Sen. Kirk W. Dillard

Filed: 5/25/2012

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 5078

2    AMENDMENT NO. ______. Amend House Bill 5078, AS AMENDED,
3immediately above Section 5, by inserting the following:
 
4    "Section 1. Retroactive repeal. This amendatory Act of the
597th General Assembly hereby repeals and declares void ab
6initio Section 8-226.7 of the Illinois Pension Code as
7contained in Section 5 of Public Act 95-504 as that Section
8furnishes no vested rights because it violates multiple
9provisions of the 1970 Illinois Constitution, including, but
10not limited to, Article VIII, Section 1 and Article IV, Section
1113. Upon receipt of an application within 6 months after the
12effective date of this amendatory Act of the 97th General
13Assembly, the System shall immediately refund any
14contributions made by or on behalf of a person to receive
15service credit pursuant to the text set forth in said Section
168-226.7, as well as any amount determined by the Board to be
17equal to the investment earned by the System on those

 

 

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1contributions since their receipt.
 
2    Section 2. The Illinois Pension Code is amended by changing
3Section 7-139 as follows:
 
4    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
5    Sec. 7-139. Credits and creditable service to employees.
6    (a) Each participating employee shall be granted credits
7and creditable service, for purposes of determining the amount
8of any annuity or benefit to which he or a beneficiary is
9entitled, as follows:
10        1. For prior service: Each participating employee who
11    is an employee of a participating municipality or
12    participating instrumentality on the effective date shall
13    be granted creditable service, but no credits under
14    paragraph 2 of this subsection (a), for periods of prior
15    service for which credit has not been received under any
16    other pension fund or retirement system established under
17    this Code, as follows:
18        If the effective date of participation for the
19    participating municipality or participating
20    instrumentality is on or before January 1, 1998, creditable
21    service shall be granted for the entire period of prior
22    service with that employer without any employee
23    contribution.
24        If the effective date of participation for the

 

 

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1    participating municipality or participating
2    instrumentality is after January 1, 1998, creditable
3    service shall be granted for the last 20% of the period of
4    prior service with that employer, but no more than 5 years,
5    without any employee contribution. A participating
6    employee may establish creditable service for the
7    remainder of the period of prior service with that employer
8    by making an application in writing, accompanied by payment
9    of an employee contribution in an amount determined by the
10    Fund, based on the employee contribution rates in effect at
11    the time of application for the creditable service and the
12    employee's salary rate on the effective date of
13    participation for that employer, plus interest at the
14    effective rate from the date of the prior service to the
15    date of payment. Application for this creditable service
16    may be made at any time while the employee is still in
17    service.
18        A municipality that (i) has at least 35 employees; (ii)
19    is located in a county with at least 2,000,000 inhabitants;
20    and (iii) maintains an independent defined benefit pension
21    plan for the benefit of its eligible employees may restrict
22    creditable service in whole or in part for periods of prior
23    service with the employer if the governing body of the
24    municipality adopts an irrevocable resolution to restrict
25    that creditable service and files the resolution with the
26    board before the municipality's effective date of

 

 

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1    participation.
2        Any person who has withdrawn from the service of a
3    participating municipality or participating
4    instrumentality prior to the effective date, who reenters
5    the service of the same municipality or participating
6    instrumentality after the effective date and becomes a
7    participating employee is entitled to creditable service
8    for prior service as otherwise provided in this subdivision
9    (a)(1) only if he or she renders 2 years of service as a
10    participating employee after the effective date.
11    Application for such service must be made while in a
12    participating status. The salary rate to be used in the
13    calculation of the required employee contribution, if any,
14    shall be the employee's salary rate at the time of first
15    reentering service with the employer after the employer's
16    effective date of participation.
17        2. For current service, each participating employee
18    shall be credited with:
19            a. Additional credits of amounts equal to each
20        payment of additional contributions received from him
21        under Section 7-173, as of the date the corresponding
22        payment of earnings is payable to him.
23            b. Normal credits of amounts equal to each payment
24        of normal contributions received from him, as of the
25        date the corresponding payment of earnings is payable
26        to him, and normal contributions made for the purpose

 

 

