Rep. Jay Hoffman

Filed: 3/1/2013

 

 


 

 


 
09800HB1166ham003LRB098 08855 EFG 41978 a

1
AMENDMENT TO HOUSE BILL 1166

2    AMENDMENT NO. ______. Amend House Bill 1166, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Budget Stabilization Act is amended by
6changing Sections 20 and 25 as follows:
 
7    (30 ILCS 122/20)
8    Sec. 20. Pension Stabilization Fund.
9    (a) The Pension Stabilization Fund is hereby created as a
10special fund in the State treasury. Moneys in the fund shall be
11used for the sole purpose of making payments to the designated
12retirement systems as provided in Section 25.
13    (b) For each fiscal year when the General Assembly's
14appropriations and transfers or diversions as required by law
15from general funds do not exceed 99% of the estimated general
16funds revenues pursuant to subsection (a) of Section 10, the

 

 

09800HB1166ham003- 2 -LRB098 08855 EFG 41978 a

1Comptroller shall transfer from the General Revenue Fund as
2provided by this Section a total amount equal to 0.5% of the
3estimated general funds revenues to the Pension Stabilization
4Fund.
5    (c) For each fiscal year through Fiscal Year 2013 when the
6General Assembly's appropriations and transfers or diversions
7as required by law from general funds do not exceed 98% of the
8estimated general funds revenues pursuant to subsection (b) of
9Section 10, the Comptroller shall transfer from the General
10Revenue Fund as provided by this Section a total amount equal
11to 1.0% of the estimated general funds revenues to the Pension
12Stabilization Fund.
13    (c-5) In Fiscal Year 2016 and each fiscal year thereafter,
14the State Comptroller shall order transferred and the State
15Treasurer shall transfer the following amounts from the General
16Revenue Fund to the Pension Stabilization Fund:
17    in Fiscal Year 2016, $441,429,372;
18    in Fiscal Year 2017, $150,545,372;
19    in Fiscal Year 2018, $179,267,872;
20    in Fiscal Year 2019, $211,777,872;
21    in Fiscal Year 2020, $1,123,333,372;
22    in Fiscal Year 2021, $1,084,470,872;
23    in Fiscal Year 2022, $1,048,083,372;
24    in Fiscal Year 2023, $1,014,170,872;
25    in Fiscal Year 2024, $957,733,372;
26    in Fiscal Year 2025, $905,683,372;

 

 

09800HB1166ham003- 3 -LRB098 08855 EFG 41978 a

1    in Fiscal Year 2026, $882,458,372;
2    in Fiscal Year 2027, $861,783,372;
3    in Fiscal Year 2028, $818,658,372;
4    in Fiscal Year 2029, $779,358,372;
5    in Fiscal Year 2030, $718,883,372;
6    in Fiscal Year 2031, $663,508,372;
7    in Fiscal Year 2032, $638,233,372;
8    in Fiscal Year 2033, $641,783,372;
9    in Fiscal Year 2034, $1,797,883,372;
10    in Fiscal Year 2035, $1,797,883,372;
11    in Fiscal Year 2036, $1,797,883,372;
12    in Fiscal Year 2037, $1,797,883,372;
13    in Fiscal Year 2038, $1,797,883,372;
14    in Fiscal Year 2039, $1,797,883,372;
15    in Fiscal Year 2040, $1,797,883,372;
16    in Fiscal Year 2041, $1,797,883,372;
17    in Fiscal Year 2042, $1,797,883,372;
18    in Fiscal Year 2043, $1,797,883,372;
19    in Fiscal Year 2044, $1,797,883,372; and
20    in Fiscal Year 2045, $1,797,883,372.
21    (c-10) The transfers made pursuant to subsection (c-5) of
22this Section shall continue until Fiscal Year 2045 or until
23each of the designated retirement systems, as defined in
24Section 25, has achieved a funding ratio of at least 100%,
25whichever occurs first.
26    (d) The Comptroller shall transfer 1/12 of the total amount

 

 

09800HB1166ham003- 4 -LRB098 08855 EFG 41978 a

1to be transferred each fiscal year under this Section into the
2Pension Stabilization Fund on the first day of each month of
3that fiscal year or as soon thereafter as possible; except that
4the final transfer of the fiscal year shall be made as soon as
5practical after the August 31 following the end of the fiscal
6year.
7    Until Fiscal Year 2014, before Before the final transfer
8for a fiscal year is made, the Comptroller shall reconcile the
9estimated general funds revenues used in calculating the other
10transfers under this Section for that fiscal year with the
11actual general funds revenues for that fiscal year. The final
12transfer for the fiscal year shall be adjusted so that the
13total amount transferred under this Section for that fiscal
14year is equal to the percentage specified in subsection (b) or
15(c) of this Section, whichever is applicable, of the actual
16general funds revenues for that fiscal year. The actual general
17funds revenues for the fiscal year shall be calculated in a
18manner consistent with subsection (c) of Section 10 of this
19Act.
20(Source: P.A. 94-839, eff. 6-6-06.)
 
21    (30 ILCS 122/25)
22    Sec. 25. Transfers from the Pension Stabilization Fund.
23    (a) As used in this Section, "designated retirement
24systems" means:
25        (1) the State Employees' Retirement System of

 

 

09800HB1166ham003- 5 -LRB098 08855 EFG 41978 a

1    Illinois;
2        (2) the Teachers' Retirement System of the State of
3    Illinois;
4        (3) the State Universities Retirement System;
5        (4) the Judges Retirement System of Illinois; and
6        (5) the General Assembly Retirement System.
7    (b) As soon as may be practical after any money is
8deposited into the Pension Stabilization Fund, the State
9Comptroller shall apportion the deposited amount among the
10designated retirement systems and the State Comptroller and
11State Treasurer shall pay the apportioned amounts to the
12designated retirement systems. The amount deposited shall be
13apportioned among the designated retirement systems in
14proportion to their respective certified State contributions
15for the State fiscal year in which the payment is made to those
16systems in the same proportion as their respective portions of
17the total actuarial reserve deficiency of the designated
18retirement systems, as most recently determined by the
19Governor's Office of Management and Budget. Amounts received by
20a designated retirement system under this Section shall be used
21for funding the unfunded liabilities of the retirement system.
22Payments under this Section are authorized by the continuing
23appropriation under Section 1.7 of the State Pension Funds
24Continuing Appropriation Act.
25    (c) At the request of the State Comptroller, the Governor's
26Office of Management and Budget shall determine the individual

 

 

09800HB1166ham003- 6 -LRB098 08855 EFG 41978 a

1and total actuarial reserve deficiencies of the designated
2retirement systems. For this purpose, the Governor's Office of
3Management and Budget shall consider the latest available audit
4and actuarial reports of each of the retirement systems and the
5relevant reports and statistics of the Public Pension Division
6of the Department of Financial and Professional Regulation.
7    (d) Payments to the designated retirement systems under
8this Section shall be in addition to, and not in lieu of, any
9State contributions required under Section 2-124, 14-131,
1015-155, 16-158, or 18-131 of the Illinois Pension Code.
11(Source: P.A. 94-839, eff. 6-6-06.)
 
12    Section 15. The Illinois Pension Code is amended by adding
13Sections 2-105.1, 2-105.2, 14-103.40, 14-103.41, 15-107.1,
1415-107.2, 16-106.4, 16-106.5, and 16-158.2 and changing
15Sections 1-103.3, 2-124, 2-125, 2-126, 14-131, 14-132, 14-133,
1615-136, 15-155, 15-156, 15-157, 16-133, 16-152, and 16-158 as
17follows:
 
18    (40 ILCS 5/1-103.3)
19    Sec. 1-103.3. Application of 1994 amendment; funding
20standard.
21    (a) The provisions of Public Act 88-593 this amendatory Act
22of 1994 that change the method of calculating, certifying, and
23paying the required State contributions to the retirement
24systems established under Articles 2, 14, 15, 16, and 18 shall

 

 

09800HB1166ham003- 7 -LRB098 08855 EFG 41978 a

1first apply to the State contributions required for State
2fiscal year 1996.
3    (b) (Blank) The General Assembly declares that a funding
4ratio (the ratio of a retirement system's total assets to its
5total actuarial liabilities) of 90% is an appropriate goal for
6State-funded retirement systems in Illinois, and it finds that
7a funding ratio of 90% is now the generally-recognized norm
8throughout the nation for public employee retirement systems
9that are considered to be financially secure and funded in an
10appropriate and responsible manner.
11    (c) Every 5 years, beginning in 1999, the Commission on
12Government Forecasting and Accountability, in consultation
13with the affected retirement systems and the Governor's Office
14of Management and Budget (formerly Bureau of the Budget), shall
15consider and determine whether the funding goals 90% funding
16ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
17continue subsection (b) continues to represent an appropriate
18funding goals goal for those State-funded retirement systems in
19Illinois, and it shall report its findings and recommendations
20on this subject to the Governor and the General Assembly.
21(Source: P.A. 93-1067, eff. 1-15-05.)
 
22    (40 ILCS 5/2-105.1 new)
23    Sec. 2-105.1. Tier I participant."Tier I participant": A
24participant who first became a participant before January 1,
252011 and who is not a Tier I retiree.
 

 

 

09800HB1166ham003- 8 -LRB098 08855 EFG 41978 a

1    (40 ILCS 5/2-105.2 new)
2    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
3former Tier I participant who is receiving a retirement
4annuity.
 
5    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
6    Sec. 2-124. Contributions by State.
7    (a) The State shall make contributions to the System by
8appropriations of amounts which, together with the
9contributions of participants, interest earned on investments,
10and other income will meet the cost of maintaining and
11administering the System on a 100% 90% funded basis in
12accordance with actuarial recommendations.
13    (b) The Board shall determine the amount of State
14contributions required for each fiscal year on the basis of the
15actuarial tables and other assumptions adopted by the Board and
16the prescribed rate of interest, using the formula in
17subsection (c).
18    (c) For State fiscal years 2015 through 2045, the minimum
19contribution to the System to be made by the State for each
20fiscal year shall be an amount determined by the System to be
21sufficient to bring the total assets of the System up to 100%
22of the total actuarial liabilities of the System by the end of
23State fiscal year 2045. In making these determinations, the
24required State contribution shall be calculated each year as a

 

 

09800HB1166ham003- 9 -LRB098 08855 EFG 41978 a

1level percentage of payroll over the years remaining to and
2including fiscal year 2045 and shall be determined under the
3projected unit credit actuarial cost method.
4    For State fiscal years 2012 through 2014 2045, the minimum
5contribution to the System to be made by the State for each
6fiscal year shall be an amount determined by the System to be
7sufficient to bring the total assets of the System up to 90% of
8the total actuarial liabilities of the System by the end of
9State fiscal year 2045. In making these determinations, the
10required State contribution shall be calculated each year as a
11level percentage of payroll over the years remaining to and
12including fiscal year 2045 and shall be determined under the
13projected unit credit actuarial cost method.
14    For State fiscal years 1996 through 2005, the State
15contribution to the System, as a percentage of the applicable
16employee payroll, shall be increased in equal annual increments
17so that by State fiscal year 2011, the State is contributing at
18the rate required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2006 is
21$4,157,000.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2007 is
24$5,220,300.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

09800HB1166ham003- 10 -LRB098 08855 EFG 41978 a

1employee payroll, shall be increased in equal annual increments
2from the required State contribution for State fiscal year
32007, so that by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2010 is
7$10,454,000 and shall be made from the proceeds of bonds sold
8in fiscal year 2010 pursuant to Section 7.2 of the General
9Obligation Bond Act, less (i) the pro rata share of bond sale
10expenses determined by the System's share of total bond
11proceeds, (ii) any amounts received from the General Revenue
12Fund in fiscal year 2010, and (iii) any reduction in bond
13proceeds due to the issuance of discounted bonds, if
14applicable.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2011 is
17the amount recertified by the System on or before April 1, 2011
18pursuant to Section 2-134 and shall be made from the proceeds
19of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
20the General Obligation Bond Act, less (i) the pro rata share of
21bond sale expenses determined by the System's share of total
22bond proceeds, (ii) any amounts received from the General
23Revenue Fund in fiscal year 2011, and (iii) any reduction in
24bond proceeds due to the issuance of discounted bonds, if
25applicable.
26    Beginning in State fiscal year 2046, the minimum State

 

 

09800HB1166ham003- 11 -LRB098 08855 EFG 41978 a

1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 100% 90% of the
3total actuarial liabilities of the System.
4    Amounts received by the System pursuant to Section 25 of
5the Budget Stabilization Act or Section 8.12 of the State
6Finance Act in any fiscal year do not reduce and do not
7constitute payment of any portion of the minimum State
8contribution required under this Article in that fiscal year.
9Such amounts shall not reduce, and shall not be included in the
10calculation of, the required State contributions under this
11Article in any future year until the System has reached a
12funding ratio of at least 80% 90%. A reference in this Article
13to the "required State contribution" or any substantially
14similar term does not include or apply to any amounts payable
15to the System under Section 25 of the Budget Stabilization Act.
16    Notwithstanding any other provision of this Code or the
17Budget Stabilization Act, amounts transferred to the System
18pursuant to the Budget Stabilization Act after the effective
19date of this amendatory Act of the 98th General Assembly do not
20reduce and do not constitute payment of any portion of the
21required State contribution under this Article in that fiscal
22year. Such amounts shall not reduce, and shall not be included
23in the calculation of, the required State contributions under
24this Article in any future year until the System has received
25payment of contributions pursuant to the Budget Stabilization
26Act.

