Rep. Michelle Mussman

Filed: 3/25/2011

 

 


 

 


 
09700HB3591ham001LRB097 10786 JDS 53391 a

1
AMENDMENT TO HOUSE BILL 3591

2    AMENDMENT NO. ______. Amend House Bill 3591 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 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

 

 

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1contributions to the established system as required under this
2Section and may make any additional contributions provided for
3by Board ordinance or collective bargaining agreement. The
4participating employees shall make such periodic payments to
5the established system as required under this Section and may
6make any additional contributions provided for by Board
7ordinance or collective bargaining agreement.
8    Provisions shall be made by the Board for all officers 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

 

 

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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

 

 

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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    (c) All individuals who were previously participants in the
18Retirement Plan for Chicago Transit Authority Employees shall
19remain participants, and shall receive the same benefits
20established by the Retirement Plan for Chicago Transit
21Authority Employees, except as provided in this amendatory Act
22or by subsequent legislative enactment or amendment to the
23Retirement Plan. For Authority employees hired on or after the
24effective date of this amendatory Act of the 95th General
25Assembly, the Retirement Plan for Chicago Transit Authority
26Employees shall be the exclusive retirement plan and such

 

 

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

 

 

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

 

 

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1to an amount not to exceed 6% of compensation paid by the
2Authority in that following year.
3    (3) By September 15 of each year beginning in 2009 and
4ending on December 31, 2039, on the basis of a report prepared
5by an enrolled actuary retained by the Plan, the Board of
6Trustees of the Retirement Plan shall determine the estimated
7funded ratio of the total assets of the Retirement Plan to its
8total actuarially determined liabilities. A report containing
9that determination and the actuarial assumptions on which it is
10based shall be filed with the Authority, the representatives of
11its participating employees, the Auditor General of the State
12of Illinois, and the Regional Transportation Authority. If the
13funded ratio is projected to decline below 60% in any year
14before 2040, the Board of Trustees shall also determine the
15increased contribution required each year as a level percentage
16of payroll over the years remaining until 2040 using the
17projected unit credit actuarial cost method so the funded ratio
18does not decline below 60% and include that determination in
19its report. If the actual funded ratio declines below 60% in
20any year prior to 2040, the Board of Trustees shall also
21determine the increased contribution required each year as a
22level percentage of payroll during the years after the then
23current year using the projected unit credit actuarial cost
24method so the funded ratio is projected to reach at least 60%
25no later than 10 years after the then current year and include
26that determination in its report. Within 60 days after

 

 

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1receiving the report, the Auditor General shall review the
2determination and the assumptions on which it is based, and if
3he finds that the determination and the assumptions on which it
4is based are unreasonable in the aggregate, he shall issue a
5new determination of the funded ratio, the assumptions on which
6it is based and the increased contribution required each year
7as a level percentage of payroll over the years remaining until
82040 using the projected unit credit actuarial cost method so
9the funded ratio does not decline below 60%, or, in the event
10of an actual decline below 60%, so the funded ratio is
11projected to reach 60% by no later than 10 years after the then
12current year. If the Board of Trustees or the Auditor General
13determine that an increased contribution is required to meet
14the funded ratio required by the subsection, effective January
151 following the determination or 30 days after such
16determination, whichever is later, one-third of the increased
17contribution shall be paid by participating employees and
18two-thirds by the Authority, in addition to the contributions
19required by this subsection (1).
20    (4) For the period beginning 2040, the minimum contribution
21to the Retirement Plan for each fiscal year shall be an amount
22determined by the Board of Trustees of the Retirement Plan to
23be sufficient to bring the total assets of the Retirement Plan
24up to 90% of its total actuarial liabilities by the end of
252059. Participating employees shall be responsible for
26one-third of the required contribution and the Authority shall

 

 

