Rep. Barbara Flynn Currie

Filed: 5/3/2012

 

 


 

 


 
09700HB4246ham001LRB097 15237 EFG 69168 a

1
AMENDMENT TO HOUSE BILL 4246

2    AMENDMENT NO. ______. Amend House Bill 4246 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 17-127 and 17-129 as follows:
 
6    (40 ILCS 5/17-127)  (from Ch. 108 1/2, par. 17-127)
7    Sec. 17-127. Financing; State contributions;
8certifications; vouchers revenues for the Fund.
9    (a) The revenues for the Fund shall consist of: (1) amounts
10paid into the Fund by contributors thereto and from employer
11contributions and State appropriations in accordance with this
12Article; (2) amounts contributed to the Fund by an Employer;
13(3) amounts contributed to the Fund pursuant to any law now in
14force or hereafter to be enacted; (4) contributions from any
15other source; and (5) the earnings on investments.
16    (b) The General Assembly finds that for many years the

 

 

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1State has contributed to the Fund an annual amount that is
2between 20% and 30% of the amount of the annual State
3contribution to the Article 16 retirement system, and the
4General Assembly declares that through fiscal year 2012, it is
5its goal and intention to continue this level of contribution
6to the Fund in the future.
7    Beginning in State fiscal year 1999 and through fiscal year
82012, the State shall include in its annual contribution to the
9Fund an additional amount equal to 0.544% of the Fund's total
10teacher payroll; except that this additional contribution need
11not be made in a fiscal year if the Board has certified in the
12previous fiscal year that the Fund is at least 90% funded,
13based on actuarial determinations. These additional State
14contributions are intended to offset a portion of the cost to
15the Fund of the increases in retirement benefits resulting from
16this amendatory Act of 1998.
17    (c) For fiscal year 2013, the State shall contribute
18$191,289,707 to the Fund.
19    (d) For fiscal year 2014 and each fiscal year thereafter,
20the State shall contribute to the Fund an amount to be
21determined by the Board in consultation with the Commission on
22Government Forecasting and Accountability, equal to the sum of
23the following:
24        (1) the State's share of the Fund's certified normal
25    cost for that fiscal year (excluding any amortization of
26    the unfunded accrued liability); and

 

 

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1        (2) a positive or negative amount equal to the net
2    amount of any increases or decreases in the Fund's
3    supplemental annual cost for that fiscal year that are not
4    attributable to the effects of lost investment earnings due
5    to underfunding as defined in subsection (g). Such
6    increases or decreases may include, but are not limited to,
7    those resulting from changes in benefits, changes in
8    actuarial assumptions adopted by the Board, differences
9    between actuarial assumptions and actual experience, and
10    variations in investment earnings other than lost
11    investment earnings due to underfunding.
12    (e) Annually, on or before November 15, the Board shall
13certify to the Governor the total annual amount of the required
14State contribution under this Section for the next fiscal year.
15The certification shall include a copy of the actuarial
16recommendations upon which it is based. The certification shall
17also specifically identify and certify for that next fiscal
18year: (i) the Fund's predicted normal cost; (ii) the estimated
19amount of participant contributions under Section 17-130; and
20(iii) each of the amounts determined under subdivisions (1) and
21(2) of subsection (d) and the methodology and facts relied upon
22in determining those amounts.
23    The certification for fiscal year 2013, however, shall be
24made within 30 days after the effective date of this amendatory
25Act of the 97th General Assembly and shall consist only of the
26amount specified in subsection (c).

