14    Nothing in this subsection (b-10) shall cause or otherwise
15result in any retroactive adjustment of any employee
16contributions. Nothing in this subsection (b-10) shall cause
17or otherwise result in any retroactive adjustment of
18disability or other payments made between January 1, 2011 and
19January 1, 2024.
20    (c) A member or participant is entitled to a retirement
21annuity upon written application if he or she has attained age
2267 (age 65, with respect to service under Article 12 that is
23subject to this Section, for a member or participant under
24Article 12 who first becomes a member or participant under
25Article 12 on or after January 1, 2022 or who makes the
26election under item (i) of subsection (d-15) of this Section)

 

 

SB3073- 43 -LRB103 37686 RPS 67813 b

1and has at least 10 years of service credit and is otherwise
2eligible under the requirements of the applicable Article.
3    A member or participant who has attained age 62 (age 60,
4with respect to service under Article 12 that is subject to
5this Section, for a member or participant under Article 12 who
6first becomes a member or participant under Article 12 on or
7after January 1, 2022 or who makes the election under item (i)
8of subsection (d-15) of this Section) and has at least 10 years
9of service credit and is otherwise eligible under the
10requirements of the applicable Article may elect to receive
11the lower retirement annuity provided in subsection (d) of
12this Section.
13    (c-5) A person who first becomes a member or a participant
14subject to this Section on or after July 6, 2017 (the effective
15date of Public Act 100-23), notwithstanding any other
16provision of this Code to the contrary, is entitled to a
17retirement annuity under Article 8 or Article 11 upon written
18application if he or she has attained age 65 and has at least
1910 years of service credit and is otherwise eligible under the
20requirements of Article 8 or Article 11 of this Code,
21whichever is applicable.
22    (d) The retirement annuity of a member or participant who
23is retiring after attaining age 62 (age 60, with respect to
24service under Article 12 that is subject to this Section, for a
25member or participant under Article 12 who first becomes a
26member or participant under Article 12 on or after January 1,

 

 

SB3073- 44 -LRB103 37686 RPS 67813 b

12022 or who makes the election under item (i) of subsection
2(d-15) of this Section) with at least 10 years of service
3credit shall be reduced by one-half of 1% for each full month
4that the member's age is under age 67 (age 65, with respect to
5service under Article 12 that is subject to this Section, for a
6member or participant under Article 12 who first becomes a
7member or participant under Article 12 on or after January 1,
82022 or who makes the election under item (i) of subsection
9(d-15) of this Section).
10    (d-5) The retirement annuity payable under Article 8 or
11Article 11 to an eligible person subject to subsection (c-5)
12of this Section who is retiring at age 60 with at least 10
13years of service credit shall be reduced by one-half of 1% for
14each full month that the member's age is under age 65.
15    (d-10) Each person who first became a member or
16participant under Article 8 or Article 11 of this Code on or
17after January 1, 2011 and prior to July 6, 2017 (the effective
18date of Public Act 100-23) shall make an irrevocable election
19either:
20        (i) to be eligible for the reduced retirement age
21    provided in subsections (c-5) and (d-5) of this Section,
22    the eligibility for which is conditioned upon the member
23    or participant agreeing to the increases in employee
24    contributions for age and service annuities provided in
25    subsection (a-5) of Section 8-174 of this Code (for
26    service under Article 8) or subsection (a-5) of Section

 

 

SB3073- 45 -LRB103 37686 RPS 67813 b

1    11-170 of this Code (for service under Article 11); or
2        (ii) to not agree to item (i) of this subsection
3    (d-10), in which case the member or participant shall
4    continue to be subject to the retirement age provisions in
5    subsections (c) and (d) of this Section and the employee
6    contributions for age and service annuity as provided in
7    subsection (a) of Section 8-174 of this Code (for service
8    under Article 8) or subsection (a) of Section 11-170 of
9    this Code (for service under Article 11).
10    The election provided for in this subsection shall be made
11between October 1, 2017 and November 15, 2017. A person
12subject to this subsection who makes the required election
13shall remain bound by that election. A person subject to this
14subsection who fails for any reason to make the required
15election within the time specified in this subsection shall be
16deemed to have made the election under item (ii).
17    (d-15) Each person who first becomes a member or
18participant under Article 12 on or after January 1, 2011 and
19prior to January 1, 2022 shall make an irrevocable election
20either:
21        (i) to be eligible for the reduced retirement age
22    specified in subsections (c) and (d) of this Section, the
23    eligibility for which is conditioned upon the member or
24    participant agreeing to the increase in employee
25    contributions for service annuities specified in
26    subsection (b) of Section 12-150; or

 

 

SB3073- 46 -LRB103 37686 RPS 67813 b

1        (ii) to not agree to item (i) of this subsection
2    (d-15), in which case the member or participant shall not
3    be eligible for the reduced retirement age specified in
4    subsections (c) and (d) of this Section and shall not be
5    subject to the increase in employee contributions for
6    service annuities specified in subsection (b) of Section
7    12-150.
8    The election provided for in this subsection shall be made
9between January 1, 2022 and April 1, 2022. A person subject to
10this subsection who makes the required election shall remain
11bound by that election. A person subject to this subsection
12who fails for any reason to make the required election within
13the time specified in this subsection shall be deemed to have
14made the election under item (ii).
15    (e) Any retirement annuity or supplemental annuity shall
16be subject to annual increases on the January 1 occurring
17either on or after the attainment of age 67 (age 65, with
18respect to service under Article 12 that is subject to this
19Section, for a member or participant under Article 12 who
20first becomes a member or participant under Article 12 on or
21after January 1, 2022 or who makes the election under item (i)
22of subsection (d-15); and beginning on July 6, 2017 (the
23effective date of Public Act 100-23), age 65 with respect to
24service under Article 8 or Article 11 for eligible persons
25who: (i) are subject to subsection (c-5) of this Section; or
26(ii) made the election under item (i) of subsection (d-10) of

 

 

SB3073- 47 -LRB103 37686 RPS 67813 b

1this Section) or the first anniversary of the annuity start
2date, whichever is later. Each annual increase shall be
3calculated at 3% or one-half the annual unadjusted percentage
4increase (but not less than zero) in the consumer price
5index-u for the 12 months ending with the September preceding
6each November 1, whichever is less, of the originally granted
7retirement annuity. If the annual unadjusted percentage change
8in the consumer price index-u for the 12 months ending with the
9September preceding each November 1 is zero or there is a
10decrease, then the annuity shall not be increased.
11    For the purposes of Section 1-103.1 of this Code, the
12changes made to this Section by Public Act 102-263 are
13applicable without regard to whether the employee was in
14active service on or after August 6, 2021 (the effective date
15of Public Act 102-263).
16    For the purposes of Section 1-103.1 of this Code, the
17changes made to this Section by Public Act 100-23 are
18applicable without regard to whether the employee was in
19active service on or after July 6, 2017 (the effective date of
20Public Act 100-23).
21    (f) The initial survivor's or widow's annuity of an
22otherwise eligible survivor or widow of a retired member or
23participant who first became a member or participant on or
24after January 1, 2011 shall be in the amount of 66 2/3% of the
25retired member's or participant's retirement annuity at the
26date of death. In the case of the death of a member or

 

 

SB3073- 48 -LRB103 37686 RPS 67813 b

1participant who has not retired and who first became a member
2or participant on or after January 1, 2011, eligibility for a
3survivor's or widow's annuity shall be determined by the
4applicable Article of this Code. The initial benefit shall be
566 2/3% of the earned annuity without a reduction due to age. A
6child's annuity of an otherwise eligible child shall be in the
7amount prescribed under each Article if applicable. Any
8survivor's or widow's annuity shall be increased (1) on each
9January 1 occurring on or after the commencement of the
10annuity if the deceased member died while receiving a
11retirement annuity or (2) in other cases, on each January 1
12occurring after the first anniversary of the commencement of
13the annuity. Each annual increase shall be calculated at 3% or
14one-half the annual unadjusted percentage increase (but not
15less than zero) in the consumer price index-u for the 12 months
16ending with the September preceding each November 1, whichever
17is less, of the originally granted survivor's annuity. If the
18annual unadjusted percentage change in the consumer price
19index-u for the 12 months ending with the September preceding
20each November 1 is zero or there is a decrease, then the
21annuity shall not be increased.
22    (g) The benefits in Section 14-110 apply if the person is a
23fire fighter in the fire protection service of a department, a
24security employee of the Department of Corrections or the
25Department of Juvenile Justice, or a security employee of the
26Department of Innovation and Technology, as those terms are

 

 

SB3073- 49 -LRB103 37686 RPS 67813 b

1defined in subsection (b) and subsection (c) of Section
214-110. A person who meets the requirements of this Section is
3entitled to an annuity calculated under the provisions of
4Section 14-110, in lieu of the regular or minimum retirement
5annuity, only if the person has withdrawn from service with
6not less than 20 years of eligible creditable service and has
7attained age 60, regardless of whether the attainment of age
860 occurs while the person is still in service.
9    (g-5) The benefits in Section 14-110 apply if the person
10is a State policeman, investigator for the Secretary of State,
11conservation police officer, investigator for the Department
12of Revenue or the Illinois Gaming Board, investigator for the
13Office of the Attorney General, Commerce Commission police
14officer, or arson investigator, as those terms are defined in
15subsection (b) and subsection (c) of Section 14-110. A person
16who meets the requirements of this Section is entitled to an
17annuity calculated under the provisions of Section 14-110, in
18lieu of the regular or minimum retirement annuity, only if the
19person has withdrawn from service with not less than 20 years
20of eligible creditable service and has attained age 55,
21regardless of whether the attainment of age 55 occurs while
22the person is still in service.
23    (h) If a person who first becomes a member or a participant
24of a retirement system or pension fund subject to this Section
25on or after January 1, 2011 is receiving a retirement annuity
26or retirement pension under that system or fund and becomes a

 

 

