97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0538

 

Introduced 2/8/2011, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/14-131

    Amends the State Employee Article of the Illinois Pension Code. Makes a technical change in a Section concerning contributions by the State.


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PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Section 14-131 as follows:
 
6    (40 ILCS 5/14-131)
7    Sec. 14-131. Contributions by State.
8    (a) The The State shall make contributions to the System by
9appropriations of amounts which, together with other employer
10contributions from trust, federal, and other funds, employee
11contributions, investment income, and other income, will be
12sufficient to meet the cost of maintaining and administering
13the System on a 90% funded basis in accordance with actuarial
14recommendations.
15    For the purposes of this Section and Section 14-135.08,
16references to State contributions refer only to employer
17contributions and do not include employee contributions that
18are picked up or otherwise paid by the State or a department on
19behalf of the employee.
20    (b) The Board shall determine the total amount of State
21contributions required for each fiscal year on the basis of the
22actuarial tables and other assumptions adopted by the Board,
23using the formula in subsection (e).

 

 

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1    The Board shall also determine a State contribution rate
2for each fiscal year, expressed as a percentage of payroll,
3based on the total required State contribution for that fiscal
4year (less the amount received by the System from
5appropriations under Section 8.12 of the State Finance Act and
6Section 1 of the State Pension Funds Continuing Appropriation
7Act, if any, for the fiscal year ending on the June 30
8immediately preceding the applicable November 15 certification
9deadline), the estimated payroll (including all forms of
10compensation) for personal services rendered by eligible
11employees, and the recommendations of the actuary.
12    For the purposes of this Section and Section 14.1 of the
13State Finance Act, the term "eligible employees" includes
14employees who participate in the System, persons who may elect
15to participate in the System but have not so elected, persons
16who are serving a qualifying period that is required for
17participation, and annuitants employed by a department as
18described in subdivision (a)(1) or (a)(2) of Section 14-111.
19    (c) Contributions shall be made by the several departments
20for each pay period by warrants drawn by the State Comptroller
21against their respective funds or appropriations based upon
22vouchers stating the amount to be so contributed. These amounts
23shall be based on the full rate certified by the Board under
24Section 14-135.08 for that fiscal year. From the effective date
25of this amendatory Act of the 93rd General Assembly through the
26payment of the final payroll from fiscal year 2004

 

 

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1appropriations, the several departments shall not make
2contributions for the remainder of fiscal year 2004 but shall
3instead make payments as required under subsection (a-1) of
4Section 14.1 of the State Finance Act. The several departments
5shall resume those contributions at the commencement of fiscal
6year 2005.
7    (c-1) Notwithstanding subsection (c) of this Section, for
8fiscal year 2010 only, contributions by the several departments
9are not required to be made for General Revenue Funds payrolls
10processed by the Comptroller. Payrolls paid by the several
11departments from all other State funds must continue to be
12processed pursuant to subsection (c) of this Section.
13    (c-2) For State fiscal year 2010 only, on or as soon as
14possible after the 15th day of each month the Board shall
15submit vouchers for payment of State contributions to the
16System, in a total monthly amount of one-twelfth of the fiscal
17year 2010 General Revenue Fund appropriation to the System.
18    (d) If an employee is paid from trust funds or federal
19funds, the department or other employer shall pay employer
20contributions from those funds to the System at the certified
21rate, unless the terms of the trust or the federal-State
22agreement preclude the use of the funds for that purpose, in
23which case the required employer contributions shall be paid by
24the State. From the effective date of this amendatory Act of
25the 93rd General Assembly through the payment of the final
26payroll from fiscal year 2004 appropriations, the department or

 

 

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1other employer shall not pay contributions for the remainder of
2fiscal year 2004 but shall instead make payments as required
3under subsection (a-1) of Section 14.1 of the State Finance
4Act. The department or other employer shall resume payment of
5contributions at the commencement of fiscal year 2005.
6    (e) For State fiscal years 2011 through 2045, the minimum
7contribution to the System to be made by the State for each
8fiscal year shall be an amount determined by the System to be
9sufficient to bring the total assets of the System up to 90% of
10the total actuarial liabilities of the System by the end of
11State fiscal year 2045. In making these determinations, the
12required State contribution shall be calculated each year as a
13level percentage of payroll over the years remaining to and
14including fiscal year 2045 and shall be determined under the
15projected unit credit actuarial cost method.
16    For State fiscal years 1996 through 2005, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19so that by State fiscal year 2011, the State is contributing at
20the rate required under this Section; except that (i) for State
21fiscal year 1998, for all purposes of this Code and any other
22law of this State, the certified percentage of the applicable
23employee payroll shall be 5.052% for employees earning eligible
24creditable service under Section 14-110 and 6.500% for all
25other employees, notwithstanding any contrary certification
26made under Section 14-135.08 before the effective date of this

 

 

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1amendatory Act of 1997, and (ii) in the following specified
2State fiscal years, the State contribution to the System shall
3not be less than the following indicated percentages of the
4applicable employee payroll, even if the indicated percentage
5will produce a State contribution in excess of the amount
6otherwise required under this subsection and subsection (a):
79.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
82002; 10.6% in FY 2003; and 10.8% in FY 2004.
9    Notwithstanding any other provision of this Article, the
10total required State contribution to the System for State
11fiscal year 2006 is $203,783,900.
12    Notwithstanding any other provision of this Article, the
13total required State contribution to the System for State
14fiscal year 2007 is $344,164,400.
15    For each of State fiscal years 2008 through 2009, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18from the required State contribution for State fiscal year
192007, so that by State fiscal year 2011, the State is
20contributing at the rate otherwise required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State General Revenue Fund contribution for
23State fiscal year 2010 is $723,703,100 and shall be made from
24the proceeds of bonds sold in fiscal year 2010 pursuant to
25Section 7.2 of the General Obligation Bond Act, less (i) the
26pro rata share of bond sale expenses determined by the System's