 

 

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1    (f) Beginning in State fiscal year 2013, the annual State
2contribution required under this Section shall be payable to
3the Fund in 12 substantially equal monthly installments.
4    On the 15th day of each month, or as soon thereafter as may
5be practicable, the Board shall submit vouchers for payment of
6State contributions to the Fund, in a total monthly amount of
7one-twelfth of the annual amount of the required State
8contribution certified under subsection (e). These vouchers
9shall be paid by the State Comptroller and Treasurer by
10warrants drawn on the funds appropriated to the Fund for that
11fiscal year.
12    If in any month the amount remaining unexpended from all
13other appropriations for State contributions to the Fund for
14the applicable fiscal year is less than the amount lawfully
15vouchered under this subsection, the difference shall be paid
16from the General Revenue Fund under the continuing
17appropriation authority provided in Section 1.9 of the State
18Pension Funds Continuing Appropriation Act.
19    (g) For the purposes of this Article:
20    "Lost investment earnings due to underfunding" means the
21additional earnings on investments, if any, that the Fund would
22have received during a particular fiscal year if the Fund had
23been 100% funded on July 1, 2012, taking into consideration the
24reduction of the unfunded accrued liability in existence on
25July 1, 2012 under subdivision (b)(iv) of Section 17-129 prior
26to that fiscal year.

 

 

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1    "Normal cost" means that part of the actuarial present
2value of all future benefit payments and appropriate
3administrative expenses assigned to a fiscal year under the
4actuarial valuation method used by the Fund, excluding any
5amortization of the unfunded accrued liability.
6    "The State's share of the Fund's certified normal cost"
7means an amount equal to the Fund's certified normal cost for
8the fiscal year minus the certified estimate for that fiscal
9year of participant contributions required under Section
1017-130.
11    "Supplemental annual cost" means that portion of the
12unfunded accrued liability that is assigned to a fiscal year.
13Unfunded accrued liability in existence on July 1, 2012 and
14unfunded accrued liability accruing after that date that is
15attributable to the effects of lost investment earnings due to
16underfunding shall be assigned according to the schedule
17adopted under subdivision (b)(iv) of Section 17-129. Unfunded
18accrued liability that accrues on or after July 1, 2012 and is
19not attributable to the effects of lost investment earnings due
20to underfunding shall be assigned as the level annual amount
21required to amortize that unfunded accrued liability over a
22period not exceeding 30 years.
23    (h) It is declared to be the funding goal of the Fund to
24achieve and maintain a funding ratio of 100%.
25(Source: P.A. 90-548, eff. 12-4-97; 90-566, eff. 1-2-98;
2690-582, eff. 5-27-98; 90-655, eff. 7-30-98.)
 

 

 

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1    (40 ILCS 5/17-129)  (from Ch. 108 1/2, par. 17-129)
2    Sec. 17-129. Board of Education Employer contributions;
3certification; deficiency in Fund.
4    (a) If in any fiscal year of the Board of Education ending
5prior to 1997 the total amounts paid to the Fund from the Board
6of Education (other than under this subsection, and other than
7amounts used for making or "picking up" contributions on behalf
8of teachers) and from the State do not equal the total
9contributions made by or on behalf of the teachers for such
10year, or if the total income of the Fund in any such fiscal
11year of the Board of Education from all sources is less than
12the total such expenditures by the Fund for such year, the
13Board of Education shall, in the next succeeding year, in
14addition to any other payment to the Fund set apart and
15appropriate from moneys from its tax levy for educational
16purposes, a sum sufficient to remove such deficiency or
17deficiencies, and promptly pay such sum into the Fund in order
18to restore any of the reserves of the Fund that may have been
19so temporarily applied. Any amounts received by the Fund after
20December 4, 1997 from State appropriations, including under
21Section 17-127, shall be a credit against and shall fully
22satisfy any obligation that may have arisen, or be claimed to
23have arisen, under this subsection (a) as a result of any
24deficiency or deficiencies in the fiscal year of the Board of
25Education ending in calendar year 1997.