SB3073- 50 -LRB103 37686 RPS 67813 b

1member or participant under any other system or fund created
2by this Code and is employed on a full-time basis, except for
3those members or participants exempted from the provisions of
4this Section under subsection (a) of this Section, then the
5person's retirement annuity or retirement pension under that
6system or fund shall be suspended during that employment. Upon
7termination of that employment, the person's retirement
8annuity or retirement pension payments shall resume and be
9recalculated if recalculation is provided for under the
10applicable Article of this Code.
11    If a person who first becomes a member of a retirement
12system or pension fund subject to this Section on or after
13January 1, 2012 and is receiving a retirement annuity or
14retirement pension under that system or fund and accepts on a
15contractual basis a position to provide services to a
16governmental entity from which he or she has retired, then
17that person's annuity or retirement pension earned as an
18active employee of the employer shall be suspended during that
19contractual service. A person receiving an annuity or
20retirement pension under this Code shall notify the pension
21fund or retirement system from which he or she is receiving an
22annuity or retirement pension, as well as his or her
23contractual employer, of his or her retirement status before
24accepting contractual employment. A person who fails to submit
25such notification shall be guilty of a Class A misdemeanor and
26required to pay a fine of $1,000. Upon termination of that

 

 

SB3073- 51 -LRB103 37686 RPS 67813 b

1contractual employment, the person's retirement annuity or
2retirement pension payments shall resume and, if appropriate,
3be recalculated under the applicable provisions of this Code.
4    (i) (Blank).
5    (j) In the case of a conflict between the provisions of
6this Section and any other provision of this Code, the
7provisions of this Section shall control.
8(Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
9102-210, eff. 1-1-22; 102-263, eff. 8-6-21; 102-719, eff.
105-6-22.)
 
11    (Text of Section from P.A. 102-813)
12    Sec. 1-160. Provisions applicable to new hires.
13    (a) The provisions of this Section apply to a person who,
14on or after January 1, 2011, first becomes a member or a
15participant under any reciprocal retirement system or pension
16fund established under this Code, other than a retirement
17system or pension fund established under Article 2, 3, 4, 5, 6,
187, 15, or 18 of this Code, notwithstanding any other provision
19of this Code to the contrary, but do not apply to any
20self-managed plan established under this Code or to any
21participant of the retirement plan established under Section
2222-101; except that this Section applies to a person who
23elected to establish alternative credits by electing in
24writing after January 1, 2011, but before August 8, 2011,
25under Section 7-145.1 of this Code. Notwithstanding anything

 

 

SB3073- 52 -LRB103 37686 RPS 67813 b

1to the contrary in this Section, for purposes of this Section,
2a person who is a Tier 1 regular employee as defined in Section
37-109.4 of this Code or who participated in a retirement
4system under Article 15 prior to January 1, 2011 shall be
5deemed a person who first became a member or participant prior
6to January 1, 2011 under any retirement system or pension fund
7subject to this Section. The changes made to this Section by
8Public Act 98-596 are a clarification of existing law and are
9intended to be retroactive to January 1, 2011 (the effective
10date of Public Act 96-889), notwithstanding the provisions of
11Section 1-103.1 of this Code.
12    This Section does not apply to a person who first becomes a
13noncovered employee under Article 14 on or after the
14implementation date of the plan created under Section 1-161
15for that Article, unless that person elects under subsection
16(b) of Section 1-161 to instead receive the benefits provided
17under this Section and the applicable provisions of that
18Article.
19    This Section does not apply to a person who first becomes a
20member or participant under Article 16 on or after the
21implementation date of the plan created under Section 1-161
22for that Article, unless that person elects under subsection
23(b) of Section 1-161 to instead receive the benefits provided
24under this Section and the applicable provisions of that
25Article.
26    This Section does not apply to a person who elects under

 

 

SB3073- 53 -LRB103 37686 RPS 67813 b

1subsection (c-5) of Section 1-161 to receive the benefits
2under Section 1-161.
3    This Section does not apply to a person who first becomes a
4member or participant of an affected pension fund on or after 6
5months after the resolution or ordinance date, as defined in
6Section 1-162, unless that person elects under subsection (c)
7of Section 1-162 to receive the benefits provided under this
8Section and the applicable provisions of the Article under
9which he or she is a member or participant.
10    This Section does not apply to a person who participates
11in a defined contribution plan established under Section
1214-155.5.
13    (b) "Final average salary" means, except as otherwise
14provided in this subsection, the average monthly (or annual)
15salary obtained by dividing the total salary or earnings
16calculated under the Article applicable to the member or
17participant during the 96 consecutive months (or 8 consecutive
18years) of service within the last 120 months (or 10 years) of
19service in which the total salary or earnings calculated under
20the applicable Article was the highest by the number of months
21(or years) of service in that period. For the purposes of a
22person who first becomes a member or participant of any
23retirement system or pension fund to which this Section
24applies on or after January 1, 2011, in this Code, "final
25average salary" shall be substituted for the following:
26        (1) (Blank).

 

 

SB3073- 54 -LRB103 37686 RPS 67813 b

1        (2) In Articles 8, 9, 10, 11, and 12, "highest average
2    annual salary for any 4 consecutive years within the last
3    10 years of service immediately preceding the date of
4    withdrawal".
5        (3) In Article 13, "average final salary".
6        (4) In Article 14, "final average compensation".
7        (5) In Article 17, "average salary".
8        (6) In Section 22-207, "wages or salary received by
9    him at the date of retirement or discharge".
10    A member of the Teachers' Retirement System of the State
11of Illinois who retires on or after June 1, 2021 and for whom
12the 2020-2021 school year is used in the calculation of the
13member's final average salary shall use the higher of the
14following for the purpose of determining the member's final
15average salary:
16        (A) the amount otherwise calculated under the first
17    paragraph of this subsection; or
18        (B) an amount calculated by the Teachers' Retirement
19    System of the State of Illinois using the average of the
20    monthly (or annual) salary obtained by dividing the total
21    salary or earnings calculated under Article 16 applicable
22    to the member or participant during the 96 months (or 8
23    years) of service within the last 120 months (or 10 years)
24    of service in which the total salary or earnings
25    calculated under the Article was the highest by the number
26    of months (or years) of service in that period.

 

 

SB3073- 55 -LRB103 37686 RPS 67813 b

1    (b-5) Beginning on January 1, 2011, for all purposes under
2this Code (including without limitation the calculation of
3benefits and employee contributions), the annual earnings,
4salary, or wages (based on the plan year) of a member or
5participant to whom this Section applies shall not exceed
6$106,800; however, that amount shall annually thereafter be
7increased by the lesser of (i) 3% of that amount, including all
8previous adjustments, or (ii) one-half the annual unadjusted
9percentage increase (but not less than zero) in the consumer
10price index-u for the 12 months ending with the September
11preceding each November 1, including all previous adjustments.
12    For the purposes of this Section, "consumer price index-u"
13means the index published by the Bureau of Labor Statistics of
14the United States Department of Labor that measures the
15average change in prices of goods and services purchased by
16all urban consumers, United States city average, all items,
171982-84 = 100. The new amount resulting from each annual
18adjustment shall be determined by the Public Pension Division
19of the Department of Insurance and made available to the
20boards of the retirement systems and pension funds by November
211 of each year.
22    (b-10) Beginning on January 1, 2024, for all purposes
23under this Code (including, without limitation, the
24calculation of benefits and employee contributions), the
25annual earnings, salary, or wages (based on the plan year) of a
26member or participant under Article 9 to whom this Section

 

 

SB3073- 56 -LRB103 37686 RPS 67813 b

1applies shall include an annual earnings, salary, or wage cap
2that tracks the Social Security wage base. Maximum annual
3earnings, wages, or salary shall be the annual contribution
4and benefit base established for the applicable year by the
5Commissioner of the Social Security Administration under the
6federal Social Security Act.
7    However, in no event shall the annual earnings, salary, or
8wages for the purposes of this Article and Article 9 exceed any
9limitation imposed on annual earnings, salary, or wages under
10Section 1-117. Under no circumstances shall the maximum amount
11of annual earnings, salary, or wages be greater than the
12amount set forth in this subsection (b-10) as a result of
13reciprocal service or any provisions regarding reciprocal
14services, nor shall the Fund under Article 9 be required to pay
15any refund as a result of the application of this maximum
16annual earnings, salary, and wage cap.
17    Nothing in this subsection (b-10) shall cause or otherwise
18result in any retroactive adjustment of any employee
19contributions. Nothing in this subsection (b-10) shall cause
20or otherwise result in any retroactive adjustment of
21disability or other payments made between January 1, 2011 and
22January 1, 2024.
23    (c) A member or participant is entitled to a retirement
24annuity upon written application if he or she has attained age
2567 (age 65, with respect to service under Article 12 that is
26subject to this Section, for a member or participant under

 

 

SB3073- 57 -LRB103 37686 RPS 67813 b

1Article 12 who first becomes a member or participant under
2Article 12 on or after January 1, 2022 or who makes the
3election under item (i) of subsection (d-15) of this Section)
4and has at least 10 years of service credit and is otherwise
5eligible under the requirements of the applicable Article.
6    A member or participant who has attained age 62 (age 60,
7with respect to service under Article 12 that is subject to
8this Section, for a member or participant under Article 12 who
9first becomes a member or participant under Article 12 on or
10after January 1, 2022 or who makes the election under item (i)
11of subsection (d-15) of this Section) and has at least 10 years
12of service credit and is otherwise eligible under the
13requirements of the applicable Article may elect to receive
14the lower retirement annuity provided in subsection (d) of
15this Section.
16    (c-5) A person who first becomes a member or a participant
17subject to this Section on or after July 6, 2017 (the effective
18date of Public Act 100-23), notwithstanding any other
19provision of this Code to the contrary, is entitled to a
20retirement annuity under Article 8 or Article 11 upon written
21application if he or she has attained age 65 and has at least
2210 years of service credit and is otherwise eligible under the
23requirements of Article 8 or Article 11 of this Code,
24whichever is applicable.
25    (d) The retirement annuity of a member or participant who
26is retiring after attaining age 62 (age 60, with respect to

 

 