 

 

09800HB1166ham003- 12 -LRB098 08855 EFG 41978 a

1    Notwithstanding any other provision of this Section, the
2required State contribution for State fiscal year 2005 and for
3fiscal year 2008 and each fiscal year thereafter through State
4fiscal year 2014, as calculated under this Section and
5certified under Section 2-134, shall not exceed an amount equal
6to (i) the amount of the required State contribution that would
7have been calculated under this Section for that fiscal year if
8the System had not received any payments under subsection (d)
9of Section 7.2 of the General Obligation Bond Act, minus (ii)
10the portion of the State's total debt service payments for that
11fiscal year on the bonds issued in fiscal year 2003 for the
12purposes of that Section 7.2, as determined and certified by
13the Comptroller, that is the same as the System's portion of
14the total moneys distributed under subsection (d) of Section
157.2 of the General Obligation Bond Act. In determining this
16maximum for State fiscal years 2008 through 2010, however, the
17amount referred to in item (i) shall be increased, as a
18percentage of the applicable employee payroll, in equal
19increments calculated from the sum of the required State
20contribution for State fiscal year 2007 plus the applicable
21portion of the State's total debt service payments for fiscal
22year 2007 on the bonds issued in fiscal year 2003 for the
23purposes of Section 7.2 of the General Obligation Bond Act, so
24that, by State fiscal year 2011, the State is contributing at
25the rate otherwise required under this Section.
26    (d) For purposes of determining the required State

 

 

09800HB1166ham003- 13 -LRB098 08855 EFG 41978 a

1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (e) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
177-13-12.)
 
18    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
19    Sec. 2-125. Obligations of State; funding guarantee.
20    (a) The payment of (1) the required State contributions,
21(2) all benefits granted under this system and (3) all expenses
22of administration and operation are obligations of the State to
23the extent specified in this Article.
24    (b) All income, interest and dividends derived from
25deposits and investments shall be credited to the account of

 

 

09800HB1166ham003- 14 -LRB098 08855 EFG 41978 a

1the system in the State Treasury and used to pay benefits under
2this Article.
3    (c) Pursuant to Article XIII, Section 5 of the 1970
4Constitution of the State of Illinois, beginning on July 1,
52013, the State shall, as a retirement benefit to each
6participant and annuitant of the System be contractually
7obligated to the System (as a fiduciary and trustee of the
8participants and annuitants) to pay the annual required State
9contribution, as determined by the Board of the System using
10generally accepted actuarial principles, as is necessary to
11bring the total assets of the System up to 100% of the total
12actuarial liabilities of the System by the end of State fiscal
13year 2045. As a further retirement benefit and contractual
14obligation, each fiscal year, the State shall pay to each
15designated retirement system the annual required State
16contribution certified by the Board for that fiscal year.
17Payments of the annual required State contribution for each
18fiscal year shall be made in equal monthly installments.
19Additionally, beginning in fiscal year 2014, State transfers to
20the Pension Stabilization Fund pursuant to Section 20 of the
21Budget Stabilization Act and payments to the System pursuant to
22Section 25 of the Budget Stabilization Act shall be further
23retirement benefits and contractual obligations. The transfers
24and payments prescribed in Sections 20 and 25 of the Budget
25Stabilization Act shall not be used by the retirement system
26when calculation any pension payment until the System has

 

 

09800HB1166ham003- 15 -LRB098 08855 EFG 41978 a

1reached a funded level of 100%. This Section and the security
2it provides to participants and annuitants is intended to be,
3and is, a contractual right that is part of the pension
4benefits provided to the participants and annuitants.
5Notwithstanding anything to the contrary in the Court of Claims
6Act or any other law, a designated retirement system has the
7exclusive right to and shall bring a mandamus action in the
8Circuit Court of Sangamon County against the State to compel
9the State to make any installment of the annual required State
10contribution required by this Section, irrespective of other
11remedies that may be available to the System. Each member or
12annuitant of the System has the right to in any judicial
13district in which the System maintains an office if the System
14fails to bring an action specified in this Section,
15irrespective of other remedies that may be available to the
16member or annuitant. 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(Source: P.A. 83-1440.)
 
22    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
23    Sec. 2-126. Contributions by participants.
24    (a) Each participant shall contribute toward the cost of
25his or her retirement annuity a percentage of each payment of

 

 

09800HB1166ham003- 16 -LRB098 08855 EFG 41978 a

1salary received by him or her for service as a member as
2follows: for service between October 31, 1947 and January 1,
31959, 5%; for service between January 1, 1959 and June 30,
41969, 6%; for service between July 1, 1969 and January 10,
51973, 6 1/2%; for service after January 10, 1973, 7%; for
6service after December 31, 1981, 8 1/2%.
7    (a-5) In addition to the contributions otherwise required
8under this Article, each Tier I participant shall also make the
9following contributions toward the cost of his or her
10retirement annuity from each payment of salary received by him
11or her for service as a member:
12        (1) beginning July 1, 2013 and through June 30, 2014,
13    1% of salary; and
14        (2) beginning on July 1, 2014, 2% of salary.
15    (b) Beginning August 2, 1949, each male participant, and
16from July 1, 1971, each female participant shall contribute
17towards the cost of the survivor's annuity 2% of salary.
18    A participant who has no eligible survivor's annuity
19beneficiary may elect to cease making contributions for
20survivor's annuity under this subsection. A survivor's annuity
21shall not be payable upon the death of a person who has made
22this election, unless prior to that death the election has been
23revoked and the amount of the contributions that would have
24been paid under this subsection in the absence of the election
25is paid to the System, together with interest at the rate of 4%
26per year from the date the contributions would have been made

 

 

09800HB1166ham003- 17 -LRB098 08855 EFG 41978 a

1to the date of payment.
2    (c) Beginning July 1, 1967, each participant shall
3contribute 1% of salary towards the cost of automatic increase
4in annuity provided in Section 2-119.1. These contributions
5shall be made concurrently with contributions for retirement
6annuity purposes.
7    (d) In addition, each participant serving as an officer of
8the General Assembly shall contribute, for the same purposes
9and at the same rates as are required of a regular participant,
10on each additional payment received as an officer. If the
11participant serves as an officer for at least 2 but less than 4
12years, he or she shall contribute an amount equal to the amount
13that would have been contributed had the participant served as
14an officer for 4 years. Persons who serve as officers in the
1587th General Assembly but cannot receive the additional payment
16to officers because of the ban on increases in salary during
17their terms may nonetheless make contributions based on those
18additional payments for the purpose of having the additional
19payments included in their highest salary for annuity purposes;
20however, persons electing to make these additional
21contributions must also pay an amount representing the
22corresponding employer contributions, as calculated by the
23System.
24    (e) Notwithstanding any other provision of this Article,
25the required contribution of a participant who first becomes a
26participant on or after January 1, 2011 shall not exceed the

 

 

09800HB1166ham003- 18 -LRB098 08855 EFG 41978 a

1contribution that would be due under this Article if that
2participant's highest salary for annuity purposes were
3$106,800, plus any increases in that amount under Section
42-108.1.
5(Source: P.A. 96-1490, eff. 1-1-11.)
 
6    (40 ILCS 5/14-103.40 new)
7    Sec. 14-103.40. Tier I member. "Tier I member": A member of
8this System who first became a member or participant before
9January 1, 2011 under any reciprocal retirement system or
10pension fund established under this Code other than a
11retirement system or pension fund established under Article 2,
123, 4, 5, 6, or 18 of this Code and who is not a Tier I retiree.
 
13    (40 ILCS 5/14-103.41 new)
14    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
15Tier I member who is receiving a retirement annuity.
 
16    (40 ILCS 5/14-131)
17    Sec. 14-131. Contributions by State.
18    (a) The State shall make contributions to the System by
19appropriations of amounts which, together with other employer
20contributions from trust, federal, and other funds, employee
21contributions, investment income, and other income, will be
22sufficient to meet the cost of maintaining and administering
23the System on a 100% 90% funded basis in accordance with

 

 

09800HB1166ham003- 19 -LRB098 08855 EFG 41978 a

1actuarial recommendations.
2    For the purposes of this Section and Section 14-135.08,
3references to State contributions refer only to employer
4contributions and do not include employee contributions that
5are picked up or otherwise paid by the State or a department on
6behalf of the employee.
7    (b) The Board shall determine the total amount of State
8contributions required for each fiscal year on the basis of the
9actuarial tables and other assumptions adopted by the Board,
10using the formula in subsection (e).
11    The Board shall also determine a State contribution rate
12for each fiscal year, expressed as a percentage of payroll,
13based on the total required State contribution for that fiscal
14year (less the amount received by the System from
15appropriations under Section 8.12 of the State Finance Act and
16Section 1 of the State Pension Funds Continuing Appropriation
17Act, if any, for the fiscal year ending on the June 30
18immediately preceding the applicable November 15 certification
19deadline), the estimated payroll (including all forms of
20compensation) for personal services rendered by eligible
21employees, and the recommendations of the actuary.
22    For the purposes of this Section and Section 14.1 of the
23State Finance Act, the term "eligible employees" includes
24employees who participate in the System, persons who may elect
25to participate in the System but have not so elected, persons
26who are serving a qualifying period that is required for

 

 

09800HB1166ham003- 20 -LRB098 08855 EFG 41978 a

1participation, and annuitants employed by a department as
2described in subdivision (a)(1) or (a)(2) of Section 14-111.
3    (c) Contributions shall be made by the several departments
4for each pay period by warrants drawn by the State Comptroller
5against their respective funds or appropriations based upon
6vouchers stating the amount to be so contributed. These amounts
7shall be based on the full rate certified by the Board under
8Section 14-135.08 for that fiscal year. From the effective date
9of this amendatory Act of the 93rd General Assembly through the
10payment of the final payroll from fiscal year 2004
11appropriations, the several departments shall not make
12contributions for the remainder of fiscal year 2004 but shall
13instead make payments as required under subsection (a-1) of
14Section 14.1 of the State Finance Act. The several departments
15shall resume those contributions at the commencement of fiscal
16year 2005.
17    (c-1) Notwithstanding subsection (c) of this Section, for
18fiscal years 2010, 2012, and 2013 only, contributions by the
19several departments are not required to be made for General
20Revenue Funds payrolls processed by the Comptroller. Payrolls
21paid by the several departments from all other State funds must
22continue to be processed pursuant to subsection (c) of this
23Section.
24    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
25or as soon as possible after the 15th day of each month, the
26Board shall submit vouchers for payment of State contributions

 

 

09800HB1166ham003- 21 -LRB098 08855 EFG 41978 a

1to the System, in a total monthly amount of one-twelfth of the
2fiscal year General Revenue Fund contribution as certified by
3the System pursuant to Section 14-135.08 of the Illinois
4Pension Code.
5    (d) If an employee is paid from trust funds or federal
6funds, the department or other employer shall pay employer
7contributions from those funds to the System at the certified
8rate, unless the terms of the trust or the federal-State
9agreement preclude the use of the funds for that purpose, in
10which case the required employer contributions shall be paid by
11the State. From the effective date of this amendatory Act of
12the 93rd General Assembly through the payment of the final
13payroll from fiscal year 2004 appropriations, the department or
14other employer shall not pay contributions for the remainder of
15fiscal year 2004 but shall instead make payments as required
16under subsection (a-1) of Section 14.1 of the State Finance
17Act. The department or other employer shall resume payment of
18contributions at the commencement of fiscal year 2005.
19    (e) For State fiscal years 2015 through 2045, the minimum
20contribution to the System to be made by the State for each
21fiscal year shall be an amount determined by the System to be
22sufficient to bring the total assets of the System up to 100%
23of the total actuarial liabilities of the System by the end of
24State fiscal year 2045. In making these determinations, the
25required State contribution shall be calculated each year as a
26level percentage of payroll over the years remaining to and

 

 

09800HB1166ham003- 22 -LRB098 08855 EFG 41978 a

1including fiscal year 2045 and shall be determined under the
2projected unit credit actuarial cost method.
3    For State fiscal years 2012 through 2014 2045, the minimum
4contribution to the System to be made by the State for each
5fiscal year shall be an amount determined by the System to be
6sufficient to bring the total assets of the System up to 90% of
7the total actuarial liabilities of the System by the end of
8State fiscal year 2045. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section; except that (i) for State
18fiscal year 1998, for all purposes of this Code and any other
19law of this State, the certified percentage of the applicable
20employee payroll shall be 5.052% for employees earning eligible
21creditable service under Section 14-110 and 6.500% for all
22other employees, notwithstanding any contrary certification
23made under Section 14-135.08 before the effective date of this
24amendatory Act of 1997, and (ii) in the following specified
25State fiscal years, the State contribution to the System shall
26not be less than the following indicated percentages of the

