Rep. Karen May

Filed: 3/11/2011

 

 


 

 


 
09700HB3475ham001LRB097 10960 JDS 52827 a

1
AMENDMENT TO HOUSE BILL 3475

2    AMENDMENT NO. ______. Amend House Bill 3475 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 7-116, 7-172, 14-103.05, 22-101, and 22-103
6and by adding Sections 1-161 and 1-162 as follows:
 
7    (40 ILCS 5/1-161 new)
8    Sec. 1-161. Final average salary provisions for all
9members.
10    (a) The provisions of this Section apply to a person who is
11a member or participant under any Article of this Code
12regardless of the date of participation.
13    (b) "Final average salary" shall be limited to the base
14salary or other base compensation paid to the member or
15participant for employment by the employer, and shall not
16include, without limitation: overtime; commissions; bonuses;

 

 

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1payment of any type in anticipation of retirement; termination
2or severance pay; lump sum payments for sick, compensatory,
3vacation time, or other benefits; indirect or in-kind payments
4for items such as housing, vehicles, lodging, travel, or
5clothing allowances; or any other type of payment that is a
6divergence from the normal progression patterns on which an
7individual's benefits should be based. For the purposes of a
8person who is a member or participant of any retirement system
9or pension fund to which this Section applies on or after the
10effective date of this amendatory Act of the 97th General
11Assembly, in this Code, "final average salary" shall be
12substituted for the following:
13        (1) In Article 2, "highest salary for annuity
14    purposes".
15        (2) In Articles 7 (except for service as sheriff's law
16    enforcement employees) and 15, "final rate of earnings".
17        (3) In Articles 8, 9, 10, 11, and 12, "highest average
18    annual salary for any 4 consecutive years within the last
19    10 years of service immediately preceding the date of
20    withdrawal".
21        (4) In Article 13, "average final salary".
22        (5) In Article 14, "final average compensation".
23        (6) In Article 17, "average salary".
24        (7) In Article 18, "final average salary".
25        (8) In Section 22-207, "wages or salary received by him
26    at the date of retirement or discharge".
 

 

 

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1    (40 ILCS 5/1-162 new)
2    Sec. 1-162. Contractual employment following retirement.
3If a member or participant of a retirement system or pension
4fund under this Code is receiving a retirement annuity or
5retirement pension under that system or fund and accepts on a
6contractual basis a position to provide services to a
7governmental entity from which he or she has retired, then that
8person's annuity or retirement pension earned as an active
9employee of the employer shall be suspended during that
10contractual service. Persons receiving an annuity or
11retirement pension under this Code shall notify their
12contractual employer of their retirement status before
13accepting contractual employment. A person who fails to submit
14such notification shall be a guilty of a Class A misdemeanor
15and required 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    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)
20    Sec. 7-116. "Final rate of earnings":
21    (a) For retirement and survivor annuities, the monthly
22earnings obtained by dividing the total earnings received by
23the employee during the period of either (1) the 48 consecutive
24months of service within the last 120 months of service in

 

 

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1which his total earnings were the highest or (2) the employee's
2total period of service, by the number of months of service in
3such period.
4    (b) For death benefits, the higher of the rate determined
5under paragraph (a) of this Section or total earnings received
6in the last 12 months of service divided by twelve. If the
7deceased employee has less than 12 months of service, the
8monthly final rate shall be the monthly rate of pay the
9employee was receiving when he began service.
10    (c) For disability benefits, the total earnings of a
11participating employee in the last 12 calendar months of
12service prior to the date he becomes disabled divided by 12.
13    (d) In computing the final rate of earnings: (1) the
14earnings rate for all periods of prior service shall be
15considered equal to the average earnings rate for the last 3
16calendar years of prior service for which creditable service is
17received under Section 7-139 or, if there is less than 3 years
18of creditable prior service, the average for the total prior
19service period for which creditable service is received under
20Section 7-139; (2) for out of state service and authorized
21leave, the earnings rate shall be the rate upon which service
22credits are granted; (3) periods of military leave shall not be
23considered; (4) the earnings rate for all periods of disability
24shall be considered equal to the rate of earnings upon which
25the employee's disability benefits are computed for such
26periods; (5) the earnings to be considered for each of the

 

 

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1final 24 three months of the final earnings period shall not
2exceed 125% of the highest earnings of any other month in the
3final earnings period; and (6) the annual amount of final rate
4of earnings shall be the monthly amount multiplied by the
5number of months of service normally required by the position
6in a year.
7(Source: P.A. 90-448, eff. 8-16-97.)
 
8    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
9    Sec. 7-172. Contributions by participating municipalities
10and participating instrumentalities.
11    (a) Each participating municipality and each participating
12instrumentality shall make payment to the fund as follows:
13        1. municipality contributions in an amount determined
14    by applying the municipality contribution rate to each
15    payment of earnings paid to each of its participating
16    employees;
17        2. an amount equal to the employee contributions
18    provided by paragraphs (a) and (b) of Section 7-173,
19    whether or not the employee contributions are withheld as
20    permitted by that Section;
21        3. all accounts receivable, together with interest
22    charged thereon, as provided in Section 7-209;
23        4. if it has no participating employees with current
24    earnings, an amount payable which, over a closed period of
25    20 years for participating municipalities and 10 years for

 

 

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1    participating instrumentalities, will amortize, at the
2    effective rate for that year, any unfunded obligation. The
3    unfunded obligation shall be computed as provided in
4    paragraph 2 of subsection (b);
5        5. if it has fewer than 7 participating employees or a
6    negative balance in its municipality reserve, the greater
7    of (A) an amount payable that, over a period of 20 years,
8    will amortize at the effective rate for that year any
9    unfunded obligation, computed as provided in paragraph 2 of
10    subsection (b) or (B) the amount required by paragraph 1 of
11    this subsection (a).
12    (b) A separate municipality contribution rate shall be
13determined for each calendar year for all participating
14municipalities together with all instrumentalities thereof.
15The municipality contribution rate shall be determined for
16participating instrumentalities as if they were participating
17municipalities. The municipality contribution rate shall be
18the sum of the following percentages:
19        1. The percentage of earnings of all the participating
20    employees of all participating municipalities and
21    participating instrumentalities which, if paid over the
22    entire period of their service, will be sufficient when
23    combined with all employee contributions available for the
24    payment of benefits, to provide all annuities for
25    participating employees, and the $3,000 death benefit
26    payable under Sections 7-158 and 7-164, such percentage to

