HB4109 Engrossed LRB093 16923 LRD 42580 b

1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Sections 7-137 and 7-139 as follows:
 
6     (40 ILCS 5/7-137)  (from Ch. 108 1/2, par. 7-137)
7     Sec. 7-137. Participating and covered employees.
8     (a) The persons described in this paragraph (a) shall be
9 included within and be subject to this Article and eligible to
10 benefits from this fund, beginning upon the dates hereinafter
11 specified:
12         1. Except as to the employees specifically excluded
13 under the provisions of this Article, all persons who are
14 employees of any municipality (or instrumentality thereof)
15 or participating instrumentality on the effective date of
16 participation of the municipality or participating
17 instrumentality beginning upon such effective date.
18         2. Except as to the employees specifically excluded
19 under the provisions of this Article, all persons, who
20 became employees of any participating municipality (or
21 instrumentality thereof) or participating instrumentality
22 after the effective date of participation of such
23 municipality or participating instrumentality, beginning
24 upon the date such person becomes an employee.
25         3. All persons who file notice with the board as
26 provided in paragraph (b) 2 and 3 of this Section,
27 beginning upon the date of filing such notice.
28     (b) The following described persons shall not be considered
29 participating employees eligible for benefits from this fund,
30 but shall be included within and be subject to this Article
31 (each of the descriptions is not exclusive but is cumulative):
32         1. Any person who occupies an office or is employed in

 

 

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1 a position normally requiring performance of duty during
2 less than 600 hours a year for a municipality (including
3 all instrumentalities thereof) or a participating
4 instrumentality. If a school treasurer performs services
5 for more than one school district, the total number of
6 hours of service normally required for the several school
7 districts shall be considered to determine whether he
8 qualifies under this paragraph;
9         2. Any person who holds elective office unless he has
10 elected while in that office in a written notice on file
11 with the board to become a participating employee;
12         3. Any person working for a city hospital unless any
13 such person, while in active employment, has elected in a
14 written notice on file with the board to become a
15 participating employee and notification thereof is
16 received by the board;
17         4. Any person who becomes an employee after June 30,
18 1979 as a public service employment program participant
19 under the federal Comprehensive Employment and Training
20 Act and whose wages or fringe benefits are paid in whole or
21 in part by funds provided under such Act; .
22         5. Any person who is actively employed by a
23 municipality on its effective date of participation in the
24 Fund if that municipality (i) has at least 35 employees on
25 its effective date of participation; (ii) is located in a
26 county with at least 2,000,000 inhabitants; and (iii)
27 maintains an independent defined benefit pension plan for
28 the benefit of its eligible employees, unless the person
29 files with the board within 90 days after the
30 municipality's effective date of participation an
31 irrevocable election to participate.
32     (c) Any person electing to be a participating employee,
33 pursuant to paragraph (b) of this Section may not change such
34 election, except as provided in Section 7-137.1.
35     (d) Any employee who occupied the position of school nurse
36 in any participating municipality on August 8, 1961 and

 

 

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1 continuously thereafter until the effective date of the
2 exercise of the option authorized by this subparagraph, who on
3 August 7, 1961 was a member of the Teachers' Retirement System
4 of Illinois, by virtue of certification by the Department of
5 Registration and Education as a public health nurse, may elect
6 to terminate participation in this Fund in order to
7 re-establish membership in such System. The election may be
8 exercised by filing written notice thereof with the Board or
9 with the Board of Trustees of said Teachers' Retirement System,
10 not later than September 30, 1963, and shall be effective on
11 the first day of the calendar month next following the month in
12 which the notice was filed. If the written notice is filed with
13 such Teachers' Retirement System, that System shall
14 immediately notify this Fund, but neither failure nor delay in
15 notification shall affect the validity of the employee's
16 election. If the option is exercised, the Fund shall notify
17 such Teachers' Retirement System of such fact and transfer to
18 that system the amounts contributed by the employee to this
19 Fund, including interest at 3% per annum, but excluding
20 contributions applicable to social security coverage during
21 the period beginning August 8, 1961 to the effective date of
22 the employee's election. Participation in this Fund as to any
23 credits on or after August 8, 1961 and up to the effective date
24 of the employee's election shall terminate on such effective
25 date.
26     (e) Any participating municipality or participating
27 instrumentality, other than a school district or special
28 education joint agreement created under Section 10-22.31 of the
29 School Code, may, by a resolution or ordinance duly adopted by
30 its governing body, elect to exclude from participation and
31 eligibility for benefits all persons who are employed after the
32 effective date of such resolution or ordinance and who occupy
33 an office or are employed in a position normally requiring
34 performance of duty for less than 1000 hours per year for the
35 participating municipality (including all instrumentalities
36 thereof) or participating instrumentality except for persons