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1be responsible for two-thirds of the required contribution. In
2making these determinations, the Board of Trustees shall
3calculate the required contribution each year as a level
4percentage of payroll over the years remaining to and including
5fiscal year 2059 using the projected unit credit actuarial cost
6method. A report containing that determination and the
7actuarial assumptions on which it is based shall be filed by
8September 15 of each year with the Authority, the
9representatives of its participating employees, the Auditor
10General of the State of Illinois and the Regional
11Transportation Authority. If the funded ratio is projected to
12fail to reach 90% by December 31, 2059, the Board of Trustees
13shall also determine the increased contribution required each
14year as a level percentage of payroll over the years remaining
15until December 31, 2059 using the projected unit credit
16actuarial cost method so the funded ratio will meet 90% by
17December 31, 2059 and include that determination in its report.
18Within 60 days after receiving the report, the Auditor General
19shall review the determination and the assumptions on which it
20is based and if he finds that the determination and the
21assumptions on which it is based are unreasonable in the
22aggregate, he shall issue a new determination of the funded
23ratio, the assumptions on which it is based and the increased
24contribution required each year as a level percentage of
25payroll over the years remaining until December 31, 2059 using
26the projected unit credit actuarial cost method so the funded

 

 

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1ratio reaches no less than 90% by December 31, 2059. If the
2Board of Trustees or the Auditor General determine that an
3increased contribution is required to meet the funded ratio
4required by this subsection, effective January 1 following the
5determination or 30 days after such determination, whichever is
6later, one-third of the increased contribution shall be paid by
7participating employees and two-thirds by the Authority, in
8addition to the contributions required by subsection (e)(1).
9    (5) Beginning in 2060, the minimum contribution for each
10year shall be the amount needed to maintain the total assets of
11the Retirement Plan at 90% of the total actuarial liabilities
12of the Plan, and the contribution shall be funded two-thirds by
13the Authority and one-third by the participating employees in
14accordance with this subsection.
15    (f) The Authority shall take the steps necessary to comply
16with Section 414(h)(2) of the Internal Revenue Code of 1986, as
17amended, to permit the pick-up of employee contributions under
18subsections (d) and (e) on a tax-deferred basis.
19    (g) The Board of Trustees shall certify to the Governor,
20the General Assembly, the Auditor General, the Board of the
21Regional Transportation Authority, and the Authority at least
2290 days prior to the end of each fiscal year the amount of the
23required contributions to the retirement system for the next
24retirement system fiscal year under this Section. The
25certification shall include a copy of the actuarial
26recommendations upon which it is based. In addition, copies of

 

 

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1the certification shall be sent to the Commission on Government
2Forecasting and Accountability and the Mayor of Chicago.
3    (h)(1) As to an employee who first becomes entitled to a
4retirement allowance commencing on or after November 30, 1989,
5the retirement allowance shall be the amount determined in
6accordance with the following formula:
7        (A) One percent (1%) of his "Average Annual
8    Compensation in the highest four (4) completed Plan Years"
9    for each full year of continuous service from the date of
10    original employment to the effective date of the Plan; plus
11        (B) One and seventy-five hundredths percent (1.75%) of
12    his "Average Annual Compensation in the highest four (4)
13    completed Plan Years" for each year (including fractions
14    thereof to completed calendar months) of continuous
15    service as provided for in the Retirement Plan for Chicago
16    Transit Authority Employees.
17Provided, however that:
18    (2) As to an employee who first becomes entitled to a
19retirement allowance commencing on or after January 1, 1993,
20the retirement allowance shall be the amount determined in
21accordance with the following formula:
22        (A) One percent (1%) of his "Average Annual
23    Compensation in the highest four (4) completed Plan Years"
24    for each full year of continuous service from the date of
25    original employment to the effective date of the Plan; plus
26        (B) One and eighty hundredths percent (1.80%) of his

 

 