SB3073- 58 -LRB103 37686 RPS 67813 b

1service under Article 12 that is subject to this Section, for a
2member or participant under Article 12 who first becomes a
3member or participant under Article 12 on or after January 1,
42022 or who makes the election under item (i) of subsection
5(d-15) of this Section) with at least 10 years of service
6credit shall be reduced by one-half of 1% for each full month
7that the member's age is under age 67 (age 65, with respect to
8service under Article 12 that is subject to this Section, for a
9member or participant under Article 12 who first becomes a
10member or participant under Article 12 on or after January 1,
112022 or who makes the election under item (i) of subsection
12(d-15) of this Section).
13    (d-5) The retirement annuity payable under Article 8 or
14Article 11 to an eligible person subject to subsection (c-5)
15of this Section who is retiring at age 60 with at least 10
16years of service credit shall be reduced by one-half of 1% for
17each full month that the member's age is under age 65.
18    (d-10) Each person who first became a member or
19participant under Article 8 or Article 11 of this Code on or
20after January 1, 2011 and prior to July 6, 2017 (the effective
21date of Public Act 100-23) shall make an irrevocable election
22either:
23        (i) to be eligible for the reduced retirement age
24    provided in subsections (c-5) and (d-5) of this Section,
25    the eligibility for which is conditioned upon the member
26    or participant agreeing to the increases in employee

 

 

SB3073- 59 -LRB103 37686 RPS 67813 b

1    contributions for age and service annuities provided in
2    subsection (a-5) of Section 8-174 of this Code (for
3    service under Article 8) or subsection (a-5) of Section
4    11-170 of this Code (for service under Article 11); or
5        (ii) to not agree to item (i) of this subsection
6    (d-10), in which case the member or participant shall
7    continue to be subject to the retirement age provisions in
8    subsections (c) and (d) of this Section and the employee
9    contributions for age and service annuity as provided in
10    subsection (a) of Section 8-174 of this Code (for service
11    under Article 8) or subsection (a) of Section 11-170 of
12    this Code (for service under Article 11).
13    The election provided for in this subsection shall be made
14between October 1, 2017 and November 15, 2017. A person
15subject to this subsection who makes the required election
16shall remain bound by that election. A person subject to this
17subsection who fails for any reason to make the required
18election within the time specified in this subsection shall be
19deemed to have made the election under item (ii).
20    (d-15) Each person who first becomes a member or
21participant under Article 12 on or after January 1, 2011 and
22prior to January 1, 2022 shall make an irrevocable election
23either:
24        (i) to be eligible for the reduced retirement age
25    specified in subsections (c) and (d) of this Section, the
26    eligibility for which is conditioned upon the member or

 

 

SB3073- 60 -LRB103 37686 RPS 67813 b

1    participant agreeing to the increase in employee
2    contributions for service annuities specified in
3    subsection (b) of Section 12-150; or
4        (ii) to not agree to item (i) of this subsection
5    (d-15), in which case the member or participant shall not
6    be eligible for the reduced retirement age specified in
7    subsections (c) and (d) of this Section and shall not be
8    subject to the increase in employee contributions for
9    service annuities specified in subsection (b) of Section
10    12-150.
11    The election provided for in this subsection shall be made
12between January 1, 2022 and April 1, 2022. A person subject to
13this subsection who makes the required election shall remain
14bound by that election. A person subject to this subsection
15who fails for any reason to make the required election within
16the time specified in this subsection shall be deemed to have
17made the election under item (ii).
18    (e) Any retirement annuity or supplemental annuity shall
19be subject to annual increases on the January 1 occurring
20either on or after the attainment of age 67 (age 65, with
21respect to service under Article 12 that is subject to this
22Section, 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); and beginning on July 6, 2017 (the
26effective date of Public Act 100-23), age 65 with respect to

 

 

SB3073- 61 -LRB103 37686 RPS 67813 b

1service under Article 8 or Article 11 for eligible persons
2who: (i) are subject to subsection (c-5) of this Section; or
3(ii) made the election under item (i) of subsection (d-10) of
4this Section) or the first anniversary of the annuity start
5date, whichever is later. Each annual increase shall be
6calculated at 3% or one-half the annual unadjusted percentage
7increase (but not less than zero) in the consumer price
8index-u for the 12 months ending with the September preceding
9each November 1, whichever is less, of the originally granted
10retirement annuity. If the annual unadjusted percentage change
11in the consumer price index-u for the 12 months ending with the
12September preceding each November 1 is zero or there is a
13decrease, then the annuity shall not be increased.
14    For the purposes of Section 1-103.1 of this Code, the
15changes made to this Section by Public Act 102-263 are
16applicable without regard to whether the employee was in
17active service on or after August 6, 2021 (the effective date
18of Public Act 102-263).
19    For the purposes of Section 1-103.1 of this Code, the
20changes made to this Section by Public Act 100-23 are
21applicable without regard to whether the employee was in
22active service on or after July 6, 2017 (the effective date of
23Public Act 100-23).
24    (f) The initial survivor's or widow's annuity of an
25otherwise eligible survivor or widow of a retired member or
26participant who first became a member or participant on or

 

 

SB3073- 62 -LRB103 37686 RPS 67813 b

1after January 1, 2011 shall be in the amount of 66 2/3% of the
2retired member's or participant's retirement annuity at the
3date of death. In the case of the death of a member or
4participant who has not retired and who first became a member
5or participant on or after January 1, 2011, eligibility for a
6survivor's or widow's annuity shall be determined by the
7applicable Article of this Code. The initial benefit shall be
866 2/3% of the earned annuity without a reduction due to age. A
9child's annuity of an otherwise eligible child shall be in the
10amount prescribed under each Article if applicable. Any
11survivor's or widow's annuity shall be increased (1) on each
12January 1 occurring on or after the commencement of the
13annuity if the deceased member died while receiving a
14retirement annuity or (2) in other cases, on each January 1
15occurring after the first anniversary of the commencement of
16the annuity. Each annual increase shall be calculated at 3% or
17one-half the annual unadjusted percentage increase (but not
18less than zero) in the consumer price index-u for the 12 months
19ending with the September preceding each November 1, whichever
20is less, of the originally granted survivor's annuity. If the
21annual unadjusted percentage change in the consumer price
22index-u for the 12 months ending with the September preceding
23each November 1 is zero or there is a decrease, then the
24annuity shall not be increased.
25    (g) The benefits in Section 14-110 apply only if the
26person is a State policeman, a fire fighter in the fire

 

 

SB3073- 63 -LRB103 37686 RPS 67813 b

1protection service of a department, a conservation police
2officer, an investigator for the Secretary of State, an arson
3investigator, a Commerce Commission police officer,
4investigator for the Department of Revenue or the Illinois
5Gaming Board, a security employee of the Department of
6Corrections or the Department of Juvenile Justice, or a
7security employee of the Department of Innovation and
8Technology, as those terms are defined in subsection (b) and
9subsection (c) of Section 14-110. A person who meets the
10requirements of this Section is entitled to an annuity
11calculated under the provisions of Section 14-110, in lieu of
12the regular or minimum retirement annuity, only if the person
13has withdrawn from service with not less than 20 years of
14eligible creditable service and has attained age 60,
15regardless of whether the attainment of age 60 occurs while
16the person is still in service.
17    (h) If a person who first becomes a member or a participant
18of a retirement system or pension fund subject to this Section
19on or after January 1, 2011 is receiving a retirement annuity
20or retirement pension under that system or fund and becomes a
21member or participant under any other system or fund created
22by this Code and is employed on a full-time basis, except for
23those members or participants exempted from the provisions of
24this Section under subsection (a) of this Section, then the
25person's retirement annuity or retirement pension under that
26system or fund shall be suspended during that employment. Upon

 

 

SB3073- 64 -LRB103 37686 RPS 67813 b

1termination of that employment, the person's retirement
2annuity or retirement pension payments shall resume and be
3recalculated if recalculation is provided for under the
4applicable Article of this Code.
5    If a person who first becomes a member of a retirement
6system or pension fund subject to this Section on or after
7January 1, 2012 and is receiving a retirement annuity or
8retirement pension under that system or fund and accepts on a
9contractual basis a position to provide services to a
10governmental entity from which he or she has retired, then
11that person's annuity or retirement pension earned as an
12active employee of the employer shall be suspended during that
13contractual service. A person receiving an annuity or
14retirement pension under this Code shall notify the pension
15fund or retirement system from which he or she is receiving an
16annuity or retirement pension, as well as his or her
17contractual employer, of his or her retirement status before
18accepting contractual employment. A person who fails to submit
19such notification shall be guilty of a Class A misdemeanor and
20required to pay a fine of $1,000. Upon termination of that
21contractual employment, the person's retirement annuity or
22retirement pension payments shall resume and, if appropriate,
23be recalculated under the applicable provisions of this Code.
24    (i) (Blank).
25    (j) In the case of a conflict between the provisions of
26this Section and any other provision of this Code, the

 

 

SB3073- 65 -LRB103 37686 RPS 67813 b

1provisions of this Section shall control.
2(Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
3102-210, eff. 1-1-22; 102-263, eff. 8-6-21; 102-813, eff.
45-13-22.)
 