 

 

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1 employed in a position normally requiring performance of duty
2 for 600 hours or more per year (i) by such participating
3 municipality or participating instrumentality prior to the
4 effective date of the resolution or ordinance, (ii) by any
5 participating municipality or participating instrumentality
6 prior to January 1, 1982 and (iii) by a participating
7 municipality or participating instrumentality, which had not
8 adopted such a resolution when the person was employed, and the
9 function served by the employee's position is assumed by
10 another participating municipality or participating
11 instrumentality. A participating municipality or participating
12 instrumentality included in and subject to this Article after
13 January 1, 1982 may adopt such resolution or ordinance only
14 prior to the date it becomes included in and subject to this
15 Article. Notwithstanding the foregoing, a participating
16 municipality or participating instrumentality which is formed
17 solely to succeed to the functions of a participating
18 municipality or participating instrumentality shall be
19 considered to have adopted any such resolution or ordinance
20 which may have been applicable to the employees performing such
21 functions. The election made by the resolution or ordinance
22 shall take effect at the time specified in the resolution or
23 ordinance, and once effective shall be irrevocable.
24 (Source: P.A. 86-272; 87-740; 87-850.)
 
25     (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
26     Sec. 7-139. Credits and creditable service to employees.
27     (a) Each participating employee shall be granted credits
28 and creditable service, for purposes of determining the amount
29 of any annuity or benefit to which he or a beneficiary is
30 entitled, as follows:
31         1. For prior service: Each participating employee who
32 is an employee of a participating municipality or
33 participating instrumentality on the effective date shall
34 be granted creditable service, but no credits under
35 paragraph 2 of this subsection (a), for periods of prior

 

 

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1 service for which credit has not been received under any
2 other pension fund or retirement system established under
3 this Code, as follows:
4         If the effective date of participation for the
5 participating municipality or participating
6 instrumentality is on or before January 1, 1998, creditable
7 service shall be granted for the entire period of prior
8 service with that employer without any employee
9 contribution.
10         If the effective date of participation for the
11 participating municipality or participating
12 instrumentality is after January 1, 1998, creditable
13 service shall be granted for the last 20% of the period of
14 prior service with that employer, but no more than 5 years,
15 without any employee contribution. A participating
16 employee may establish creditable service for the
17 remainder of the period of prior service with that employer
18 by making an application in writing, accompanied by payment
19 of an employee contribution in an amount determined by the
20 Fund, based on the employee contribution rates in effect at
21 the time of application for the creditable service and the
22 employee's salary rate on the effective date of
23 participation for that employer, plus interest at the
24 effective rate from the date of the prior service to the
25 date of payment. Application for this creditable service
26 may be made at any time while the employee is still in
27 service.
28         A municipality that (i) has at least 35 employees; (ii)
29 is located in a county with at least 2,000,000 inhabitants;
30 and (iii) maintains an independent defined benefit pension
31 plan for the benefit of its eligible employees may restrict
32 creditable service in whole or in part for periods of prior
33 service with the employer if the governing body of the
34 municipality adopts an irrevocable resolution to restrict
35 that creditable service and files the resolution with the
36 board before the municipality's effective date of

 

 