 

 

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1    be known as the normal cost rate.
2        2. The percentage of earnings of the participating
3    employees of each participating municipality and
4    participating instrumentalities necessary to adjust for
5    the difference between the present value of all benefits,
6    excluding temporary and total and permanent disability and
7    death benefits, to be provided for its participating
8    employees and the sum of its accumulated municipality
9    contributions and the accumulated employee contributions
10    and the present value of expected future employee and
11    municipality contributions pursuant to subparagraph 1 of
12    this paragraph (b). This adjustment shall be spread over
13    the remainder of the period that is allowable under
14    generally accepted accounting principles.
15        3. The percentage of earnings of the participating
16    employees of all municipalities and participating
17    instrumentalities necessary to provide the present value
18    of all temporary and total and permanent disability
19    benefits granted during the most recent year for which
20    information is available.
21        4. The percentage of earnings of the participating
22    employees of all participating municipalities and
23    participating instrumentalities necessary to provide the
24    present value of the net single sum death benefits expected
25    to become payable from the reserve established under
26    Section 7-206 during the year for which this rate is fixed.

 

 

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1        5. The percentage of earnings necessary to meet any
2    deficiency arising in the Terminated Municipality Reserve.
3    (c) A separate municipality contribution rate shall be
4computed for each participating municipality or participating
5instrumentality for its sheriff's law enforcement employees.
6    A separate municipality contribution rate shall be
7computed for the sheriff's law enforcement employees of each
8forest preserve district that elects to have such employees.
9For the period from January 1, 1986 to December 31, 1986, such
10rate shall be the forest preserve district's regular rate plus
112%.
12    In the event that the Board determines that there is an
13actuarial deficiency in the account of any municipality with
14respect to a person who has elected to participate in the Fund
15under Section 3-109.1 of this Code, the Board may adjust the
16municipality's contribution rate so as to make up that
17deficiency over such reasonable period of time as the Board may
18determine.
19    (d) The Board may establish a separate municipality
20contribution rate for all employees who are program
21participants employed under the federal Comprehensive
22Employment Training Act by all of the participating
23municipalities and instrumentalities. The Board may also
24provide that, in lieu of a separate municipality rate for these
25employees, a portion of the municipality contributions for such
26program participants shall be refunded or an extra charge

 

 

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1assessed so that the amount of municipality contributions
2retained or received by the fund for all CETA program
3participants shall be an amount equal to that which would be
4provided by the separate municipality contribution rate for all
5such program participants. Refunds shall be made to prime
6sponsors of programs upon submission of a claim therefor and
7extra charges shall be assessed to participating
8municipalities and instrumentalities. In establishing the
9municipality contribution rate as provided in paragraph (b) of
10this Section, the use of a separate municipality contribution
11rate for program participants or the refund of a portion of the
12municipality contributions, as the case may be, may be
13considered.
14    (e) Computations of municipality contribution rates for
15the following calendar year shall be made prior to the
16beginning of each year, from the information available at the
17time the computations are made, and on the assumption that the
18employees in each participating municipality or participating
19instrumentality at such time will continue in service until the
20end of such calendar year at their respective rates of earnings
21at such time.
22    (f) Any municipality which is the recipient of State
23allocations representing that municipality's contributions for
24retirement annuity purposes on behalf of its employees as
25provided in Section 12-21.16 of the Illinois Public Aid Code
26shall pay the allocations so received to the Board for such

 

 

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1purpose. Estimates of State allocations to be received during
2any taxable year shall be considered in the determination of
3the municipality's tax rate for that year under Section 7-171.
4If a special tax is levied under Section 7-171, none of the
5proceeds may be used to reimburse the municipality for the
6amount of State allocations received and paid to the Board. Any
7multiple-county or consolidated health department which
8receives contributions from a county under Section 11.2 of "An
9Act in relation to establishment and maintenance of county and
10multiple-county health departments", approved July 9, 1943, as
11amended, or distributions under Section 3 of the Department of
12Public Health Act, shall use these only for municipality
13contributions by the health department.
14    (g) Municipality contributions for the several purposes
15specified shall, for township treasurers and employees in the
16offices of the township treasurers who meet the qualifying
17conditions for coverage hereunder, be allocated among the
18several school districts and parts of school districts serviced
19by such treasurers and employees in the proportion which the
20amount of school funds of each district or part of a district
21handled by the treasurer bears to the total amount of all
22school funds handled by the treasurer.
23    From the funds subject to allocation among districts and
24parts of districts pursuant to the School Code, the trustees
25shall withhold the proportionate share of the liability for
26municipality contributions imposed upon such districts by this

 

 

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1Section, in respect to such township treasurers and employees
2and remit the same to the Board.
3    The municipality contribution rate for an educational
4service center shall initially be the same rate for each year
5as the regional office of education or school district which
6serves as its administrative agent. When actuarial data become
7available, a separate rate shall be established as provided in
8subparagraph (i) of this Section.
9    The municipality contribution rate for a public agency,
10other than a vocational education cooperative, formed under the
11Intergovernmental Cooperation Act shall initially be the
12average rate for the municipalities which are parties to the
13intergovernmental agreement. When actuarial data become
14available, a separate rate shall be established as provided in
15subparagraph (i) of this Section.
16    (h) Each participating municipality and participating
17instrumentality shall make the contributions in the amounts
18provided in this Section in the manner prescribed from time to
19time by the Board and all such contributions shall be
20obligations of the respective participating municipalities and
21participating instrumentalities to this fund. The failure to
22deduct any employee contributions shall not relieve the
23participating municipality or participating instrumentality of
24its obligation to this fund. Delinquent payments of
25contributions due under this Section may, with interest, be
26recovered by civil action against the participating

 

 

