97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0029

 

Introduced 1/27/2011, by Sen. Chris Lauzen

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Assembly, State Employees, State Universities, Downstate Teachers, and Judges Articles of the Illinois Pension Code. With respect to service on or after July 1, 2011 by current employees, adds provisions concerning the annuity rate of accrual, annuity calculations, automatic annual increases, and survivors' annuities. With respect to later entrants (members who first become members on or after July 1, 2011), adds provisions concerning creditable service, conditions for eligibility, amount of annuities, automatic annual increases, survivors' annuities, and refunds. Defines "salary", "earnings", "compensation", and "wages" for periods of service on and after July 1, 2011 for any participant or member of any retirement system or pension fund under this Code. Effective immediately.


LRB097 00067 AMC 40072 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0029LRB097 00067 AMC 40072 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
ARTICLE 1.

 
5    Section 1-5. The Illinois Pension Code is amended by adding
6Sections 2-300, 2-305, 2-310, 2-315, 2-320, 2-325, 2-330,
714-300, 14-305, 14-310, 14-315, 14-320, 14-325, 14-330,
815-300, 15-305, 15-310, 15-315, 15-320, 15-325, 15-330,
916-300, 16-305, 16-310, 16-315, 16-320, 16-325, 16-330,
1018-300, 18-305, 18-310, 18-315, 18-320, 18-325, and 18-330 as
11follows:
 
12    (40 ILCS 5/2-300 new)
13    Sec. 2-300. Provisions applicable to later entrants. The
14provisions of Sections 2-300, 2-305, 2-310, 2-315, 2-320,
152-325, and 2-330 apply only to members who first become members
16on or after July 1, 2011, who are referred to as "later
17entrants". Notwithstanding anything in the foregoing
18provisions of this Article to the contrary, the provisions of
19Sections 2-300, 2-305, 2-310, 2-315, 2-320, 2-325, and 2-330
20shall control for later entrants.
 
21    (40 ILCS 5/2-305 new)

 

 

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1    Sec. 2-305. Creditable service for later entrants.
2Creditable service for later entrants under this Article is
3subject to the following conditions:
4    (a) The maximum amount of creditable service a member may
5establish under this Article is 35 years.
6    (b) A member may only establish creditable service for his
7or her service as a member under this Article.
8    (c) A member may not convert any unused sick leave or
9vacation into creditable service under this Article.
 
10    (40 ILCS 5/2-310 new)
11    Sec. 2-310. Retirement annuity; conditions for
12eligibility; later entrants. Later entrants under this Article
13shall be eligible to claim a retirement annuity under the
14following conditions:
15    (a) A member may claim a retirement annuity upon attainment
16of age 67 with at least 10 years of service credit.
17    (b) A member may claim a reduced retirement annuity under
18subsection (c) of Section 2-315 if he or she has reached age 62
19and has at least 10 years of service.
 
20    (40 ILCS 5/2-315 new)
21    Sec. 2-315. Retirement annuity; amount; later entrants.
22Retirement annuities for later entrants shall be subject to the
23following conditions:
24    (a) With respect to later entrants, the following

 

 

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1limitations shall apply when calculating an annuity under this
2Article:
3        (1) "Final average salary" means the monthly salary
4    obtained by dividing the total salary of a participant
5    during the period of: (A) the 96 consecutive months of
6    service in which the total salary was the highest within
7    the last 120 months of service, or (B) the total period of
8    service, if less than 96 months, by the number of months of
9    service in such period; provided that the monthly salary to
10    be considered in each of the last 12 months of the final
11    average salary period shall not exceed 125% of the highest
12    salary in any other month in the final average salary
13    period that precedes such final 12-month period. In no
14    event shall the annual final average salary exceed
15    $106,800, as automatically increased by the lesser of 3% or
16    one-half of the annual increase in the consumer price
17    index-u during the preceding 12-month calendar year.
18        For the purposes of this paragraph (1), "consumer price
19    index-u" means the index published by the Bureau of Labor
20    Statistics of the United States Department of Labor that
21    measures the average change in prices of goods and services
22    purchased by all urban consumers, United States city
23    average, all items, 1982-84 = 100. The new amount resulting
24    from each annual adjustment shall be determined by the
25    Public Pension Division of the Department of Insurance and
26    made available to the boards of the retirement systems and

 

 

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1    pension funds.
2        (2) "Salary" means base salary paid to a member.
3    (b) The retirement annuity shall be 2% of final average
4salary for each year of service.
 
5    (40 ILCS 5/2-320 new)
6    Sec. 2-320. Survivors' annuities for survivors of later
7entrants. The initial survivor's annuity of an otherwise
8eligible survivor of a later entrant shall be in the amount of
966 2/3% of the participant's earned retirement annuity at the
10date of death and shall be increased (1) on each January 1
11occurring on or after the commencement of the annuity if the
12deceased member died while receiving a retirement annuity or
13(2) in other cases, on each January 1 occurring after the first
14anniversary of the commencement of the annuity. Each annual
15increase shall be calculated at the lesser of (1) 3% or (2)
16one-half of the percentage increase, if any, in the Consumer
17Price Index for All Urban Consumers measured from the preceding
18January 1 to the January 1 of the year during which the
19increase is being granted. The increase for each year shall be
20applied to the amount of the recipient's originally granted
21annuity.
 
22    (40 ILCS 5/2-325 new)
23    Sec. 2-325. Automatic annual increases for later entrants.
24Notwithstanding any other provision of this Article, a person

 

 

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1receiving a retirement or survivor annuity under Sections 2-315
2or 2-320 shall, on the first anniversary of retirement, but not
3before attaining the full (normal) retirement age as provided
4in the federal Social Security Act, and annually thereafter,
5have his or her annuity increased by the lesser of (1) 3% or
6(2) one-half of the percentage increase, if any, in the
7Consumer Price Index for All Urban Consumers measured from the
8preceding January 1 to the January 1 of the year during which
9the increase is being granted. The increase for each year shall
10be applied to the amount of the recipient's originally granted
11annuity.
 