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1 participation.
2         Any person who has withdrawn from the service of a
3 participating municipality or participating
4 instrumentality prior to the effective date, who reenters
5 the service of the same municipality or participating
6 instrumentality after the effective date and becomes a
7 participating employee is entitled to creditable service
8 for prior service as otherwise provided in this subdivision
9 (a)(1) only if he or she renders 2 years of service as a
10 participating employee after the effective date.
11 Application for such service must be made while in a
12 participating status. The salary rate to be used in the
13 calculation of the required employee contribution, if any,
14 shall be the employee's salary rate at the time of first
15 reentering service with the employer after the employer's
16 effective date of participation.
17         2. For current service, each participating employee
18 shall be credited with:
19             a. Additional credits of amounts equal to each
20 payment of additional contributions received from him
21 under Section 7-173, as of the date the corresponding
22 payment of earnings is payable to him.
23             b. Normal credits of amounts equal to each payment
24 of normal contributions received from him, as of the
25 date the corresponding payment of earnings is payable
26 to him, and normal contributions made for the purpose
27 of establishing out-of-state service credits as
28 permitted under the conditions set forth in paragraph 6
29 of this subsection (a).
30             c. Municipality credits in an amount equal to 1.4
31 times the normal credits, except those established by
32 out-of-state service credits, as of the date of
33 computation of any benefit if these credits would
34 increase the benefit.
35             d. Survivor credits equal to each payment of
36 survivor contributions received from the participating

 

 

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1 employee as of the date the corresponding payment of
2 earnings is payable, and survivor contributions made
3 for the purpose of establishing out-of-state service
4 credits.
5         3. For periods of temporary and total and permanent
6 disability benefits, each employee receiving disability
7 benefits shall be granted creditable service for the period
8 during which disability benefits are payable. Normal and
9 survivor credits, based upon the rate of earnings applied
10 for disability benefits, shall also be granted if such
11 credits would result in a higher benefit to any such
12 employee or his beneficiary.
13         4. For authorized leave of absence without pay: A
14 participating employee shall be granted credits and
15 creditable service for periods of authorized leave of
16 absence without pay under the following conditions:
17             a. An application for credits and creditable
18 service is submitted to the board while the employee is
19 in a status of active employment, and within 2 years
20 after termination of the leave of absence period for
21 which credits and creditable service are sought.
22             b. Not more than 12 complete months of creditable
23 service for authorized leave of absence without pay
24 shall be counted for purposes of determining any
25 benefits payable under this Article.
26             c. Credits and creditable service shall be granted
27 for leave of absence only if such leave is approved by
28 the governing body of the municipality, including
29 approval of the estimated cost thereof to the
30 municipality as determined by the fund, and employee
31 contributions, plus interest at the effective rate
32 applicable for each year from the end of the period of
33 leave to date of payment, have been paid to the fund in
34 accordance with Section 7-173. The contributions shall
35 be computed upon the assumption earnings continued
36 during the period of leave at the rate in effect when

 

 

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1 the leave began.
2             d. Benefits under the provisions of Sections
3 7-141, 7-146, 7-150 and 7-163 shall become payable to
4 employees on authorized leave of absence, or their
5 designated beneficiary, only if such leave of absence
6 is creditable hereunder, and if the employee has at
7 least one year of creditable service other than the
8 service granted for leave of absence. Any employee
9 contributions due may be deducted from any benefits
10 payable.
11             e. No credits or creditable service shall be
12 allowed for leave of absence without pay during any
13 period of prior service.
14         5. For military service: The governing body of a
15 municipality or participating instrumentality may elect to
16 allow creditable service to participating employees who
17 leave their employment to serve in the armed forces of the
18 United States for all periods of such service, provided
19 that the person returns to active employment within 90 days
20 after completion of full time active duty, but no
21 creditable service shall be allowed such person for any
22 period that can be used in the computation of a pension or
23 any other pay or benefit, other than pay for active duty,
24 for service in any branch of the armed forces of the United
25 States. If necessary to the computation of any benefit, the
26 board shall establish municipality credits for
27 participating employees under this paragraph on the
28 assumption that the employee received earnings at the rate
29 received at the time he left the employment to enter the
30 armed forces. A participating employee in the armed forces
31 shall not be considered an employee during such period of
32 service and no additional death and no disability benefits
33 are payable for death or disability during such period.
34         Any participating employee who left his employment
35 with a municipality or participating instrumentality to
36 serve in the armed forces of the United States and who

 

 