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1municipalities or participating instrumentalities.
2Municipality contributions, other than the amount necessary
3for employee contributions and Social Security contributions,
4for periods of service by employees from whose earnings no
5deductions were made for employee contributions to the fund,
6may be charged to the municipality reserve for the municipality
7or participating instrumentality.
8    (i) Contributions by participating instrumentalities shall
9be determined as provided herein except that the percentage
10derived under subparagraph 2 of paragraph (b) of this Section,
11and the amount payable under subparagraph 4 of paragraph (a) of
12this Section, shall be based on an amortization period of 10
13years.
14    (j) Notwithstanding the other provisions of this Section,
15the additional unfunded liability accruing as a result of this
16amendatory Act of the 94th General Assembly shall be amortized
17over a period of 30 years beginning on January 1 of the second
18calendar year following the calendar year in which this
19amendatory Act takes effect, except that the employer may
20provide for a longer amortization period by adopting a
21resolution or ordinance specifying a 35-year or 40-year period
22and submitting a certified copy of the ordinance or resolution
23to the fund no later than June 1 of the calendar year following
24the calendar year in which this amendatory Act takes effect.
25    (k) If the amount of a participating employee's earnings
26for any calendar year used to determine the participating

 

 

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1employee's retirement annuity, determined on a full-time
2equivalent basis, exceeds the amount of his or her earnings
3with the same participating municipality or participating
4instrumentality for the previous calendar year, determined on a
5full-time equivalent basis, by more than 6%, then the
6participating municipality or participating instrumentality
7shall pay to the fund, in addition to all other payments
8required under this Article and in accordance with guidelines
9established by the fund, the present value of the increase in
10benefits resulting from the portion of the increase in earnings
11that is in excess of 6%. This present value shall be computed
12by the fund on the basis of the actuarial assumptions and
13tables used in the most recent actuarial valuation of the fund
14that is available at the time of the computation. The fund may
15require the participating municipality or participating
16instrumentality to provide any pertinent information or
17documentation.
18    Whenever it determines that a payment is or may be required
19under this subsection (k), the fund shall calculate the amount
20of the payment and bill the participating municipality or
21participating instrumentality for that amount. The bill shall
22specify the calculations used to determine the amount due. If
23the participating municipality or participating
24instrumentality disputes the amount of the bill, it may, within
2530 days after receipt of the bill, apply to the fund in writing
26for a recalculation. The application must specify in detail the

 

 

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1grounds of the dispute. Upon receiving a timely application for
2recalculation, the fund shall review the application and, if
3appropriate, recalculate the amount due. The participating
4municipality and participating instrumentality contributions
5required under this subsection (k) may be paid in the form of a
6lump sum within 90 days after receipt of the bill. If the
7participating municipality and participating instrumentality
8contributions are not paid within 90 days after receipt of the
9bill, then interest will be charged at a rate equal to the
10fund's annual actuarially assumed rate of return on investment
11compounded annually from the 91st day after receipt of the
12bill. Payments must be concluded within 3 years after receipt
13of the bill by the participating municipality or participating
14instrumentality.
15    When assessing payment for any amount due under this
16subsection (k), the fund shall exclude earnings increases
17resulting from overload or overtime earnings.
18    When assessing payment for any amount due under this
19subsection (k), the fund shall also exclude earnings increases
20attributable to standard employment promotions resulting in
21increased responsibility and workload.
22(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
23revised 9-16-10.)
 
24    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
25    Sec. 14-103.05. Employee.

 

 

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1    (a) Any person employed by a Department who receives salary
2for personal services rendered to the Department on a warrant
3issued pursuant to a payroll voucher certified by a Department
4and drawn by the State Comptroller upon the State Treasurer,
5including an elected official described in subparagraph (d) of
6Section 14-104, shall become an employee for purpose of
7membership in the Retirement System on the first day of such
8employment.
9    A person entering service on or after January 1, 1972 and
10prior to January 1, 1984 shall become a member as a condition
11of employment and shall begin making contributions as of the
12first day of employment.
13    A person entering service on or after January 1, 1984
14shall, upon completion of 6 months of continuous service which
15is not interrupted by a break of more than 2 months, become a
16member as a condition of employment. Contributions shall begin
17the first of the month after completion of the qualifying
18period.
19    A person employed by the Chicago Metropolitan Agency for
20Planning on the effective date of this amendatory Act of the
2195th General Assembly who was a member of this System as an
22employee of the Chicago Area Transportation Study and makes an
23election under Section 14-104.13 to participate in this System
24for his or her employment with the Chicago Metropolitan Agency
25for Planning.
26    The qualifying period of 6 months of service is not

 

 

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1applicable to: (1) a person who has been granted credit for
2service in a position covered by the State Universities
3Retirement System, the Teachers' Retirement System of the State
4of Illinois, the General Assembly Retirement System, or the
5Judges Retirement System of Illinois unless that service has
6been forfeited under the laws of those systems; (2) a person
7entering service on or after July 1, 1991 in a noncovered
8position; (3) a person to whom Section 14-108.2a or 14-108.2b
9applies; or (4) a person to whom subsection (a-5) of this
10Section applies.
11    (a-5) A person entering service on or after December 1,
122010 shall become a member as a condition of employment and
13shall begin making contributions as of the first day of
14employment. A person serving in the qualifying period on
15December 1, 2010 will become a member on December 1, 2010 and
16shall begin making contributions as of December 1, 2010.
17    (b) The term "employee" does not include the following:
18        (1) members of the State Legislature, and persons
19    electing to become members of the General Assembly
20    Retirement System pursuant to Section 2-105;
21        (2) incumbents of offices normally filled by vote of
22    the people;
23        (3) except as otherwise provided in this Section, any
24    person appointed by the Governor with the advice and
25    consent of the Senate unless that person elects to
26    participate in this system;

 

 

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1        (3.1) any person serving as a commissioner of an ethics
2    commission created under the State Officials and Employees
3    Ethics Act unless that person elects to participate in this
4    system with respect to that service as a commissioner;
5        (3.2) any person serving as a part-time employee in any
6    of the following positions: Legislative Inspector General,
7    Special Legislative Inspector General, employee of the
8    Office of the Legislative Inspector General, Executive
9    Director of the Legislative Ethics Commission, or staff of
10    the Legislative Ethics Commission, regardless of whether
11    he or she is in active service on or after July 8, 2004
12    (the effective date of Public Act 93-685), unless that
13    person elects to participate in this System with respect to
14    that service; in this item (3.2), a "part-time employee" is
15    a person who is not required to work at least 35 hours per
16    week;
17        (3.3) any person who has made an election under Section
18    1-123 and who is serving either as legal counsel in the
19    Office of the Governor or as Chief Deputy Attorney General;
20        (4) except as provided in Section 14-108.2 or
21    14-108.2c, any person who is covered or eligible to be
22    covered by the Teachers' Retirement System of the State of
23    Illinois, the State Universities Retirement System, or the
24    Judges Retirement System of Illinois;
25        (5) an employee of a municipality or any other
26    political subdivision of the State;

