Sen. Daniel Biss

Filed: 5/31/2013

 

 


 

 


 
09800HB1154sam001LRB098 08482 EFG 46778 a

1
AMENDMENT TO HOUSE BILL 1154

2    AMENDMENT NO. ______. Amend House Bill 1154 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. If and only if Senate Bill 1687 of the 98th
5General Assembly becomes law, the Illinois Pension Code is
6amended by changing Section 15-155 as follows:
 
7    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
8    Sec. 15-155. State and employer contributions.
9    (a) The State of Illinois shall make contributions by
10appropriations of amounts which, together with contributions
11paid by employers, other employer contributions from trust,
12federal, and other funds, employee contributions, income from
13investments, and other income of this System, will be
14sufficient to meet the cost of maintaining and administering
15the System in accordance with actuarial recommendations.
16    The Board shall determine the amount of State and employer

 

 

09800HB1154sam001- 2 -LRB098 08482 EFG 46778 a

1contributions required for each fiscal year on the basis of the
2actuarial tables and other assumptions adopted by the Board and
3the recommendations of the System's actuary, using the formulas
4provided in this Section.
5    The System shall make all necessary assumptions to
6determine and allocate total demographic gains and losses for
7the purpose of determining State and employer contributions
8under this Section. Such assumptions shall include but not be
9limited to the rates of retirement, termination, disability,
10and mortality.
11    (a-1) For State fiscal years 2012 through 2014, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 90% of
15the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of payroll over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit credit actuarial cost method.
21    For State fiscal years 2015 through 2044, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total actuarial assets of the System
25attributable to the State up to 100% of the total actuarial
26liabilities of the System attributable to the State by the end

 

 

09800HB1154sam001- 3 -LRB098 08482 EFG 46778 a

1of State fiscal year 2044. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2044 and shall be determined under the
5entry age normal actuarial cost method.
6    If at the end of State fiscal year 2044 the total actuarial
7assets of the System attributable to the State are less than
8100% of the total actuarial liabilities of the System
9attributable to the State, the System shall determine the
10amount necessary to bring that those assets up to 100% of those
11liabilities and shall certify that amount as a required State
12contribution for State fiscal year 2046, and the State shall
13pay that amount to the System in State fiscal year 2046.
14    Beginning when the State has paid the contribution required
15under this subsection (a-1) for fiscal year 2046, or in State
16fiscal year 2045 if no such contribution for fiscal year 2046
17is required, the State has no further obligation to make
18contributions to the System under this subsection (a-1).
19    For the purposes of this Article, "total actuarial
20liabilities of the System attributable to the State" means the
21total liabilities of the System less any notional liabilities
22assigned to employer accounts under Section 15-155.2.
23    For the purposes of this Article, "total actuarial assets
24of the System attributable to the State" means the total assets
25of the System less any notional assets assigned to employer
26accounts under Section 15-155.2.

 

 

09800HB1154sam001- 4 -LRB098 08482 EFG 46778 a

1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2006 is
8$166,641,900.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2007 is
11$252,064,100.
12    For each of State fiscal years 2008 through 2009, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15from the required State contribution for State fiscal year
162007, so that by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2010 is
20$702,514,000 and shall be made from the State Pensions Fund and
21proceeds of bonds sold in fiscal year 2010 pursuant to Section
227.2 of the General Obligation Bond Act, less (i) the pro rata
23share of bond sale expenses determined by the System's share of
24total bond proceeds, (ii) any amounts received from the General
25Revenue Fund in fiscal year 2010, (iii) any reduction in bond
26proceeds due to the issuance of discounted bonds, if

 

 