12    (40 ILCS 5/2-330 new)
13    Sec. 2-330. Refunds; later entrants. A participant who is a
14later entrant and who ceases to be a member, other than an
15annuitant, shall, upon written request, receive a refund of his
16or her total contributions. Upon re-entry into service as a
17member, a former member who was a later entrant may reestablish
18any creditable service forfeited by acceptance of a refund by
19paying to the System the full amount refunded, plus interest at
20the actuarially assumed rate, not compounded, from the date of
21payment of the refund to the date of repayment.
 
22    (40 ILCS 5/14-300 new)
23    Sec. 14-300. Provisions applicable to later entrants. The
24provisions of Sections 14-300, 14-305, 14-310, 14-315, 14-320,

 

 

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114-325, and 14-330 apply only to employees who first become
2employees on or after July 1, 2011, who are referred to as
3"later entrants". Notwithstanding anything in the foregoing
4provisions of this Article to the contrary, the provisions of
5Sections 14-300, 14-305, 14-310, 14-315, 14-320, 14-325, and
614-330 shall control for later entrants.
 
7    (40 ILCS 5/14-305 new)
8    Sec. 14-305. Creditable service for later entrants.
9Creditable service for later entrants under this Article is
10subject to the following conditions:
11    (a) The maximum amount of creditable service a member may
12establish under this Article is 35 years.
13    (b) A member may only establish creditable service for his
14or her membership service, as defined in Section 14-103.13.
15    (c) A member may not convert any unused sick leave or
16vacation into creditable service under this Article.
 
17    (40 ILCS 5/14-315 new)
18    Sec. 14-315. Retirement annuity; amount; later entrants.
19    (a) With respect to calculating an annuity under this
20Article for later entrants, "compensation" means a member's
21base compensation.
22    (b) The retirement annuity shall be (1) 1.5% of final
23average compensation for each year of service for covered
24employees or (2) 2% of final average compensation for each year

 

 

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1of service for noncovered employees.
 
2    (40 ILCS 5/14-330 new)
3    Sec. 14-330. Refunds; later entrants. An employee who is a
4later entrant and who ceases to be a member, other than an
5annuitant, shall, upon written request, receive a refund of his
6or her total contributions. Upon re-entry into service as a
7member, a former member who was a later entrant may reestablish
8any creditable service forfeited by acceptance of a refund by
9paying to the System the full amount refunded, plus interest at
10actuarially assumed rate, not compounded, from the date of
11payment of the refund to the date of repayment.
 
12    (40 ILCS 5/15-300 new)
13    Sec. 15-300. Provisions applicable to later entrants. The
14provisions of Sections 15-300, 15-305, 15-310, 15-315, 15-320,
1515-325, and 15-330 apply only to employees who first become
16employees on or after July 1, 2011, who are referred to as
17"later entrants". Notwithstanding anything in the foregoing
18provisions of this Article to the contrary, the provisions of
19Sections 15-300, 15-305, 15-310, 15-315, 15-320, 15-325, and
2015-330 shall control for later entrants.
 
21    (40 ILCS 5/15-305 new)
22    Sec. 15-305. Creditable service for later entrants.
23Creditable service for later entrants under this Article is

 

 

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1subject to the following conditions:
2    (a) The maximum amount of creditable service a member may
3establish under this Article is 35 years.
4    (b) A member may only establish creditable service for his
5or her service for employment with an employer, as defined in
6Section 15-106.
7    (c) A member may not convert any unused sick leave or
8vacation into creditable service under this Article.
 
9    (40 ILCS 5/15-315 new)
10    Sec. 15-315. Retirement annuity; amount; later entrants.
11    (a) With respect to calculating an annuity under this
12Article for later entrants, "earnings" means an employee's base
13earnings.
14    (b) The retirement annuity shall be 2% of the final rate of
15earnings for each year of service.
 
16    (40 ILCS 5/15-330 new)
17    Sec. 15-330. Refunds; later entrants. An employee who is a
18later entrant and who ceases to be a participant, other than an
19annuitant, shall, upon written request, receive a refund of his
20or her total contributions. Upon re-entry into service as an
21employee, a former participant who was a later entrant may
22reestablish any creditable service forfeited by acceptance of a
23refund by paying to the System the full amount refunded, plus
24interest at the actuarially assumed rate, not compounded, from

 

 

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1the date of payment of the refund to the date of repayment.
 
2    (40 ILCS 5/16-300 new)
3    Sec. 16-300. Provisions applicable to later entrants. The
4provisions of Sections 16-300, 16-305, 16-310, 16-315, 16-320,
516-325, and 16-330 apply only to teachers who first become
6teachers on or after July 1, 2011, who are referred to as
7"later entrants". Notwithstanding anything in the foregoing
8provisions of this Article to the contrary, the provisions of
9Sections 16-300, 16-305, 16-310, 16-315, 16-320, 16-325, and
1016-330 shall control for later entrants.
 
11    (40 ILCS 5/16-305 new)
12    Sec. 16-305. Creditable service for later entrants.
13Creditable service for later entrants under this Article is
14subject to the following conditions:
15    (a) The maximum amount of creditable service a member may
16establish under this Article is 35 years.
17    (b) A member may only establish creditable service for his
18or her service for employment as a teacher, as defined in
19Section 16-106.
20    (c) A member may not convert any unused sick leave or
21vacation into creditable service under this Article.
 
22    (40 ILCS 5/16-315 new)
23    Sec. 16-315. Retirement annuity; amount; later entrants.

 

 

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1    (a) With respect to calculating an annuity under this
2Article for later entrants, "salary" means base salary paid to
3a member.
4    (b) The retirement annuity shall be 2% of final average
5salary for each year of service.
 