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1    "Average Annual Compensation in the highest four (4)
2    completed Plan Years" for each year (including fractions
3    thereof to completed calendar months) of continuous
4    service as provided for in the Retirement Plan for Chicago
5    Transit Authority Employees.
6Provided, however that:
7    (3) As to an employee who first becomes entitled to a
8retirement allowance commencing on or after January 1, 1994,
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 eighty-five hundredths percent (1.85%) 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    (4) As to an employee who first becomes entitled to a
23retirement allowance commencing on or after January 1, 2000,
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) Two percent (2%) of his "Average Annual
5    Compensation in the highest four (4) completed Plan Years"
6    for each year (including fractions thereof to completed
7    calendar months) of continuous service as provided for in
8    the Retirement Plan for Chicago Transit Authority
9    Employees.
10Provided, however that:
11    (5) As to an employee who first becomes entitled to a
12retirement allowance commencing on or after January 1, 2001,
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) Two and fifteen hundredths percent (2.15%) 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.
25    The changes made by this amendatory Act of the 95th General
26Assembly, to the extent that they affect the rights or

 

 

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1privileges of Authority employees that are currently the
2subject of collective bargaining, have been agreed to between
3the authorized representatives of these employees and of the
4Authority prior to enactment of this amendatory Act, as
5evidenced by a Memorandum of Understanding between these
6representatives that will be filed with the Secretary of State
7Index Department and designated as "95-GA-C05". The General
8Assembly finds and declares that those changes are consistent
9with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
10Federal Transit Act) because of this agreement between
11authorized representatives of these employees and of the
12Authority, and that any future amendments to the provisions of
13this amendatory Act of the 95th General Assembly, to the extent
14those amendments would affect the rights and privileges of
15Authority employees that are currently the subject of
16collective bargaining, would be consistent with 49 U.S.C.
175333(b) if and only if those amendments were agreed to between
18these authorized representatives prior to enactment.
19    (i) Early retirement incentive plan; funded ratio.
20        (1) Beginning on the effective date of this Section, no
21    early retirement incentive shall be offered to
22    participants of the Plan unless the Funded Ratio of the
23    Plan is at least 80% or more.
24        (2) For the purposes of this Section, the Funded Ratio
25    shall be the Adjusted Assets divided by the Actuarial
26    Accrued Liability developed in accordance with Statement

 

 

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1    #25 promulgated by the Government Accounting Standards
2    Board and the actuarial assumptions described in the Plan.
3    The Adjusted Assets shall be calculated based on the
4    methodology described in the Plan.
5    (j) Nothing in this amendatory Act of the 95th General
6Assembly shall impair the rights or privileges of Authority
7employees under any other law.
8    (k) Any individual who, on or after the effective date of
9this amendatory Act of the 97th General Assembly, first becomes
10a participant of the Retirement Plan shall not be paid any of
11the benefits provided under this Code if he or she is convicted
12of a felony relating to, arising out of, or in connection with
13his or her service as a participant.
14    This subsection (k) shall not operate to impair any
15contract or vested right acquired before the effective date of
16this amendatory Act of the 97th General Assembly under any law
17or laws continued in this Code, and it shall not preclude the
18right to refund.
19(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)
 
20    (40 ILCS 5/22-103)
21    Sec. 22-103. Regional Transportation Authority and related
22pension plans.
23    (a) As used in this Section:
24    "Affected pension plan" means a defined-benefit pension
25plan supported in whole or in part by employer contributions

 

 

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1and maintained by the Regional Transportation Authority, the
2Suburban Bus Division, or the Commuter Rail Division, or any
3combination thereof, under the general authority of the
4Regional Transportation Authority Act, including but not
5limited to any such plan that has been established under or is
6subject to a collective bargaining agreement or is limited to
7employees covered by a collective bargaining agreement.
8"Affected pension plan" does not include any pension fund or
9retirement system subject to Section 22-101 of this Section.
10    "Authority" means the Regional Transportation Authority
11created under the Regional Transportation Authority Act.
12    "Contributing employer" means an employer that is required
13to make contributions to an affected pension plan under the
14terms of that plan.
15    "Funding ratio" means the ratio of an affected pension
16plan's assets to the present value of its actuarial
17liabilities, as determined at its latest actuarial valuation in
18accordance with applicable actuarial assumptions and
19recommendations.
20    "Under-funded pension plan" or "under-funded" means an
21affected pension plan that, at the time of its last actuarial
22valuation, has a funding ratio of less than 90%.
23    (b) The contributing employers of each affected pension
24plan have a general duty to make the required employer
25contributions to the affected pension plan in a timely manner
26in accordance with the terms of the plan. A contributing