09800HB1154sam001- 5 -LRB098 08482 EFG 46778 a

1applicable.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2011 is
4the amount recertified by the System on or before April 1, 2011
5pursuant to Section 15-165 and shall be made from the State
6Pensions Fund and proceeds of bonds sold in fiscal year 2011
7pursuant to Section 7.2 of the General Obligation Bond Act,
8less (i) the pro rata share of bond sale expenses determined by
9the System's share of total bond proceeds, (ii) any amounts
10received from the General Revenue Fund in fiscal year 2011, and
11(iii) any reduction in bond proceeds due to the issuance of
12discounted bonds, if applicable.
13    Amounts received by the System pursuant to Section 25 of
14the Budget Stabilization Act or Section 8.12 of the State
15Finance Act in any fiscal year do not reduce and do not
16constitute payment of any portion of the minimum State
17contribution required under this Article in that fiscal year.
18Such amounts shall not reduce, and shall not be included in the
19calculation of, the required State contributions under this
20Article in any future year until the System has reached a
21funding ratio of at least 90%. A reference in this Article to
22the "required State contribution" or any substantially similar
23term does not include or apply to any amounts payable to the
24System under Section 25 of the Budget Stabilization Act.
25    Notwithstanding any other provision of this Section, the
26required State contribution for State fiscal year 2005 and for

 

 

09800HB1154sam001- 6 -LRB098 08482 EFG 46778 a

1fiscal year 2008 through fiscal year 2014, as calculated under
2this Section and certified under Section 15-165, shall not
3exceed an amount equal to (i) the amount of the required State
4contribution that would have been calculated under this Section
5for that fiscal year if the System had not received any
6payments under subsection (d) of Section 7.2 of the General
7Obligation Bond Act, minus (ii) the portion of the State's
8total debt service payments for that fiscal year on the bonds
9issued in fiscal year 2003 for the purposes of that Section
107.2, as determined and certified by the Comptroller, that is
11the same as the System's portion of the total moneys
12distributed under subsection (d) of Section 7.2 of the General
13Obligation Bond Act. In determining this maximum for State
14fiscal years 2008 through 2010, however, the amount referred to
15in item (i) shall be increased, as a percentage of the
16applicable employee payroll, in equal increments calculated
17from the sum of the required State contribution for State
18fiscal year 2007 plus the applicable portion of the State's
19total debt service payments for fiscal year 2007 on the bonds
20issued in fiscal year 2003 for the purposes of Section 7.2 of
21the General Obligation Bond Act, so that, by State fiscal year
222011, the State is contributing at the rate otherwise required
23under this Section.
24    (a-5) In addition to the contributions that the State is
25otherwise required to make under this Article, beginning in
26fiscal year 2015 and in each fiscal year thereafter until the

 

 

09800HB1154sam001- 7 -LRB098 08482 EFG 46778 a

1State has no further obligation to make contributions to the
2System under subsection (a-1), the State shall be required to
3make an additional contribution to the System equal to the
4projected dollar amount of contributions to be made by
5employers pursuant to items (i) and (vi) of subsection (a-10)
6for that fiscal year. Contributions required to be made
7pursuant to this subsection do not reduce and do not constitute
8payment of any portion of the required State contribution made
9to the System pursuant to subsection (a-1) in that fiscal year.
10A contribution required to be made pursuant to this subsection
11shall not reduce, and shall not be included in the calculation
12of, the required contribution to be made by the State pursuant
13to subsection (a-1) in any future year, until the System has
14received the contribution pursuant to this subsection.
15    (a-10) Subject to the limitations provided in subsection
16(a-15) of this Section, beginning with State fiscal year 2015,
17each employer under this Article shall pay to the System a
18required contribution determined as a percentage of projected
19payroll and sufficient to produce an annual amount equal to:
20        (i) the employer normal cost for that fiscal year for
21    participating employees of that employer (excluding costs
22    attributable to any new benefit increases approved by that
23    employer pursuant to Section 15-198), determined as a
24    percentage of applicable payroll; plus
25        (ii) the amount required for that fiscal year to
26    amortize any unfunded actuarial accrued liability

 

 

09800HB1154sam001- 8 -LRB098 08482 EFG 46778 a

1    associated with the present value of liabilities
2    attributable to the employer's account under Section
3    15-155.2 (excluding costs attributable to any new benefit
4    increases approved by that employer pursuant to Section
5    15-198), determined as a level percentage of payroll over a
6    30-year rolling amortization period; plus
7        (iii) that employer's normal cost for that fiscal year
8    attributable to all new benefit increases approved by that
9    employer pursuant to Section 15-198; plus
10        (iv) the amounts required for that fiscal year to
11    amortize any unfunded actuarial accrued liability
12    associated with the present value of each new benefit
13    increase approved by that employer pursuant to Section
14    15-198, determined as a level percentage of payroll over a
15    fixed 10-year amortization period; plus
16        (v) beginning when the State has no further obligation
17    to make contributions to the System under subsection (a-1),
18    the amount required for that fiscal year to amortize any
19    unfunded actuarial accrued liability of the System not
20    attributable to any employer's account under Section
21    15-155.2, determined as a level percentage of payroll over
22    a 30-year rolling amortization period; plus
23        (vi) the amount of employer contributions for that
24    fiscal year required for employees of that employer who
25    participate in the self-managed plan under Section
26    15-158.2.