 

 

09800HB1166ham003- 23 -LRB098 08855 EFG 41978 a

1applicable employee payroll, even if the indicated percentage
2will produce a State contribution in excess of the amount
3otherwise required under this subsection and subsection (a):
49.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
52002; 10.6% in FY 2003; and 10.8% in FY 2004.
6    Notwithstanding any other provision of this Article, the
7total required State contribution to the System for State
8fiscal year 2006 is $203,783,900.
9    Notwithstanding any other provision of this Article, the
10total required State contribution to the System for State
11fiscal year 2007 is $344,164,400.
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 General Revenue Fund contribution for
20State fiscal year 2010 is $723,703,100 and shall be made from
21the proceeds of bonds sold in fiscal year 2010 pursuant to
22Section 7.2 of the General Obligation Bond Act, less (i) the
23pro rata share of bond sale expenses determined by the System's
24share of total bond proceeds, (ii) any amounts received from
25the General Revenue Fund in fiscal year 2010, and (iii) any
26reduction in bond proceeds due to the issuance of discounted

 

 

09800HB1166ham003- 24 -LRB098 08855 EFG 41978 a

1bonds, if applicable.
2    Notwithstanding any other provision of this Article, the
3total required State General Revenue Fund contribution for
4State fiscal year 2011 is the amount recertified by the System
5on or before April 1, 2011 pursuant to Section 14-135.08 and
6shall be made from the proceeds of bonds sold in fiscal year
72011 pursuant to Section 7.2 of the General Obligation Bond
8Act, less (i) the pro rata share of bond sale expenses
9determined by the System's share of total bond proceeds, (ii)
10any amounts received from the General Revenue Fund in fiscal
11year 2011, and (iii) any reduction in bond proceeds due to the
12issuance of discounted bonds, if applicable.
13    Beginning in State fiscal year 2046, the minimum State
14contribution for each fiscal year shall be the amount needed to
15maintain the total assets of the System at 90% of the total
16actuarial liabilities of the System.
17    Amounts received by the System pursuant to Section 25 of
18the Budget Stabilization Act or Section 8.12 of the State
19Finance Act in any fiscal year do not reduce and do not
20constitute payment of any portion of the minimum State
21contribution required under this Article in that fiscal year.
22Such amounts shall not reduce, and shall not be included in the
23calculation of, the required State contributions under this
24Article in any future year until the System has reached a
25funding ratio of at least 100% 90%. A reference in this Article
26to the "required State contribution" or any substantially

 

 

09800HB1166ham003- 25 -LRB098 08855 EFG 41978 a

1similar term does not include or apply to any amounts payable
2to the System under Section 25 of the Budget Stabilization Act.
3    Notwithstanding any other provision of this Code or the
4Budget Stabilization Act, amounts transferred to the System
5pursuant to the Budget Stabilization Act after the effective
6date of this amendatory Act of the 98th General Assembly do not
7reduce and do not constitute payment of any portion of the
8required State contribution under this Article in that fiscal
9year. Such amounts shall not reduce, and shall not be included
10in the calculation of, the required State contributions under
11this Article in any future year until the System has received
12payment of contributions pursuant to the Budget Stabilization
13Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter through State
17fiscal year 2014, as calculated under this Section and
18certified under Section 14-135.08, shall not exceed an amount
19equal to (i) the amount of the required State contribution that
20would have been calculated under this Section for that fiscal
21year if the System had not received any payments under
22subsection (d) of Section 7.2 of the General Obligation Bond
23Act, minus (ii) the portion of the State's total debt service
24payments for that fiscal year on the bonds issued in fiscal
25year 2003 for the purposes of that Section 7.2, as determined
26and certified by the Comptroller, that is the same as the

 

 

09800HB1166ham003- 26 -LRB098 08855 EFG 41978 a

1System's portion of the total moneys distributed under
2subsection (d) of Section 7.2 of the General Obligation Bond
3Act. In determining this maximum for State fiscal years 2008
4through 2010, however, the amount referred to in item (i) shall
5be increased, as a percentage of the applicable employee
6payroll, in equal increments calculated from the sum of the
7required State contribution for State fiscal year 2007 plus the
8applicable portion of the State's total debt service payments
9for fiscal year 2007 on the bonds issued in fiscal year 2003
10for the purposes of Section 7.2 of the General Obligation Bond
11Act, so that, by State fiscal year 2011, the State is
12contributing at the rate otherwise required under this Section.
13    (f) After the submission of all payments for eligible
14employees from personal services line items in fiscal year 2004
15have been made, the Comptroller shall provide to the System a
16certification of the sum of all fiscal year 2004 expenditures
17for personal services that would have been covered by payments
18to the System under this Section if the provisions of this
19amendatory Act of the 93rd General Assembly had not been
20enacted. Upon receipt of the certification, the System shall
21determine the amount due to the System based on the full rate
22certified by the Board under Section 14-135.08 for fiscal year
232004 in order to meet the State's obligation under this
24Section. The System shall compare this amount due to the amount
25received by the System in fiscal year 2004 through payments
26under this Section and under Section 6z-61 of the State Finance

 

 

09800HB1166ham003- 27 -LRB098 08855 EFG 41978 a

1Act. If the amount due is more than the amount received, the
2difference shall be termed the "Fiscal Year 2004 Shortfall" for
3purposes of this Section, and the Fiscal Year 2004 Shortfall
4shall be satisfied under Section 1.2 of the State Pension Funds
5Continuing Appropriation Act. If the amount due is less than
6the amount received, the difference shall be termed the "Fiscal
7Year 2004 Overpayment" for purposes of this Section, and the
8Fiscal Year 2004 Overpayment shall be repaid by the System to
9the Pension Contribution Fund as soon as practicable after the
10certification.
11    (g) For purposes of determining the required State
12contribution to the System, the value of the System's assets
13shall be equal to the actuarial value of the System's assets,
14which shall be calculated as follows:
15    As of June 30, 2008, the actuarial value of the System's
16assets shall be equal to the market value of the assets as of
17that date. In determining the actuarial value of the System's
18assets for fiscal years after June 30, 2008, any actuarial
19gains or losses from investment return incurred in a fiscal
20year shall be recognized in equal annual amounts over the
215-year period following that fiscal year.
22    (h) For purposes of determining the required State
23contribution to the System for a particular year, the actuarial
24value of assets shall be assumed to earn a rate of return equal
25to the System's actuarially assumed rate of return.
26    (i) After the submission of all payments for eligible

 

 

09800HB1166ham003- 28 -LRB098 08855 EFG 41978 a

1employees from personal services line items paid from the
2General Revenue Fund in fiscal year 2010 have been made, the
3Comptroller shall provide to the System a certification of the
4sum of all fiscal year 2010 expenditures for personal services
5that would have been covered by payments to the System under
6this Section if the provisions of this amendatory Act of the
796th General Assembly had not been enacted. Upon receipt of the
8certification, the System shall determine the amount due to the
9System based on the full rate certified by the Board under
10Section 14-135.08 for fiscal year 2010 in order to meet the
11State's obligation under this Section. The System shall compare
12this amount due to the amount received by the System in fiscal
13year 2010 through payments under this Section. If the amount
14due is more than the amount received, the difference shall be
15termed the "Fiscal Year 2010 Shortfall" for purposes of this
16Section, and the Fiscal Year 2010 Shortfall shall be satisfied
17under Section 1.2 of the State Pension Funds Continuing
18Appropriation Act. If the amount due is less than the amount
19received, the difference shall be termed the "Fiscal Year 2010
20Overpayment" for purposes of this Section, and the Fiscal Year
212010 Overpayment shall be repaid by the System to the General
22Revenue Fund as soon as practicable after the certification.
23    (j) After the submission of all payments for eligible
24employees from personal services line items paid from the
25General Revenue Fund in fiscal year 2011 have been made, the
26Comptroller shall provide to the System a certification of the

 

 

09800HB1166ham003- 29 -LRB098 08855 EFG 41978 a

1sum of all fiscal year 2011 expenditures for personal services
2that would have been covered by payments to the System under
3this Section if the provisions of this amendatory Act of the
496th General Assembly had not been enacted. Upon receipt of the
5certification, the System shall determine the amount due to the
6System based on the full rate certified by the Board under
7Section 14-135.08 for fiscal year 2011 in order to meet the
8State's obligation under this Section. The System shall compare
9this amount due to the amount received by the System in fiscal
10year 2011 through payments under this Section. If the amount
11due is more than the amount received, the difference shall be
12termed the "Fiscal Year 2011 Shortfall" for purposes of this
13Section, and the Fiscal Year 2011 Shortfall shall be satisfied
14under Section 1.2 of the State Pension Funds Continuing
15Appropriation Act. If the amount due is less than the amount
16received, the difference shall be termed the "Fiscal Year 2011
17Overpayment" for purposes of this Section, and the Fiscal Year
182011 Overpayment shall be repaid by the System to the General
19Revenue Fund as soon as practicable after the certification.
20    (k) For fiscal years 2012 and 2013 only, after the
21submission of all payments for eligible employees from personal
22services line items paid from the General Revenue Fund in the
23fiscal year have been made, the Comptroller shall provide to
24the System a certification of the sum of all expenditures in
25the fiscal year for personal services. Upon receipt of the
26certification, the System shall determine the amount due to the

 

 

09800HB1166ham003- 30 -LRB098 08855 EFG 41978 a

1System based on the full rate certified by the Board under
2Section 14-135.08 for the fiscal year in order to meet the
3State's obligation under this Section. The System shall compare
4this amount due to the amount received by the System for the
5fiscal year. If the amount due is more than the amount
6received, the difference shall be termed the "Prior Fiscal Year
7Shortfall" for purposes of this Section, and the Prior Fiscal
8Year Shortfall shall be satisfied under Section 1.2 of the
9State Pension Funds Continuing Appropriation Act. If the amount
10due is less than the amount received, the difference shall be
11termed the "Prior Fiscal Year Overpayment" for purposes of this
12Section, and the Prior Fiscal Year Overpayment shall be repaid
13by the System to the General Revenue Fund as soon as
14practicable after the certification.
15(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1696-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
171-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
18eff. 6-30-12.)
 
19    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
20    Sec. 14-132. Obligations of State; funding guarantee.
21    (a) The payment of the required department contributions,
22all allowances, annuities, benefits granted under this
23Article, and all expenses of administration of the system are
24obligations of the State of Illinois to the extent specified in
25this Article.

 

 

09800HB1166ham003- 31 -LRB098 08855 EFG 41978 a

1    (b) All income of the system shall be credited to a
2separate account for this system in the State treasury and
3shall be used to pay allowances, annuities, benefits and
4administration expense.
5    (c) Pursuant to Article XIII, Section 5 of the 1970
6Constitution of the State of Illinois, beginning on July 1,
72013, the State shall, as a retirement benefit to each
8participant and annuitant of the System be contractually
9obligated to the System (as a fiduciary and trustee of the
10participants and annuitants) to pay the annual required State
11contribution, as determined by the Board of the System using
12generally accepted actuarial principles, as is necessary to
13bring the total assets of the System up to 100% of the total
14actuarial liabilities of the System by the end of State fiscal
15year 2045. As a further retirement benefit and contractual
16obligation, each fiscal year, the State shall pay to each
17designated retirement system the annual required State
18contribution certified by the Board for that fiscal year.
19Payments of the annual required State contribution for each
20fiscal year shall be made in equal monthly installments.
21Additionally, beginning in fiscal year 2014, State transfers to
22the Pension Stabilization Fund pursuant to Section 20 of the
23Budget Stabilization Act and payments to the System pursuant to
24Section 25 of the Budget Stabilization Act shall be further
25retirement benefits and contractual obligations. The transfers
26and payments prescribed in Sections 20 and 25 of the Budget

 

 

09800HB1166ham003- 32 -LRB098 08855 EFG 41978 a

1Stabilization Act shall not be used by the retirement system
2when calculation any pension payment until the System has
3reached a funded level of 100%. This Section and the security
4it provides to participants and annuitants is intended to be,
5and is, a contractual right that is part of the pension
6benefits provided to the participants and annuitants.
7Notwithstanding anything to the contrary in the Court of Claims
8Act or any other law, a designated retirement system has the
9exclusive right to and shall bring a mandamus action in the
10Circuit Court of Sangamon County against the State to compel
11the State to make any installment of the annual required State
12contribution required by this Section, irrespective of other
13remedies that may be available to the System. Each member or
14annuitant of the System has the right to in any judicial
15district in which the System maintains an office if the System
16fails to bring an action specified in this Section,
17irrespective of other remedies that may be available to the
18member or annuitant. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of payroll over the years remaining to and
21including fiscal year 2045 and shall be determined under the
22projected unit credit actuarial cost method.
23(Source: P.A. 80-841.)
 