5    (Text of Section from P.A. 102-956)
6    Sec. 1-160. Provisions applicable to new hires.
7    (a) The provisions of this Section apply to a person who,
8on or after January 1, 2011, first becomes a member or a
9participant under any reciprocal retirement system or pension
10fund established under this Code, other than a retirement
11system or pension fund established under Article 2, 3, 4, 5, 6,
127, 15, or 18 of this Code, notwithstanding any other provision
13of this Code to the contrary, but do not apply to any
14self-managed plan established under this Code or to any
15participant of the retirement plan established under Section
1622-101; except that this Section applies to a person who
17elected to establish alternative credits by electing in
18writing after January 1, 2011, but before August 8, 2011,
19under Section 7-145.1 of this Code. Notwithstanding anything
20to the contrary in this Section, for purposes of this Section,
21a person who is a Tier 1 regular employee as defined in Section
227-109.4 of this Code or who participated in a retirement
23system under Article 15 prior to January 1, 2011 shall be
24deemed a person who first became a member or participant prior
25to January 1, 2011 under any retirement system or pension fund

 

 

SB3073- 66 -LRB103 37686 RPS 67813 b

1subject to this Section. The changes made to this Section by
2Public Act 98-596 are a clarification of existing law and are
3intended to be retroactive to January 1, 2011 (the effective
4date of Public Act 96-889), notwithstanding the provisions of
5Section 1-103.1 of this Code.
6    This Section does not apply to a person who first becomes a
7noncovered employee under Article 14 on or after the
8implementation date of the plan created under Section 1-161
9for that Article, unless that person elects under subsection
10(b) of Section 1-161 to instead receive the benefits provided
11under this Section and the applicable provisions of that
12Article.
13    This Section does not apply to a person who first becomes a
14member or participant under Article 16 on or after the
15implementation date of the plan created under Section 1-161
16for that Article, unless that person elects under subsection
17(b) of Section 1-161 to instead receive the benefits provided
18under this Section and the applicable provisions of that
19Article.
20    This Section does not apply to a person who elects under
21subsection (c-5) of Section 1-161 to receive the benefits
22under Section 1-161.
23    This Section does not apply to a person who first becomes a
24member or participant of an affected pension fund on or after 6
25months after the resolution or ordinance date, as defined in
26Section 1-162, unless that person elects under subsection (c)

 

 

SB3073- 67 -LRB103 37686 RPS 67813 b

1of Section 1-162 to receive the benefits provided under this
2Section and the applicable provisions of the Article under
3which he or she is a member or participant.
4    This Section does not apply to a person who participates
5in a defined contribution plan established under Section
614-155.5.
7    (b) "Final average salary" means, except as otherwise
8provided in this subsection, the average monthly (or annual)
9salary obtained by dividing the total salary or earnings
10calculated under the Article applicable to the member or
11participant during the 96 consecutive months (or 8 consecutive
12years) of service within the last 120 months (or 10 years) of
13service in which the total salary or earnings calculated under
14the applicable Article was the highest by the number of months
15(or years) of service in that period. For the purposes of a
16person who first becomes a member or participant of any
17retirement system or pension fund to which this Section
18applies on or after January 1, 2011, in this Code, "final
19average salary" shall be substituted for the following:
20        (1) (Blank).
21        (2) In Articles 8, 9, 10, 11, and 12, "highest average
22    annual salary for any 4 consecutive years within the last
23    10 years of service immediately preceding the date of
24    withdrawal".
25        (3) In Article 13, "average final salary".
26        (4) In Article 14, "final average compensation".

 

 

SB3073- 68 -LRB103 37686 RPS 67813 b

1        (5) In Article 17, "average salary".
2        (6) In Section 22-207, "wages or salary received by
3    him at the date of retirement or discharge".
4    A member of the Teachers' Retirement System of the State
5of Illinois who retires on or after June 1, 2021 and for whom
6the 2020-2021 school year is used in the calculation of the
7member's final average salary shall use the higher of the
8following for the purpose of determining the member's final
9average salary:
10        (A) the amount otherwise calculated under the first
11    paragraph of this subsection; or
12        (B) an amount calculated by the Teachers' Retirement
13    System of the State of Illinois using the average of the
14    monthly (or annual) salary obtained by dividing the total
15    salary or earnings calculated under Article 16 applicable
16    to the member or participant during the 96 months (or 8
17    years) of service within the last 120 months (or 10 years)
18    of service in which the total salary or earnings
19    calculated under the Article was the highest by the number
20    of months (or years) of service in that period.
21    (b-5) Beginning on January 1, 2011, for all purposes under
22this Code (including without limitation the calculation of
23benefits and employee contributions), the annual earnings,
24salary, or wages (based on the plan year) of a member or
25participant to whom this Section applies shall not exceed
26$106,800; however, that amount shall annually thereafter be

 

 

SB3073- 69 -LRB103 37686 RPS 67813 b

1increased by the lesser of (i) 3% of that amount, including all
2previous adjustments, or (ii) one-half the annual unadjusted
3percentage increase (but not less than zero) in the consumer
4price index-u for the 12 months ending with the September
5preceding each November 1, including all previous adjustments.
6    For the purposes of this Section, "consumer price index-u"
7means the index published by the Bureau of Labor Statistics of
8the United States Department of Labor that measures the
9average change in prices of goods and services purchased by
10all urban consumers, United States city average, all items,
111982-84 = 100. The new amount resulting from each annual
12adjustment shall be determined by the Public Pension Division
13of the Department of Insurance and made available to the
14boards of the retirement systems and pension funds by November
151 of each year.
16    (b-10) Beginning on January 1, 2024, for all purposes
17under this Code (including, without limitation, the
18calculation of benefits and employee contributions), the
19annual earnings, salary, or wages (based on the plan year) of a
20member or participant under Article 9 to whom this Section
21applies shall include an annual earnings, salary, or wage cap
22that tracks the Social Security wage base. Maximum annual
23earnings, wages, or salary shall be the annual contribution
24and benefit base established for the applicable year by the
25Commissioner of the Social Security Administration under the
26federal Social Security Act.

 

 

SB3073- 70 -LRB103 37686 RPS 67813 b

1    However, in no event shall the annual earnings, salary, or
2wages for the purposes of this Article and Article 9 exceed any
3limitation imposed on annual earnings, salary, or wages under
4Section 1-117. Under no circumstances shall the maximum amount
5of annual earnings, salary, or wages be greater than the
6amount set forth in this subsection (b-10) as a result of
7reciprocal service or any provisions regarding reciprocal
8services, nor shall the Fund under Article 9 be required to pay
9any refund as a result of the application of this maximum
10annual earnings, salary, and wage cap.
11    Nothing in this subsection (b-10) shall cause or otherwise
12result in any retroactive adjustment of any employee
13contributions. Nothing in this subsection (b-10) shall cause
14or otherwise result in any retroactive adjustment of
15disability or other payments made between January 1, 2011 and
16January 1, 2024.
17    (c) A member or participant is entitled to a retirement
18annuity upon written application if he or she has attained age
1967 (age 65, with respect to service under Article 12 that is
20subject to this Section, for a member or participant under
21Article 12 who first becomes a member or participant under
22Article 12 on or after January 1, 2022 or who makes the
23election under item (i) of subsection (d-15) of this Section)
24and has at least 10 years of service credit and is otherwise
25eligible under the requirements of the applicable Article.
26    A member or participant who has attained age 62 (age 60,

 

 

SB3073- 71 -LRB103 37686 RPS 67813 b

1with respect to service under Article 12 that is subject to
2this Section, for a member or participant under Article 12 who
3first becomes a member or participant under Article 12 on or
4after January 1, 2022 or who makes the election under item (i)
5of subsection (d-15) of this Section) and has at least 10 years
6of service credit and is otherwise eligible under the
7requirements of the applicable Article may elect to receive
8the lower retirement annuity provided in subsection (d) of
9this Section.
10    (c-5) A person who first becomes a member or a participant
11subject to this Section on or after July 6, 2017 (the effective
12date of Public Act 100-23), notwithstanding any other
13provision of this Code to the contrary, is entitled to a
14retirement annuity under Article 8 or Article 11 upon written
15application if he or she has attained age 65 and has at least
1610 years of service credit and is otherwise eligible under the
17requirements of Article 8 or Article 11 of this Code,
18whichever is applicable.
19    (d) The retirement annuity of a member or participant who
20is retiring after attaining age 62 (age 60, with respect to
21service under Article 12 that is subject to this Section, for a
22member or participant under Article 12 who first becomes a
23member or participant under Article 12 on or after January 1,
242022 or who makes the election under item (i) of subsection
25(d-15) of this Section) with at least 10 years of service
26credit shall be reduced by one-half of 1% for each full month

 

 

SB3073- 72 -LRB103 37686 RPS 67813 b

1that the member's age is under age 67 (age 65, with respect to
2service under Article 12 that is subject to this Section, for a
3member or participant under Article 12 who first becomes a
4member or participant under Article 12 on or after January 1,
52022 or who makes the election under item (i) of subsection
6(d-15) of this Section).
7    (d-5) The retirement annuity payable under Article 8 or
8Article 11 to an eligible person subject to subsection (c-5)
9of this Section who is retiring at age 60 with at least 10
10years of service credit shall be reduced by one-half of 1% for
11each full month that the member's age is under age 65.
12    (d-10) Each person who first became a member or
13participant under Article 8 or Article 11 of this Code on or
14after January 1, 2011 and prior to July 6, 2017 (the effective
15date of Public Act 100-23) shall make an irrevocable election
16either:
17        (i) to be eligible for the reduced retirement age
18    provided in subsections (c-5) and (d-5) of this Section,
19    the eligibility for which is conditioned upon the member
20    or participant agreeing to the increases in employee
21    contributions for age and service annuities provided in
22    subsection (a-5) of Section 8-174 of this Code (for
23    service under Article 8) or subsection (a-5) of Section
24    11-170 of this Code (for service under Article 11); or
25        (ii) to not agree to item (i) of this subsection
26    (d-10), in which case the member or participant shall

 

 

SB3073- 73 -LRB103 37686 RPS 67813 b

1    continue to be subject to the retirement age provisions in
2    subsections (c) and (d) of this Section and the employee
3    contributions for age and service annuity as provided in
4    subsection (a) of Section 8-174 of this Code (for service
5    under Article 8) or subsection (a) of Section 11-170 of
6    this Code (for service under Article 11).
7    The election provided for in this subsection shall be made
8between October 1, 2017 and November 15, 2017. A person
9subject to this subsection who makes the required election
10shall remain bound by that election. A person subject to this
11subsection who fails for any reason to make the required
12election within the time specified in this subsection shall be
13deemed to have made the election under item (ii).
14    (d-15) Each person who first becomes a member or
15participant under Article 12 on or after January 1, 2011 and
16prior to January 1, 2022 shall make an irrevocable election
17either:
18        (i) to be eligible for the reduced retirement age
19    specified in subsections (c) and (d) of this Section, the
20    eligibility for which is conditioned upon the member or
21    participant agreeing to the increase in employee
22    contributions for service annuities specified in
23    subsection (b) of Section 12-150; or
24        (ii) to not agree to item (i) of this subsection
25    (d-15), in which case the member or participant shall not
26    be eligible for the reduced retirement age specified in