6    (40 ILCS 5/16-330 new)
7    Sec. 16-330. Refunds; later entrants. A teacher who is a
8later entrant and who ceases to be a member, other than an
9annuitant, shall, upon written request, receive a refund of his
10or her total contributions. Upon re-entry into service as a
11teacher, a former member who was a later entrant may
12reestablish any creditable service forfeited by acceptance of a
13refund by paying to the System the full amount refunded, plus
14interest at the actuarially assumed rate, not compounded, from
15the date of payment of the refund to the date of repayment.
 
16    (40 ILCS 5/18-300 new)
17    Sec. 18-300. Provisions applicable to later entrants. The
18provisions of Sections 18-300, 18-305, 18-310, 18-315, 18-320,
1918-325, and 18-330 apply only to judges who first become judges
20on or after July 1, 2011, who are referred to as "later
21entrants". Notwithstanding anything in the foregoing
22provisions of this Article to the contrary, the provisions of
23Sections 18-300, 18-305, 18-310, 18-315, 18-320, 18-325, and
2418-330 shall control for later entrants.
 

 

 

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1    (40 ILCS 5/18-305 new)
2    Sec. 18-305. Creditable service for later entrants.
3Creditable service for later entrants under this Article is
4subject to the following conditions:
5    (a) The maximum amount of creditable service a member may
6establish under this Article is 35 years.
7    (b) A participant may only establish creditable service for
8his or her service for employment as a judge, as defined in
9Section 18-112.
10    (c) A member may not convert any unused sick leave or
11vacation into creditable service under this Article.
 
12    (40 ILCS 5/18-310 new)
13    Sec. 18-310. Retirement annuity; conditions for
14eligibility; later entrants. Later entrants under this Article
15shall be eligible to claim a retirement annuity under the
16following conditions:
17    (a) A participant may claim a retirement annuity upon
18attainment of age 67 with at least 10 years of service credit.
19    (b) A participant may claim a reduced retirement annuity
20under subsection (c) of Section 18-315 if he or she has reached
21age 62 and has at least 10 years of service.
 
22    (40 ILCS 5/18-315 new)
23    Sec. 18-315. Retirement annuity; amount; later entrants.

 

 

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1Retirement annuities for later entrants shall be subject to the
2following conditions:
3    (a) With respect to later entrants, the following
4limitations shall apply when calculating an annuity under this
5Article:
6        (1) "Final average salary" means the monthly salary
7    obtained by dividing the total salary of a participant
8    during the period of: (A) the 96 consecutive months of
9    service in which the total salary was the highest within
10    the last 120 months of service, or (B) the total period of
11    service, if less than 96 months, by the number of months of
12    service in such period; provided that the monthly salary to
13    be considered in each of the last 12 months of the final
14    average salary period shall not exceed 125% of the highest
15    salary in any other month in the final average salary
16    period that precedes such final 12-month period. In no
17    event shall the annual final average salary exceed
18    $106,800, as automatically increased by the lesser of 3% or
19    one-half of the annual increase in the consumer price
20    index-u during the preceding 12-month calendar year.
21        For the purposes of this paragraph (1), "consumer price
22    index-u" means the index published by the Bureau of Labor
23    Statistics of the United States Department of Labor that
24    measures the average change in prices of goods and services
25    purchased by all urban consumers, United States city
26    average, all items, 1982-84 = 100. The new amount resulting

 

 

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1    from each annual adjustment shall be determined by the
2    Public Pension Division of the Department of Insurance and
3    made available to the boards of the retirement systems and
4    pension funds.
5        (2) "Salary" means base salary paid to a participant.
6    (b) The retirement annuity shall be 2% of final average
7salary for each year of service.
 
8    (40 ILCS 5/18-320 new)
9    Sec. 18-320. Survivors' annuities for survivors of later
10entrants. The initial survivor's annuity of an otherwise
11eligible survivor of a later entrant shall be in the amount of
1266 2/3% of the participant's earned retirement annuity at the
13date of death and shall be increased (1) on each January 1
14occurring on or after the commencement of the annuity if the
15deceased member died while receiving a retirement annuity or
16(2) in other cases, on each January 1 occurring after the first
17anniversary of the commencement of the annuity. Each annual
18increase shall be calculated at the lesser of (1) 3% or (2)
19one-half of the percentage increase, if any, in the Consumer
20Price Index for All Urban Consumers measured from the preceding
21January 1 to the January 1 of the year during which the
22increase is being granted. The increase for each year shall be
23applied to the amount of the recipient's originally granted
24annuity.
 

 

 

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1    (40 ILCS 5/18-325 new)
2    Sec. 18-325. Automatic annual increases for later
3entrants. Notwithstanding any other provision of this Article,
4a person receiving a retirement or survivor annuity under
5Sections 18-315 or 18-320 shall, on the first anniversary of
6retirement, but not before attaining the full (normal)
7retirement age as provided in the federal Social Security Act,
8and annually thereafter, have his or her annuity increased by
9the lesser of (1) 3% or (2) one-half of the percentage
10increase, if any, in the Consumer Price Index for All Urban
11Consumers measured from the preceding January 1 to the January
121 of the year during which the increase is being granted. The
13increase for each year shall be applied to the amount of the
14recipient's originally granted annuity.
 
15    (40 ILCS 5/18-330 new)
16    Sec. 18-330. Refunds; later entrants. A judge who was a
17later entrant and who ceases to be a participant, other than an
18annuitant, shall, upon written request, receive a refund of his
19or her total contributions. Upon re-entry into service as a
20judge, a former participant who was a later entrant may
21reestablish any creditable service forfeited by acceptance of a
22refund by paying to the System the full amount refunded, plus
23interest at the actuarially assumed rate, not compounded, from
24the date of payment of the refund to the date of repayment.
 

 

 

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1
ARTICLE 2.