24    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
25    Sec. 14-133. Contributions on behalf of members.

 

 

09800HB1166ham003- 33 -LRB098 08855 EFG 41978 a

1    (a) Each participating employee shall make contributions
2to the System, based on the employee's compensation, as
3follows:
4        (1) Covered employees, except as indicated below, 3.5%
5    for retirement annuity, and 0.5% for a widow or survivors
6    annuity;
7        (2) Noncovered employees, except as indicated below,
8    7% for retirement annuity and 1% for a widow or survivors
9    annuity;
10        (3) Noncovered employees serving in a position in which
11    "eligible creditable service" as defined in Section 14-110
12    may be earned, 1% for a widow or survivors annuity plus the
13    following amount for retirement annuity: 8.5% through
14    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
15    in 2004 and thereafter;
16        (4) Covered employees serving in a position in which
17    "eligible creditable service" as defined in Section 14-110
18    may be earned, 0.5% for a widow or survivors annuity plus
19    the following amount for retirement annuity: 5% through
20    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
21    and thereafter;
22        (5) Each security employee of the Department of
23    Corrections or of the Department of Human Services who is a
24    covered employee, 0.5% for a widow or survivors annuity
25    plus the following amount for retirement annuity: 5%
26    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%

 

 

09800HB1166ham003- 34 -LRB098 08855 EFG 41978 a

1    in 2004 and thereafter;
2        (6) Each security employee of the Department of
3    Corrections or of the Department of Human Services who is
4    not a covered employee, 1% for a widow or survivors annuity
5    plus the following amount for retirement annuity: 8.5%
6    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
7    11.5% in 2004 and thereafter.
8    (a-5) In addition to the contributions otherwise required
9under this Article, each Tier I participant shall also make the
10following contributions toward the cost of his or her
11retirement annuity from each payment of salary received by him
12or her for service as a member:
13        (1) beginning July 1, 2013 and through June 30, 2014,
14    1% of compensation; and
15        (2) beginning on July 1, 2014, 2% of compensation.
16    (b) Contributions shall be in the form of a deduction from
17compensation and shall be made notwithstanding that the
18compensation paid in cash to the employee shall be reduced
19thereby below the minimum prescribed by law or regulation. Each
20member is deemed to consent and agree to the deductions from
21compensation provided for in this Article, and shall receipt in
22full for salary or compensation.
23(Source: P.A. 92-14, eff. 6-28-01.)
 
24    (40 ILCS 5/15-107.1 new)
25    Sec. 15-107.1. Tier I participant. "Tier I participant": A

 

 

09800HB1166ham003- 35 -LRB098 08855 EFG 41978 a

1participant under this Article, other than a participant in the
2self-managed plan under Section 15-158.2, who first became a
3member or participant before January 1, 2011 under any
4reciprocal retirement system or pension fund established under
5this Code other than a retirement system or pension fund
6established under Article 2, 3, 4, 5, 6, or 18 of this Code and
7who is not a Tier I retiree.
 
8    (40 ILCS 5/15-107.2 new)
9    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
10Tier I participant who is receiving a retirement annuity.
 
11    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
12    Sec. 15-136. Retirement annuities - Amount. The provisions
13of this Section 15-136 apply only to those participants who are
14participating in the traditional benefit package or the
15portable benefit package and do not apply to participants who
16are participating in the self-managed plan.
17    (a) The amount of a participant's retirement annuity,
18expressed in the form of a single-life annuity, shall be
19determined by whichever of the following rules is applicable
20and provides the largest annuity:
21    Rule 1: The retirement annuity shall be 1.67% of final rate
22of earnings for each of the first 10 years of service, 1.90%
23for each of the next 10 years of service, 2.10% for each year
24of service in excess of 20 but not exceeding 30, and 2.30% for

 

 

09800HB1166ham003- 36 -LRB098 08855 EFG 41978 a

1each year in excess of 30; or for persons who retire on or
2after January 1, 1998, 2.2% of the final rate of earnings for
3each year of service.
4    Rule 2: The retirement annuity shall be the sum of the
5following, determined from amounts credited to the participant
6in accordance with the actuarial tables and the effective rate
7of interest in effect at the time the retirement annuity
8begins:
9        (i) the normal annuity which can be provided on an
10    actuarially equivalent basis, by the accumulated normal
11    contributions as of the date the annuity begins;
12        (ii) an annuity from employer contributions of an
13    amount equal to that which can be provided on an
14    actuarially equivalent basis from the accumulated normal
15    contributions made by the participant under Section
16    15-113.6 and Section 15-113.7 plus 1.4 times all other
17    accumulated normal contributions made by the participant;
18    and
19        (iii) the annuity that can be provided on an
20    actuarially equivalent basis from the entire contribution
21    made by the participant under Section 15-113.3.
22    For the purpose of calculating an annuity under this Rule
232, the contribution required under subsection (c-5) of Section
2415-157 shall not be considered when determining the
25participant's accumulated normal contributions under clause
26(i) or the employer contribution under clause (ii).

 

 

09800HB1166ham003- 37 -LRB098 08855 EFG 41978 a

1    With respect to a police officer or firefighter who retires
2on or after August 14, 1998, the accumulated normal
3contributions taken into account under clauses (i) and (ii) of
4this Rule 2 shall include the additional normal contributions
5made by the police officer or firefighter under Section
615-157(a).
7    The amount of a retirement annuity calculated under this
8Rule 2 shall be computed solely on the basis of the
9participant's accumulated normal contributions, as specified
10in this Rule and defined in Section 15-116. Neither an employee
11or employer contribution for early retirement under Section
1215-136.2 nor any other employer contribution shall be used in
13the calculation of the amount of a retirement annuity under
14this Rule 2.
15    This amendatory Act of the 91st General Assembly is a
16clarification of existing law and applies to every participant
17and annuitant without regard to whether status as an employee
18terminates before the effective date of this amendatory Act.
19    This Rule 2 does not apply to a person who first becomes an
20employee under this Article on or after July 1, 2005.
21    Rule 3: The retirement annuity of a participant who is
22employed at least one-half time during the period on which his
23or her final rate of earnings is based, shall be equal to the
24participant's years of service not to exceed 30, multiplied by
25(1) $96 if the participant's final rate of earnings is less
26than $3,500, (2) $108 if the final rate of earnings is at least

 

 

09800HB1166ham003- 38 -LRB098 08855 EFG 41978 a

1$3,500 but less than $4,500, (3) $120 if the final rate of
2earnings is at least $4,500 but less than $5,500, (4) $132 if
3the final rate of earnings is at least $5,500 but less than
4$6,500, (5) $144 if the final rate of earnings is at least
5$6,500 but less than $7,500, (6) $156 if the final rate of
6earnings is at least $7,500 but less than $8,500, (7) $168 if
7the final rate of earnings is at least $8,500 but less than
8$9,500, and (8) $180 if the final rate of earnings is $9,500 or
9more, except that the annuity for those persons having made an
10election under Section 15-154(a-1) shall be calculated and
11payable under the portable retirement benefit program pursuant
12to the provisions of Section 15-136.4.
13    Rule 4: A participant who is at least age 50 and has 25 or
14more years of service as a police officer or firefighter, and a
15participant who is age 55 or over and has at least 20 but less
16than 25 years of service as a police officer or firefighter,
17shall be entitled to a retirement annuity of 2 1/4% of the
18final rate of earnings for each of the first 10 years of
19service as a police officer or firefighter, 2 1/2% for each of
20the next 10 years of service as a police officer or
21firefighter, and 2 3/4% for each year of service as a police
22officer or firefighter in excess of 20. The retirement annuity
23for all other service shall be computed under Rule 1.
24    For purposes of this Rule 4, a participant's service as a
25firefighter shall also include the following:
26        (i) service that is performed while the person is an

 

 

09800HB1166ham003- 39 -LRB098 08855 EFG 41978 a

1    employee under subsection (h) of Section 15-107; and
2        (ii) in the case of an individual who was a
3    participating employee employed in the fire department of
4    the University of Illinois's Champaign-Urbana campus
5    immediately prior to the elimination of that fire
6    department and who immediately after the elimination of
7    that fire department transferred to another job with the
8    University of Illinois, service performed as an employee of
9    the University of Illinois in a position other than police
10    officer or firefighter, from the date of that transfer
11    until the employee's next termination of service with the
12    University of Illinois.
13    Rule 5: The retirement annuity of a participant who elected
14early retirement under the provisions of Section 15-136.2 and
15who, on or before February 16, 1995, brought administrative
16proceedings pursuant to the administrative rules adopted by the
17System to challenge the calculation of his or her retirement
18annuity shall be the sum of the following, determined from
19amounts credited to the participant in accordance with the
20actuarial tables and the prescribed rate of interest in effect
21at the time the retirement annuity begins:
22        (i) the normal annuity which can be provided on an
23    actuarially equivalent basis, by the accumulated normal
24    contributions as of the date the annuity begins; and
25        (ii) an annuity from employer contributions of an
26    amount equal to that which can be provided on an

 

 

09800HB1166ham003- 40 -LRB098 08855 EFG 41978 a

1    actuarially equivalent basis from the accumulated normal
2    contributions made by the participant under Section
3    15-113.6 and Section 15-113.7 plus 1.4 times all other
4    accumulated normal contributions made by the participant;
5    and
6        (iii) an annuity which can be provided on an
7    actuarially equivalent basis from the employee
8    contribution for early retirement under Section 15-136.2,
9    and an annuity from employer contributions of an amount
10    equal to that which can be provided on an actuarially
11    equivalent basis from the employee contribution for early
12    retirement under Section 15-136.2.
13    In no event shall a retirement annuity under this Rule 5 be
14lower than the amount obtained by adding (1) the monthly amount
15obtained by dividing the combined employee and employer
16contributions made under Section 15-136.2 by the System's
17annuity factor for the age of the participant at the beginning
18of the annuity payment period and (2) the amount equal to the
19participant's annuity if calculated under Rule 1, reduced under
20Section 15-136(b) as if no contributions had been made under
21Section 15-136.2.
22    With respect to a participant who is qualified for a
23retirement annuity under this Rule 5 whose retirement annuity
24began before the effective date of this amendatory Act of the
2591st General Assembly, and for whom an employee contribution
26was made under Section 15-136.2, the System shall recalculate

 

 

09800HB1166ham003- 41 -LRB098 08855 EFG 41978 a

1the retirement annuity under this Rule 5 and shall pay any
2additional amounts due in the manner provided in Section
315-186.1 for benefits mistakenly set too low.
4    The amount of a retirement annuity calculated under this
5Rule 5 shall be computed solely on the basis of those
6contributions specifically set forth in this Rule 5. Except as
7provided in clause (iii) of this Rule 5, neither an employee
8nor employer contribution for early retirement under Section
915-136.2, nor any other employer contribution, shall be used in
10the calculation of the amount of a retirement annuity under
11this Rule 5.
12    The General Assembly has adopted the changes set forth in
13Section 25 of this amendatory Act of the 91st General Assembly
14in recognition that the decision of the Appellate Court for the
15Fourth District in Mattis v. State Universities Retirement
16System et al. might be deemed to give some right to the
17plaintiff in that case. The changes made by Section 25 of this
18amendatory Act of the 91st General Assembly are a legislative
19implementation of the decision of the Appellate Court for the
20Fourth District in Mattis v. State Universities Retirement
21System et al. with respect to that plaintiff.
22    The changes made by Section 25 of this amendatory Act of
23the 91st General Assembly apply without regard to whether the
24person is in service as an employee on or after its effective
25date.
26    (b) The retirement annuity provided under Rules 1 and 3

 

 

09800HB1166ham003- 42 -LRB098 08855 EFG 41978 a

1above shall be reduced by 1/2 of 1% for each month the
2participant is under age 60 at the time of retirement. However,
3this reduction shall not apply in the following cases:
4        (1) For a disabled participant whose disability
5    benefits have been discontinued because he or she has
6    exhausted eligibility for disability benefits under clause
7    (6) of Section 15-152;
8        (2) For a participant who has at least the number of
9    years of service required to retire at any age under
10    subsection (a) of Section 15-135; or
11        (3) For that portion of a retirement annuity which has
12    been provided on account of service of the participant
13    during periods when he or she performed the duties of a
14    police officer or firefighter, if these duties were
15    performed for at least 5 years immediately preceding the
16    date the retirement annuity is to begin.
17    (c) The maximum retirement annuity provided under Rules 1,
182, 4, and 5 shall be the lesser of (1) the annual limit of
19benefits as specified in Section 415 of the Internal Revenue
20Code of 1986, as such Section may be amended from time to time
21and as such benefit limits shall be adjusted by the
22Commissioner of Internal Revenue, and (2) 80% of final rate of
23earnings.
24    (d) An annuitant whose status as an employee terminates
25after August 14, 1969 shall receive automatic increases in his
26or her retirement annuity as follows:

 

 

09800HB1166ham003- 43 -LRB098 08855 EFG 41978 a

1    Effective January 1 immediately following the date the
2retirement annuity begins, the annuitant shall receive an
3increase in his or her monthly retirement annuity of 0.125% of
4the monthly retirement annuity provided under Rule 1, Rule 2,
5Rule 3, Rule 4, or Rule 5, contained in this Section,
6multiplied by the number of full months which elapsed from the
7date the retirement annuity payments began to January 1, 1972,
8plus 0.1667% of such annuity, multiplied by the number of full
9months which elapsed from January 1, 1972, or the date the
10retirement annuity payments began, whichever is later, to
11January 1, 1978, plus 0.25% of such annuity multiplied by the
12number of full months which elapsed from January 1, 1978, or
13the date the retirement annuity payments began, whichever is
14later, to the effective date of the increase.
15    The annuitant shall receive an increase in his or her
16monthly retirement annuity on each January 1 thereafter during
17the annuitant's life of 3% of the monthly annuity provided
18under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
19this Section. The change made under this subsection by P.A.
2081-970 is effective January 1, 1980 and applies to each
21annuitant whose status as an employee terminates before or
22after that date.
23    Beginning January 1, 1990, all automatic annual increases
24payable under this Section shall be calculated as a percentage
25of the total annuity payable at the time of the increase,
26including all increases previously granted under this Article.

