HB3591 EnrolledLRB097 10786 JDS 51220 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 22-101 and 22-103 as follows:
 
6    (40 ILCS 5/22-101)  (from Ch. 108 1/2, par. 22-101)
7    Sec. 22-101. Retirement Plan for Chicago Transit Authority
8Employees.
9    (a) There shall be established and maintained by the
10Authority created by the "Metropolitan Transit Authority Act",
11approved April 12, 1945, as amended, (referred to in this
12Section as the "Authority") a financially sound pension and
13retirement system adequate to provide for all payments when due
14under such established system or as modified from time to time
15by ordinance of the Chicago Transit Board or collective
16bargaining agreement. For this purpose, the Board must make
17contributions to the established system as required under this
18Section and may make any additional contributions provided for
19by Board ordinance or collective bargaining agreement. The
20participating employees shall make such periodic payments to
21the established system as required under this Section and may
22make any additional contributions provided for by Board
23ordinance or collective bargaining agreement.

 

 

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1    Provisions shall be made by the Board for all officers and
2employees of the Authority appointed pursuant to the
3"Metropolitan Transit Authority Act" to become, subject to
4reasonable rules and regulations, participants of the pension
5or retirement system with uniform rights, privileges,
6obligations and status as to the class in which such officers
7and employees belong. The terms, conditions and provisions of
8any pension or retirement system or of any amendment or
9modification thereof affecting employees who are members of any
10labor organization may be established, amended or modified by
11agreement with such labor organization, provided the terms,
12conditions and provisions must be consistent with this Act, the
13annual funding levels for the retirement system established by
14law must be met and the benefits paid to future participants in
15the system may not exceed the benefit ceilings set for future
16participants under this Act and the contribution levels
17required by the Authority and its employees may not be less
18than the contribution levels established under this Act.
19    (b) The Board of Trustees shall consist of 11 members
20appointed as follows: (i) 5 trustees shall be appointed by the
21Chicago Transit Board; (ii) 3 trustees shall be appointed by an
22organization representing the highest number of Chicago
23Transit Authority participants; (iii) one trustee shall be
24appointed by an organization representing the second-highest
25number of Chicago Transit Authority participants; (iv) one
26trustee shall be appointed by the recognized coalition

 

 

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1representatives of participants who are not represented by an
2organization with the highest or second-highest number of
3Chicago Transit Authority participants; and (v) one trustee
4shall be selected by the Regional Transportation Authority
5Board of Directors, and the trustee shall be a professional
6fiduciary who has experience in the area of collectively
7bargained pension plans. Trustees shall serve until a successor
8has been appointed and qualified, or until resignation, death,
9incapacity, or disqualification.
10    Any person appointed as a trustee of the board shall
11qualify by taking an oath of office that he or she will
12diligently and honestly administer the affairs of the system
13and will not knowingly violate or willfully permit the
14violation of any of the provisions of law applicable to the
15Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110,
161-111, 1-114, and 1-115 of the Illinois Pension Code.
17    Each trustee shall cast individual votes, and a majority
18vote shall be final and binding upon all interested parties,
19provided that the Board of Trustees may require a supermajority
20vote with respect to the investment of the assets of the
21Retirement Plan, and may set forth that requirement in the
22Retirement Plan documents, by-laws, or rules of the Board of
23Trustees. Each trustee shall have the rights, privileges,
24authority, and obligations as are usual and customary for such
25fiduciaries.
26    The Board of Trustees may cause amounts on deposit in the

 

 

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1Retirement Plan to be invested in those investments that are
2permitted investments for the investment of moneys held under
3any one or more of the pension or retirement systems of the
4State, any unit of local government or school district, or any
5agency or instrumentality thereof. The Board, by a vote of at
6least two-thirds of the trustees, may transfer investment
7management to the Illinois State Board of Investment, which is
8hereby authorized to manage these investments when so requested
9by the Board of Trustees.
10    (c) All individuals who were previously participants in the
11Retirement Plan for Chicago Transit Authority Employees shall
12remain participants, and shall receive the same benefits
13established by the Retirement Plan for Chicago Transit
14Authority Employees, except as provided in this amendatory Act
15or by subsequent legislative enactment or amendment to the
16Retirement Plan. For Authority employees hired on or after the
17effective date of this amendatory Act of the 95th General
18Assembly, the Retirement Plan for Chicago Transit Authority
19Employees shall be the exclusive retirement plan and such
20employees shall not be eligible for any supplemental plan,
21except for a deferred compensation plan funded only by employee
22contributions.
23    For all Authority employees who are first hired on or after
24the effective date of this amendatory Act of the 95th General
25Assembly and are participants in the Retirement Plan for
26Chicago Transit Authority Employees, the following terms,