 
2    Section 2-1. Legislative intent. Article XIII, Section 5 of
3the 1970 Illinois State Constitution provides public employees
4a right to retain their contractual rights to pension benefits
5that they have already earned. The goal and intent of the
6following provisions is to preserve the accrued benefits of
7members in the five State pension systems, while making changes
8on a prospective basis to protect the funded status of each
9State pension system, thereby preserving each system's ability
10to provide benefits for all members.
 
11    Section 2-5. The Illinois Pension Code is amended by adding
12Sections 2-400, 2-405, 2-410, 2-415, 2-420, 2-425, 14-400,
1314-405, 14-410, 14-415, 14-420, 14-425, 15-400, 15-405,
1415-410, 15-415, 15-420, 15-425, 16-400, 16-405, 16-410,
1516-415, 16-420, 16-425, 18-400, 18-405, 18-410, 18-415,
1618-420, and 18-425 as follows:
 
17    (40 ILCS 5/2-400 new)
18    Sec. 2-400. Provisions applicable to benefit accruals on or
19after July 1, 2011. Notwithstanding anything in the foregoing
20provisions of this Article to the contrary, the provisions of
21Sections 2-405, 2-410, 2-415, and 2-420 shall control for any
22annuity calculations and benefit accruals by members besides
23later entrants on or after July 1, 2011.
 

 

 

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1    (40 ILCS 5/2-405 new)
2    Sec. 2-405. Rate of accrual on or after July 1, 2011. For
3all service by a member on or after July 1, 2011, the annual
4retirement annuity rate of accrual is 2% of final average
5salary for each year of service.
 
6    (40 ILCS 5/2-410 new)
7    Sec. 2-410. Annuity calculations for benefit accruals on or
8after July 1, 2011. For purposes of calculating an annuity
9based on service performed on or after July 1, 2011, the
10following rules apply to benefit accruals on or after July 1,
112011:
12    (a) "Final average salary" means the monthly salary
13obtained by dividing the total salary of a participant during
14the period of: (A) the 96 consecutive months of service in
15which the total salary was the highest within the last 120
16months of service, or (B) the total period of service, if less
17than 96 months, by the number of months of service in such
18period; provided that the monthly salary to be considered in
19each of the last 12 months of the final average salary period
20shall not exceed 125% of the highest salary in any other month
21in the final average salary period that precedes such final
2212-month period. In no event shall the annual final average
23salary exceed $106,800, as automatically increased by the
24lesser of 3% or one-half of the annual increase in the consumer

 

 

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1price index-u during the preceding 12-month calendar year.
2    For the purposes of this Section, "consumer price index-u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the boards of the retirement
10systems and pension funds.
11    (b) "Salary" means base salary paid to a member.
12    (c) The portion of any annuity earned on or after July 1,
132011 shall be reduced by one-half of 1% for each month that the
14member's retirement age is under the full (normal) retirement
15age as provided in the federal Social Security Act.
16    (d) The maximum amount of creditable service a member may
17establish on or after July 1, 2011 is 35 years.
 
18    (40 ILCS 5/2-415 new)
19    Sec. 2-415. Automatic annual increases for accruals on or
20after July 1, 2011. A person receiving an annuity based on
21service performed on or after July 1, 2011 shall, on the first
22anniversary of retirement, but not before attaining the full
23(normal) retirement age as provided in the federal Social
24Security Act, and annually thereafter, have the portion of his
25or her annuity earned on or after July 1, 2011 increased by the

 

 

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1lesser of (1) 3% or (2) one-half of the percentage increase, if
2any, in the Consumer Price Index for All Urban Consumers
3measured from the preceding January 1 to the January 1 of the
4year during which the increase is being granted. The increase
5for each year shall be applied to the amount of the recipient's
6originally granted annuity.
 
7    (40 ILCS 5/2-420 new)
8    Sec. 2-420. Calculation of annuity. When calculating an
9annuity for a participant who has service before and after July
101, 2011, the participant's total accrued benefit shall be the
11sum of (A) the participant's benefit accruals prior to July 1,
122011 as if the participant had retired on that date, and (B)
13the participant's benefit accruals on or after July 1, 2011, as
14modified by the rules in sections 2-405, 2-410, and 2-415.
15Within 180 days after the effective date of this amendatory Act
16of the 96th General Assembly, the system shall promulgate rules
17and regulations to effectuate the provisions of this amendatory
18Act of the 96th General Assembly. In no event shall the
19participant's total accrued benefit be less, at his retirement,
20than if the participant's entire period of service had been as
21a later entrant.
 
22    (40 ILCS 5/2-425 new)
23    Sec. 2-425. Survivors' annuities based on service
24performed on or after July 1, 2011. For purposes of calculating

 

 

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1an annuity based on service performed on or after July 1, 2011,
2the initial survivor's annuity of an otherwise eligible
3survivor shall be in the amount of 66 2/3% of the participant's
4earned retirement annuity at the date of death and shall be
5increased (1) on each January 1 occurring on or after the
6commencement of the annuity if the deceased member died while
7receiving a retirement annuity or (2) in other cases, on each
8January 1 occurring after the first anniversary of the
9commencement of the annuity. Each annual increase shall be
10calculated at the lesser of (1) 3% or (2) one-half of the
11percentage increase, if any, in the Consumer Price Index for
12All Urban Consumers measured from the preceding January 1 to
13the January 1 of the year during which the increase is being
14granted. The increase for each year shall be applied to the
15amount of the recipient's originally granted annuity.
 
16    (40 ILCS 5/14-400 new)
17    Sec. 14-400. Provisions applicable to benefit accruals on
18or after July 1, 2011. Notwithstanding anything in the
19foregoing provisions of this Article to the contrary, the
20provisions of Sections 14-405, 14-410, 14-415, and 14-420 shall
21control for any annuity calculations and benefit accruals by
22employees besides later entrants on or after July 1, 2011.
 
23    (40 ILCS 5/14-405 new)
24    Sec. 14-405. Rate of accrual on or after July 1, 2011. For

 

 

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1all service by an employee on or after July 1, 2011, the annual
2retirement annuity rate of accrual is 2% of final average
3compensation for each year of service for noncovered employees
4and 1.5% of final average compensation for each year of service
5for covered employees.
 