 

 

09800HB1166ham003- 44 -LRB098 08855 EFG 41978 a

1    The change made in this subsection by P.A. 85-1008 is
2effective January 26, 1988, and is applicable without regard to
3whether status as an employee terminated before that date.
4    (e) If, on January 1, 1987, or the date the retirement
5annuity payment period begins, whichever is later, the sum of
6the retirement annuity provided under Rule 1 or Rule 2 of this
7Section and the automatic annual increases provided under the
8preceding subsection or Section 15-136.1, amounts to less than
9the retirement annuity which would be provided by Rule 3, the
10retirement annuity shall be increased as of January 1, 1987, or
11the date the retirement annuity payment period begins,
12whichever is later, to the amount which would be provided by
13Rule 3 of this Section. Such increased amount shall be
14considered as the retirement annuity in determining benefits
15provided under other Sections of this Article. This paragraph
16applies without regard to whether status as an employee
17terminated before the effective date of this amendatory Act of
181987, provided that the annuitant was employed at least
19one-half time during the period on which the final rate of
20earnings was based.
21    (f) A participant is entitled to such additional annuity as
22may be provided on an actuarially equivalent basis, by any
23accumulated additional contributions to his or her credit.
24However, the additional contributions made by the participant
25toward the automatic increases in annuity provided under this
26Section and the contributions made under subsection (c-5) of

 

 

09800HB1166ham003- 45 -LRB098 08855 EFG 41978 a

1Section 15-157 by this amendatory Act of the 98th General
2Assembly shall not be taken into account in determining the
3amount of such additional annuity.
4    (g) If, (1) by law, a function of a governmental unit, as
5defined by Section 20-107 of this Code, is transferred in whole
6or in part to an employer, and (2) a participant transfers
7employment from such governmental unit to such employer within
86 months after the transfer of the function, and (3) the sum of
9(A) the annuity payable to the participant under Rule 1, 2, or
103 of this Section (B) all proportional annuities payable to the
11participant by all other retirement systems covered by Article
1220, and (C) the initial primary insurance amount to which the
13participant is entitled under the Social Security Act, is less
14than the retirement annuity which would have been payable if
15all of the participant's pension credits validated under
16Section 20-109 had been validated under this system, a
17supplemental annuity equal to the difference in such amounts
18shall be payable to the participant.
19    (h) On January 1, 1981, an annuitant who was receiving a
20retirement annuity on or before January 1, 1971 shall have his
21or her retirement annuity then being paid increased $1 per
22month for each year of creditable service. On January 1, 1982,
23an annuitant whose retirement annuity began on or before
24January 1, 1977, shall have his or her retirement annuity then
25being paid increased $1 per month for each year of creditable
26service.

 

 

09800HB1166ham003- 46 -LRB098 08855 EFG 41978 a

1    (i) On January 1, 1987, any annuitant whose retirement
2annuity began on or before January 1, 1977, shall have the
3monthly retirement annuity increased by an amount equal to 8
4per year of creditable service times the number of years that
5have elapsed since the annuity began.
6(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
7    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
8    Sec. 15-155. Employer contributions.
9    (a) The State of Illinois shall make contributions by
10appropriations of amounts which, together with the other
11employer contributions from trust, federal, and other funds,
12employee contributions, income from investments, and other
13income of this System, will be sufficient to meet the cost of
14maintaining and administering the System on a 100% 90% funded
15basis in accordance with actuarial recommendations.
16    The Board shall determine the amount of State contributions
17required for each fiscal year on the basis of the actuarial
18tables and other assumptions adopted by the Board and the
19recommendations of the actuary, using the formula in subsection
20(a-1).
21    (a-1) For State fiscal years 2015 through 2045, 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 assets of the System up to 100%
25of the total actuarial liabilities of the System by the end of

 

 

09800HB1166ham003- 47 -LRB098 08855 EFG 41978 a

1State fiscal year 2045. 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 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 2012 through 2014 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.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2006 is
23$166,641,900.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2007 is
26$252,064,100.

 

 

09800HB1166ham003- 48 -LRB098 08855 EFG 41978 a

1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$702,514,000 and shall be made from the State Pensions Fund and
10proceeds of bonds sold in fiscal year 2010 pursuant to Section
117.2 of the General Obligation Bond Act, less (i) the pro rata
12share of bond sale expenses determined by the System's share of
13total bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2010, (iii) any reduction in bond
15proceeds due to the issuance of discounted bonds, if
16applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to Section 15-165 and shall be made from the State
21Pensions Fund and proceeds of bonds sold in fiscal year 2011
22pursuant to Section 7.2 of the General Obligation Bond Act,
23less (i) the pro rata share of bond sale expenses determined by
24the System's share of total bond proceeds, (ii) any amounts
25received from the General Revenue Fund in fiscal year 2011, and
26(iii) any reduction in bond proceeds due to the issuance of

 

 

09800HB1166ham003- 49 -LRB098 08855 EFG 41978 a

1discounted bonds, if applicable.
2    Beginning in State fiscal year 2046, the minimum State
3contribution for each fiscal year shall be the amount needed to
4maintain the total assets of the System at 90% of the total
5actuarial liabilities of the System.
6    Amounts received by the System pursuant to Section 25 of
7the Budget Stabilization Act or Section 8.12 of the State
8Finance Act in any fiscal year do not reduce and do not
9constitute payment of any portion of the minimum State
10contribution required under this Article in that fiscal year.
11Such amounts shall not reduce, and shall not be included in the
12calculation of, the required State contributions under this
13Article in any future year until the System has reached a
14funding ratio of at least 100% 90%. A reference in this Article
15to the "required State contribution" or any substantially
16similar term does not include or apply to any amounts payable
17to the System under Section 25 of the Budget Stabilization Act.
18    Notwithstanding any other provision of this Code or the
19Budget Stabilization Act, amounts transferred to the System
20pursuant to the Budget Stabilization Act after the effective
21date of this amendatory Act of the 98th General Assembly do not
22reduce and do not constitute payment of any portion of the
23required State contribution under this Article in that fiscal
24year. Such amounts shall not reduce, and shall not be included
25in the calculation of, the required State contributions under
26this Article in any future year until the System has received

 

 

09800HB1166ham003- 50 -LRB098 08855 EFG 41978 a

1payment of contributions pursuant to the Budget Stabilization
2Act.
3    Notwithstanding any other provision of this Section, the
4required State contribution for State fiscal year 2005 and for
5fiscal year 2008 and each fiscal year thereafter through State
6fiscal year 2014, as calculated under this Section and
7certified under Section 15-165, shall not exceed an amount
8equal to (i) the amount of the required State contribution that
9would have been calculated under this Section for that fiscal
10year if the System had not received any payments under
11subsection (d) of Section 7.2 of the General Obligation Bond
12Act, minus (ii) the portion of the State's total debt service
13payments for that fiscal year on the bonds issued in fiscal
14year 2003 for the purposes of that Section 7.2, as determined
15and certified by the Comptroller, that is the same as the
16System's portion of the total moneys distributed under
17subsection (d) of Section 7.2 of the General Obligation Bond
18Act. In determining this maximum for State fiscal years 2008
19through 2010, however, the amount referred to in item (i) shall
20be increased, as a percentage of the applicable employee
21payroll, in equal increments calculated from the sum of the
22required State contribution for State fiscal year 2007 plus the
23applicable portion of the State's total debt service payments
24for fiscal year 2007 on the bonds issued in fiscal year 2003
25for the purposes of Section 7.2 of the General Obligation Bond
26Act, so that, by State fiscal year 2011, the State is

 

 

09800HB1166ham003- 51 -LRB098 08855 EFG 41978 a

1contributing at the rate otherwise required under this Section.
2    (b) If an employee is paid from trust or federal funds, the
3employer shall pay to the Board contributions from those funds
4which are sufficient to cover the accruing normal costs on
5behalf of the employee. However, universities having employees
6who are compensated out of local auxiliary funds, income funds,
7or service enterprise funds are not required to pay such
8contributions on behalf of those employees. The local auxiliary
9funds, income funds, and service enterprise funds of
10universities shall not be considered trust funds for the
11purpose of this Article, but funds of alumni associations,
12foundations, and athletic associations which are affiliated
13with the universities included as employers under this Article
14and other employers which do not receive State appropriations
15are considered to be trust funds for the purpose of this
16Article.
17    (b-1) The City of Urbana and the City of Champaign shall
18each make employer contributions to this System for their
19respective firefighter employees who participate in this
20System pursuant to subsection (h) of Section 15-107. The rate
21of contributions to be made by those municipalities shall be
22determined annually by the Board on the basis of the actuarial
23assumptions adopted by the Board and the recommendations of the
24actuary, and shall be expressed as a percentage of salary for
25each such employee. The Board shall certify the rate to the
26affected municipalities as soon as may be practical. The

 

 

09800HB1166ham003- 52 -LRB098 08855 EFG 41978 a

1employer contributions required under this subsection shall be
2remitted by the municipality to the System at the same time and
3in the same manner as employee contributions.
4    (c) Through State fiscal year 1995: The total employer
5contribution shall be apportioned among the various funds of
6the State and other employers, whether trust, federal, or other
7funds, in accordance with actuarial procedures approved by the
8Board. State of Illinois contributions for employers receiving
9State appropriations for personal services shall be payable
10from appropriations made to the employers or to the System. The
11contributions for Class I community colleges covering earnings
12other than those paid from trust and federal funds, shall be
13payable solely from appropriations to the Illinois Community
14College Board or the System for employer contributions.
15    (d) Beginning in State fiscal year 1996, the required State
16contributions to the System shall be appropriated directly to
17the System and shall be payable through vouchers issued in
18accordance with subsection (c) of Section 15-165, except as
19provided in subsection (g).
20    (e) The State Comptroller shall draw warrants payable to
21the System upon proper certification by the System or by the
22employer in accordance with the appropriation laws and this
23Code.
24    (f) Normal costs under this Section means liability for
25pensions and other benefits which accrues to the System because
26of the credits earned for service rendered by the participants

 

 

09800HB1166ham003- 53 -LRB098 08855 EFG 41978 a

1during the fiscal year and expenses of administering the
2System, but shall not include the principal of or any
3redemption premium or interest on any bonds issued by the Board
4or any expenses incurred or deposits required in connection
5therewith.
6    (g) If the amount of a participant's earnings for any
7academic year used to determine the final rate of earnings,
8determined on a full-time equivalent basis, exceeds the amount
9of his or her earnings with the same employer for the previous
10academic year, determined on a full-time equivalent basis, by
11more than 6%, the participant's employer shall pay to the
12System, in addition to all other payments required under this
13Section and in accordance with guidelines established by the
14System, the present value of the increase in benefits resulting
15from the portion of the increase in earnings that is in excess
16of 6%. This present value shall be computed by the System on
17the basis of the actuarial assumptions and tables used in the
18most recent actuarial valuation of the System that is available
19at the time of the computation. The System may require the
20employer to provide any pertinent information or
21documentation.
22    Whenever it determines that a payment is or may be required
23under this subsection (g), the System shall calculate the
24amount of the payment and bill the employer for that amount.
25The bill shall specify the calculations used to determine the
26amount due. If the employer disputes the amount of the bill, it

 

 