 

 

09800HB1154sam001- 9 -LRB098 08482 EFG 46778 a

1    In determining contributions required under item (i) of
2this subsection, the System shall determine an aggregate rate
3for all employers, expressed as a percentage of projected
4payroll, exclusive of costs attributable to any new benefit
5increase approved pursuant to Section 15-198 and exclusive of
6employer contributions required for participating employees of
7the self-managed plan under Section 15-158.2.
8    In determining contributions required under item (ii) of
9this subsection, the System shall determine an individual rate
10determined as a percentage of projected payroll applicable to
11each employer based on that employer's individual account under
12Section 15-155.2, exclusive of (i) any liabilities
13attributable to the System as a whole rather than to the
14employer's account and (ii) costs attributable to any new
15benefit increase approved pursuant to Section 15-198.
16    In determining contributions required under items (iii)
17and (iv) of this subsection, the System shall determine an
18individual rate determined as a percentage of projected payroll
19applicable to each employer that approves a new benefit
20increase pursuant to Section 15-198.
21    In determining contributions required under item (v) of
22this subsection, the System shall determine an aggregate rate
23determined as a percentage of projected payroll applicable to
24all employers under the System.
25    The contributions required under this subsection (a-10)
26shall be paid by an employer concurrently with that employer's

 

 

09800HB1154sam001- 10 -LRB098 08482 EFG 46778 a

1payroll payment period.
2    (a-15) For State fiscal year 2015, the required
3contribution of employers under item (i) of subsection (a-10)
4shall be reduced to an amount equal to 0.5% of applicable
5payroll. For each fiscal year thereafter, the required
6contribution of employers under item (i) of subsection (a-10)
7shall be the percentage of projected payroll required under
8this subsection (a-15) for the previous fiscal year, increased
9by 0.5% of payroll, except that when the percentage of
10projected payroll required under this subsection (a-15) first
11reaches the percentage of payroll required under item (i) of
12subsection (a-10), this subsection (a-15) shall cease to apply.
13    For State fiscal year 2015, the required contribution of
14employers under item (vi) of subsection (a-10) shall be reduced
15to an amount equal to 0.5% of applicable payroll. For each
16fiscal year thereafter, the required contribution of employers
17under item (vi) of subsection (a-10) shall be the percentage of
18projected payroll required under this subsection (a-15) for the
19previous fiscal year, increased by 0.5% of payroll, except that
20when the percentage of payroll required under this subsection
21(a-15) first reaches the percentage of payroll required under
22item (vi) of subsection (a-10), this subsection (a-15) shall
23cease to apply.
24    The limitations in this subsection (a-15) do not apply to
25(i) employer contributions required to be made under subsection
26(b) of this Section for employees who are compensated out of

 

 

09800HB1154sam001- 11 -LRB098 08482 EFG 46778 a

1trust or federal funds, (ii) contributions required to be made
2by the City of Champaign or the City of Urbana for individuals
3described under subsection (h) of Section 15-107, (iii)
4contributions required to be made by a teacher organization for
5individuals described under subsection (i) of Section 15-107,
6or (iv) contributions required to be made by a teacher
7organization for individuals on special leave of absence under
8Section 15-113.2.
9    (b) If an employee is paid from trust or federal funds, the
10employer shall pay to the Board contributions from those funds
11which are sufficient to cover the accruing normal costs on
12behalf of the employee. However, universities having employees
13who are compensated out of local auxiliary funds, income funds,
14or service enterprise funds are not required to pay such
15contributions on behalf of those employees prior to July 1,
162014. Beginning July 1, 2014, universities having employees who
17are compensated out of local auxiliary funds, income funds, or
18service enterprise funds shall pay to the Board contributions
19from those funds that are sufficient to cover the accruing
20normal costs on behalf of those employees. The local auxiliary
21funds, income funds, and service enterprise funds of
22universities shall not be considered trust funds for the
23purpose of this Article, but funds of alumni associations,
24foundations, and athletic associations which are affiliated
25with the universities included as employers under this Article
26and other employers which do not receive State appropriations