 

 

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1share of total bond proceeds, (ii) any amounts received from
2the General Revenue Fund in fiscal year 2010, and (iii) any
3reduction in bond proceeds due to the issuance of discounted
4bonds, if applicable.
5    Beginning in State fiscal year 2046, the minimum State
6contribution for each fiscal year shall be the amount needed to
7maintain the total assets of the System at 90% of the total
8actuarial liabilities of the System.
9    Amounts received by the System pursuant to Section 25 of
10the Budget Stabilization Act or Section 8.12 of the State
11Finance Act in any fiscal year do not reduce and do not
12constitute payment of any portion of the minimum State
13contribution required under this Article in that fiscal year.
14Such amounts shall not reduce, and shall not be included in the
15calculation of, the required State contributions under this
16Article in any future year until the System has reached a
17funding ratio of at least 90%. A reference in this Article to
18the "required State contribution" or any substantially similar
19term does not include or apply to any amounts payable to the
20System under Section 25 of the Budget Stabilization Act.
21    Notwithstanding any other provision of this Section, the
22required State contribution for State fiscal year 2005 and for
23fiscal year 2008 and each fiscal year thereafter, as calculated
24under this Section and certified under Section 14-135.08, shall
25not exceed an amount equal to (i) the amount of the required
26State contribution that would have been calculated under this

 

 

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1Section for that fiscal year if the System had not received any
2payments under subsection (d) of Section 7.2 of the General
3Obligation Bond Act, minus (ii) the portion of the State's
4total debt service payments for that fiscal year on the bonds
5issued for the purposes of that Section 7.2, as determined and
6certified by the Comptroller, that is the same as the System's
7portion of the total moneys distributed under subsection (d) of
8Section 7.2 of the General Obligation Bond Act. In determining
9this maximum for State fiscal years 2008 through 2010, however,
10the amount referred to in item (i) shall be increased, as a
11percentage of the applicable employee payroll, in equal
12increments calculated from the sum of the required State
13contribution for State fiscal year 2007 plus the applicable
14portion of the State's total debt service payments for fiscal
15year 2007 on the bonds issued for the purposes of Section 7.2
16of the General Obligation Bond Act, so that, by State fiscal
17year 2011, the State is contributing at the rate otherwise
18required under this Section.
19    (f) After the submission of all payments for eligible
20employees from personal services line items in fiscal year 2004
21have been made, the Comptroller shall provide to the System a
22certification of the sum of all fiscal year 2004 expenditures
23for personal services that would have been covered by payments
24to the System under this Section if the provisions of this
25amendatory Act of the 93rd General Assembly had not been
26enacted. Upon receipt of the certification, the System shall

 

 

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1determine the amount due to the System based on the full rate
2certified by the Board under Section 14-135.08 for fiscal year
32004 in order to meet the State's obligation under this
4Section. The System shall compare this amount due to the amount
5received by the System in fiscal year 2004 through payments
6under this Section and under Section 6z-61 of the State Finance
7Act. If the amount due is more than the amount received, the
8difference shall be termed the "Fiscal Year 2004 Shortfall" for
9purposes of this Section, and the Fiscal Year 2004 Shortfall
10shall be satisfied under Section 1.2 of the State Pension Funds
11Continuing Appropriation Act. If the amount due is less than
12the amount received, the difference shall be termed the "Fiscal
13Year 2004 Overpayment" for purposes of this Section, and the
14Fiscal Year 2004 Overpayment shall be repaid by the System to
15the Pension Contribution Fund as soon as practicable after the
16certification.
17    (g) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

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15-year period following that fiscal year.
2    (h) For purposes of determining the required State
3contribution to the System for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the System's actuarially assumed rate of return.
6    (i) After the submission of all payments for eligible
7employees from personal services line items paid from the
8General Revenue Fund in fiscal year 2010 have been made, the
9Comptroller shall provide to the System a certification of the
10sum of all fiscal year 2010 expenditures for personal services
11that would have been covered by payments to the System under
12this Section if the provisions of this amendatory Act of the
1396th General Assembly had not been enacted. Upon receipt of the
14certification, the System shall determine the amount due to the
15System based on the full rate certified by the Board under
16Section 14-135.08 for fiscal year 2010 in order to meet the
17State's obligation under this Section. The System shall compare
18this amount due to the amount received by the System in fiscal
19year 2010 through payments under this Section. If the amount
20due is more than the amount received, the difference shall be
21termed the "Fiscal Year 2010 Shortfall" for purposes of this
22Section, and the Fiscal Year 2010 Shortfall shall be satisfied
23under Section 1.2 of the State Pension Funds Continuing
24Appropriation Act. If the amount due is less than the amount
25received, the difference shall be termed the "Fiscal Year 2010
26Overpayment" for purposes of this Section, and the Fiscal Year

 

 

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12010 Overpayment shall be repaid by the System to the General
2Revenue Fund as soon as practicable after the certification.
3(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-45,
4eff. 7-15-09; 96-1000, eff. 7-2-10.)