 

 

SB3073- 74 -LRB103 37686 RPS 67813 b

1    subsections (c) and (d) of this Section and shall not be
2    subject to the increase in employee contributions for
3    service annuities specified in subsection (b) of Section
4    12-150.
5    The election provided for in this subsection shall be made
6between January 1, 2022 and April 1, 2022. A person subject to
7this subsection who makes the required election shall remain
8bound by that election. A person subject to this subsection
9who fails for any reason to make the required election within
10the time specified in this subsection shall be deemed to have
11made the election under item (ii).
12    (e) Any retirement annuity or supplemental annuity shall
13be subject to annual increases on the January 1 occurring
14either on or after the attainment of age 67 (age 65, with
15respect to service under Article 12 that is subject to this
16Section, for a member or participant under Article 12 who
17first becomes a member or participant under Article 12 on or
18after January 1, 2022 or who makes the election under item (i)
19of subsection (d-15); and beginning on July 6, 2017 (the
20effective date of Public Act 100-23), age 65 with respect to
21service under Article 8 or Article 11 for eligible persons
22who: (i) are subject to subsection (c-5) of this Section; or
23(ii) made the election under item (i) of subsection (d-10) of
24this Section) or the first anniversary of the annuity start
25date, whichever is later. Each annual increase shall be
26calculated at 3% or one-half the annual unadjusted percentage

 

 

SB3073- 75 -LRB103 37686 RPS 67813 b

1increase (but not less than zero) in the consumer price
2index-u for the 12 months ending with the September preceding
3each November 1, whichever is less, of the originally granted
4retirement annuity. If the annual unadjusted percentage change
5in the consumer price index-u for the 12 months ending with the
6September preceding each November 1 is zero or there is a
7decrease, then the annuity shall not be increased.
8    For the purposes of Section 1-103.1 of this Code, the
9changes made to this Section by Public Act 102-263 are
10applicable without regard to whether the employee was in
11active service on or after August 6, 2021 (the effective date
12of Public Act 102-263).
13    For the purposes of Section 1-103.1 of this Code, the
14changes made to this Section by Public Act 100-23 are
15applicable without regard to whether the employee was in
16active service on or after July 6, 2017 (the effective date of
17Public Act 100-23).
18    (f) The initial survivor's or widow's annuity of an
19otherwise eligible survivor or widow of a retired member or
20participant who first became a member or participant on or
21after January 1, 2011 shall be in the amount of 66 2/3% of the
22retired member's or participant's retirement annuity at the
23date of death. In the case of the death of a member or
24participant who has not retired and who first became a member
25or participant on or after January 1, 2011, eligibility for a
26survivor's or widow's annuity shall be determined by the

 

 

SB3073- 76 -LRB103 37686 RPS 67813 b

1applicable Article of this Code. The initial benefit shall be
266 2/3% of the earned annuity without a reduction due to age. A
3child's annuity of an otherwise eligible child shall be in the
4amount prescribed under each Article if applicable. Any
5survivor's or widow's annuity shall be increased (1) on each
6January 1 occurring on or after the commencement of the
7annuity if the deceased member died while receiving a
8retirement annuity or (2) in other cases, on each January 1
9occurring after the first anniversary of the commencement of
10the annuity. Each annual increase shall be calculated at 3% or
11one-half the annual unadjusted percentage increase (but not
12less than zero) in the consumer price index-u for the 12 months
13ending with the September preceding each November 1, whichever
14is less, of the originally granted survivor's annuity. If the
15annual unadjusted percentage change in the consumer price
16index-u for the 12 months ending with the September preceding
17each November 1 is zero or there is a decrease, then the
18annuity shall not be increased.
19    (g) The benefits in Section 14-110 apply only if the
20person is a State policeman, a fire fighter in the fire
21protection service of a department, a conservation police
22officer, an investigator for the Secretary of State, an
23investigator for the Office of the Attorney General, an arson
24investigator, a Commerce Commission police officer,
25investigator for the Department of Revenue or the Illinois
26Gaming Board, a security employee of the Department of

 

 

SB3073- 77 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 78 -LRB103 37686 RPS 67813 b

1system or pension fund subject to this Section on or after
2January 1, 2012 and is receiving a retirement annuity or
3retirement pension under that system or fund and accepts on a
4contractual basis a position to provide services to a
5governmental entity from which he or she has retired, then
6that person's annuity or retirement pension earned as an
7active employee of the employer shall be suspended during that
8contractual service. A person receiving an annuity or
9retirement pension under this Code shall notify the pension
10fund or retirement system from which he or she is receiving an
11annuity or retirement pension, as well as his or her
12contractual employer, of his or her retirement status before
13accepting contractual employment. A person who fails to submit
14such notification shall be guilty of a Class A misdemeanor and
15required to pay a fine of $1,000. Upon termination of that
16contractual employment, the person's retirement annuity or
17retirement pension payments shall resume and, if appropriate,
18be recalculated under the applicable provisions of this Code.
19    (i) (Blank).
20    (j) In the case of a conflict between the provisions of
21this Section and any other provision of this Code, the
22provisions of this Section shall control.
23(Source: P.A. 102-16, eff. 6-17-21; 102-210, eff. 1-1-22;
24102-263, eff. 8-6-21; 102-956, eff. 5-27-22; 103-529, eff.
258-11-23.)
 

 

 

SB3073- 79 -LRB103 37686 RPS 67813 b

1    (40 ILCS 5/1-161)
2    Sec. 1-161. Optional benefits for certain Tier 2 members
3under Articles 14, 15, and 16.
4    (a) Notwithstanding any other provision of this Code to
5the contrary, the provisions of this Section apply to a person
6who first becomes a member or a participant under Article 14,
715, or 16 on or after the implementation date under this
8Section for the applicable Article and who does not make the
9election under subsection (b) or (c), whichever applies. The
10provisions of this Section also apply to a person who makes the
11election under subsection (c-5). However, the provisions of
12this Section do not apply to any participant in a self-managed
13plan or a defined contribution plan established under Section
1414-155.5, nor to a covered employee under Article 14.
15    As used in this Section and Section 1-160, the
16"implementation date" under this Section means the earliest
17date upon which the board of a retirement system authorizes
18members of that system to begin participating in accordance
19with this Section, as determined by the board of that
20retirement system. Each of the retirement systems subject to
21this Section shall endeavor to make such participation
22available as soon as possible after the effective date of this
23Section and shall establish an implementation date by board
24resolution.
25    (b) In lieu of the benefits provided under this Section, a
26member or participant, except for a participant under Article

 

 

SB3073- 80 -LRB103 37686 RPS 67813 b

115, may irrevocably elect the benefits under Section 1-160 and
2the benefits otherwise applicable to that member or
3participant. The election must be made within 30 days after
4becoming a member or participant. Each retirement system shall
5establish procedures for making this election.
6    (c) A participant under Article 15 may irrevocably elect
7the benefits otherwise provided to a Tier 2 member under
8Article 15. The election must be made within 30 days after
9becoming a member. The retirement system under Article 15
10shall establish procedures for making this election.
11    (c-5) A non-covered participant under Article 14 to whom
12Section 1-160 applies, a Tier 2 member under Article 15, or a
13participant under Article 16 to whom Section 1-160 applies may
14irrevocably elect to receive the benefits under this Section
15in lieu of the benefits under Section 1-160 or the benefits
16otherwise available to a Tier 2 member under Article 15,
17whichever is applicable. Each retirement System shall
18establish procedures for making this election.
19    (d) "Final average salary" means the average monthly (or
20annual) salary obtained by dividing the total salary or
21earnings calculated under the Article applicable to the member
22or participant during the last 120 months (or 10 years) of
23service in which the total salary or earnings calculated under
24the applicable Article was the highest by the number of months
25(or years) of service in that period. For the purposes of a
26person to whom this Section applies, in this Code, "final

 

 

SB3073- 81 -LRB103 37686 RPS 67813 b

1average salary" shall be substituted for "final average
2compensation" in Article 14.
3    (e) Beginning on the implementation date, for all purposes
4under this Code (including without limitation the calculation
5of benefits and employee contributions), the annual earnings,
6salary, compensation, or wages (based on the plan year) of a
7member or participant to whom this Section applies shall not
8at any time exceed the federal Social Security Wage Base then
9in effect.
10    (f) A member or participant is entitled to a retirement
11annuity upon written application if he or she has attained the
12normal retirement age determined by the Social Security
13Administration for that member or participant's year of birth,
14but no earlier than 67 years of age, and has at least 10 years
15of service credit and is otherwise eligible under the
16requirements of the applicable Article.
17    (g) The amount of the retirement annuity to which a member
18or participant is entitled shall be computed by multiplying
191.25% for each year of service credit by his or her final
20average salary.
21    (h) Any retirement annuity or supplemental annuity shall
22be subject to annual increases on the first anniversary of the
23annuity start date. Each annual increase shall be one-half the
24annual unadjusted percentage increase (but not less than zero)
25in the consumer price index-w for the 12 months ending with the
26September preceding each November 1 of the originally granted

 

 

SB3073- 82 -LRB103 37686 RPS 67813 b

1retirement annuity. If the annual unadjusted percentage change
2in the consumer price index-w for the 12 months ending with the
3September preceding each November 1 is zero or there is a
4decrease, then the annuity shall not be increased.
5    For the purposes of this Section, "consumer price index-w"
6means the index published by the Bureau of Labor Statistics of
7the United States Department of Labor that measures the
8average change in prices of goods and services purchased by
9Urban Wage Earners and Clerical Workers, United States city
10average, all items, 1982-84 = 100. The new amount resulting
11from each annual adjustment shall be determined by the Public
12Pension Division of the Department of Insurance and made
13available to the boards of the retirement systems and pension
14funds by November 1 of each year.
15    (i) The initial survivor's or widow's annuity of an
16otherwise eligible survivor or widow of a retired member or
17participant to whom this Section applies shall be in the
18amount of 66 2/3% of the retired member's or participant's
19retirement annuity at the date of death. In the case of the
20death of a member or participant who has not retired and to
21whom this Section applies, eligibility for a survivor's or
22widow's annuity shall be determined by the applicable Article
23of this Code. The benefit shall be 66 2/3% of the earned
24annuity without a reduction due to age. A child's annuity of an
25otherwise eligible child shall be in the amount prescribed
26under each Article if applicable.