 

 

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1        (6) any person who becomes an employee after June 30,
2    1979 as a public service employment program participant
3    under the Federal Comprehensive Employment and Training
4    Act and whose wages or fringe benefits are paid in whole or
5    in part by funds provided under such Act;
6        (7) enrollees of the Illinois Young Adult Conservation
7    Corps program, administered by the Department of Natural
8    Resources, authorized grantee pursuant to Title VIII of the
9    "Comprehensive Employment and Training Act of 1973", 29 USC
10    993, as now or hereafter amended;
11        (8) enrollees and temporary staff of programs
12    administered by the Department of Natural Resources under
13    the Youth Conservation Corps Act of 1970;
14        (9) any person who is a member of any professional
15    licensing or disciplinary board created under an Act
16    administered by the Department of Professional Regulation
17    or a successor agency or created or re-created after the
18    effective date of this amendatory Act of 1997, and who
19    receives per diem compensation rather than a salary,
20    notwithstanding that such per diem compensation is paid by
21    warrant issued pursuant to a payroll voucher; such persons
22    have never been included in the membership of this System,
23    and this amendatory Act of 1987 (P.A. 84-1472) is not
24    intended to effect any change in the status of such
25    persons;
26        (10) any person who is a member of the Illinois Health

 

 

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1    Care Cost Containment Council, and receives per diem
2    compensation rather than a salary, notwithstanding that
3    such per diem compensation is paid by warrant issued
4    pursuant to a payroll voucher; such persons have never been
5    included in the membership of this System, and this
6    amendatory Act of 1987 is not intended to effect any change
7    in the status of such persons;
8        (11) any person who is a member of the Oil and Gas
9    Board created by Section 1.2 of the Illinois Oil and Gas
10    Act, and receives per diem compensation rather than a
11    salary, notwithstanding that such per diem compensation is
12    paid by warrant issued pursuant to a payroll voucher; or
13        (12) a person employed by the State Board of Higher
14    Education in a position with the Illinois Century Network
15    as of June 30, 2004, who remains continuously employed
16    after that date by the Department of Central Management
17    Services in a position with the Illinois Century Network
18    and participates in the Article 15 system with respect to
19    that employment; .
20        (13) any person who first becomes a member of the Civil
21    Service Commission on or after the effective date of this
22    amendatory Act of the 97th General Assembly;
23        (14) any person, other than the Director of Employment
24    Security, who first becomes a member of the Board of Review
25    of the Department of Employment Security on or after the
26    effective date of this amendatory Act of the 97th General

 

 

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1    Assembly;
2        (15) any person who first becomes a member of the Civil
3    Service Commission on or after the effective date of this
4    amendatory Act of the 97th General Assembly;
5        (16) any person who first becomes a member of the
6    Illinois Liquor Control Commission on or after the
7    effective date of this amendatory Act of the 97th General
8    Assembly;
9        (17) any person who first becomes a member of the
10    Secretary of State Merit Commission on or after the
11    effective date of this amendatory Act of the 97th General
12    Assembly;
13        (18) any person who first becomes a member of the Human
14    Rights Commission on or after the effective date of this
15    amendatory Act of the 97th General Assembly;
16        (19) any person who first becomes a member of the State
17    Mining Board on or after the effective date of this
18    amendatory Act of the 97th General Assembly;
19        (20) any person who first becomes a member of the
20    Property Tax Appeal Board on or after the effective date of
21    this amendatory Act of the 97th General Assembly;
22        (21) any person who first becomes a member of the
23    Illinois Racing Board on or after the effective date of
24    this amendatory Act of the 97th General Assembly;
25        (22) any person who first becomes a member of the
26    Department of State Police Merit Board on or after the

 

 

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1    effective date of this amendatory Act of the 97th General
2    Assembly;
3        (23) any person who first becomes a member of the
4    Illinois State Toll Highway Authority on or after the
5    effective date of this amendatory Act of the 97th General
6    Assembly; or
7        (24) any person who first becomes a member of the
8    Illinois State Board of Elections on or after the effective
9    date of this amendatory Act of the 97th General Assembly.
10    (c) An individual who represents or is employed as an
11officer or employee of a statewide labor organization that
12represents members of this System may participate in the System
13and shall be deemed an employee, provided that (1) the
14individual has previously earned creditable service under this
15Article, (2) the individual files with the System an
16irrevocable election to become a participant within 6 months
17after the effective date of this amendatory Act of the 94th
18General Assembly, and (3) the individual does not receive
19credit for that employment under any other provisions of this
20Code. An employee under this subsection (c) is responsible for
21paying to the System both (i) employee contributions based on
22the actual compensation received for service with the labor
23organization and (ii) employer contributions based on the
24percentage of payroll certified by the board; all or any part
25of these contributions may be paid on the employee's behalf or
26picked up for tax purposes (if authorized under federal law) by

 

 

09700HB3475ham001- 22 -LRB097 10960 JDS 52827 a

1the labor organization.
2    A person who is an employee as defined in this subsection
3(c) may establish service credit for similar employment prior
4to becoming an employee under this subsection by paying to the
5System for that employment the contributions specified in this
6subsection, plus interest at the effective rate from the date
7of service to the date of payment. However, credit shall not be
8granted under this subsection (c) for any such prior employment
9for which the applicant received credit under any other
10provision of this Code or during which the applicant was on a
11leave of absence.
12(Source: P.A. 95-677, eff. 10-11-07; 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/22-101)  (from Ch. 108 1/2, par. 22-101)
14    Sec. 22-101. Retirement Plan for Chicago Transit Authority
15Employees.
16    (a) There shall be established and maintained by the
17Authority created by the "Metropolitan Transit Authority Act",
18approved April 12, 1945, as amended, (referred to in this
19Section as the "Authority") a financially sound pension and
20retirement system adequate to provide for all payments when due
21under such established system or as modified from time to time
22by ordinance of the Chicago Transit Board or collective
23bargaining agreement. For this purpose, the Board must make
24contributions to the established system as required under this
25Section and may make any additional contributions provided for