09800HB1166ham003- 54 -LRB098 08855 EFG 41978 a

1may, within 30 days after receipt of the bill, apply to the
2System in writing for a recalculation. The application must
3specify in detail the grounds of the dispute and, if the
4employer asserts that the calculation is subject to subsection
5(h) or (i) of this Section, must include an affidavit setting
6forth and attesting to all facts within the employer's
7knowledge that are pertinent to the applicability of subsection
8(h) or (i). Upon receiving a timely application for
9recalculation, the System shall review the application and, if
10appropriate, recalculate the amount due.
11    The employer contributions required under this subsection
12(g) (f) may be paid in the form of a lump sum within 90 days
13after receipt of the bill. If the employer contributions are
14not paid within 90 days after receipt of the bill, then
15interest will be charged at a rate equal to the System's annual
16actuarially assumed rate of return on investment compounded
17annually from the 91st day after receipt of the bill. Payments
18must be concluded within 3 years after the employer's receipt
19of the bill.
20    (h) This subsection (h) applies only to payments made or
21salary increases given on or after June 1, 2005 but before July
221, 2011. The changes made by Public Act 94-1057 shall not
23require the System to refund any payments received before July
2431, 2006 (the effective date of Public Act 94-1057).
25    When assessing payment for any amount due under subsection
26(g), the System shall exclude earnings increases paid to

 

 

09800HB1166ham003- 55 -LRB098 08855 EFG 41978 a

1participants under contracts or collective bargaining
2agreements entered into, amended, or renewed before June 1,
32005.
4    When assessing payment for any amount due under subsection
5(g), the System shall exclude earnings increases paid to a
6participant at a time when the participant is 10 or more years
7from retirement eligibility under Section 15-135.
8    When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases resulting from
10overload work, including a contract for summer teaching, or
11overtime when the employer has certified to the System, and the
12System has approved the certification, that: (i) in the case of
13overloads (A) the overload work is for the sole purpose of
14academic instruction in excess of the standard number of
15instruction hours for a full-time employee occurring during the
16academic year that the overload is paid and (B) the earnings
17increases are equal to or less than the rate of pay for
18academic instruction computed using the participant's current
19salary rate and work schedule; and (ii) in the case of
20overtime, the overtime was necessary for the educational
21mission.
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude any earnings increase resulting
24from (i) a promotion for which the employee moves from one
25classification to a higher classification under the State
26Universities Civil Service System, (ii) a promotion in academic

 

 

09800HB1166ham003- 56 -LRB098 08855 EFG 41978 a

1rank for a tenured or tenure-track faculty position, or (iii) a
2promotion that the Illinois Community College Board has
3recommended in accordance with subsection (k) of this Section.
4These earnings increases shall be excluded only if the
5promotion is to a position that has existed and been filled by
6a member for no less than one complete academic year and the
7earnings increase as a result of the promotion is an increase
8that results in an amount no greater than the average salary
9paid for other similar positions.
10    (i) When assessing payment for any amount due under
11subsection (g), the System shall exclude any salary increase
12described in subsection (h) of this Section given on or after
13July 1, 2011 but before July 1, 2014 under a contract or
14collective bargaining agreement entered into, amended, or
15renewed on or after June 1, 2005 but before July 1, 2011.
16Notwithstanding any other provision of this Section, any
17payments made or salary increases given after June 30, 2014
18shall be used in assessing payment for any amount due under
19subsection (g) of this Section.
20    (j) The System shall prepare a report and file copies of
21the report with the Governor and the General Assembly by
22January 1, 2007 that contains all of the following information:
23        (1) The number of recalculations required by the
24    changes made to this Section by Public Act 94-1057 for each
25    employer.
26        (2) The dollar amount by which each employer's

 

 

09800HB1166ham003- 57 -LRB098 08855 EFG 41978 a

1    contribution to the System was changed due to
2    recalculations required by Public Act 94-1057.
3        (3) The total amount the System received from each
4    employer as a result of the changes made to this Section by
5    Public Act 94-4.
6        (4) The increase in the required State contribution
7    resulting from the changes made to this Section by Public
8    Act 94-1057.
9    (k) The Illinois Community College Board shall adopt rules
10for recommending lists of promotional positions submitted to
11the Board by community colleges and for reviewing the
12promotional lists on an annual basis. When recommending
13promotional lists, the Board shall consider the similarity of
14the positions submitted to those positions recognized for State
15universities by the State Universities Civil Service System.
16The Illinois Community College Board shall file a copy of its
17findings with the System. The System shall consider the
18findings of the Illinois Community College Board when making
19determinations under this Section. The System shall not exclude
20any earnings increases resulting from a promotion when the
21promotion was not submitted by a community college. Nothing in
22this subsection (k) shall require any community college to
23submit any information to the Community College Board.
24    (l) For purposes of determining the required State
25contribution to the System, the value of the System's assets
26shall be equal to the actuarial value of the System's assets,

 

 

09800HB1166ham003- 58 -LRB098 08855 EFG 41978 a

1which shall be calculated as follows:
2    As of June 30, 2008, the actuarial value of the System's
3assets shall be equal to the market value of the assets as of
4that date. In determining the actuarial value of the System's
5assets for fiscal years after June 30, 2008, any actuarial
6gains or losses from investment return incurred in a fiscal
7year shall be recognized in equal annual amounts over the
85-year period following that fiscal year.
9    (m) For purposes of determining the required State
10contribution to the system for a particular year, the actuarial
11value of assets shall be assumed to earn a rate of return equal
12to the system's actuarially assumed rate of return.
13(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
157-13-12; revised 10-17-12.)
 
16    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
17    Sec. 15-156. Obligations of State; funding guarantees.
18    (a) The payment of (1) the required State contributions,
19(2) all benefits granted under this system and (3) all expenses
20in connection with the administration and operation thereof are
21obligations of the State of Illinois to the extent specified in
22this Article. The accumulated employee normal, additional and
23survivors insurance contributions credited to the accounts of
24active and inactive participants shall not be used to pay the
25State's share of the obligations.

 

 

09800HB1166ham003- 59 -LRB098 08855 EFG 41978 a

1    (c) Pursuant to Article XIII, Section 5 of the 1970
2Constitution of the State of Illinois, beginning on July 1,
32013, the State shall, as a retirement benefit to each
4participant and annuitant of the System be contractually
5obligated to the System (as a fiduciary and trustee of the
6participants and annuitants) to pay the annual required State
7contribution, as determined by the Board of the System using
8generally accepted actuarial principles, as is necessary to
9bring the total assets of the System up to 100% of the total
10actuarial liabilities of the System by the end of State fiscal
11year 2045. As a further retirement benefit and contractual
12obligation, each fiscal year, the State shall pay to each
13designated retirement system the annual required State
14contribution certified by the Board for that fiscal year.
15Payments of the annual required State contribution for each
16fiscal year shall be made in equal monthly installments.
17Additionally, beginning in fiscal year 2014, State transfers to
18the Pension Stabilization Fund pursuant to Section 20 of the
19Budget Stabilization Act and payments to the System pursuant to
20Section 25 of the Budget Stabilization Act shall be further
21retirement benefits and contractual obligations. The transfers
22and payments prescribed in Sections 20 and 25 of the Budget
23Stabilization Act shall not be used by the retirement system
24when calculation any pension payment until the System has
25reached a funded level of 100%. This Section and the security
26it provides to participants and annuitants is intended to be,

 

 

09800HB1166ham003- 60 -LRB098 08855 EFG 41978 a

1and is, a contractual right that is part of the pension
2benefits provided to the participants and annuitants.
3Notwithstanding anything to the contrary in the Court of Claims
4Act or any other law, a designated retirement system has the
5exclusive right to and shall bring a mandamus action in the
6Circuit Court of Champaign County against the State to compel
7the State to make any installment of the annual required State
8contribution required by this Section, irrespective of other
9remedies that may be available to the System. Each member or
10annuitant of the System has the right to in any judicial
11district in which the System maintains an office if the System
12fails to bring an action specified in this Section,
13irrespective of other remedies that may be available to the
14member or annuitant. In making these determinations, the
15required State contribution shall be calculated each year as a
16level percentage of payroll over the years remaining to and
17including fiscal year 2045 and shall be determined under the
18projected unit credit actuarial cost method.
19(Source: P.A. 83-1440.)
 
20    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
21    Sec. 15-157. Employee Contributions.
22    (a) Each participating employee shall make contributions
23towards the retirement benefits payable under the retirement
24program applicable to the employee from each payment of
25earnings applicable to employment under this system on and

 

 

09800HB1166ham003- 61 -LRB098 08855 EFG 41978 a

1after the date of becoming a participant as follows: Prior to
2September 1, 1949, 3 1/2% of earnings; from September 1, 1949
3to August 31, 1955, 5%; from September 1, 1955 to August 31,
41969, 6%; from September 1, 1969, 6 1/2%. These contributions
5are to be considered as normal contributions for purposes of
6this Article.
7    Each participant who is a police officer or firefighter
8shall make normal contributions of 8% of each payment of
9earnings applicable to employment as a police officer or
10firefighter under this system on or after September 1, 1981,
11unless he or she files with the board within 60 days after the
12effective date of this amendatory Act of 1991 or 60 days after
13the board receives notice that he or she is employed as a
14police officer or firefighter, whichever is later, a written
15notice waiving the retirement formula provided by Rule 4 of
16Section 15-136. This waiver shall be irrevocable. If a
17participant had met the conditions set forth in Section
1815-132.1 prior to the effective date of this amendatory Act of
191991 but failed to make the additional normal contributions
20required by this paragraph, he or she may elect to pay the
21additional contributions plus compound interest at the
22effective rate. If such payment is received by the board, the
23service shall be considered as police officer service in
24calculating the retirement annuity under Rule 4 of Section
2515-136. While performing service described in clause (i) or
26(ii) of Rule 4 of Section 15-136, a participating employee

 

 

09800HB1166ham003- 62 -LRB098 08855 EFG 41978 a

1shall be deemed to be employed as a firefighter for the purpose
2of determining the rate of employee contributions under this
3Section.
4    (b) Starting September 1, 1969, each participating
5employee shall make additional contributions of 1/2 of 1% of
6earnings to finance a portion of the cost of the annual
7increases in retirement annuity provided under Section 15-136,
8except that with respect to participants in the self-managed
9plan this additional contribution shall be used to finance the
10benefits obtained under that retirement program.
11    (c) In addition to the amounts described in subsections (a)
12and (b) of this Section, each participating employee shall make
13contributions of 1% of earnings applicable under this system on
14and after August 1, 1959. The contributions made under this
15subsection (c) shall be considered as survivor's insurance
16contributions for purposes of this Article if the employee is
17covered under the traditional benefit package, and such
18contributions shall be considered as additional contributions
19for purposes of this Article if the employee is participating
20in the self-managed plan or has elected to participate in the
21portable benefit package and has completed the applicable
22one-year waiting period. Contributions in excess of $80 during
23any fiscal year beginning before August 31, 1969 and in excess
24of $120 during any fiscal year thereafter until September 1,
251971 shall be considered as additional contributions for
26purposes of this Article.

 

 

09800HB1166ham003- 63 -LRB098 08855 EFG 41978 a

1    (c-5) In addition to the contributions otherwise required
2under this Article, each Tier I participant shall also make the
3following contributions toward the cost of his or her
4retirement annuity from each payment of salary received by him
5or her for service as a member:
6        (1) beginning July 1, 2013 and through June 30, 2014,
7    1% of earnings; and
8        (2) beginning on July 1, 2014, 2% of earnings.
9    Except as otherwise specified, these contributions are to
10be considered as normal contributions for purposes of this
11Article.
12    (d) If the board by board rule so permits and subject to
13such conditions and limitations as may be specified in its
14rules, a participant may make other additional contributions of
15such percentage of earnings or amounts as the participant shall
16elect in a written notice thereof received by the board.
17    (e) That fraction of a participant's total accumulated
18normal contributions, the numerator of which is equal to the
19number of years of service in excess of that which is required
20to qualify for the maximum retirement annuity, and the
21denominator of which is equal to the total service of the
22participant, shall be considered as accumulated additional
23contributions. The determination of the applicable maximum
24annuity and the adjustment in contributions required by this
25provision shall be made as of the date of the participant's
26retirement.

 

 

09800HB1166ham003- 64 -LRB098 08855 EFG 41978 a

1    (f) Notwithstanding the foregoing, a participating
2employee shall not be required to make contributions under this
3Section after the date upon which continuance of such
4contributions would otherwise cause his or her retirement
5annuity to exceed the maximum retirement annuity as specified
6in clause (1) of subsection (c) of Section 15-136.
7    (g) A participating employee may make contributions for the
8purchase of service credit under this Article.
9(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
10eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1190-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
12    (40 ILCS 5/16-106.4 new)
13    Sec. 16-106.4. Tier I member. "Tier I member": A member
14under this Article who first became a member or participant
15before January 1, 2011 under any reciprocal retirement system
16or pension fund established under this Code other than a
17retirement system or pension fund established under Article 2,
183, 4, 5, 6, or 18 of this Code and who is not a Tier I retiree.
 
19    (40 ILCS 5/16-106.5 new)
20    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
21Tier I member who is receiving a retirement annuity.
 