 

 

SB3073- 83 -LRB103 37686 RPS 67813 b

1    (j) In lieu of any other employee contributions, except
2for the contribution to the defined contribution plan under
3subsection (k) of this Section, each employee shall contribute
46.2% of his her or salary to the retirement system. However,
5the employee contribution under this subsection shall not
6exceed the amount of the total normal cost of the benefits for
7all members making contributions under this Section (except
8for the defined contribution plan under subsection (k) of this
9Section), expressed as a percentage of payroll and certified
10on or before January 15 of each year by the board of trustees
11of the retirement system. If the board of trustees of the
12retirement system certifies that the 6.2% employee
13contribution rate exceeds the normal cost of the benefits
14under this Section (except for the defined contribution plan
15under subsection (k) of this Section), then on or before
16December 1 of that year, the board of trustees shall certify
17the amount of the normal cost of the benefits under this
18Section (except for the defined contribution plan under
19subsection (k) of this Section), expressed as a percentage of
20payroll, to the State Actuary and the Commission on Government
21Forecasting and Accountability, and the employee contribution
22under this subsection shall be reduced to that amount
23beginning July 1 of that year. Thereafter, if the normal cost
24of the benefits under this Section (except for the defined
25contribution plan under subsection (k) of this Section),
26expressed as a percentage of payroll and certified on or

 

 

SB3073- 84 -LRB103 37686 RPS 67813 b

1before January 1 of each year by the board of trustees of the
2retirement system, exceeds 6.2% of salary, then on or before
3January 15 of that year, the board of trustees shall certify
4the normal cost to the State Actuary and the Commission on
5Government Forecasting and Accountability, and the employee
6contributions shall revert back to 6.2% of salary beginning
7January 1 of the following year.
8    (k) In accordance with each retirement system's
9implementation date, each retirement system under Article 14,
1015, or 16 shall prepare and implement a defined contribution
11plan for members or participants who are subject to this
12Section. The defined contribution plan developed under this
13subsection shall be a plan that aggregates employer and
14employee contributions in individual participant accounts
15which, after meeting any other requirements, are used for
16payouts after retirement in accordance with this subsection
17and any other applicable laws.
18        (1) Each member or participant shall contribute a
19    minimum of 4% of his or her salary to the defined
20    contribution plan.
21        (2) For each participant in the defined contribution
22    plan who has been employed with the same employer for at
23    least one year, employer contributions shall be paid into
24    that participant's accounts at a rate expressed as a
25    percentage of salary. This rate may be set for individual
26    employees, but shall be no higher than 6% of salary and

 

 

SB3073- 85 -LRB103 37686 RPS 67813 b

1    shall be no lower than 2% of salary.
2        (3) Employer contributions shall vest when those
3    contributions are paid into a member's or participant's
4    account.
5        (4) The defined contribution plan shall provide a
6    variety of options for investments. These options shall
7    include investments handled by the Illinois State Board of
8    Investment as well as private sector investment options.
9        (5) The defined contribution plan shall provide a
10    variety of options for payouts to retirees and their
11    survivors.
12        (6) To the extent authorized under federal law and as
13    authorized by the retirement system, the defined
14    contribution plan shall allow former participants in the
15    plan to transfer or roll over employee and employer
16    contributions, and the earnings thereon, into other
17    qualified retirement plans.
18        (7) Each retirement system shall reduce the employee
19    contributions credited to the member's defined
20    contribution plan account by an amount determined by that
21    retirement system to cover the cost of offering the
22    benefits under this subsection and any applicable
23    administrative fees.
24        (8) No person shall begin participating in the defined
25    contribution plan until it has attained qualified plan
26    status and received all necessary approvals from the U.S.

 

 

SB3073- 86 -LRB103 37686 RPS 67813 b

1    Internal Revenue Service.
2    (l) In the case of a conflict between the provisions of
3this Section and any other provision of this Code, the
4provisions of this Section shall control.
5(Source: P.A. 100-23, eff. 7-6-17.)
 
6    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
7    Sec. 14-103.05. Employee.
8    (a) Except as provided in subsection (e), any Any person
9employed by a Department who receives salary for personal
10services rendered to the Department on a warrant issued
11pursuant to a payroll voucher certified by a Department and
12drawn by the State Comptroller upon the State Treasurer,
13including an elected official described in subparagraph (d) of
14Section 14-104, shall become an employee for purpose of
15membership in the Retirement System on the first day of such
16employment.
17    A person entering service on or after January 1, 1972 and
18prior to January 1, 1984 shall become a member as a condition
19of employment and shall begin making contributions as of the
20first day of employment.
21    A person entering service on or after January 1, 1984
22shall, upon completion of 6 months of continuous service which
23is not interrupted by a break of more than 2 months, become a
24member as a condition of employment. Contributions shall begin
25the first of the month after completion of the qualifying

 

 

SB3073- 87 -LRB103 37686 RPS 67813 b

1period.
2    A person employed by the Chicago Metropolitan Agency for
3Planning on the effective date of this amendatory Act of the
495th General Assembly who was a member of this System as an
5employee of the Chicago Area Transportation Study and makes an
6election under Section 14-104.13 to participate in this System
7for his or her employment with the Chicago Metropolitan Agency
8for Planning.
9    The qualifying period of 6 months of service is not
10applicable to: (1) a person who has been granted credit for
11service in a position covered by the State Universities
12Retirement System, the Teachers' Retirement System of the
13State of Illinois, the General Assembly Retirement System, or
14the Judges Retirement System of Illinois unless that service
15has been forfeited under the laws of those systems; (2) a
16person entering service on or after July 1, 1991 in a
17noncovered position; (3) a person to whom Section 14-108.2a or
1814-108.2b applies; or (4) a person to whom subsection (a-5) of
19this Section applies.
20    (a-5) Except as provided in subsection (e), a A person
21entering service on or after December 1, 2010 and before the
22effective date of this amendatory Act of the 103rd General
23Assembly shall become a member as a condition of employment
24and shall begin making contributions as of the first day of
25employment. A person serving in the qualifying period on
26December 1, 2010 will become a member on December 1, 2010 and

 

 

SB3073- 88 -LRB103 37686 RPS 67813 b

1shall begin making contributions as of December 1, 2010.
2    (b) The term "employee" does not include the following:
3        (1) members of the State Legislature, and persons
4    electing to become members of the General Assembly
5    Retirement System pursuant to Section 2-105;
6        (2) incumbents of offices normally filled by vote of
7    the people;
8        (3) except as otherwise provided in this Section, any
9    person appointed by the Governor with the advice and
10    consent of the Senate unless that person elects to
11    participate in this system;
12        (3.1) any person serving as a commissioner of an
13    ethics commission created under the State Officials and
14    Employees Ethics Act unless that person elects to
15    participate in this system with respect to that service as
16    a commissioner;
17        (3.2) any person serving as a part-time employee in
18    any of the following positions: Legislative Inspector
19    General, Special Legislative Inspector General, employee
20    of the Office of the Legislative Inspector General,
21    Executive Director of the Legislative Ethics Commission,
22    or staff of the Legislative Ethics Commission, regardless
23    of whether he or she is in active service on or after July
24    8, 2004 (the effective date of Public Act 93-685), unless
25    that person elects to participate in this System with
26    respect to that service; in this item (3.2), a "part-time

 

 

SB3073- 89 -LRB103 37686 RPS 67813 b

1    employee" is a person who is not required to work at least
2    35 hours per week;
3        (3.3) any person who has made an election under
4    Section 1-123 and who is serving either as legal counsel
5    in the Office of the Governor or as Chief Deputy Attorney
6    General;
7        (4) except as provided in Section 14-108.2 or
8    14-108.2c, any person who is covered or eligible to be
9    covered by the Teachers' Retirement System of the State of
10    Illinois, the State Universities Retirement System, or the
11    Judges Retirement System of Illinois;
12        (5) an employee of a municipality or any other
13    political subdivision of the State;
14        (6) any person who becomes an employee after June 30,
15    1979 as a public service employment program participant
16    under the Federal Comprehensive Employment and Training
17    Act and whose wages or fringe benefits are paid in whole or
18    in part by funds provided under such Act;
19        (7) enrollees of the Illinois Young Adult Conservation
20    Corps program, administered by the Department of Natural
21    Resources, authorized grantee pursuant to Title VIII of
22    the "Comprehensive Employment and Training Act of 1973",
23    29 USC 993, as now or hereafter amended;
24        (8) enrollees and temporary staff of programs
25    administered by the Department of Natural Resources under
26    the Youth Conservation Corps Act of 1970;

 

 

SB3073- 90 -LRB103 37686 RPS 67813 b

1        (9) any person who is a member of any professional
2    licensing or disciplinary board created under an Act
3    administered by the Department of Professional Regulation
4    or a successor agency or created or re-created after the
5    effective date of this amendatory Act of 1997, and who
6    receives per diem compensation rather than a salary,
7    notwithstanding that such per diem compensation is paid by
8    warrant issued pursuant to a payroll voucher; such persons
9    have never been included in the membership of this System,
10    and this amendatory Act of 1987 (P.A. 84-1472) is not
11    intended to effect any change in the status of such
12    persons;
13        (10) any person who is a member of the Illinois Health
14    Care Cost Containment Council, and receives per diem
15    compensation rather than a salary, notwithstanding that
16    such per diem compensation is paid by warrant issued
17    pursuant to a payroll voucher; such persons have never
18    been included in the membership of this System, and this
19    amendatory Act of 1987 is not intended to effect any
20    change in the status of such persons;
21        (11) any person who is a member of the Oil and Gas
22    Board created by Section 1.2 of the Illinois Oil and Gas
23    Act, and receives per diem compensation rather than a
24    salary, notwithstanding that such per diem compensation is
25    paid by warrant issued pursuant to a payroll voucher;
26        (12) a person employed by the State Board of Higher