 

 

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1conditions and provisions with respect to retirement shall be
2applicable:
3        (1) Such participant shall be eligible for an unreduced
4    retirement allowance for life upon the attainment of age 64
5    with 25 years of continuous service.
6        (2) Such participant shall be eligible for a reduced
7    retirement allowance for life upon the attainment of age 55
8    with 10 years of continuous service.
9        (3) For the purpose of determining the retirement
10    allowance to be paid to a retiring employee, the term
11    "Continuous Service" as used in the Retirement Plan for
12    Chicago Transit Authority Employees shall also be deemed to
13    include all pension credit for service with any retirement
14    system established under Article 8 or Article 11 of this
15    Code, provided that the employee forfeits and relinquishes
16    all pension credit under Article 8 or Article 11 of this
17    Code, and the contribution required under this subsection
18    is made by the employee. The Retirement Plan's actuary
19    shall determine the contribution paid by the employee as an
20    amount equal to the normal cost of the benefit accrued, had
21    the service been rendered as an employee, plus interest per
22    annum from the time such service was rendered until the
23    date the payment is made.
24    (d) From the effective date of this amendatory Act through
25December 31, 2008, all participating employees shall
26contribute to the Retirement Plan in an amount not less than 6%

 

 

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1of compensation, and the Authority shall contribute to the
2Retirement Plan in an amount not less than 12% of compensation.
3    (e)(1) Beginning January 1, 2009 the Authority shall make
4contributions to the Retirement Plan in an amount equal to
5twelve percent (12%) of compensation and participating
6employees shall make contributions to the Retirement Plan in an
7amount equal to six percent (6%) of compensation. These
8contributions may be paid by the Authority and participating
9employees on a payroll or other periodic basis, but shall in
10any case be paid to the Retirement Plan at least monthly.
11    (2) For the period ending December 31, 2040, the amount
12paid by the Authority in any year with respect to debt service
13on bonds issued for the purposes of funding a contribution to
14the Retirement Plan under Section 12c of the Metropolitan
15Transit Authority Act, other than debt service paid with the
16proceeds of bonds or notes issued by the Authority for any year
17after calendar year 2008, shall be treated as a credit against
18the amount of required contribution to the Retirement Plan by
19the Authority under subsection (e)(1) for the following year up
20to an amount not to exceed 6% of compensation paid by the
21Authority in that following year.
22    (3) By September 15 of each year beginning in 2009 and
23ending on December 31, 2039, on the basis of a report prepared
24by an enrolled actuary retained by the Plan, the Board of
25Trustees of the Retirement Plan shall determine the estimated
26funded ratio of the total assets of the Retirement Plan to its

 

 

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1total actuarially determined liabilities. A report containing
2that determination and the actuarial assumptions on which it is
3based shall be filed with the Authority, the representatives of
4its participating employees, the Auditor General of the State
5of Illinois, and the Regional Transportation Authority. If the
6funded ratio is projected to decline below 60% in any year
7before 2040, the Board of Trustees shall also determine the
8increased contribution required each year as a level percentage
9of payroll over the years remaining until 2040 using the
10projected unit credit actuarial cost method so the funded ratio
11does not decline below 60% and include that determination in
12its report. If the actual funded ratio declines below 60% in
13any year prior to 2040, the Board of Trustees shall also
14determine the increased contribution required each year as a
15level percentage of payroll during the years after the then
16current year using the projected unit credit actuarial cost
17method so the funded ratio is projected to reach at least 60%
18no later than 10 years after the then current year and include
19that determination in its report. Within 60 days after
20receiving the report, the Auditor General shall review the
21determination and the assumptions on which it is based, and if
22he finds that the determination and the assumptions on which it
23is based are unreasonable in the aggregate, he shall issue a
24new determination of the funded ratio, the assumptions on which
25it is based and the increased contribution required each year
26as a level percentage of payroll over the years remaining until