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1 again became a participating employee within 90 days after
2 completion of full time active duty by entering the service
3 of a different municipality or participating
4 instrumentality, which has elected to allow creditable
5 service for periods of military service under the preceding
6 paragraph, shall also be allowed creditable service for his
7 period of military service on the same terms that would
8 apply if he had been employed, before entering military
9 service, by the municipality or instrumentality which
10 employed him after he left the military service and the
11 employer costs arising in relation to such grant of
12 creditable service shall be charged to and paid by that
13 municipality or instrumentality.
14         Notwithstanding the foregoing, any participating
15 employee shall be entitled to creditable service as
16 required by any federal law relating to re-employment
17 rights of persons who served in the United States Armed
18 Services. Such creditable service shall be granted upon
19 payment by the member of an amount equal to the employee
20 contributions which would have been required had the
21 employee continued in service at the same rate of earnings
22 during the military leave period, plus interest at the
23 effective rate.
24         5.1. In addition to any creditable service established
25 under paragraph 5 of this subsection (a), creditable
26 service may be granted for up to 24 months of service in
27 the armed forces of the United States.
28         In order to receive creditable service for military
29 service under this paragraph 5.1, a participating employee
30 must (1) apply to the Fund in writing and provide evidence
31 of the military service that is satisfactory to the Board;
32 (2) obtain the written approval of the current employer;
33 and (3) make contributions to the Fund equal to (i) the
34 employee contributions that would have been required had
35 the service been rendered as a member, plus (ii) an amount
36 determined by the board to be equal to the employer's

 

 

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1 normal cost of the benefits accrued for that military
2 service, plus (iii) interest on items (i) and (ii) from the
3 date of first membership in the Fund to the date of
4 payment. If payment is made during the 6-month period that
5 begins 3 months after the effective date of this amendatory
6 Act of 1997, the required interest shall be at the rate of
7 2.5% per year, compounded annually; otherwise, the
8 required interest shall be calculated at the regular
9 interest rate.
10         6. For out-of-state service: Creditable service shall
11 be granted for service rendered to an out-of-state local
12 governmental body under the following conditions: The
13 employee had participated and has irrevocably forfeited
14 all rights to benefits in the out-of-state public employees
15 pension system; the governing body of his participating
16 municipality or instrumentality authorizes the employee to
17 establish such service; the employee has 2 years current
18 service with this municipality or participating
19 instrumentality; the employee makes a payment of
20 contributions, which shall be computed at 8% (normal) plus
21 2% (survivor) times length of service purchased times the
22 average rate of earnings for the first 2 years of service
23 with the municipality or participating instrumentality
24 whose governing body authorizes the service established
25 plus interest at the effective rate on the date such
26 credits are established, payable from the date the employee
27 completes the required 2 years of current service to date
28 of payment. In no case shall more than 120 months of
29 creditable service be granted under this provision.
30         7. For retroactive service: Any employee who could have
31 but did not elect to become a participating employee, or
32 who should have been a participant in the Municipal Public
33 Utilities Annuity and Benefit Fund before that fund was
34 superseded, may receive creditable service for the period
35 of service not to exceed 50 months; however, a current or
36 former elected or appointed official of a participating

 

 

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1 municipality may establish credit under this paragraph 7
2 for more than 50 months of service as an official of that
3 municipality, if the excess over 50 months is approved by
4 resolution of the governing body of the affected
5 municipality filed with the Fund before January 1, 2002.
6         Any employee who is a participating employee on or
7 after September 24, 1981 and who was excluded from
8 participation by the age restrictions removed by Public Act
9 82-596 may receive creditable service for the period, on or
10 after January 1, 1979, excluded by the age restriction and,
11 in addition, if the governing body of the participating
12 municipality or participating instrumentality elects to
13 allow creditable service for all employees excluded by the
14 age restriction prior to January 1, 1979, for service
15 during the period prior to that date excluded by the age
16 restriction. Any employee who was excluded from
17 participation by the age restriction removed by Public Act
18 82-596 and who is not a participating employee on or after
19 September 24, 1981 may receive creditable service for
20 service after January 1, 1979. Creditable service under
21 this paragraph shall be granted upon payment of the
22 employee contributions which would have been required had
23 he participated, with interest at the effective rate for
24 each year from the end of the period of service established
25 to date of payment.
26         8. For accumulated unused sick leave: A participating
27 employee who is applying for a retirement annuity shall be
28 entitled to creditable service for that portion of the
29 employee's accumulated unused sick leave for which payment
30 is not received, as follows:
31             a. Sick leave days shall be limited to those
32 accumulated under a sick leave plan established by a
33 participating municipality or participating
34 instrumentality which is available to all employees or
35 a class of employees.
36             b. Only sick leave days accumulated with a