 

 

09700HB3475ham001- 23 -LRB097 10960 JDS 52827 a

1by Board ordinance or collective bargaining agreement. The
2participating employees shall make such periodic payments to
3the established system as required under this Section and may
4make any additional contributions provided for by Board
5ordinance or collective bargaining agreement.
6    Provisions shall be made by the Board for all officers,
7except trustees who first become members on after the effective
8date of this amendatory Act of the 97th General Assembly, and
9employees of the Authority appointed pursuant to the
10"Metropolitan Transit Authority Act" to become, subject to
11reasonable rules and regulations, participants of the pension
12or retirement system with uniform rights, privileges,
13obligations and status as to the class in which such officers
14and employees belong. The terms, conditions and provisions of
15any pension or retirement system or of any amendment or
16modification thereof affecting employees who are members of any
17labor organization may be established, amended or modified by
18agreement with such labor organization, provided the terms,
19conditions and provisions must be consistent with this Act, the
20annual funding levels for the retirement system established by
21law must be met and the benefits paid to future participants in
22the system may not exceed the benefit ceilings set for future
23participants under this Act and the contribution levels
24required by the Authority and its employees may not be less
25than the contribution levels established under this Act.
26    (b) The Board of Trustees shall consist of 11 members

 

 

09700HB3475ham001- 24 -LRB097 10960 JDS 52827 a

1appointed as follows: (i) 5 trustees shall be appointed by the
2Chicago Transit Board; (ii) 3 trustees shall be appointed by an
3organization representing the highest number of Chicago
4Transit Authority participants; (iii) one trustee shall be
5appointed by an organization representing the second-highest
6number of Chicago Transit Authority participants; (iv) one
7trustee shall be appointed by the recognized coalition
8representatives of participants who are not represented by an
9organization with the highest or second-highest number of
10Chicago Transit Authority participants; and (v) one trustee
11shall be selected by the Regional Transportation Authority
12Board of Directors, and the trustee shall be a professional
13fiduciary who has experience in the area of collectively
14bargained pension plans. Trustees shall serve until a successor
15has been appointed and qualified, or until resignation, death,
16incapacity, or disqualification.
17    Any person appointed as a trustee of the board shall
18qualify by taking an oath of office that he or she will
19diligently and honestly administer the affairs of the system
20and will not knowingly violate or willfully permit the
21violation of any of the provisions of law applicable to the
22Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110,
231-111, 1-114, and 1-115 of the Illinois Pension Code.
24    Each trustee shall cast individual votes, and a majority
25vote shall be final and binding upon all interested parties,
26provided that the Board of Trustees may require a supermajority

 

 

09700HB3475ham001- 25 -LRB097 10960 JDS 52827 a

1vote with respect to the investment of the assets of the
2Retirement Plan, and may set forth that requirement in the
3Retirement Plan documents, by-laws, or rules of the Board of
4Trustees. Each trustee shall have the rights, privileges,
5authority, and obligations as are usual and customary for such
6fiduciaries.
7    The Board of Trustees may cause amounts on deposit in the
8Retirement Plan to be invested in those investments that are
9permitted investments for the investment of moneys held under
10any one or more of the pension or retirement systems of the
11State, any unit of local government or school district, or any
12agency or instrumentality thereof. The Board, by a vote of at
13least two-thirds of the trustees, may transfer investment
14management to the Illinois State Board of Investment, which is
15hereby authorized to manage these investments when so requested
16by the Board of Trustees.
17    Notwithstanding any other provision of this Article or any
18law to the contrary, any person who first becomes a trustee on
19or after the effective date of this Act shall not be eligible
20to participate in this Retirement Plan.
21    (c) All individuals who were previously participants in the
22Retirement Plan for Chicago Transit Authority Employees shall
23remain participants, and shall receive the same benefits
24established by the Retirement Plan for Chicago Transit
25Authority Employees, except as provided in this amendatory Act
26or by subsequent legislative enactment or amendment to the

 

 

09700HB3475ham001- 26 -LRB097 10960 JDS 52827 a

1Retirement Plan. For Authority employees hired on or after the
2effective date of this amendatory Act of the 95th General
3Assembly, the Retirement Plan for Chicago Transit Authority
4Employees shall be the exclusive retirement plan and such
5employees shall not be eligible for any supplemental plan,
6except for a deferred compensation plan funded only by employee
7contributions.
8    For all Authority employees who are first hired on or after
9the effective date of this amendatory Act of the 95th General
10Assembly and are participants in the Retirement Plan for
11Chicago Transit Authority Employees, the following terms,
12conditions and provisions with respect to retirement shall be
13applicable:
14        (1) Such participant shall be eligible for an unreduced
15    retirement allowance for life upon the attainment of age 64
16    with 25 years of continuous service.
17        (2) Such participant shall be eligible for a reduced
18    retirement allowance for life upon the attainment of age 55
19    with 10 years of continuous service.
20        (3) For the purpose of determining the retirement
21    allowance to be paid to a retiring employee, the term
22    "Continuous Service" as used in the Retirement Plan for
23    Chicago Transit Authority Employees shall also be deemed to
24    include all pension credit for service with any retirement
25    system established under Article 8 or Article 11 of this
26    Code, provided that the employee forfeits and relinquishes

 

 