 

 

SB3073- 91 -LRB103 37686 RPS 67813 b

1    Education in a position with the Illinois Century Network
2    as of June 30, 2004, who remains continuously employed
3    after that date by the Department of Central Management
4    Services in a position with the Illinois Century Network
5    and participates in the Article 15 system with respect to
6    that employment;
7        (13) any person who first becomes a member of the
8    Civil Service Commission on or after January 1, 2012;
9        (14) any person, other than the Director of Employment
10    Security, who first becomes a member of the Board of
11    Review of the Department of Employment Security on or
12    after January 1, 2012;
13        (15) any person who first becomes a member of the
14    Civil Service Commission on or after January 1, 2012;
15        (16) any person who first becomes a member of the
16    Illinois Liquor Control Commission on or after January 1,
17    2012;
18        (17) any person who first becomes a member of the
19    Secretary of State Merit Commission on or after January 1,
20    2012;
21        (18) any person who first becomes a member of the
22    Human Rights Commission on or after January 1, 2012 unless
23    he or she is eligible to participate in accordance with
24    subsection (d) of this Section;
25        (19) any person who first becomes a member of the
26    State Mining Board on or after January 1, 2012;

 

 

SB3073- 92 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 93 -LRB103 37686 RPS 67813 b

1organization and (ii) employer contributions based on the
2percentage of payroll certified by the board; all or any part
3of these contributions may be paid on the employee's behalf or
4picked up for tax purposes (if authorized under federal law)
5by the labor organization.
6    A person who is an employee as defined in this subsection
7(c) may establish service credit for similar employment prior
8to becoming an employee under this subsection by paying to the
9System for that employment the contributions specified in this
10subsection, plus interest at the effective rate from the date
11of service to the date of payment. However, credit shall not be
12granted under this subsection (c) for any such prior
13employment for which the applicant received credit under any
14other provision of this Code or during which the applicant was
15on a leave of absence.
16    (d) A person appointed as a member of the Human Rights
17Commission on or after June 1, 2019 may elect to participate in
18the System and shall be deemed an employee. Service and
19contributions shall begin on the first payroll period
20immediately following the employee's election to participate
21in the System.
22    A person who is an employee as described in this
23subsection (d) may establish service credit for employment as
24a Human Rights Commissioner that occurred on or after June 1,
252019 and before establishing service under this subsection by
26paying to the System for that employment the contributions

 

 

SB3073- 94 -LRB103 37686 RPS 67813 b

1specified in paragraph (1) of subsection (a) of Section
214-133, plus regular interest from the date of service to the
3date of payment.
4    (e) Notwithstanding any other provision of this Article, a
5person who first becomes an employee after the effective date
6of this amendatory Act of the 103rd General Assembly is not
7required, as a condition of employment or otherwise, to
8participate in this System. An employee may elect not to
9participate in this System by notifying the System in a manner
10specified by the System.
11(Source: P.A. 101-10, eff. 6-5-19; 102-538, eff. 8-20-21.)
 
12    (40 ILCS 5/14-103.41)
13    Sec. 14-103.41. Tier 1 member; Tier 2 member; defined
14contribution plan member. "Tier 1 member": A member of this
15System who first became a member or participant before January
161, 2011 under any reciprocal retirement system or pension fund
17established under this Code other than a retirement system or
18pension fund established under Article 2, 3, 4, 5, 6, or 18 of
19this Code.
20    In the case of a Tier 1 member who elects to participate in
21the defined contribution plan under Section 14-155.5 of this
22Code, that Tier 1 member shall be deemed a Tier 1 member only
23with respect to service performed or established before the
24effective date of that election.
25    "Tier 2 member": A member of this System who first becomes

 

 

SB3073- 95 -LRB103 37686 RPS 67813 b

1a member under this Article on or after January 1, 2011 and who
2is not a Tier 1 member.
3    In the case of a Tier 2 member who elects to participate in
4the defined contribution plan under Section 14-155.5 of this
5Code, that Tier 2 member shall be deemed a Tier 2 member only
6with respect to service performed or established before the
7effective date of that election.
8    "Defined contribution plan member": A Tier 1 or Tier 2
9member who elects to participate in the defined contribution
10plan under Section 14-155.5 of this Code, but only with
11respect to service performed on or after the effective date of
12that election.
13(Source: P.A. 100-587, eff. 6-4-18.)
 
14    (40 ILCS 5/14-152.1)
15    Sec. 14-152.1. Application and expiration of new benefit
16increases.
17    (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article, that results from an amendment
21to this Code that takes effect after June 1, 2005 (the
22effective date of Public Act 94-4). "New benefit increase",
23however, does not include any benefit increase resulting from
24the changes made to Article 1 or this Article by Public Act
2596-37, Public Act 100-23, Public Act 100-587, Public Act

 

 

SB3073- 96 -LRB103 37686 RPS 67813 b

1100-611, Public Act 101-10, Public Act 101-610, Public Act
2102-210, Public Act 102-856, Public Act 102-956, or this
3amendatory Act of the 103rd General Assembly or this
4amendatory Act of the 102nd General Assembly.
5    (b) Notwithstanding any other provision of this Code or
6any subsequent amendment to this Code, every new benefit
7increase is subject to this Section and shall be deemed to be
8granted only in conformance with and contingent upon
9compliance with the provisions of this Section.
10    (c) The Public Act enacting a new benefit increase must
11identify and provide for payment to the System of additional
12funding at least sufficient to fund the resulting annual
13increase in cost to the System as it accrues.
14    Every new benefit increase is contingent upon the General
15Assembly providing the additional funding required under this
16subsection. The Commission on Government Forecasting and
17Accountability shall analyze whether adequate additional
18funding has been provided for the new benefit increase and
19shall report its analysis to the Public Pension Division of
20the Department of Insurance. A new benefit increase created by
21a Public Act that does not include the additional funding
22required under this subsection is null and void. If the Public
23Pension Division determines that the additional funding
24provided for a new benefit increase under this subsection is
25or has become inadequate, it may so certify to the Governor and
26the State Comptroller and, in the absence of corrective action

 

 

SB3073- 97 -LRB103 37686 RPS 67813 b

1by the General Assembly, the new benefit increase shall expire
2at the end of the fiscal year in which the certification is
3made.
4    (d) Every new benefit increase shall expire 5 years after
5its effective date or on such earlier date as may be specified
6in the language enacting the new benefit increase or provided
7under subsection (c). This does not prevent the General
8Assembly from extending or re-creating a new benefit increase
9by law.
10    (e) Except as otherwise provided in the language creating
11the new benefit increase, a new benefit increase that expires
12under this Section continues to apply to persons who applied
13and qualified for the affected benefit while the new benefit
14increase was in effect and to the affected beneficiaries and
15alternate payees of such persons, but does not apply to any
16other person, including, without limitation, a person who
17continues in service after the expiration date and did not
18apply and qualify for the affected benefit while the new
19benefit increase was in effect.
20(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
21101-610, eff. 1-1-20; 102-210, eff. 7-30-21; 102-856, eff.
221-1-23; 102-956, eff. 5-27-22.)
 
23    (40 ILCS 5/14-155.5 new)
24    Sec. 14-155.5. Defined contribution plan.
25    (a) As used in this Section, "defined benefit plan" means

 

 

SB3073- 98 -LRB103 37686 RPS 67813 b

1the retirement plan available under this Article to Tier 1 or
2Tier 2 members who have not made the election authorized under
3this Section.
4    (b) By July 1, 2026, the System shall prepare and
5implement a defined contribution plan. The defined
6contribution plan developed under this Section shall be a plan
7that aggregates State and employee contributions in individual
8participant accounts that, after meeting any other
9requirements, are used for payouts after retirement in
10accordance with this Section and any other applicable laws.
11        (1) Participation in the defined contribution plan for
12    persons who elect to participate shall begin on July 1,
13    2026. For persons who elect to participate on or after
14    July 1, 2026, participation in the defined contribution
15    plan shall begin as soon as practical after the election
16    is made.
17        (2) A participant in the defined contribution plan
18    shall pay employee contributions at a rate determined by
19    the participant, but not less than 3% of compensation and
20    not more than a percentage of compensation determined by
21    the board in accordance with the requirements of State and
22    federal law.
23        (3) State contributions shall be paid into the
24    accounts of all participants in the defined contribution
25    plan at a uniform rate, expressed as a percentage of
26    compensation and determined for each year. This rate shall

 

 

SB3073- 99 -LRB103 37686 RPS 67813 b

1    be no higher than 7.6% of compensation and shall be no
2    lower than 3% of compensation. The State shall adjust this
3    rate annually.
4        (4) The defined contribution plan shall require 5
5    years of participation in the defined contribution plan
6    before vesting in State contributions. If the participant
7    fails to vest in them, the State contributions, and the
8    earnings thereon, shall be forfeited.
9        (5) The defined contribution plan may provide for
10    participants in the plan to be eligible for the defined
11    disability benefits available to other participants under
12    this Article. If it does, the System shall reduce the
13    employee contributions credited to the member's defined
14    contribution plan account by an amount determined by the
15    System to cover the cost of offering such benefits.
16        (6) The defined contribution plan shall provide a
17    variety of options for investments. These options shall
18    include investments handled by the Illinois State Board of
19    Investment as well as private sector investment options.
20        (7) The defined contribution plan shall provide a
21    variety of options for payouts to participants in the
22    defined contribution plan who are no longer active in the
23    System and their survivors.
24        (8) To the extent authorized under federal law and as
25    authorized by the System, the plan shall allow former
26    participants in the plan to transfer or roll over employee

 

 