 

 

09800HB1154sam001- 12 -LRB098 08482 EFG 46778 a

1are considered to be trust funds for the purpose of this
2Article. Beginning July 1, 2014, the provisions of this
3subsection (b) apply to the payment of employer contributions
4required under subsection (a-10) of this Section and shall not
5be construed as a separate or additional contribution.
6    (b-1) The City of Urbana and the City of Champaign shall
7each make employer contributions to this System for their
8respective firefighter employees who participate in this
9System pursuant to subsection (h) of Section 15-107. The rate
10of contributions to be made by those municipalities shall be
11determined annually by the Board on the basis of the actuarial
12assumptions adopted by the Board and the recommendations of the
13actuary, and shall be expressed as a percentage of salary for
14each such employee. The Board shall certify the rate to the
15affected municipalities as soon as may be practical. The
16employer contributions required under this subsection shall be
17remitted by the municipality to the System at the same time and
18in the same manner as employee contributions.
19    (c) Through State fiscal year 1995: The total employer
20contribution shall be apportioned among the various funds of
21the State and other employers, whether trust, federal, or other
22funds, in accordance with actuarial procedures approved by the
23Board. State of Illinois contributions for employers receiving
24State appropriations for personal services shall be payable
25from appropriations made to the employers or to the System. The
26contributions for Class I community colleges covering earnings

 

 

09800HB1154sam001- 13 -LRB098 08482 EFG 46778 a

1other than those paid from trust and federal funds, shall be
2payable solely from appropriations to the Illinois Community
3College Board or the System for employer contributions.
4    (d) Beginning in State fiscal year 1996, the required State
5contributions to the System shall be appropriated directly to
6the System and shall be payable through vouchers issued in
7accordance with subsection (c) of Section 15-165, except as
8provided in subsection (g).
9    (e) The State Comptroller shall draw warrants payable to
10the System upon proper certification by the System or by the
11employer in accordance with the appropriation laws and this
12Code.
13    (f) Normal costs under this Section means liability for
14pensions and other benefits which accrues to the System because
15of the credits earned for service rendered by the participants
16during the fiscal year and expenses of administering the
17System, but shall not include the principal of or any
18redemption premium or interest on any bonds issued by the Board
19or any expenses incurred or deposits required in connection
20therewith.
21    (g) If the amount of a participant's earnings for any
22academic year used to determine the final rate of earnings,
23determined on a full-time equivalent basis, exceeds the amount
24of his or her earnings with the same employer for the previous
25academic year, determined on a full-time equivalent basis, by
26more than 6%, the participant's employer shall pay to the

 

 

09800HB1154sam001- 14 -LRB098 08482 EFG 46778 a

1System, in addition to all other payments required under this
2Section and in accordance with guidelines established by the
3System, the present value of the increase in benefits resulting
4from the portion of the increase in earnings that is in excess
5of 6%. This present value shall be computed by the System on
6the basis of the actuarial assumptions and tables used in the
7most recent actuarial valuation of the System that is available
8at the time of the computation. The System may require the
9employer to provide any pertinent information or
10documentation.
11    Whenever it determines that a payment is or may be required
12under this subsection (g), the System shall calculate the
13amount of the payment and bill the employer for that amount.
14The bill shall specify the calculations used to determine the
15amount due. If the employer disputes the amount of the bill, it
16may, within 30 days after receipt of the bill, apply to the
17System in writing for a recalculation. The application must
18specify in detail the grounds of the dispute and, if the
19employer asserts that the calculation is subject to subsection
20(h) or (i) of this Section, must include an affidavit setting
21forth and attesting to all facts within the employer's
22knowledge that are pertinent to the applicability of subsection
23(h) or (i). Upon receiving a timely application for
24recalculation, the System shall review the application and, if
25appropriate, recalculate the amount due.
26    The employer contributions required under this subsection

 

 