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1        of establishing out-of-state service credits as
2        permitted under the conditions set forth in paragraph 6
3        of this subsection (a).
4            c. Municipality credits in an amount equal to 1.4
5        times the normal credits, except those established by
6        out-of-state service credits, as of the date of
7        computation of any benefit if these credits would
8        increase the benefit.
9            d. Survivor credits equal to each payment of
10        survivor contributions received from the participating
11        employee as of the date the corresponding payment of
12        earnings is payable, and survivor contributions made
13        for the purpose of establishing out-of-state service
14        credits.
15        3. For periods of temporary and total and permanent
16    disability benefits, each employee receiving disability
17    benefits shall be granted creditable service for the period
18    during which disability benefits are payable. Normal and
19    survivor credits, based upon the rate of earnings applied
20    for disability benefits, shall also be granted if such
21    credits would result in a higher benefit to any such
22    employee or his beneficiary.
23        4. For authorized leave of absence without pay: A
24    participating employee shall be granted credits and
25    creditable service for periods of authorized leave of
26    absence without pay under the following conditions:

 

 

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1            a. An application for credits and creditable
2        service is submitted to the board while the employee is
3        in a status of active employment.
4            b. Not more than 12 complete months of creditable
5        service for authorized leave of absence without pay
6        shall be counted for purposes of determining any
7        benefits payable under this Article.
8            c. Credits and creditable service shall be granted
9        for leave of absence only if such leave is approved by
10        the governing body of the municipality, including
11        approval of the estimated cost thereof to the
12        municipality as determined by the fund, and employee
13        contributions, plus interest at the effective rate
14        applicable for each year from the end of the period of
15        leave to date of payment, have been paid to the fund in
16        accordance with Section 7-173. The contributions shall
17        be computed upon the assumption earnings continued
18        during the period of leave at the rate in effect when
19        the leave began.
20            d. Benefits under the provisions of Sections
21        7-141, 7-146, 7-150 and 7-163 shall become payable to
22        employees on authorized leave of absence, or their
23        designated beneficiary, only if such leave of absence
24        is creditable hereunder, and if the employee has at
25        least one year of creditable service other than the
26        service granted for leave of absence. Any employee

 

 

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1        contributions due may be deducted from any benefits
2        payable.
3            e. No credits or creditable service shall be
4        allowed for leave of absence without pay during any
5        period of prior service.
6        5. For military service: The governing body of a
7    municipality or participating instrumentality may elect to
8    allow creditable service to participating employees who
9    leave their employment to serve in the armed forces of the
10    United States for all periods of such service, provided
11    that the person returns to active employment within 90 days
12    after completion of full time active duty, but no
13    creditable service shall be allowed such person for any
14    period that can be used in the computation of a pension or
15    any other pay or benefit, other than pay for active duty,
16    for service in any branch of the armed forces of the United
17    States. If necessary to the computation of any benefit, the
18    board shall establish municipality credits for
19    participating employees under this paragraph on the
20    assumption that the employee received earnings at the rate
21    received at the time he left the employment to enter the
22    armed forces. A participating employee in the armed forces
23    shall not be considered an employee during such period of
24    service and no additional death and no disability benefits
25    are payable for death or disability during such period.
26        Any participating employee who left his employment

 

 

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1    with a municipality or participating instrumentality to
2    serve in the armed forces of the United States and who
3    again became a participating employee within 90 days after
4    completion of full time active duty by entering the service
5    of a different municipality or participating
6    instrumentality, which has elected to allow creditable
7    service for periods of military service under the preceding
8    paragraph, shall also be allowed creditable service for his
9    period of military service on the same terms that would
10    apply if he had been employed, before entering military
11    service, by the municipality or instrumentality which
12    employed him after he left the military service and the
13    employer costs arising in relation to such grant of
14    creditable service shall be charged to and paid by that
15    municipality or instrumentality.
16        Notwithstanding the foregoing, any participating
17    employee shall be entitled to creditable service as
18    required by any federal law relating to re-employment
19    rights of persons who served in the United States Armed
20    Services. Such creditable service shall be granted upon
21    payment by the member of an amount equal to the employee
22    contributions which would have been required had the
23    employee continued in service at the same rate of earnings
24    during the military leave period, plus interest at the
25    effective rate.
26        5.1. In addition to any creditable service established

 

 