 

 

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1 participating municipality or participating
2 instrumentality with which the employee was in service
3 within 60 days of the effective date of his retirement
4 annuity shall be credited; If the employee was in
5 service with more than one employer during this period
6 only the sick leave days with the employer with which
7 the employee has the greatest number of unpaid sick
8 leave days shall be considered.
9             c. The creditable service granted shall be
10 considered solely for the purpose of computing the
11 amount of the retirement annuity and shall not be used
12 to establish any minimum service period required by any
13 provision of the Illinois Pension Code, the effective
14 date of the retirement annuity, or the final rate of
15 earnings.
16             d. The creditable service shall be at the rate of
17 1/20 of a month for each full sick day, provided that
18 no more than 12 months may be credited under this
19 subdivision 8.
20             e. Employee contributions shall not be required
21 for creditable service under this subdivision 8.
22             f. Each participating municipality and
23 participating instrumentality with which an employee
24 has service within 60 days of the effective date of his
25 retirement annuity shall certify to the board the
26 number of accumulated unpaid sick leave days credited
27 to the employee at the time of termination of service.
28         9. For service transferred from another system:
29 Credits and creditable service shall be granted for service
30 under Article 3, 4, 5, 14 or 16 of this Act, to any active
31 member of this Fund, and to any inactive member who has
32 been a county sheriff, upon transfer of such credits
33 pursuant to Section 3-110.3, 4-108.3, 5-235, 14-105.6 or
34 16-131.4, and payment by the member of the amount by which
35 (1) the employer and employee contributions that would have
36 been required if he had participated in this Fund as a

 

 

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1 sheriff's law enforcement employee during the period for
2 which credit is being transferred, plus interest thereon at
3 the effective rate for each year, compounded annually, from
4 the date of termination of the service for which credit is
5 being transferred to the date of payment, exceeds (2) the
6 amount actually transferred to the Fund. Such transferred
7 service shall be deemed to be service as a sheriff's law
8 enforcement employee for the purposes of Section 7-142.1.
9     (b) Creditable service - amount:
10         1. One month of creditable service shall be allowed for
11 each month for which a participating employee made
12 contributions as required under Section 7-173, or for which
13 creditable service is otherwise granted hereunder. Not
14 more than 1 month of service shall be credited and counted
15 for 1 calendar month, and not more than 1 year of service
16 shall be credited and counted for any calendar year. A
17 calendar month means a nominal month beginning on the first
18 day thereof, and a calendar year means a year beginning
19 January 1 and ending December 31.
20         2. A seasonal employee shall be given 12 months of
21 creditable service if he renders the number of months of
22 service normally required by the position in a 12-month
23 period and he remains in service for the entire 12-month
24 period. Otherwise a fractional year of service in the
25 number of months of service rendered shall be credited.
26         3. An intermittent employee shall be given creditable
27 service for only those months in which a contribution is
28 made under Section 7-173.
29     (c) No application for correction of credits or creditable
30 service shall be considered unless the board receives an
31 application for correction while (1) the applicant is a
32 participating employee and in active employment with a
33 participating municipality or instrumentality, or (2) while
34 the applicant is actively participating in a pension fund or
35 retirement system which is a participating system under the
36 Retirement Systems Reciprocal Act. A participating employee or

 

 

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1 other applicant shall not be entitled to credits or creditable
2 service unless the required employee contributions are made in
3 a lump sum or in installments made in accordance with board
4 rule.
5     (d) Upon the granting of a retirement, surviving spouse or
6 child annuity, a death benefit or a separation benefit, on
7 account of any employee, all individual accumulated credits
8 shall thereupon terminate. Upon the withdrawal of additional
9 contributions, the credits applicable thereto shall thereupon
10 terminate. Terminated credits shall not be applied to increase
11 the benefits any remaining employee would otherwise receive
12 under this Article.
13 (Source: P.A. 91-887, eff. 7-6-00; 92-424, eff. 8-17-01.)
 
14     Section 99. Effective date. This Act takes effect upon
15 becoming law.