 

 

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1employer must make contributions to the affected pension plan
2as required under this subsection and, if applicable,
3subsection (c); a contributing employer may make any additional
4contributions provided for by the board of the employer or
5collective bargaining agreement.
6    (c) In the case of an affected pension plan that is
7under-funded on January 1, 2009 or becomes under-funded at any
8time after that date, the contributing employers shall
9contribute to the affected pension plan, in addition to all
10amounts otherwise required, amounts sufficient to bring the
11funding ratio of the affected pension plan up to 90% in
12accordance with an amortization schedule adopted jointly by the
13contributing employers and the trustee of the affected pension
14plan. The amortization schedule may extend for any period up to
15a maximum of 50 years and shall provide for additional employer
16contributions in substantially equal annual amounts over the
17selected period. If the contributing employers and the trustee
18of the affected pension plan do not agree on an appropriate
19period for the amortization schedule within 6 months of the
20date of determination that the plan is under-funded, then the
21amortization schedule shall be based on a period of 50 years.
22    In the case of an affected pension plan that has more than
23one contributing employer, each contributing employer's share
24of the total additional employer contributions required under
25this subsection shall be determined: (i) in proportion to the
26amounts, if any, by which the respective contributing employers

 

 

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1have failed to meet their contribution obligations under the
2terms of the affected pension plan; or (ii) if all of the
3contributing employers have met their contribution obligations
4under the terms of the affected pension plan, then in the same
5proportion as they are required to contribute under the terms
6of that plan. In the case of an affected pension plan that has
7only one contributing employer, that contributing employer is
8responsible for all of the additional employer contributions
9required under this subsection.
10    If an under-funded pension plan is determined to have
11achieved a funding ratio of at least 90% during the period when
12an amortization schedule is in force under this Section, the
13contributing employers and the trustee of the affected pension
14plan, acting jointly, may cancel the amortization schedule and
15the contributing employers may cease making additional
16contributions under this subsection for as long as the affected
17pension plan retains a funding ratio of at least 90%.
18    (d) Beginning January 1, 2009, if the Authority fails to
19pay to an affected pension fund within 30 days after it is due
20(i) any employer contribution that it is required to make as a
21contributing employer, (ii) any additional employer
22contribution that it is required to pay under subsection (c),
23or (iii) any payment that it is required to make under Section
244.02a or 4.02b of the Regional Transportation Authority Act,
25the trustee of the affected pension fund shall promptly so
26notify the Commission on Government Forecasting and

 

 

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1Accountability, the Mayor of Chicago, the Governor, and the
2General Assembly.
3    (e) For purposes of determining employer contributions,
4assets, and actuarial liabilities under this subsection,
5contributions, assets, and liabilities relating to health care
6benefits shall not be included.
7    (f) This amendatory Act of the 94th General Assembly does
8not affect or impair the right of any contributing employer or
9its employees to collectively bargain the amount or level of
10employee contributions to an affected pension plan, to the
11extent that the plan includes employees subject to collective
12bargaining.
13    (g) Any individual who, on or after the effective date of
14this amendatory Act of the 97th General Assembly, first becomes
15a participant of an affected pension plan shall not be paid any
16of the benefits provided under this Code if he or she is
17convicted of a felony relating to, arising out of, or in
18connection with his or her service as a participant.
19    This subsection shall not operate to impair any contract or
20vested right acquired before the effective date of this
21amendatory Act of the 97th General Assembly under any law or
22laws continued in this Code, and it shall not preclude the
23right to refund.
24(Source: P.A. 94-839, eff. 6-6-06.)
 
25    Section 99. Effective date. This Act takes effect upon

 

 

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1becoming law.".