 

 

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1    (b) (i) Notwithstanding any other provision of this
2Section, and notwithstanding any prior certification by the
3Board under subsection (c) for fiscal year 2011, the Board of
4Education's total required contribution to the Fund for fiscal
5year 2011 under this Section is $187,000,000.
6    (ii) Notwithstanding any other provision of this Section,
7the Board of Education's total required contribution to the
8Fund for fiscal year 2012 under this Section is $192,000,000.
9    (iii) The Notwithstanding any other provision of this
10Section, the Board of Education's total required contribution
11to the Fund for fiscal year 2013 under this Section is
12$196,000,000, without any credit or offset of the amount
13payable by the State under Section 17-127.
14    (iv) For fiscal years 2014 through 2059, the minimum
15contribution to the Fund to be made by the Board of Education
16in each fiscal year shall be an amount determined by the Fund
17to be sufficient to amortize 100% of the unfunded accrued
18liability of the Fund in existence on July 1, 2012, plus any
19additional unfunded accrued liability accruing after that date
20that is attributable to the effects of lost investment earnings
21due to underfunding (as defined in Section 17-127) bring the
22total assets of the Fund up to 90% of the total actuarial
23liabilities of the Fund by the end of fiscal year 2059. In
24making these determinations, the required Board of Education
25contribution shall be calculated each year as a level
26percentage of the applicable employee payrolls over the years

 

 

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1remaining to and including fiscal year 2059 and shall be
2determined under the projected unit credit actuarial cost
3method.
4    (v) Beginning in fiscal year 2060, or as soon as the
5contributions under subdivision (iv) have paid off 100% of the
6unfunded accrued liability of the Fund in existence on July 1,
72012 plus any additional unfunded accrued liability that has
8accrued after that date and is attributable to the effects of
9lost investment earnings due to underfunding, no further Board
10of Education contribution shall be required. the minimum Board
11of Education contribution for each fiscal year shall be the
12amount needed to maintain the total assets of the Fund at 90%
13of the total actuarial liabilities of the Fund.
14    (vi) (Blank). Notwithstanding any other provision of this
15subsection (b), for any fiscal year, the contribution to the
16Fund from the Board of Education shall not be required to be in
17excess of the amount calculated as needed to maintain the
18assets (or cause the assets to be) at the 90% level by the end
19of the fiscal year.
20    (vii) (Blank). Any contribution by the State to or for the
21benefit of the Fund, including, without limitation, as referred
22to under Section 17-127, shall be a credit against any
23contribution required to be made by the Board of Education
24under this subsection (b).
25    (c) The Board shall determine the amount of Board of
26Education contributions required for each fiscal year on the

 

 

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1basis of the actuarial tables and other assumptions adopted by
2the Board and the recommendations of the actuary, in order to
3meet the minimum contribution requirements of subsections (a)
4and (b). Annually, on or before February 28, the Board shall
5certify to the Governor and the Board of Education the amount
6of the required Board of Education contribution for the coming
7fiscal year. The certification shall include a copy of the
8actuarial recommendations upon which it is based. The Board
9shall, if necessary, recertify the required contribution
10amount under subdivision (b)(iii) for fiscal year 2013 in
11accordance with this amendatory Act of the 97th General
12Assembly.
13(Source: P.A. 96-889, eff. 4-14-10.)
 
14    (40 ILCS 5/17-127.2 rep.)
15    Section 10. The Illinois Pension Code is amended by
16repealing Section 17-127.2.
 
17    Section 15. The State Pension Funds Continuing
18Appropriation Act is amended by adding Section 1.9 as follows:
 
19    (40 ILCS 15/1.9 new)
20    Sec. 1.9. Appropriation for Chicago Teachers' Pension
21Fund. There is hereby appropriated from the General Revenue
22Fund to the Public School Teachers' Pension and Retirement Fund
23of Chicago, on a continuing monthly basis, the amount, if any,

 

 

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1by which the total available amount of all other appropriations
2to that Fund for the payment of State contributions required
3under Section 17-127 of the Illinois Pension Code is less than
4the total amount of the vouchers for required State
5contributions lawfully submitted by the Fund for that month
6under that Section.
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".