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1    under paragraph 5 of this subsection (a), creditable
2    service may be granted for up to 48 months of service in
3    the armed forces of the United States.
4        In order to receive creditable service for military
5    service under this paragraph 5.1, a participating employee
6    must (1) apply to the Fund in writing and provide evidence
7    of the military service that is satisfactory to the Board;
8    (2) obtain the written approval of the current employer;
9    and (3) make contributions to the Fund equal to (i) the
10    employee contributions that would have been required had
11    the service been rendered as a member, plus (ii) an amount
12    determined by the board to be equal to the employer's
13    normal cost of the benefits accrued for that military
14    service, plus (iii) interest on items (i) and (ii) from the
15    date of first membership in the Fund to the date of
16    payment. The required interest shall be calculated at the
17    regular interest rate.
18        The changes made to this paragraph 5.1 by Public Acts
19    95-483 and 95-486 apply only to participating employees in
20    service on or after August 28, 2007 (the effective date of
21    those Public Acts).
22        6. For out-of-state service: Creditable service shall
23    be granted for service rendered to an out-of-state local
24    governmental body under the following conditions: The
25    employee had participated and has irrevocably forfeited
26    all rights to benefits in the out-of-state public employees

 

 

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1    pension system; the governing body of his participating
2    municipality or instrumentality authorizes the employee to
3    establish such service; the employee has 2 years current
4    service with this municipality or participating
5    instrumentality; the employee makes a payment of
6    contributions, which shall be computed at 8% (normal) plus
7    2% (survivor) times length of service purchased times the
8    average rate of earnings for the first 2 years of service
9    with the municipality or participating instrumentality
10    whose governing body authorizes the service established
11    plus interest at the effective rate on the date such
12    credits are established, payable from the date the employee
13    completes the required 2 years of current service to date
14    of payment. In no case shall more than 120 months of
15    creditable service be granted under this provision.
16        7. For retroactive service: Any employee who could have
17    but did not elect to become a participating employee, or
18    who should have been a participant in the Municipal Public
19    Utilities Annuity and Benefit Fund before that fund was
20    superseded, may receive creditable service for the period
21    of service not to exceed 50 months; however, a current or
22    former elected or appointed official of a participating
23    municipality may establish credit under this paragraph 7
24    for more than 50 months of service as an official of that
25    municipality, if the excess over 50 months is approved by
26    resolution of the governing body of the affected

 

 

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

 

 

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1            a. Sick leave days shall be limited to those
2        accumulated under a sick leave plan established by a
3        participating municipality or participating
4        instrumentality which is available to all employees or
5        a class of employees.
6            b. Except as provided in item b-1, only sick leave
7        days accumulated with a participating municipality or
8        participating instrumentality with which the employee
9        was in service within 60 days of the effective date of
10        his retirement annuity shall be credited; If the
11        employee was in service with more than one employer
12        during this period only the sick leave days with the
13        employer with which the employee has the greatest
14        number of unpaid sick leave days shall be considered.
15            b-1. If the employee was in the service of more
16        than one employer as defined in item (2) of paragraph
17        (a) of subsection (A) of Section 7-132, then the sick
18        leave days from all such employers shall be credited,
19        as long as the creditable service attributed to those
20        sick leave days does not exceed the limitation in item
21        f of this paragraph 8. In calculating the creditable
22        service under this item b-1, the sick leave days from
23        the last employer shall be considered first, then the
24        remaining sick leave days shall be considered until
25        there are no more days or the maximum creditable sick
26        leave threshold under item f of this paragraph 8 has

 

 

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1        been reached.
2            c. The creditable service granted shall be
3        considered solely for the purpose of computing the
4        amount of the retirement annuity and shall not be used
5        to establish any minimum service period required by any
6        provision of the Illinois Pension Code, the effective
7        date of the retirement annuity, or the final rate of
8        earnings.
9            d. The creditable service shall be at the rate of
10        1/20 of a month for each full sick day, provided that
11        no more than 12 months may be credited under this
12        subdivision 8.
13            e. Employee contributions shall not be required
14        for creditable service under this subdivision 8.
15            f. Each participating municipality and
16        participating instrumentality with which an employee
17        has service within 60 days of the effective date of his
18        retirement annuity shall certify to the board the
19        number of accumulated unpaid sick leave days credited
20        to the employee at the time of termination of service.
21        9. For service transferred from another system:
22    Credits and creditable service shall be granted for service
23    under Article 3, 4, 5, 8, 14, or 16 of this Act, to any
24    active member of this Fund, and to any inactive member who
25    has been a county sheriff, upon transfer of such credits
26    pursuant to Section 3-110.3, 4-108.3, 5-235, 8-226.7,

 

 