6    (40 ILCS 5/14-410 new)
7    Sec. 14-410. Annuity calculations for benefit accruals on
8or after July 1, 2011. For purposes of calculating an annuity
9based on service performed on or after July 1, 2011, the
10following rules apply to benefit accruals on or after July 1,
112011:
12    (a) "Final average compensation" means the monthly
13compensation obtained by dividing the total compensation of an
14employee during the period of: (A) the 96 consecutive months of
15service in which the total compensation was the highest within
16the last 120 months of service, or (B) the total period of
17service, if less than 96 months, by the number of months of
18service in such period; provided that the monthly compensation
19to be considered in each of the last 12 months of the final
20average compensation period shall not exceed 125% of the
21highest compensation in any other month in the final average
22compensation period that precedes such final 12-month period.
23In no event shall the annual final average compensation exceed
24$106,800, as automatically increased by the lesser of 3% or
25one-half of the annual increase in the consumer price index-u

 

 

SB0029- 21 -LRB097 00067 AMC 40072 b

1during the preceding 12-month calendar year.
2    For the purposes of this Section, "consumer price index-u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the boards of the retirement
10systems and pension funds.
11    (b) "Compensation" means base compensation paid to an
12employee.
13    (c) The portion of any annuity earned on or after July 1,
142011 shall be reduced by one-half of 1% for each month that the
15employee's retirement age is under the full (normal) retirement
16age as provided in the federal Social Security Act.
17    (d) The maximum amount of creditable service an employee
18may establish on or after July 1, 2011 is 35 years.
 
19    (40 ILCS 5/14-415 new)
20    Sec. 14-415. Automatic annual increases for accruals on or
21after July 1, 2011. A person receiving an annuity based on
22service performed on or after July 1, 2011 shall, on the first
23anniversary of retirement, but not before attaining the full
24(normal) retirement age as provided in the federal Social
25Security Act, and annually thereafter, have the portion of his

 

 

SB0029- 22 -LRB097 00067 AMC 40072 b

1or her annuity earned on or after July 1, 2011 increased by the
2lesser of (1) 3% or (2) one-half of the percentage increase, if
3any, in the Consumer Price Index for All Urban Consumers
4measured from the preceding January 1 to the January 1 of the
5year during which the increase is being granted. The increase
6for each year shall be applied to the amount of the recipient's
7originally granted annuity.
 
8    (40 ILCS 5/14-420 new)
9    Sec. 14-420. Calculation of annuity. When calculating an
10annuity for an employee who has service before and after July
111, 2011, the employee's total accrued benefit shall be the sum
12of (A) the employee's benefit accruals prior to July 1, 2011 as
13if the employee had retired on that date, and (B) the
14employee's benefit accruals on or after July 1, 2011, as
15modified by the rules in sections 14-405, 14-410, and 14-415.
16Within 180 days after the effective date of this amendatory Act
17of the 96th General Assembly, the system shall promulgate rules
18and regulations to effectuate the provisions of this amendatory
19Act of the 96th General Assembly. In no event shall the
20employee's total accrued benefit be less, at his retirement,
21than if the employee's entire period of service had been as a
22later entrant.
 
23    (40 ILCS 5/14-425 new)
24    Sec. 14-425. Survivors' annuities based on service

 

 

SB0029- 23 -LRB097 00067 AMC 40072 b

1performed on or after July 1, 2011. For purposes of calculating
2an annuity based on service performed on or after July 1, 2011,
3the initial survivor's annuity of an otherwise eligible
4survivor shall be in the amount of 66 2/3% of the participant's
5earned retirement annuity at the date of death and shall be
6increased (1) on each January 1 occurring on or after the
7commencement of the annuity if the deceased member died while
8receiving a retirement annuity or (2) in other cases, on each
9January 1 occurring after the first anniversary of the
10commencement of the annuity. Each annual increase shall be
11calculated at the lesser of (1) 3% or (2) one-half of the
12percentage increase, if any, in the Consumer Price Index for
13All Urban Consumers measured from the preceding January 1 to
14the January 1 of the year during which the increase is being
15granted. The increase for each year shall be applied to the
16amount of the recipient's originally granted annuity.
 
17    (40 ILCS 5/15-400 new)
18    Sec. 15-400. Provisions applicable to benefit accruals on
19or after July 1, 2011. Notwithstanding anything in the
20foregoing provisions of this Article to the contrary, the
21provisions of Sections 15-405, 15-410, 15-415, and 15-420 shall
22control for any annuity calculations and benefit accruals by
23employees besides later entrants on or after July 1, 2011.
 
24    (40 ILCS 5/15-405 new)

 

 

SB0029- 24 -LRB097 00067 AMC 40072 b

1    Sec. 15-405. Rate of accrual on or after July 1, 2011. For
2all service by an employee on or after July 1, 2011, the annual
3retirement annuity rate of accrual is 2% of final rate of
4earnings for each year of service.
 
5    (40 ILCS 5/15-410 new)
6    Sec. 15-410. Annuity calculations for benefit accruals on
7or after July 1, 2011. For purposes of calculating an annuity
8based on service performed on or after July 1, 2011, the
9following rules apply to benefit accruals on or after July 1,
102011:
11    (a) "Final rate of earnings" means the monthly earnings
12obtained by dividing the total earnings of an employee during
13the period of: (A) the 96 consecutive months of service in
14which the total earnings was the highest within the last 120
15months of service, or (B) the total period of service, if less
16than 96 months, by the number of months of service in such
17period; provided that the monthly earnings to be considered in
18each of the last 12 months of the final rate of earnings period
19shall not exceed 125% of the highest earnings in any other
20month in the final rate of earnings period that precedes such
21final 12-month period. In no event shall the annual final rate
22of earnings exceed $106,800, as automatically increased by the
23lesser of 3% or one-half of the annual increase in the consumer
24price index-u during the preceding 12-month calendar year.
25    For the purposes of this Section, "consumer price index-u"

 

 

SB0029- 25 -LRB097 00067 AMC 40072 b

1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the average
3change in prices of goods and services purchased by all urban
4consumers, United States city average, all items, 1982-84 =
5100. The new amount resulting from each annual adjustment shall
6be determined by the Public Pension Division of the Department
7of Insurance and made available to the boards of the retirement
8systems and pension funds.
9    (b) "Earnings" means base salary paid to an employee.
10    (c) The portion of any annuity earned on or after July 1,
112011 shall be reduced by one-half of 1% for each month that the
12employee's retirement age is under the full (normal) retirement
13age as provided in the federal Social Security Act.
14    (d) The maximum amount of creditable service an employee
15may establish on or after July 1, 2011 is 35 years.
 