22    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
23    Sec. 16-133. Retirement annuity; amount.

 

 

09800HB1166ham003- 65 -LRB098 08855 EFG 41978 a

1    (a) The amount of the retirement annuity shall be (i) in
2the case of a person who first became a teacher under this
3Article before July 1, 2005, the larger of the amounts
4determined under paragraphs (A) and (B) below, or (ii) in the
5case of a person who first becomes a teacher under this Article
6on or after July 1, 2005, the amount determined under the
7applicable provisions of paragraph (B):
8        (A) An amount consisting of the sum of the following:
9            (1) An amount that can be provided on an
10        actuarially equivalent basis by the member's
11        accumulated contributions at the time of retirement;
12        and
13            (2) The sum of (i) the amount that can be provided
14        on an actuarially equivalent basis by the member's
15        accumulated contributions representing service prior
16        to July 1, 1947, and (ii) the amount that can be
17        provided on an actuarially equivalent basis by the
18        amount obtained by multiplying 1.4 times the member's
19        accumulated contributions covering service subsequent
20        to June 30, 1947; and
21            (3) If there is prior service, 2 times the amount
22        that would have been determined under subparagraph (2)
23        of paragraph (A) above on account of contributions
24        which would have been made during the period of prior
25        service creditable to the member had the System been in
26        operation and had the member made contributions at the

 

 

09800HB1166ham003- 66 -LRB098 08855 EFG 41978 a

1        contribution rate in effect prior to July 1, 1947.
2        For the purpose of calculating the sum provided under
3    this paragraph (A), the contribution required under
4    subsection (a-5) of Section 16-152 shall not be considered
5    when determining the amount of the member's accumulated
6    contributions under subparagraph (1) or (2).
7        This paragraph (A) does not apply to a person who first
8    becomes a teacher under this Article on or after July 1,
9    2005.
10        (B) An amount consisting of the greater of the
11    following:
12            (1) For creditable service earned before July 1,
13        1998 that has not been augmented under Section
14        16-129.1: 1.67% of final average salary for each of the
15        first 10 years of creditable service, 1.90% of final
16        average salary for each year in excess of 10 but not
17        exceeding 20, 2.10% of final average salary for each
18        year in excess of 20 but not exceeding 30, and 2.30% of
19        final average salary for each year in excess of 30; and
20            For creditable service earned on or after July 1,
21        1998 by a member who has at least 24 years of
22        creditable service on July 1, 1998 and who does not
23        elect to augment service under Section 16-129.1: 2.2%
24        of final average salary for each year of creditable
25        service earned on or after July 1, 1998 but before the
26        member reaches a total of 30 years of creditable

 

 

09800HB1166ham003- 67 -LRB098 08855 EFG 41978 a

1        service and 2.3% of final average salary for each year
2        of creditable service earned on or after July 1, 1998
3        and after the member reaches a total of 30 years of
4        creditable service; and
5            For all other creditable service: 2.2% of final
6        average salary for each year of creditable service; or
7            (2) 1.5% of final average salary for each year of
8        creditable service plus the sum $7.50 for each of the
9        first 20 years of creditable service.
10    The amount of the retirement annuity determined under this
11    paragraph (B) shall be reduced by 1/2 of 1% for each month
12    that the member is less than age 60 at the time the
13    retirement annuity begins. However, this reduction shall
14    not apply (i) if the member has at least 35 years of
15    creditable service, or (ii) if the member retires on
16    account of disability under Section 16-149.2 of this
17    Article with at least 20 years of creditable service, or
18    (iii) if the member (1) has earned during the period
19    immediately preceding the last day of service at least one
20    year of contributing creditable service as an employee of a
21    department as defined in Section 14-103.04, (2) has earned
22    at least 5 years of contributing creditable service as an
23    employee of a department as defined in Section 14-103.04,
24    (3) retires on or after January 1, 2001, and (4) retires
25    having attained an age which, when added to the number of
26    years of his or her total creditable service, equals at

 

 

09800HB1166ham003- 68 -LRB098 08855 EFG 41978 a

1    least 85. Portions of years shall be counted as decimal
2    equivalents.
3    (b) For purposes of this Section, final average salary
4shall be the average salary for the highest 4 consecutive years
5within the last 10 years of creditable service as determined
6under rules of the board. The minimum final average salary
7shall be considered to be $2,400 per year.
8    In the determination of final average salary for members
9other than elected officials and their appointees when such
10appointees are allowed by statute, that part of a member's
11salary for any year beginning after June 30, 1979 which exceeds
12the member's annual full-time salary rate with the same
13employer for the preceding year by more than 20% shall be
14excluded. The exclusion shall not apply in any year in which
15the member's creditable earnings are less than 50% of the
16preceding year's mean salary for downstate teachers as
17determined by the survey of school district salaries provided
18in Section 2-3.103 of the School Code.
19    (c) In determining the amount of the retirement annuity
20under paragraph (B) of this Section, a fractional year shall be
21granted proportional credit.
22    (d) The retirement annuity determined under paragraph (B)
23of this Section shall be available only to members who render
24teaching service after July 1, 1947 for which member
25contributions are required, and to annuitants who re-enter
26under the provisions of Section 16-150.

 

 

09800HB1166ham003- 69 -LRB098 08855 EFG 41978 a

1    (e) The maximum retirement annuity provided under
2paragraph (B) of this Section shall be 75% of final average
3salary.
4    (f) A member retiring after the effective date of this
5amendatory Act of 1998 shall receive a pension equal to 75% of
6final average salary if the member is qualified to receive a
7retirement annuity equal to at least 74.6% of final average
8salary under this Article or as proportional annuities under
9Article 20 of this Code.
10(Source: P.A. 94-4, eff. 6-1-05.)
 
11    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
12    Sec. 16-152. Contributions by members.
13    (a) Each member shall make contributions for membership
14service to this System as follows:
15        (1) Effective July 1, 1998, contributions of 7.50% of
16    salary towards the cost of the retirement annuity. Such
17    contributions shall be deemed "normal contributions".
18        (2) Effective July 1, 1969, contributions of 1/2 of 1%
19    of salary toward the cost of the automatic annual increase
20    in retirement annuity provided under Section 16-133.1.
21        (3) Effective July 24, 1959, contributions of 1% of
22    salary towards the cost of survivor benefits. Such
23    contributions shall not be credited to the individual
24    account of the member and shall not be subject to refund
25    except as provided under Section 16-143.2.

 

 

09800HB1166ham003- 70 -LRB098 08855 EFG 41978 a

1        (4) Effective July 1, 2005, contributions of 0.40% of
2    salary toward the cost of the early retirement without
3    discount option provided under Section 16-133.2. This
4    contribution shall cease upon termination of the early
5    retirement without discount option as provided in Section
6    16-176.
7    (a-5) In addition to the contributions otherwise required
8under this Article, each Tier I participant shall also make the
9following contributions toward the cost of his or her
10retirement annuity from each payment of salary received by him
11or her for service as a member:
12        (1) beginning July 1, 2013 and through June 30, 2014,
13    1% of salary; and
14        (2) beginning on July 1, 2014, 2% of salary.
15    Except as otherwise specified, these contributions are to
16be considered as normal contributions for purposes of this
17Article.
18    (b) The minimum required contribution for any year of
19full-time teaching service shall be $192.
20    (c) Contributions shall not be required of any annuitant
21receiving a retirement annuity who is given employment as
22permitted under Section 16-118 or 16-150.1.
23    (d) A person who (i) was a member before July 1, 1998, (ii)
24retires with more than 34 years of creditable service, and
25(iii) does not elect to qualify for the augmented rate under
26Section 16-129.1 shall be entitled, at the time of retirement,

 

 

09800HB1166ham003- 71 -LRB098 08855 EFG 41978 a

1to receive a partial refund of contributions made under this
2Section for service occurring after the later of June 30, 1998
3or attainment of 34 years of creditable service, in an amount
4equal to 1.00% of the salary upon which those contributions
5were based.
6    (e) A member's contributions toward the cost of early
7retirement without discount made under item (a)(4) of this
8Section shall not be refunded if the member has elected early
9retirement without discount under Section 16-133.2 and has
10begun to receive a retirement annuity under this Article
11calculated in accordance with that election. Otherwise, a
12member's contributions toward the cost of early retirement
13without discount made under item (a)(4) of this Section shall
14be refunded according to whichever one of the following
15circumstances occurs first:
16        (1) The contributions shall be refunded to the member,
17    without interest, within 120 days after the member's
18    retirement annuity commences, if the member does not elect
19    early retirement without discount under Section 16-133.2.
20        (2) The contributions shall be included, without
21    interest, in any refund claimed by the member under Section
22    16-151.
23        (3) The contributions shall be refunded to the member's
24    designated beneficiary (or if there is no beneficiary, to
25    the member's estate), without interest, if the member dies
26    without having begun to receive a retirement annuity under

 

 

09800HB1166ham003- 72 -LRB098 08855 EFG 41978 a

1    this Article.
2        (4) The contributions shall be refunded to the member,
3    without interest, within 120 days after the early
4    retirement without discount option provided under Section
5    16-133.2 is terminated under Section 16-176.
6(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
7    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
8    Sec. 16-158. Contributions by State and other employing
9units.
10    (a) The State shall make contributions to the System by
11means of appropriations from the Common School Fund and other
12State funds of amounts which, together with other employer
13contributions, employee contributions, investment income, and
14other income, will be sufficient to meet the cost of
15maintaining and administering the System on a 100% 90% funded
16basis in accordance with actuarial recommendations.
17    The Board shall determine the amount of State contributions
18required for each fiscal year on the basis of the actuarial
19tables and other assumptions adopted by the Board and the
20recommendations of the actuary, using the formula in subsection
21(b-3).
22    (a-1) Annually, on or before November 15 until November 15,
232011, the Board shall certify to the Governor the amount of the
24required State contribution for the coming fiscal year. The
25certification under this subsection (a-1) shall include a copy

 

 

09800HB1166ham003- 73 -LRB098 08855 EFG 41978 a

1of the actuarial recommendations upon which it is based and
2shall specifically identify the System's projected State
3normal cost for that fiscal year.
4    On or before May 1, 2004, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2005, taking
7into account the amounts appropriated to and received by the
8System under subsection (d) of Section 7.2 of the General
9Obligation Bond Act.
10    On or before July 1, 2005, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2006, taking
13into account the changes in required State contributions made
14by this amendatory Act of the 94th General Assembly.
15    On or before April 1, 2011, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2011, applying
18the changes made by Public Act 96-889 to the System's assets
19and liabilities as of June 30, 2009 as though Public Act 96-889
20was approved on that date.
21    (a-5) On or before November 1 of each year, beginning
22November 1, 2012, the Board shall submit to the State Actuary,
23the Governor, and the General Assembly a proposed certification
24of the amount of the required State contribution to the System
25for the next fiscal year, along with all of the actuarial
26assumptions, calculations, and data upon which that proposed

 

 

09800HB1166ham003- 74 -LRB098 08855 EFG 41978 a

1certification is based. On or before January 1 of each year,
2beginning January 1, 2013, the State Actuary shall issue a
3preliminary report concerning the proposed certification and
4identifying, if necessary, recommended changes in actuarial
5assumptions that the Board must consider before finalizing its
6certification of the required State contributions. On or before
7January 15, 2013 and each January 15 thereafter, the Board
8shall certify to the Governor and the General Assembly the
9amount of the required State contribution for the next fiscal
10year. The Board's certification must note any deviations from
11the State Actuary's recommended changes, the reason or reasons
12for not following the State Actuary's recommended changes, and
13the fiscal impact of not following the State Actuary's
14recommended changes on the required State contribution.
15    (b) Through State fiscal year 1995, the State contributions
16shall be paid to the System in accordance with Section 18-7 of
17the School Code.
18    (b-1) Beginning in State fiscal year 1996, on the 15th day
19of each month, or as soon thereafter as may be practicable, the
20Board shall submit vouchers for payment of State contributions
21to the System, in a total monthly amount of one-twelfth of the
22required annual State contribution certified under subsection
23(a-1). From the effective date of this amendatory Act of the
2493rd General Assembly through June 30, 2004, the Board shall
25not submit vouchers for the remainder of fiscal year 2004 in
26excess of the fiscal year 2004 certified contribution amount

 

 

09800HB1166ham003- 75 -LRB098 08855 EFG 41978 a

1determined under this Section after taking into consideration
2the transfer to the System under subsection (a) of Section
36z-61 of the State Finance Act. These vouchers shall be paid by
4the State Comptroller and Treasurer by warrants drawn on the
5funds appropriated to the System for that fiscal year.
6    If in any month the amount remaining unexpended from all
7other appropriations to the System for the applicable fiscal
8year (including the appropriations to the System under Section
98.12 of the State Finance Act and Section 1 of the State
10Pension Funds Continuing Appropriation Act) is less than the
11amount lawfully vouchered under this subsection, the
12difference shall be paid from the Common School Fund under the
13continuing appropriation authority provided in Section 1.1 of
14the State Pension Funds Continuing Appropriation Act.
15    (b-2) Allocations from the Common School Fund apportioned
16to school districts not coming under this System shall not be
17diminished or affected by the provisions of this Article.
18    (b-3) For State fiscal years 2015 through 2045, the minimum
19contribution to the System to be made by the State for each
20fiscal year shall be an amount determined by the System to be
21sufficient to bring the total assets of the System up to 100%
22of the total actuarial liabilities of the System by the end of
23State fiscal year 2045. In making these determinations, the
24required State contribution shall be calculated each year as a
25level percentage of payroll over the years remaining to and
26including fiscal year 2045 and shall be determined under the

 

 

09800HB1166ham003- 76 -LRB098 08855 EFG 41978 a

1projected unit credit actuarial cost method.
2    For State fiscal years 2012 through 2014 2045, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5sufficient to bring the total assets of the System up to 90% of
6the total actuarial liabilities of the System by the end of
7State fiscal year 2045. In making these determinations, the
8required State contribution shall be calculated each year as a
9level percentage of payroll over the years remaining to and
10including fiscal year 2045 and shall be determined under the
11projected unit credit actuarial cost method.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section; except that in the
17following specified State fiscal years, the State contribution
18to the System shall not be less than the following indicated
19percentages of the applicable employee payroll, even if the
20indicated percentage will produce a State contribution in
21excess of the amount otherwise required under this subsection
22and subsection (a), and notwithstanding any contrary
23certification made under subsection (a-1) before the effective
24date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
25in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
262003; and 13.56% in FY 2004.