09700HB3475ham001- 27 -LRB097 10960 JDS 52827 a

1    all pension credit under Article 8 or Article 11 of this
2    Code, and the contribution required under this subsection
3    is made by the employee. The Retirement Plan's actuary
4    shall determine the contribution paid by the employee as an
5    amount equal to the normal cost of the benefit accrued, had
6    the service been rendered as an employee, plus interest per
7    annum from the time such service was rendered until the
8    date the payment is made.
9    (d) From the effective date of this amendatory Act through
10December 31, 2008, all participating employees shall
11contribute to the Retirement Plan in an amount not less than 6%
12of compensation, and the Authority shall contribute to the
13Retirement Plan in an amount not less than 12% of compensation.
14    (e)(1) Beginning January 1, 2009 the Authority shall make
15contributions to the Retirement Plan in an amount equal to
16twelve percent (12%) of compensation and participating
17employees shall make contributions to the Retirement Plan in an
18amount equal to six percent (6%) of compensation. These
19contributions may be paid by the Authority and participating
20employees on a payroll or other periodic basis, but shall in
21any case be paid to the Retirement Plan at least monthly.
22    (2) For the period ending December 31, 2040, the amount
23paid by the Authority in any year with respect to debt service
24on bonds issued for the purposes of funding a contribution to
25the Retirement Plan under Section 12c of the Metropolitan
26Transit Authority Act, other than debt service paid with the

 

 

09700HB3475ham001- 28 -LRB097 10960 JDS 52827 a

1proceeds of bonds or notes issued by the Authority for any year
2after calendar year 2008, shall be treated as a credit against
3the amount of required contribution to the Retirement Plan by
4the Authority under subsection (e)(1) for the following year up
5to an amount not to exceed 6% of compensation paid by the
6Authority in that following year.
7    (3) By September 15 of each year beginning in 2009 and
8ending on December 31, 2039, on the basis of a report prepared
9by an enrolled actuary retained by the Plan, the Board of
10Trustees of the Retirement Plan shall determine the estimated
11funded ratio of the total assets of the Retirement Plan to its
12total actuarially determined liabilities. A report containing
13that determination and the actuarial assumptions on which it is
14based shall be filed with the Authority, the representatives of
15its participating employees, the Auditor General of the State
16of Illinois, and the Regional Transportation Authority. If the
17funded ratio is projected to decline below 60% in any year
18before 2040, the Board of Trustees shall also determine the
19increased contribution required each year as a level percentage
20of payroll over the years remaining until 2040 using the
21projected unit credit actuarial cost method so the funded ratio
22does not decline below 60% and include that determination in
23its report. If the actual funded ratio declines below 60% in
24any year prior to 2040, the Board of Trustees shall also
25determine the increased contribution required each year as a
26level percentage of payroll during the years after the then

 

 

09700HB3475ham001- 29 -LRB097 10960 JDS 52827 a

1current year using the projected unit credit actuarial cost
2method so the funded ratio is projected to reach at least 60%
3no later than 10 years after the then current year and include
4that determination in its report. Within 60 days after
5receiving the report, the Auditor General shall review the
6determination and the assumptions on which it is based, and if
7he finds that the determination and the assumptions on which it
8is based are unreasonable in the aggregate, he shall issue a
9new determination of the funded ratio, the assumptions on which
10it is based and the increased contribution required each year
11as a level percentage of payroll over the years remaining until
122040 using the projected unit credit actuarial cost method so
13the funded ratio does not decline below 60%, or, in the event
14of an actual decline below 60%, so the funded ratio is
15projected to reach 60% by no later than 10 years after the then
16current year. If the Board of Trustees or the Auditor General
17determine that an increased contribution is required to meet
18the funded ratio required by the subsection, effective January
191 following the determination or 30 days after such
20determination, whichever is later, one-third of the increased
21contribution shall be paid by participating employees and
22two-thirds by the Authority, in addition to the contributions
23required by this subsection (1).
24    (4) For the period beginning 2040, the minimum contribution
25to the Retirement Plan for each fiscal year shall be an amount
26determined by the Board of Trustees of the Retirement Plan to

 

 

09700HB3475ham001- 30 -LRB097 10960 JDS 52827 a

1be sufficient to bring the total assets of the Retirement Plan
2up to 90% of its total actuarial liabilities by the end of
32059. Participating employees shall be responsible for
4one-third of the required contribution and the Authority shall
5be responsible for two-thirds of the required contribution. In
6making these determinations, the Board of Trustees shall
7calculate the required contribution each year as a level
8percentage of payroll over the years remaining to and including
9fiscal year 2059 using the projected unit credit actuarial cost
10method. A report containing that determination and the
11actuarial assumptions on which it is based shall be filed by
12September 15 of each year with the Authority, the
13representatives of its participating employees, the Auditor
14General of the State of Illinois and the Regional
15Transportation Authority. If the funded ratio is projected to
16fail to reach 90% by December 31, 2059, the Board of Trustees
17shall also determine the increased contribution required each
18year as a level percentage of payroll over the years remaining
19until December 31, 2059 using the projected unit credit
20actuarial cost method so the funded ratio will meet 90% by
21December 31, 2059 and include that determination in its report.
22Within 60 days after receiving the report, the Auditor General
23shall review the determination and the assumptions on which it
24is based and if he finds that the determination and the
25assumptions on which it is based are unreasonable in the
26aggregate, he shall issue a new determination of the funded

 

 

09700HB3475ham001- 31 -LRB097 10960 JDS 52827 a

1ratio, the assumptions on which it is based and the increased
2contribution required each year as a level percentage of
3payroll over the years remaining until December 31, 2059 using
4the projected unit credit actuarial cost method so the funded
5ratio reaches no less than 90% by December 31, 2059. If the
6Board of Trustees or the Auditor General determine that an
7increased contribution is required to meet the funded ratio
8required by this subsection, effective January 1 following the
9determination or 30 days after such determination, whichever is
10later, one-third of the increased contribution shall be paid by
11participating employees and two-thirds by the Authority, in
12addition to the contributions required by subsection (e)(1).
13    (5) Beginning in 2060, the minimum contribution for each
14year shall be the amount needed to maintain the total assets of
15the Retirement Plan at 90% of the total actuarial liabilities
16of the Plan, and the contribution shall be funded two-thirds by
17the Authority and one-third by the participating employees in
18accordance with this subsection.
19    (f) The Authority shall take the steps necessary to comply
20with Section 414(h)(2) of the Internal Revenue Code of 1986, as
21amended, to permit the pick-up of employee contributions under
22subsections (d) and (e) on a tax-deferred basis.
23    (g) The Board of Trustees shall certify to the Governor,
24the General Assembly, the Auditor General, the Board of the
25Regional Transportation Authority, and the Authority at least
2690 days prior to the end of each fiscal year the amount of the