16    (40 ILCS 5/15-415 new)
17    Sec. 15-415. Automatic annual increases for accruals on or
18after July 1, 2011. A person receiving an annuity based on
19service performed on or after July 1, 2011 shall, on the first
20anniversary of retirement, but not before attaining the full
21(normal) retirement age as provided in the federal Social
22Security Act, and annually thereafter, have the portion of his
23or her annuity earned on or after July 1, 2011 increased by the
24lesser of (1) 3% or (2) one-half of the percentage increase, if
25any, in the Consumer Price Index for All Urban Consumers

 

 

SB0029- 26 -LRB097 00067 AMC 40072 b

1measured from the preceding January 1 to the January 1 of the
2year during which the increase is being granted. The increase
3for each year shall be applied to the amount of the recipient's
4originally granted annuity.
 
5    (40 ILCS 5/15-420 new)
6    Sec. 15-420. Calculation of annuity. When calculating an
7annuity for a participant who has service before and after July
81, 2011, the participant's total accrued benefit shall be the
9sum of (A) the participant's benefit accruals prior to July 1,
102011 as if the participant had retired on that date, and (B)
11the participant's benefit accruals on or after July 1, 2011, as
12modified by the rules in sections 15-405, 15-410, and 15-415.
13Within 180 days after the effective date of this amendatory Act
14of the 96th General Assembly, the system shall promulgate rules
15and regulations to effectuate the provisions of this amendatory
16Act of the 96th General Assembly. In no event shall the
17participant's total accrued benefit be less, at his retirement,
18than if the participant's entire period of service had been as
19a later entrant.
 
20    (40 ILCS 5/15-425 new)
21    Sec. 15-425. Survivors' annuities based on service
22performed on or after July 1, 2011. For purposes of calculating
23an annuity based on service performed on or after July 1, 2011,
24the initial survivor's annuity of an otherwise eligible

 

 

SB0029- 27 -LRB097 00067 AMC 40072 b

1survivor shall be in the amount of 66 2/3% of the participant's
2earned retirement annuity at the date of death and shall be
3increased (1) on each January 1 occurring on or after the
4commencement of the annuity if the deceased member died while
5receiving a retirement annuity or (2) in other cases, on each
6January 1 occurring after the first anniversary of the
7commencement of the annuity. Each annual increase shall be
8calculated at the lesser of (1) 3% or (2) one-half of the
9percentage increase, if any, in the Consumer Price Index for
10All Urban Consumers measured from the preceding January 1 to
11the January 1 of the year during which the increase is being
12granted. The increase for each year shall be applied to the
13amount of the recipient's originally granted annuity.
 
14    (40 ILCS 5/16-400 new)
15    Sec. 16-400. Provisions applicable to benefit accruals on
16or after July 1, 2011. Notwithstanding anything in the
17foregoing provisions of this Article to the contrary, the
18provisions of Sections 16-405, 16-410, 16-415, and 16-420 shall
19control for any annuity calculations and benefit accruals by
20teachers besides later entrants on or after July 1, 2011.
 
21    (40 ILCS 5/16-405 new)
22    Sec. 16-405. Rate of accrual on or after July 1, 2011. For
23all service by a teacher on or after July 1, 2011, the annual
24retirement annuity rate of accrual is 2% of final average

 

 

SB0029- 28 -LRB097 00067 AMC 40072 b

1salary for each year of service.
 
2    (40 ILCS 5/16-410 new)
3    Sec. 16-410. Annuity calculations for benefit accruals on
4or after July 1, 2011. For purposes of calculating an annuity
5based on service performed on or after July 1, 2011, the
6following rules apply to benefit accruals on or after July 1,
72011:
8    (a) "Final average salary" means the monthly salary
9obtained by dividing the total salary of an teacher during the
10period of: (A) the 96 consecutive months of service in which
11the total salary was the highest within the last 120 months of
12service, or (B) the total period of service, if less than 96
13months, by the number of months of service in such period;
14provided that the monthly salary to be considered in each of
15the last 12 months of the final average salary period shall not
16exceed 125% of the highest salary in any other month in the
17final average salary period that precedes such final 12 month
18period. In no event shall the annual final average salary
19exceed $106,800, as automatically increased by the lesser of 3%
20or one-half of the annual increase in the consumer price
21index-u during the preceding 12-month calendar year.
22    For the purposes of this Section, "consumer price index-u"
23means the index published by the Bureau of Labor Statistics of
24the United States Department of Labor that measures the average
25change in prices of goods and services purchased by all urban

 

 

SB0029- 29 -LRB097 00067 AMC 40072 b

1consumers, United States city average, all items, 1982-84 =
2100. The new amount resulting from each annual adjustment shall
3be determined by the Public Pension Division of the Department
4of Insurance and made available to the boards of the retirement
5systems and pension funds.
6    (b) "Salary" means base salary paid to a teacher.
7    (c) The portion of any annuity earned on or after July 1,
82011 shall be reduced by one-half of 1% for each month that the
9teacher's retirement age is under the full (normal) retirement
10age as provided in the federal Social Security Act.
11    (d) The maximum amount of creditable service a teacher may
12establish on or after July 1, 2011 is 35 years.
 