09800HB1154sam001- 15 -LRB098 08482 EFG 46778 a

1(g) may be paid in the form of a lump sum within 90 days after
2receipt of the bill. If the employer contributions are not paid
3within 90 days after receipt of the bill, then interest will be
4charged at a rate equal to the System's annual actuarially
5assumed rate of return on investment compounded annually from
6the 91st day after receipt of the bill. Payments must be
7concluded within 3 years after the employer's receipt of the
8bill.
9    (h) This subsection (h) applies only to (1) payments made
10or salary increases given on or after June 1, 2005 but before
11July 1, 2011 and (2) payments made or salary increases given
12after the limitation on employer contributions under
13subsection (a-15) of Section 15-155 ceases to apply to
14contributions under item (i) of subsection (a-10) of that
15Section. The changes made by Public Act 94-1057 shall not
16require the System to refund any payments received before July
1731, 2006 (the effective date of Public Act 94-1057).
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases paid to
20participants under contracts or collective bargaining
21agreements entered into, amended, or renewed before June 1,
222005.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to a
25participant at a time when the participant is 10 or more years
26from retirement eligibility under Section 15-135.

 

 

09800HB1154sam001- 16 -LRB098 08482 EFG 46778 a

1    When assessing payment for any amount due under subsection
2(g), the System shall exclude earnings increases resulting from
3overload work, including a contract for summer teaching, or
4overtime when the employer has certified to the System, and the
5System has approved the certification, that: (i) in the case of
6overloads (A) the overload work is for the sole purpose of
7academic instruction in excess of the standard number of
8instruction hours for a full-time employee occurring during the
9academic year that the overload is paid and (B) the earnings
10increases are equal to or less than the rate of pay for
11academic instruction computed using the participant's current
12salary rate and work schedule; and (ii) in the case of
13overtime, the overtime was necessary for the educational
14mission.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude any earnings increase resulting
17from (i) a promotion for which the employee moves from one
18classification to a higher classification under the State
19Universities Civil Service System, (ii) a promotion in academic
20rank for a tenured or tenure-track faculty position, or (iii) a
21promotion that the Illinois Community College Board has
22recommended in accordance with subsection (k) of this Section.
23These earnings increases shall be excluded only if the
24promotion is to a position that has existed and been filled by
25a member for no less than one complete academic year and the
26earnings increase as a result of the promotion is an increase

 

 

09800HB1154sam001- 17 -LRB098 08482 EFG 46778 a

1that results in an amount no greater than the average salary
2paid for other similar positions.
3    (i) When assessing payment for any amount due under
4subsection (g), the System shall exclude any salary increase
5described in subsection (h) of this Section given on or after
6July 1, 2011 but before July 1, 2014 under a contract or
7collective bargaining agreement entered into, amended, or
8renewed on or after June 1, 2005 but before July 1, 2011.
9    (j) The System shall prepare a report and file copies of
10the report with the Governor and the General Assembly by
11January 1, 2007 that contains all of the following information:
12        (1) The number of recalculations required by the
13    changes made to this Section by Public Act 94-1057 for each
14    employer.
15        (2) The dollar amount by which each employer's
16    contribution to the System was changed due to
17    recalculations required by Public Act 94-1057.
18        (3) The total amount the System received from each
19    employer as a result of the changes made to this Section by
20    Public Act 94-4.
21        (4) The increase in the required State contribution
22    resulting from the changes made to this Section by Public
23    Act 94-1057.
24    (k) The Illinois Community College Board shall adopt rules
25for recommending lists of promotional positions submitted to
26the Board by community colleges and for reviewing the

 

 

09800HB1154sam001- 18 -LRB098 08482 EFG 46778 a

1promotional lists on an annual basis. When recommending
2promotional lists, the Board shall consider the similarity of
3the positions submitted to those positions recognized for State
4universities by the State Universities Civil Service System.
5The Illinois Community College Board shall file a copy of its
6findings with the System. The System shall consider the
7findings of the Illinois Community College Board when making
8determinations under this Section. The System shall not exclude
9any earnings increases resulting from a promotion when the
10promotion was not submitted by a community college. Nothing in
11this subsection (k) shall require any community college to
12submit any information to the Community College Board.
13    (l) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (m) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

09800HB1154sam001- 19 -LRB098 08482 EFG 46778 a

1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
47-13-12; 09800SB1687ham002.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law, but no earlier than the effective date of Senate
7Bill 1687 of the 98th General Assembly.".