 

 

09700HB3475ham001- 32 -LRB097 10960 JDS 52827 a

1required contributions to the retirement system for the next
2retirement system fiscal year under this Section. The
3certification shall include a copy of the actuarial
4recommendations upon which it is based. In addition, copies of
5the certification shall be sent to the Commission on Government
6Forecasting and Accountability and the Mayor of Chicago.
7    (h)(1) As to an employee who first becomes entitled to a
8retirement allowance commencing on or after November 30, 1989,
9the retirement allowance shall be the amount determined in
10accordance with the following formula:
11        (A) One percent (1%) of his "Average Annual
12    Compensation in the highest four (4) completed Plan Years"
13    for each full year of continuous service from the date of
14    original employment to the effective date of the Plan; plus
15        (B) One and seventy-five hundredths percent (1.75%) of
16    his "Average Annual Compensation in the highest four (4)
17    completed Plan Years" for each year (including fractions
18    thereof to completed calendar months) of continuous
19    service as provided for in the Retirement Plan for Chicago
20    Transit Authority Employees.
21Provided, however that:
22    (2) As to an employee who first becomes entitled to a
23retirement allowance commencing on or after January 1, 1993,
24the retirement allowance shall be the amount determined in
25accordance with the following formula:
26        (A) One percent (1%) of his "Average Annual

 

 

09700HB3475ham001- 33 -LRB097 10960 JDS 52827 a

1    Compensation in the highest four (4) completed Plan Years"
2    for each full year of continuous service from the date of
3    original employment to the effective date of the Plan; plus
4        (B) One and eighty hundredths percent (1.80%) of his
5    "Average Annual Compensation in the highest four (4)
6    completed Plan Years" for each year (including fractions
7    thereof to completed calendar months) of continuous
8    service as provided for in the Retirement Plan for Chicago
9    Transit Authority Employees.
10Provided, however that:
11    (3) As to an employee who first becomes entitled to a
12retirement allowance commencing on or after January 1, 1994,
13the retirement allowance shall be the amount determined in
14accordance with the following formula:
15        (A) One percent (1%) of his "Average Annual
16    Compensation in the highest four (4) completed Plan Years"
17    for each full year of continuous service from the date of
18    original employment to the effective date of the Plan; plus
19        (B) One and eighty-five hundredths percent (1.85%) of
20    his "Average Annual Compensation in the highest four (4)
21    completed Plan Years" for each year (including fractions
22    thereof to completed calendar months) of continuous
23    service as provided for in the Retirement Plan for Chicago
24    Transit Authority Employees.
25Provided, however that:
26    (4) As to an employee who first becomes entitled to a

 

 

09700HB3475ham001- 34 -LRB097 10960 JDS 52827 a

1retirement allowance commencing on or after January 1, 2000,
2the retirement allowance shall be the amount determined in
3accordance with the following formula:
4        (A) One percent (1%) of his "Average Annual
5    Compensation in the highest four (4) completed Plan Years"
6    for each full year of continuous service from the date of
7    original employment to the effective date of the Plan; plus
8        (B) Two percent (2%) of his "Average Annual
9    Compensation in the highest four (4) completed Plan Years"
10    for each year (including fractions thereof to completed
11    calendar months) of continuous service as provided for in
12    the Retirement Plan for Chicago Transit Authority
13    Employees.
14Provided, however that:
15    (5) As to an employee who first becomes entitled to a
16retirement allowance commencing on or after January 1, 2001,
17the retirement allowance shall be the amount determined in
18accordance with the following formula:
19        (A) One percent (1%) of his "Average Annual
20    Compensation in the highest four (4) completed Plan Years"
21    for each full year of continuous service from the date of
22    original employment to the effective date of the Plan; plus
23        (B) Two and fifteen hundredths percent (2.15%) of his
24    "Average Annual Compensation in the highest four (4)
25    completed Plan Years" for each year (including fractions
26    thereof to completed calendar months) of continuous

 

 

09700HB3475ham001- 35 -LRB097 10960 JDS 52827 a

1    service as provided for in the Retirement Plan for Chicago
2    Transit Authority Employees.
3    The changes made by this amendatory Act of the 95th General
4Assembly, to the extent that they affect the rights or
5privileges of Authority employees that are currently the
6subject of collective bargaining, have been agreed to between
7the authorized representatives of these employees and of the
8Authority prior to enactment of this amendatory Act, as
9evidenced by a Memorandum of Understanding between these
10representatives that will be filed with the Secretary of State
11Index Department and designated as "95-GA-C05". The General
12Assembly finds and declares that those changes are consistent
13with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
14Federal Transit Act) because of this agreement between
15authorized representatives of these employees and of the
16Authority, and that any future amendments to the provisions of
17this amendatory Act of the 95th General Assembly, to the extent
18those amendments would affect the rights and privileges of
19Authority employees that are currently the subject of
20collective bargaining, would be consistent with 49 U.S.C.
215333(b) if and only if those amendments were agreed to between
22these authorized representatives prior to enactment.
23    (i) Early retirement incentive plan; funded ratio.
24        (1) Beginning on the effective date of this Section, no
25    early retirement incentive shall be offered to
26    participants of the Plan unless the Funded Ratio of the

 

 

09700HB3475ham001- 36 -LRB097 10960 JDS 52827 a

1    Plan is at least 80% or more.
2        (2) For the purposes of this Section, the Funded Ratio
3    shall be the Adjusted Assets divided by the Actuarial
4    Accrued Liability developed in accordance with Statement
5    #25 promulgated by the Government Accounting Standards
6    Board and the actuarial assumptions described in the Plan.
7    The Adjusted Assets shall be calculated based on the
8    methodology described in the Plan.
9    (j) Nothing in this amendatory Act of the 95th General
10Assembly shall impair the rights or privileges of Authority
11employees under any other law.
12(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)
 
13    (40 ILCS 5/22-103)
14    Sec. 22-103. Regional Transportation Authority and related
15pension plans.
16    (a) As used in this Section:
17    "Affected pension plan" means a defined-benefit pension
18plan supported in whole or in part by employer contributions
19and maintained by the Regional Transportation Authority, the
20Suburban Bus Division, or the Commuter Rail Division, or any
21combination thereof, under the general authority of the
22Regional Transportation Authority Act, including but not
23limited to any such plan that has been established under or is
24subject to a collective bargaining agreement or is limited to
25employees covered by a collective bargaining agreement.