13    (40 ILCS 5/16-415 new)
14    Sec. 16-415. Automatic annual increases for accruals on or
15after July 1, 2011. A person receiving an annuity based on
16service performed on or after July 1, 2011 shall, on the first
17anniversary of retirement, but not before attaining the full
18(normal) retirement age as provided in the federal Social
19Security Act, and annually thereafter, have the portion of his
20or her annuity earned on or after July 1, 2011 increased by the
21lesser of (1) 3% or (2) one-half of the percentage increase, if
22any, in the Consumer Price Index for All Urban Consumers
23measured from the preceding January 1 to the January 1 of the
24year during which the increase is being granted. The increase
25for each year shall be applied to the amount of the recipient's

 

 

SB0029- 30 -LRB097 00067 AMC 40072 b

1originally granted annuity.
 
2    (40 ILCS 5/16-420 new)
3    Sec. 16-420. Calculation of annuity. When calculating an
4annuity for a teacher who has service before and after July 1,
52011, the teacher's total accrued benefit shall be the sum of
6(A) the teacher's benefit accruals prior to July 1, 2011 as if
7the teacher had retired on that date, and (B) the teacher's
8benefit accruals on or after July 1, 2011, as modified by the
9rules in sections 16-405, 16-410, and 16-415. Within 180 days
10after the effective date of this amendatory Act of the 96th
11General Assembly, the system shall promulgate rules and
12regulations to effectuate the provisions of this amendatory Act
13of the 96th General Assembly. In no event shall the teacher's
14total accrued benefit be less, at his retirement, than if the
15teacher's entire period of service had been as a later entrant.
 
16    (40 ILCS 5/16-425 new)
17    Sec. 16-425. Survivors' annuities based on service
18performed on or after July 1, 2011. For purposes of calculating
19an annuity based on service performed on or after July 1, 2011,
20the initial survivor's annuity of an otherwise eligible
21survivor shall be in the amount of 66 2/3% of the participant's
22earned retirement annuity at the date of death and shall be
23increased (1) on each January 1 occurring on or after the
24commencement of the annuity if the deceased member died while

 

 

SB0029- 31 -LRB097 00067 AMC 40072 b

1receiving a retirement annuity or (2) in other cases, on each
2January 1 occurring after the first anniversary of the
3commencement of the annuity. Each annual increase shall be
4calculated at the lesser of (1) 3% or (2) one-half of the
5percentage increase, if any, in the Consumer Price Index for
6All Urban Consumers measured from the preceding January 1 to
7the January 1 of the year during which the increase is being
8granted. The increase for each year shall be applied to the
9amount of the recipient's originally granted annuity.
 
10    (40 ILCS 5/18-400 new)
11    Sec. 18-400. Provisions applicable to benefit accruals on
12or after July 1, 2011. Notwithstanding anything in the
13foregoing provisions of this Article to the contrary, the
14provisions of Sections 18-405, 18-410, 18-415, and 18-420 shall
15control for any annuity calculations and benefit accruals by
16judges besides later entrants on or after July 1, 2011.
 
17    (40 ILCS 5/18-405 new)
18    Sec. 18-405. Rate of accrual on or after July 1, 2011. For
19all service by a judge on or after July 1, 2011, the annual
20retirement annuity rate of accrual is 2% of final average
21salary for each year of service.
 
22    (40 ILCS 5/18-410 new)
23    Sec. 18-410. Annuity calculations for benefit accruals on

 

 

SB0029- 32 -LRB097 00067 AMC 40072 b

1or after July 1, 2011. For purposes of calculating an annuity
2based on service performed on or after July 1, 2011, the
3following rules apply to benefit accruals on or after July 1,
42011:
5    (a) "Final average salary" means the monthly salary
6obtained by dividing the total salary of an judge during the
7period of: (A) the 96 consecutive months of service in which
8the total salary was the highest within the last 120 months of
9service, or (B) the total period of service, if less than 96
10months, by the number of months of service in such period;
11provided that the monthly salary to be considered in each of
12the last 12 months of the final average salary period shall not
13exceed 125% of the highest salary in any other month in the
14final average salary period that precedes such final 12 month
15period. In no event shall the annual final average salary
16exceed $106,800, as automatically increased by the lesser of 3%
17or one-half of the annual increase in the consumer price
18index-u during the preceding 12-month calendar year.
19    For the purposes of this Section, "consumer price index-u"
20means the index published by the Bureau of Labor Statistics of
21the United States Department of Labor that measures the average
22change in prices of goods and services purchased by all urban
23consumers, United States city average, all items, 1982-84 =
24100. The new amount resulting from each annual adjustment shall
25be determined by the Public Pension Division of the Department
26of Insurance and made available to the boards of the retirement

 

 

SB0029- 33 -LRB097 00067 AMC 40072 b

1systems and pension funds.
2    (b) "Salary" means base salary paid to a judge.
3    (c) The portion of any annuity earned on or after July 1,
42011 shall be reduced by one-half of 1% for each month that the
5judge's retirement age is under the full (normal) retirement
6age as provided in the federal Social Security Act.
7    (d) The maximum amount of creditable service a judge may
8establish on or after July 1, 2011 is 35 years.
 
9    (40 ILCS 5/18-415 new)
10    Sec. 18-415. Automatic annual increases for accruals on or
11after July 1, 2011. A person receiving an annuity based on
12service performed on or after July 1, 2011 shall, on the first
13anniversary of retirement, but not before attaining the full
14(normal) retirement age as provided in the federal Social
15Security Act, and annually thereafter, have the portion of his
16or her annuity earned on or after July 1, 2011 increased by the
17lesser of (1) 3% or (2) one-half of the percentage increase, if
18any, in the Consumer Price Index for All Urban Consumers
19measured from the preceding January 1 to the January 1 of the
20year during which the increase is being granted. The increase
21for each year shall be applied to the amount of the recipient's
22originally granted annuity.
 