 

 

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12040 using the projected unit credit actuarial cost method so
2the funded ratio does not decline below 60%, or, in the event
3of an actual decline below 60%, so the funded ratio is
4projected to reach 60% by no later than 10 years after the then
5current year. If the Board of Trustees or the Auditor General
6determine that an increased contribution is required to meet
7the funded ratio required by the subsection, effective January
81 following the determination or 30 days after such
9determination, whichever is later, one-third of the increased
10contribution shall be paid by participating employees and
11two-thirds by the Authority, in addition to the contributions
12required by this subsection (1).
13    (4) For the period beginning 2040, the minimum contribution
14to the Retirement Plan for each fiscal year shall be an amount
15determined by the Board of Trustees of the Retirement Plan to
16be sufficient to bring the total assets of the Retirement Plan
17up to 90% of its total actuarial liabilities by the end of
182059. Participating employees shall be responsible for
19one-third of the required contribution and the Authority shall
20be responsible for two-thirds of the required contribution. In
21making these determinations, the Board of Trustees shall
22calculate the required contribution each year as a level
23percentage of payroll over the years remaining to and including
24fiscal year 2059 using the projected unit credit actuarial cost
25method. A report containing that determination and the
26actuarial assumptions on which it is based shall be filed by

 

 

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1September 15 of each year with the Authority, the
2representatives of its participating employees, the Auditor
3General of the State of Illinois and the Regional
4Transportation Authority. If the funded ratio is projected to
5fail to reach 90% by December 31, 2059, the Board of Trustees
6shall also determine the increased contribution required each
7year as a level percentage of payroll over the years remaining
8until December 31, 2059 using the projected unit credit
9actuarial cost method so the funded ratio will meet 90% by
10December 31, 2059 and include that determination in its report.
11Within 60 days after receiving the report, the Auditor General
12shall review the determination and the assumptions on which it
13is based and if he finds that the determination and the
14assumptions on which it is based are unreasonable in the
15aggregate, he shall issue a new determination of the funded
16ratio, the assumptions on which it is based and the increased
17contribution required each year as a level percentage of
18payroll over the years remaining until December 31, 2059 using
19the projected unit credit actuarial cost method so the funded
20ratio reaches no less than 90% by December 31, 2059. If the
21Board of Trustees or the Auditor General determine that an
22increased contribution is required to meet the funded ratio
23required by this subsection, effective January 1 following the
24determination or 30 days after such determination, whichever is
25later, one-third of the increased contribution shall be paid by
26participating employees and two-thirds by the Authority, in

 

 

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1addition to the contributions required by subsection (e)(1).
2    (5) Beginning in 2060, the minimum contribution for each
3year shall be the amount needed to maintain the total assets of
4the Retirement Plan at 90% of the total actuarial liabilities
5of the Plan, and the contribution shall be funded two-thirds by
6the Authority and one-third by the participating employees in
7accordance with this subsection.
8    (f) The Authority shall take the steps necessary to comply
9with Section 414(h)(2) of the Internal Revenue Code of 1986, as
10amended, to permit the pick-up of employee contributions under
11subsections (d) and (e) on a tax-deferred basis.
12    (g) The Board of Trustees shall certify to the Governor,
13the General Assembly, the Auditor General, the Board of the
14Regional Transportation Authority, and the Authority at least
1590 days prior to the end of each fiscal year the amount of the
16required contributions to the retirement system for the next
17retirement system fiscal year under this Section. The
18certification shall include a copy of the actuarial
19recommendations upon which it is based. In addition, copies of
20the certification shall be sent to the Commission on Government
21Forecasting and Accountability and the Mayor of Chicago.
22    (h)(1) As to an employee who first becomes entitled to a
23retirement allowance commencing on or after November 30, 1989,
24the retirement allowance shall be the amount determined in
25accordance with the following formula:
26        (A) One percent (1%) of his "Average Annual

 

 

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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 seventy-five hundredths percent (1.75%) of
5    his "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    (2) As to an employee who first becomes entitled to a
12retirement allowance commencing on or after January 1, 1993,
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 hundredths percent (1.80%) of his
20    "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    (3) As to an employee who first becomes entitled to a

 

 