 

 

09700HB3475ham001- 37 -LRB097 10960 JDS 52827 a

1"Affected pension plan" does not include any pension fund or
2retirement system subject to Section 22-101 of this Section.
3    "Authority" means the Regional Transportation Authority
4created under the Regional Transportation Authority Act.
5    "Contributing employer" means an employer that is required
6to make contributions to an affected pension plan under the
7terms of that plan.
8    "Funding ratio" means the ratio of an affected pension
9plan's assets to the present value of its actuarial
10liabilities, as determined at its latest actuarial valuation in
11accordance with applicable actuarial assumptions and
12recommendations.
13    "Under-funded pension plan" or "under-funded" means an
14affected pension plan that, at the time of its last actuarial
15valuation, has a funding ratio of less than 90%.
16    (b) The contributing employers of each affected pension
17plan have a general duty to make the required employer
18contributions to the affected pension plan in a timely manner
19in accordance with the terms of the plan. A contributing
20employer must make contributions to the affected pension plan
21as required under this subsection and, if applicable,
22subsection (c); a contributing employer may make any additional
23contributions provided for by the board of the employer or
24collective bargaining agreement.
25    (c) In the case of an affected pension plan that is
26under-funded on January 1, 2009 or becomes under-funded at any

 

 

09700HB3475ham001- 38 -LRB097 10960 JDS 52827 a

1time after that date, the contributing employers shall
2contribute to the affected pension plan, in addition to all
3amounts otherwise required, amounts sufficient to bring the
4funding ratio of the affected pension plan up to 90% in
5accordance with an amortization schedule adopted jointly by the
6contributing employers and the trustee of the affected pension
7plan. The amortization schedule may extend for any period up to
8a maximum of 50 years and shall provide for additional employer
9contributions in substantially equal annual amounts over the
10selected period. If the contributing employers and the trustee
11of the affected pension plan do not agree on an appropriate
12period for the amortization schedule within 6 months of the
13date of determination that the plan is under-funded, then the
14amortization schedule shall be based on a period of 50 years.
15    In the case of an affected pension plan that has more than
16one contributing employer, each contributing employer's share
17of the total additional employer contributions required under
18this subsection shall be determined: (i) in proportion to the
19amounts, if any, by which the respective contributing employers
20have failed to meet their contribution obligations under the
21terms of the affected pension plan; or (ii) if all of the
22contributing employers have met their contribution obligations
23under the terms of the affected pension plan, then in the same
24proportion as they are required to contribute under the terms
25of that plan. In the case of an affected pension plan that has
26only one contributing employer, that contributing employer is

 

 

09700HB3475ham001- 39 -LRB097 10960 JDS 52827 a

1responsible for all of the additional employer contributions
2required under this subsection.
3    If an under-funded pension plan is determined to have
4achieved a funding ratio of at least 90% during the period when
5an amortization schedule is in force under this Section, the
6contributing employers and the trustee of the affected pension
7plan, acting jointly, may cancel the amortization schedule and
8the contributing employers may cease making additional
9contributions under this subsection for as long as the affected
10pension plan retains a funding ratio of at least 90%.
11    (d) Beginning January 1, 2009, if the Authority fails to
12pay to an affected pension fund within 30 days after it is due
13(i) any employer contribution that it is required to make as a
14contributing employer, (ii) any additional employer
15contribution that it is required to pay under subsection (c),
16or (iii) any payment that it is required to make under Section
174.02a or 4.02b of the Regional Transportation Authority Act,
18the trustee of the affected pension fund shall promptly so
19notify the Commission on Government Forecasting and
20Accountability, the Mayor of Chicago, the Governor, and the
21General Assembly.
22    (e) For purposes of determining employer contributions,
23assets, and actuarial liabilities under this subsection,
24contributions, assets, and liabilities relating to health care
25benefits shall not be included.
26    (f) This amendatory Act of the 94th General Assembly does

 

 

09700HB3475ham001- 40 -LRB097 10960 JDS 52827 a

1not affect or impair the right of any contributing employer or
2its employees to collectively bargain the amount or level of
3employee contributions to an affected pension plan, to the
4extent that the plan includes employees subject to collective
5bargaining.
6    (g) Notwithstanding any other provision of this Article or
7any law to the contrary, a person who, on or after the
8effective date of this amendatory Act of the 97th General
9Assembly, first becomes a director on the Suburban Bus Board,
10the Commuter Rail Board, or the Board of Directors of the
11Regional Transportation Authority shall not be eligible to
12participate in an affected pension plan.
13(Source: P.A. 94-839, eff. 6-6-06.)
 
14    Section 10. The Illinois Municipal Code is amended by
15adding Section 3.1-50-30 as follows:
 
16    (65 ILCS 5/3.1-50-30 new)
17    Sec. 3.1-50-30. Increases in salary; pension impact
18statement. Before increasing the salary of a municipal officer,
19executive, or manager:
20        (1) the authorities of the respective municipality who
21    are authorizing the increase must contact the Illinois
22    Municipal Retirement Fund as to the effect of that increase
23    in salary on the pension benefits of that participant;
24        (2) the Illinois Municipal Retirement Fund must

 

 

09700HB3475ham001- 41 -LRB097 10960 JDS 52827 a

1    respond with a written "Pension Impact Statement" stating
2    the effect of that increase in salary on the pension
3    benefits of that participant, and any other relevant effect
4    of the increase, including payment of the present value of
5    the increase in benefits resulting from the portion of any
6    increase in salary that is in excess of 6% as provided
7    under subsection (k) of Section 7-172, if applicable; and
8        (3) the authorities authorizing this increase must
9    sign the Pension Impact Statement, acknowledging receipt
10    and understanding of the effects of the increase.
 
11    Section 15. The State Mandates Act is amended by adding
12Section 8.35 as follows:
 
13    (30 ILCS 805/8.35 new)
14    Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8
15of this Act, no reimbursement by the State is required for the
16implementation of any mandate created by this amendatory Act of
17the 97th General Assembly.".