SB3073- 100 -LRB103 37686 RPS 67813 b

1    and vested State contributions, and the earnings thereon,
2    from the defined contribution plan into other qualified
3    retirement plans.
4        (9) The System shall reduce the employee contributions
5    credited to the member's defined contribution plan account
6    by an amount determined by the System to cover the cost of
7    offering these benefits and any applicable administrative
8    fees.
9    (b) Under the defined contribution plan, an active Tier 1
10or Tier 2 member of this System may elect, in writing, to cease
11accruing benefits in the defined benefit plan and begin
12accruing benefits for future service in the defined
13contribution plan. The election to participate in the defined
14contribution plan is voluntary and irrevocable.
15        (1) Service credit under the defined contribution plan
16    may be used for determining retirement eligibility under
17    the defined benefit plan.
18        (2) On or before December 31, 2025, the System shall
19    notify all active Tier 1 and Tier 2 members who are
20    eligible to participate in the defined contribution plan.
21    The System shall mail information describing the option to
22    join the defined contribution plan to each of these
23    employees to his or her last known address on file with the
24    System. If the employee is not responsive to other means
25    of contact, it is sufficient for the System to publish the
26    details of the option on its website. Active Tier 1 and

 

 

SB3073- 101 -LRB103 37686 RPS 67813 b

1    Tier 2 members who are notified by the System under this
2    paragraph must make the election to participate in the
3    defined contribution plan on or before December 31, 2025.
4        (3) If a person becomes an active participant of this
5    System on or after January 1, 2026, the System shall
6    notify the participant within one month after he or she
7    became an active participant that he or she is eligible to
8    participate in the defined contribution plan. The notice
9    shall be provided in the manner specified in paragraph (2)
10    of this subsection. The election to participate in the
11    defined contribution plan must be made as soon as
12    practical after the active participant is notified under
13    this paragraph.
14        (4) Upon request for further information describing
15    the option, the System shall provide employees with
16    information from the System before exercising the option
17    to join the plan, including information on the impact to
18    their benefits and service. The individual consultation
19    shall include projections of the member's defined benefits
20    at retirement or earlier termination of service and the
21    value of the member's account at retirement or earlier
22    termination of service. The System shall not provide
23    advice or counseling with respect to whether the employee
24    should exercise the option. The System shall inform Tier 1
25    and Tier 2 members who are eligible to participate in the
26    defined contribution plan that they may also wish to

 

 

SB3073- 102 -LRB103 37686 RPS 67813 b

1    obtain information and counsel relating to their option
2    from any other available source, including but not limited
3    to labor organizations, private counsel, and financial
4    advisors.
5    (c) A Tier 1 or Tier 2 member who elects to participate in
6the defined contribution plan may irrevocably elect to
7terminate all participation in the defined benefit plan. Upon
8that election, the System shall transfer to the member's
9individual account an amount equal to the amount of
10contribution refund that the member would be eligible to
11receive if the member terminated employment on that date and
12elected a refund of contributions, including regular interest
13for the respective years. The System shall make the transfer
14as a tax-free transfer in accordance with Internal Revenue
15Service guidelines, for purposes of funding the amount
16credited to the member's individual account.
17    (d) In no event shall the System, its staff, its
18authorized representatives, or the Board be liable for any
19information given to an employee under this Section. The
20System may coordinate with the Department of Central
21Management Services in accordance with this amendatory Act of
22the 103rd General Assembly to provide information concerning
23the impact of the defined contribution plan set forth in this
24Section.
25    (e) Notwithstanding any other provision of this Section,
26no person shall begin participating in the defined

 

 

SB3073- 103 -LRB103 37686 RPS 67813 b

1contribution plan until it has attained qualified plan status
2and received all necessary approvals from the U.S. Internal
3Revenue Service.
4    (f) The System shall report on its progress under this
5Section, including the available details of the defined
6contribution plan and the System's plans for informing
7eligible Tier 1 and Tier 2 members about the plan, to the
8Governor and the General Assembly on or before January 15,
92025.
10    (g) The Illinois State Board of Investment shall be the
11plan sponsor for the defined contribution plan established
12under this Section.
13    (h) The intent of this amendatory Act of the 103rd General
14Assembly is to ensure that the State's normal cost of
15participation in the defined contribution plan is similar, and
16if possible equal, to the State's normal cost of participation
17in the defined benefit plan, unless a lower State's normal
18cost is necessary to ensure cost neutrality.
 
19    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 20-121. Calculation of proportional retirement
23annuities.
24    (a) Upon retirement of the employee, a proportional
25retirement annuity shall be computed by each participating

 

 

SB3073- 104 -LRB103 37686 RPS 67813 b

1system in which pension credit has been established on the
2basis of pension credits under each system. The computation
3shall be in accordance with the formula or method prescribed
4by each participating system which is in effect at the date of
5the employee's latest withdrawal from service covered by any
6of the systems in which he has pension credits which he elects
7to have considered under this Article. However, the amount of
8any retirement annuity payable under the self-managed plan
9established under Section 15-158.2 of this Code depends solely
10on the value of the participant's vested account balances and
11is not subject to any proportional adjustment under this
12Section.
13    (a-5) For persons who participate in a defined
14contribution plan established under Article 14 of this Code to
15whom the provisions of this Article apply, the pension credits
16established under the defined contribution plan may be
17considered in determining eligibility for or the amount of the
18defined benefit retirement annuity that is payable by any
19other participating system.
20    (b) Combined pension credit under all retirement systems
21subject to this Article shall be considered in determining
22whether the minimum qualification has been met and the formula
23or method of computation which shall be applied, except as may
24be otherwise provided with respect to vesting in State or
25employer contributions in a defined contribution plan. If a
26system has a step-rate formula for calculation of the

 

 

SB3073- 105 -LRB103 37686 RPS 67813 b

1retirement annuity, pension credits covering previous service
2which have been established under another system shall be
3considered in determining which range or ranges of the
4step-rate formula are to be applicable to the employee.
5    (c) Interest on pension credit shall continue to
6accumulate in accordance with the provisions of the law
7governing the retirement system in which the same has been
8established during the time an employee is in the service of
9another employer, on the assumption such employee, for
10interest purposes for pension credit, is continuing in the
11service covered by such retirement system.
12(Source: P.A. 91-887, eff. 7-6-00.)
 
13    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
14    (Text of Section WITHOUT the changes made by P.A. 98-599,
15which has been held unconstitutional)
16    Sec. 20-123. Survivor's annuity. The provisions governing
17a retirement annuity shall be applicable to a survivor's
18annuity. Appropriate credits shall be established for
19survivor's annuity purposes in those participating systems
20which provide survivor's annuities, according to the same
21conditions and subject to the same limitations and
22restrictions herein prescribed for a retirement annuity. If a
23participating system has no survivor's annuity benefit, or if
24the survivor's annuity benefit under that system is waived,
25pension credit established in that system shall not be

 

 

SB3073- 106 -LRB103 37686 RPS 67813 b

1considered in determining eligibility for or the amount of the
2survivor's annuity which may be payable by any other
3participating system.
4    For persons who participate in the self-managed plan
5established under Section 15-158.2 or the portable benefit
6package established under Section 15-136.4, pension credit
7established under Article 15 may be considered in determining
8eligibility for or the amount of the survivor's annuity that
9is payable by any other participating system, but pension
10credit established in any other system shall not result in any
11right to a survivor's annuity under the Article 15 system.
12    For persons who participate in a defined contribution plan
13established under Article 14 of this Code to whom the
14provisions of this Article apply, the pension credits
15established under the defined contribution plan may be
16considered in determining eligibility for or the amount of the
17defined benefit survivor's annuity that is payable by any
18other participating system, but pension credits established in
19any other system shall not result in any right to or increase
20in the value of a survivor's annuity under the defined
21contribution plan, which depends solely on the options chosen
22and the value of the participant's vested account balances and
23is not subject to any proportional adjustment under this
24Section.
25(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

SB3073- 107 -LRB103 37686 RPS 67813 b

1    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 20-124. Maximum benefits.
5    (a) In no event shall the combined retirement or survivors
6annuities exceed the highest annuity which would have been
7payable by any participating system in which the employee has
8pension credits, if all of his pension credits had been
9validated in that system.
10    If the combined annuities should exceed the highest
11maximum as determined in accordance with this Section, the
12respective annuities shall be reduced proportionately
13according to the ratio which the amount of each proportional
14annuity bears to the aggregate of all such annuities.
15    (b) In the case of a participant in the self-managed plan
16established under Section 15-158.2 of this Code to whom the
17provisions of this Article apply:
18        (i) For purposes of calculating the combined
19    retirement annuity and the proportionate reduction, if
20    any, in a retirement annuity other than one payable under
21    the self-managed plan, the amount of the Article 15
22    retirement annuity shall be deemed to be the highest
23    annuity to which the annuitant would have been entitled if
24    he or she had participated in the traditional benefit
25    package as defined in Section 15-103.1 rather than the
26    self-managed plan.

 

 

SB3073- 108 -LRB103 37686 RPS 67813 b

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

 

 

SB3073- 109 -LRB103 37686 RPS 67813 b

1    subject to proportionate reduction under this Section.
2(Source: P.A. 91-887, eff. 7-6-00.)
 
3    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
4    (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6    Sec. 20-125. Return to employment - suspension of
7benefits. If a retired employee returns to employment which is
8covered by a system from which he is receiving a proportional
9annuity under this Article, his proportional annuity from all
10participating systems shall be suspended during the period of
11re-employment, except that this suspension does not apply to
12any distributions payable under the self-managed plan
13established under Section 15-158.2 of this Code or under a
14defined contribution plan established under Article 14 of this
15Code.
16    The provisions of the Article under which such employment
17would be covered shall govern the determination of whether the
18employee has returned to employment, and if applicable the
19exemption of temporary employment or employment not exceeding
20a specified duration or frequency, for all participating
21systems from which the retired employee is receiving a
22proportional annuity under this Article, notwithstanding any
23contrary provisions in the other Articles governing such
24systems.
25(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

SB3073- 110 -LRB103 37686 RPS 67813 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.