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1    14-105.6, or 16-131.4, and payment by the member of the
2    amount by which (1) the employer and employee contributions
3    that would have been required if he had participated in
4    this Fund as a sheriff's law enforcement employee during
5    the period for which credit is being transferred, plus
6    interest thereon at the effective rate for each year,
7    compounded annually, from the date of termination of the
8    service for which credit is being transferred to the date
9    of payment, exceeds (2) the amount actually transferred to
10    the Fund. Such transferred service shall be deemed to be
11    service as a sheriff's law enforcement employee for the
12    purposes of Section 7-142.1.
13        10. For service transferred from an Article 3 system
14    under Section 3-110.8: Credits and creditable service
15    shall be granted for service under Article 3 of this Act as
16    provided in Section 3-110.8, to any active member of this
17    Fund upon transfer of such credits pursuant to Section
18    3-110.8. If the amount by which (1) the employer and
19    employee contributions that would have been required if he
20    had participated in this Fund during the period for which
21    credit is being transferred, plus interest thereon at the
22    effective rate for each year, compounded annually, from the
23    date of termination of the service for which credit is
24    being transferred to the date of payment, exceeds (2) the
25    amount actually transferred to the Fund, then the amount of
26    creditable service established under this paragraph 10

 

 

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1    shall be reduced by a corresponding amount in accordance
2    with the rules and procedures established under this
3    paragraph 10.
4        The board shall establish by rule the manner of making
5    the calculation required under this paragraph 10, taking
6    into account the appropriate actuarial assumptions; the
7    member's service, age, and salary history; the level of
8    funding of the employer; and any other factors that the
9    board determines to be relevant.
10        Until January 1, 2010, members who transferred service
11    from an Article 3 system under the provisions of Public Act
12    94-356 may establish additional credit in this Fund, but
13    only up to the amount of the service credit reduction in
14    that transfer, as calculated under the actuarial
15    assumptions. This credit may be established upon payment by
16    the member of an amount to be determined by the board,
17    equal to (1) the amount that would have been contributed as
18    employee and employer contributions had all the service
19    been as an employee under this Article, plus interest
20    thereon compounded annually from the date of service to the
21    date of transfer, less (2) the total amount transferred
22    from the Article 3 system, plus (3) interest on the
23    difference at the effective rate for each year, compounded
24    annually, from the date of the transfer to the date of
25    payment. The additional service credit is allowed under
26    this amendatory Act of the 95th General Assembly

 

 

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1    notwithstanding the provisions of Article 3 terminating
2    all transferred credits on the date of transfer.
3    (b) Creditable service - amount:
4        1. One month of creditable service shall be allowed for
5    each month for which a participating employee made
6    contributions as required under Section 7-173, or for which
7    creditable service is otherwise granted hereunder. Not
8    more than 1 month of service shall be credited and counted
9    for 1 calendar month, and not more than 1 year of service
10    shall be credited and counted for any calendar year. A
11    calendar month means a nominal month beginning on the first
12    day thereof, and a calendar year means a year beginning
13    January 1 and ending December 31.
14        2. A seasonal employee shall be given 12 months of
15    creditable service if he renders the number of months of
16    service normally required by the position in a 12-month
17    period and he remains in service for the entire 12-month
18    period. Otherwise a fractional year of service in the
19    number of months of service rendered shall be credited.
20        3. An intermittent employee shall be given creditable
21    service for only those months in which a contribution is
22    made under Section 7-173.
23    (c) No application for correction of credits or creditable
24service shall be considered unless the board receives an
25application for correction while (1) the applicant is a
26participating employee and in active employment with a

 

 

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1participating municipality or instrumentality, or (2) while
2the applicant is actively participating in a pension fund or
3retirement system which is a participating system under the
4Retirement Systems Reciprocal Act. A participating employee or
5other applicant shall not be entitled to credits or creditable
6service unless the required employee contributions are made in
7a lump sum or in installments made in accordance with board
8rule.
9    (d) Upon the granting of a retirement, surviving spouse or
10child annuity, a death benefit or a separation benefit, on
11account of any employee, all individual accumulated credits
12shall thereupon terminate. Upon the withdrawal of additional
13contributions, the credits applicable thereto shall thereupon
14terminate. Terminated credits shall not be applied to increase
15the benefits any remaining employee would otherwise receive
16under this Article.
17(Source: P.A. 96-299, eff. 8-11-09; 97-415, eff. 8-16-11.)
 
18    (40 ILCS 5/8-226.7 rep.)
19    Section 3. The Illinois Pension Code is amended by
20repealing Section 8-226.7."; and
 
21immediately above Section 99, by inserting the following:
 
22    "Section 97. Severability. The provisions of this Act are
23severable under Section 1.31 of the Statute on Statutes.".