23    (40 ILCS 5/18-420 new)
24    Sec. 18-420. Calculation of annuity. When calculating an

 

 

SB0029- 34 -LRB097 00067 AMC 40072 b

1annuity for a participant who has service before and after July
21, 2011, the participant's total accrued benefit shall be the
3sum of (A) the participant's benefit accruals prior to July 1,
42011 as if the participant had retired on that date, and (B)
5the participant's benefit accruals on or after July 1, 2011, as
6modified by the rules in sections 18-405, 18-410, and 18-415.
7Within 180 days after the effective date of this amendatory Act
8of the 96th General Assembly, the system shall promulgate rules
9and regulations to effectuate the provisions of this amendatory
10Act of the 96th General Assembly. In no event shall the
11participant's total accrued benefit be less, at his retirement,
12than if the participant's entire period of service had been as
13a later entrant.
 
14    (40 ILCS 5/18-425 new)
15    Sec. 18-425. Survivors' annuities based on service
16performed on or after July 1, 2011. For purposes of calculating
17an annuity based on service performed on or after July 1, 2011,
18the initial survivor's annuity of an otherwise eligible
19survivor shall be in the amount of 66 2/3% of the participant's
20earned retirement annuity at the date of death and shall be
21increased (1) on each January 1 occurring on or after the
22commencement of the annuity if the deceased member died while
23receiving a retirement annuity or (2) in other cases, on each
24January 1 occurring after the first anniversary of the
25commencement of the annuity. Each annual increase shall be

 

 

SB0029- 35 -LRB097 00067 AMC 40072 b

1calculated at the lesser of (1) 3% or (2) one-half of the
2percentage increase, if any, in the Consumer Price Index for
3All Urban Consumers measured from the preceding January 1 to
4the January 1 of the year during which the increase is being
5granted. The increase for each year shall be applied to the
6amount of the recipient's originally granted annuity.
 
7
ARTICLE 3.

 
8    Section 3-5. The Illinois Pension Code is amended by adding
9Section 1-165 as follows:
 
10    (40 ILCS 5/1-165 new)
11    Sec. 1-165. Definition of salary, earnings, compensation,
12and wages. Notwithstanding any other provision of this Code to
13the contrary, for periods of service on and after July 1, 2011
14for any participant or member of any retirement system or
15pension fund under this Code, "salary", "earnings",
16"compensation", and "wages", as applicable under an Article of
17this Code, means all remuneration for personal services
18performed defined as "wages" under the Social Security Enabling
19Act, excluding remuneration which is in excess of the annual
20earnings, salary, or wages of a member or participant, but
21including any benefits received by an employee under a sick pay
22plan in effect before January 1, 1981. "Salary", "earnings",
23"compensation", and "wages" shall exclude lump sum salary

 

 

SB0029- 36 -LRB097 00067 AMC 40072 b

1payments:
2        (1) for vacation;
3        (2) for accumulated unused sick leave;
4        (3) upon discharge for approved holidays; and
5        (4) for approved holidays.
 
6
ARTICLE 99.

 
7    Section 99-99. Effective date. This Act takes effect upon
8becoming law.

 

 

SB0029- 37 -LRB097 00067 AMC 40072 b

1 INDEX
2 Statutes amended in order of appearance
3    40 ILCS 5/2-300 new
4    40 ILCS 5/2-305 new
5    40 ILCS 5/2-310 new
6    40 ILCS 5/2-315 new
7    40 ILCS 5/2-320 new
8    40 ILCS 5/2-325 new
9    40 ILCS 5/2-330 new
10    40 ILCS 5/14-300 new
11    40 ILCS 5/14-305 new
12    40 ILCS 5/14-315 new
13    40 ILCS 5/14-330 new
14    40 ILCS 5/15-300 new
15    40 ILCS 5/15-305 new
16    40 ILCS 5/15-315 new
17    40 ILCS 5/15-330 new
18    40 ILCS 5/16-300 new
19    40 ILCS 5/16-305 new
20    40 ILCS 5/16-315 new
21    40 ILCS 5/16-330 new
22    40 ILCS 5/18-300 new
23    40 ILCS 5/18-305 new
24    40 ILCS 5/18-310 new
25    40 ILCS 5/18-315 new

 

 

SB0029- 38 -LRB097 00067 AMC 40072 b

1    40 ILCS 5/18-320 new
2    40 ILCS 5/18-325 new
3    40 ILCS 5/18-330 new
4    40 ILCS 5/2-400 new
5    40 ILCS 5/2-405 new
6    40 ILCS 5/2-410 new
7    40 ILCS 5/2-415 new
8    40 ILCS 5/2-420 new
9    40 ILCS 5/2-425 new
10    40 ILCS 5/14-400 new
11    40 ILCS 5/14-405 new
12    40 ILCS 5/14-410 new
13    40 ILCS 5/14-415 new
14    40 ILCS 5/14-420 new
15    40 ILCS 5/14-425 new
16    40 ILCS 5/15-400 new
17    40 ILCS 5/15-405 new
18    40 ILCS 5/15-410 new
19    40 ILCS 5/15-415 new
20    40 ILCS 5/15-420 new
21    40 ILCS 5/15-425 new
22    40 ILCS 5/16-400 new
23    40 ILCS 5/16-405 new
24    40 ILCS 5/16-410 new
25    40 ILCS 5/16-415 new
26    40 ILCS 5/16-420 new

 

 

SB0029- 39 -LRB097 00067 AMC 40072 b

1    40 ILCS 5/16-425 new
2    40 ILCS 5/18-400 new
3    40 ILCS 5/18-405 new
4    40 ILCS 5/18-410 new
5    40 ILCS 5/18-415 new
6    40 ILCS 5/18-420 new
7    40 ILCS 5/18-425 new
8    40 ILCS 5/1-165 new