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1retirement allowance commencing on or after January 1, 1994,
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) One and eighty-five hundredths percent (1.85%) of
9    his "Average Annual Compensation in the highest four (4)
10    completed Plan Years" for each year (including fractions
11    thereof to completed calendar months) of continuous
12    service as provided for in the Retirement Plan for Chicago
13    Transit Authority Employees.
14Provided, however that:
15    (4) As to an employee who first becomes entitled to a
16retirement allowance commencing on or after January 1, 2000,
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 percent (2%) of his "Average Annual
24    Compensation in the highest four (4) completed Plan Years"
25    for each year (including fractions thereof to completed
26    calendar months) of continuous service as provided for in

 

 

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1    the Retirement Plan for Chicago Transit Authority
2    Employees.
3Provided, however that:
4    (5) As to an employee who first becomes entitled to a
5retirement allowance commencing on or after January 1, 2001,
6the retirement allowance shall be the amount determined in
7accordance with the following formula:
8        (A) One percent (1%) of his "Average Annual
9    Compensation in the highest four (4) completed Plan Years"
10    for each full year of continuous service from the date of
11    original employment to the effective date of the Plan; plus
12        (B) Two and fifteen hundredths percent (2.15%) of his
13    "Average Annual Compensation in the highest four (4)
14    completed Plan Years" for each year (including fractions
15    thereof to completed calendar months) of continuous
16    service as provided for in the Retirement Plan for Chicago
17    Transit Authority Employees.
18    The changes made by this amendatory Act of the 95th General
19Assembly, to the extent that they affect the rights or
20privileges of Authority employees that are currently the
21subject of collective bargaining, have been agreed to between
22the authorized representatives of these employees and of the
23Authority prior to enactment of this amendatory Act, as
24evidenced by a Memorandum of Understanding between these
25representatives that will be filed with the Secretary of State
26Index Department and designated as "95-GA-C05". The General

 

 

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1Assembly finds and declares that those changes are consistent
2with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
3Federal Transit Act) because of this agreement between
4authorized representatives of these employees and of the
5Authority, and that any future amendments to the provisions of
6this amendatory Act of the 95th General Assembly, to the extent
7those amendments would affect the rights and privileges of
8Authority employees that are currently the subject of
9collective bargaining, would be consistent with 49 U.S.C.
105333(b) if and only if those amendments were agreed to between
11these authorized representatives prior to enactment.
12    (i) Early retirement incentive plan; funded ratio.
13        (1) Beginning on the effective date of this Section, no
14    early retirement incentive shall be offered to
15    participants of the Plan unless the Funded Ratio of the
16    Plan is at least 80% or more.
17        (2) For the purposes of this Section, the Funded Ratio
18    shall be the Adjusted Assets divided by the Actuarial
19    Accrued Liability developed in accordance with Statement
20    #25 promulgated by the Government Accounting Standards
21    Board and the actuarial assumptions described in the Plan.
22    The Adjusted Assets shall be calculated based on the
23    methodology described in the Plan.
24    (j) Nothing in this amendatory Act of the 95th General
25Assembly shall impair the rights or privileges of Authority
26employees under any other law.

 

 

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1    (k) Any individual who, on or after the effective date of
2this amendatory Act of the 97th General Assembly, first becomes
3a participant of the Retirement Plan shall not be paid any of
4the benefits provided under this Code if he or she is convicted
5of a felony relating to, arising out of, or in connection with
6his or her service as a participant.
7    This subsection (k) shall not operate to impair any
8contract or vested right acquired before the effective date of
9this amendatory Act of the 97th General Assembly under any law
10or laws continued in this Code, and it shall not preclude the
11right to refund.
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.

 

 

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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

 

 

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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

 

 

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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

 

 

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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) Any individual who, on or after the effective date of
7this amendatory Act of the 97th General Assembly, first becomes
8a participant of an affected pension plan shall not be paid any
9of the benefits provided under this Code if he or she is
10convicted of a felony relating to, arising out of, or in
11connection with his or her service as a participant.
12    This subsection shall not operate to impair any contract or
13vested right acquired before the effective date of this
14amendatory Act of the 97th General Assembly under any law or
15laws continued in this Code, and it shall not preclude the
16right to refund.
17(Source: P.A. 94-839, eff. 6-6-06.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.