 

 

09800HB1166ham003- 77 -LRB098 08855 EFG 41978 a

1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2006 is
3$534,627,700.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2007 is
6$738,014,500.
7    For each of State fiscal years 2008 through 2009, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10from the required State contribution for State fiscal year
112007, so that by State fiscal year 2011, the State is
12contributing at the rate otherwise required under this Section.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2010 is
15$2,089,268,000 and shall be made from the proceeds of bonds
16sold in fiscal year 2010 pursuant to Section 7.2 of the General
17Obligation Bond Act, less (i) the pro rata share of bond sale
18expenses determined by the System's share of total bond
19proceeds, (ii) any amounts received from the Common School Fund
20in fiscal year 2010, and (iii) any reduction in bond proceeds
21due to the issuance of discounted bonds, if applicable.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2011 is
24the amount recertified by the System on or before April 1, 2011
25pursuant to subsection (a-1) of this Section and shall be made
26from the proceeds of bonds sold in fiscal year 2011 pursuant to

 

 

09800HB1166ham003- 78 -LRB098 08855 EFG 41978 a

1Section 7.2 of the General Obligation Bond Act, less (i) the
2pro rata share of bond sale expenses determined by the System's
3share of total bond proceeds, (ii) any amounts received from
4the Common School Fund in fiscal year 2011, and (iii) any
5reduction in bond proceeds due to the issuance of discounted
6bonds, if applicable. This amount shall include, in addition to
7the amount certified by the System, an amount necessary to meet
8employer contributions required by the State as an employer
9under paragraph (e) of this Section, which may also be used by
10the System for contributions required by paragraph (a) of
11Section 16-127.
12    Beginning in State fiscal year 2046, the minimum State
13contribution for each fiscal year shall be the amount needed to
14maintain the total assets of the System at 90% of the total
15actuarial liabilities of the System.
16    Amounts received by the System pursuant to Section 25 of
17the Budget Stabilization Act or Section 8.12 of the State
18Finance Act in any fiscal year do not reduce and do not
19constitute payment of any portion of the minimum State
20contribution required under this Article in that fiscal year.
21Such amounts shall not reduce, and shall not be included in the
22calculation of, the required State contributions under this
23Article in any future year until the System has reached a
24funding ratio of at least 100% 90%. A reference in this Article
25to the "required State contribution" or any substantially
26similar term does not include or apply to any amounts payable

 

 

09800HB1166ham003- 79 -LRB098 08855 EFG 41978 a

1to the System under Section 25 of the Budget Stabilization Act.
2    Notwithstanding any other provision of this Code or the
3Budget Stabilization Act, amounts transferred to the System
4pursuant to the Budget Stabilization Act after the effective
5date of this amendatory Act of the 98th General Assembly do not
6reduce and do not constitute payment of any portion of the
7required State contribution under this Article in that fiscal
8year. Such amounts shall not reduce, and shall not be included
9in the calculation of, the required State contributions under
10this Article in any future year until the System has received
11payment of contributions pursuant to the Budget Stabilization
12Act.
13    Notwithstanding any other provision of this Section, the
14required State contribution for State fiscal year 2005 and for
15fiscal year 2008 and each fiscal year thereafter through State
16fiscal year 2014, as calculated under this Section and
17certified under subsection (a-1), shall not exceed an amount
18equal to (i) the amount of the required State contribution that
19would have been calculated under this Section for that fiscal
20year if the System had not received any payments under
21subsection (d) of Section 7.2 of the General Obligation Bond
22Act, minus (ii) the portion of the State's total debt service
23payments for that fiscal year on the bonds issued in fiscal
24year 2003 for the purposes of that Section 7.2, as determined
25and certified by the Comptroller, that is the same as the
26System's portion of the total moneys distributed under

 

 

09800HB1166ham003- 80 -LRB098 08855 EFG 41978 a

1subsection (d) of Section 7.2 of the General Obligation Bond
2Act. In determining this maximum for State fiscal years 2008
3through 2010, however, the amount referred to in item (i) shall
4be increased, as a percentage of the applicable employee
5payroll, in equal increments calculated from the sum of the
6required State contribution for State fiscal year 2007 plus the
7applicable portion of the State's total debt service payments
8for fiscal year 2007 on the bonds issued in fiscal year 2003
9for the purposes of Section 7.2 of the General Obligation Bond
10Act, so that, by State fiscal year 2011, the State is
11contributing at the rate otherwise required under this Section.
12    (c) Payment of the required State contributions and of all
13pensions, retirement annuities, death benefits, refunds, and
14other benefits granted under or assumed by this System, and all
15expenses in connection with the administration and operation
16thereof, are obligations of the State.
17    If members are paid from special trust or federal funds
18which are administered by the employing unit, whether school
19district or other unit, the employing unit shall pay to the
20System from such funds the full accruing retirement costs based
21upon that service, as determined by the System. Employer
22contributions, based on salary paid to members from federal
23funds, may be forwarded by the distributing agency of the State
24of Illinois to the System prior to allocation, in an amount
25determined in accordance with guidelines established by such
26agency and the System.

 

 

09800HB1166ham003- 81 -LRB098 08855 EFG 41978 a

1    (d) Effective July 1, 1986, any employer of a teacher as
2defined in paragraph (8) of Section 16-106 shall pay the
3employer's normal cost of benefits based upon the teacher's
4service, in addition to employee contributions, as determined
5by the System. Such employer contributions shall be forwarded
6monthly in accordance with guidelines established by the
7System.
8    However, with respect to benefits granted under Section
916-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
10of Section 16-106, the employer's contribution shall be 12%
11(rather than 20%) of the member's highest annual salary rate
12for each year of creditable service granted, and the employer
13shall also pay the required employee contribution on behalf of
14the teacher. For the purposes of Sections 16-133.4 and
1516-133.5, a teacher as defined in paragraph (8) of Section
1616-106 who is serving in that capacity while on leave of
17absence from another employer under this Article shall not be
18considered an employee of the employer from which the teacher
19is on leave.
20    (e) Beginning July 1, 1998, every employer of a teacher
21shall pay to the System an employer contribution computed as
22follows:
23        (1) Beginning July 1, 1998 through June 30, 1999, the
24    employer contribution shall be equal to 0.3% of each
25    teacher's salary.
26        (2) Beginning July 1, 1999 and thereafter, the employer

 

 

09800HB1166ham003- 82 -LRB098 08855 EFG 41978 a

1    contribution shall be equal to 0.58% of each teacher's
2    salary.
3The school district or other employing unit may pay these
4employer contributions out of any source of funding available
5for that purpose and shall forward the contributions to the
6System on the schedule established for the payment of member
7contributions.
8    These employer contributions are intended to offset a
9portion of the cost to the System of the increases in
10retirement benefits resulting from this amendatory Act of 1998.
11    Each employer of teachers is entitled to a credit against
12the contributions required under this subsection (e) with
13respect to salaries paid to teachers for the period January 1,
142002 through June 30, 2003, equal to the amount paid by that
15employer under subsection (a-5) of Section 6.6 of the State
16Employees Group Insurance Act of 1971 with respect to salaries
17paid to teachers for that period.
18    The additional 1% employee contribution required under
19Section 16-152 by this amendatory Act of 1998 is the
20responsibility of the teacher and not the teacher's employer,
21unless the employer agrees, through collective bargaining or
22otherwise, to make the contribution on behalf of the teacher.
23    If an employer is required by a contract in effect on May
241, 1998 between the employer and an employee organization to
25pay, on behalf of all its full-time employees covered by this
26Article, all mandatory employee contributions required under

 

 

09800HB1166ham003- 83 -LRB098 08855 EFG 41978 a

1this Article, then the employer shall be excused from paying
2the employer contribution required under this subsection (e)
3for the balance of the term of that contract. The employer and
4the employee organization shall jointly certify to the System
5the existence of the contractual requirement, in such form as
6the System may prescribe. This exclusion shall cease upon the
7termination, extension, or renewal of the contract at any time
8after May 1, 1998.
9    (f) If the amount of a teacher's salary for any school year
10used to determine final average salary exceeds the member's
11annual full-time salary rate with the same employer for the
12previous school year by more than 6%, the teacher's employer
13shall pay to the System, in addition to all other payments
14required under this Section and in accordance with guidelines
15established by the System, the present value of the increase in
16benefits resulting from the portion of the increase in salary
17that is in excess of 6%. This present value shall be computed
18by the System on the basis of the actuarial assumptions and
19tables used in the most recent actuarial valuation of the
20System that is available at the time of the computation. If a
21teacher's salary for the 2005-2006 school year is used to
22determine final average salary under this subsection (f), then
23the changes made to this subsection (f) by Public Act 94-1057
24shall apply in calculating whether the increase in his or her
25salary is in excess of 6%. For the purposes of this Section,
26change in employment under Section 10-21.12 of the School Code

 

 

09800HB1166ham003- 84 -LRB098 08855 EFG 41978 a

1on or after June 1, 2005 shall constitute a change in employer.
2The System may require the employer to provide any pertinent
3information or documentation. The changes made to this
4subsection (f) by this amendatory Act of the 94th General
5Assembly apply without regard to whether the teacher was in
6service on or after its effective date.
7    Whenever it determines that a payment is or may be required
8under this subsection, the System shall calculate the amount of
9the payment and bill the employer for that amount. The bill
10shall specify the calculations used to determine the amount
11due. If the employer disputes the amount of the bill, it may,
12within 30 days after receipt of the bill, apply to the System
13in writing for a recalculation. The application must specify in
14detail the grounds of the dispute and, if the employer asserts
15that the calculation is subject to subsection (g) or (h) of
16this Section, must include an affidavit setting forth and
17attesting to all facts within the employer's knowledge that are
18pertinent to the applicability of that subsection. Upon
19receiving a timely application for recalculation, the System
20shall review the application and, if appropriate, recalculate
21the amount due.
22    The employer contributions required under this subsection
23(f) may be paid in the form of a lump sum within 90 days after
24receipt of the bill. If the employer contributions are not paid
25within 90 days after receipt of the bill, then interest will be
26charged at a rate equal to the System's annual actuarially

 

 

09800HB1166ham003- 85 -LRB098 08855 EFG 41978 a

1assumed rate of return on investment compounded annually from
2the 91st day after receipt of the bill. Payments must be
3concluded within 3 years after the employer's receipt of the
4bill.
5    (g) This subsection (g) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases paid to teachers
12under contracts or collective bargaining agreements entered
13into, amended, or renewed before June 1, 2005.
14    When assessing payment for any amount due under subsection
15(f), the System shall exclude salary increases paid to a
16teacher at a time when the teacher is 10 or more years from
17retirement eligibility under Section 16-132 or 16-133.2.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude salary increases resulting from
20overload work, including summer school, when the school
21district has certified to the System, and the System has
22approved the certification, that (i) the overload work is for
23the sole purpose of classroom instruction in excess of the
24standard number of classes for a full-time teacher in a school
25district during a school year and (ii) the salary increases are
26equal to or less than the rate of pay for classroom instruction

 

 

09800HB1166ham003- 86 -LRB098 08855 EFG 41978 a

1computed on the teacher's current salary and work schedule.
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude a salary increase resulting from
4a promotion (i) for which the employee is required to hold a
5certificate or supervisory endorsement issued by the State
6Teacher Certification Board that is a different certification
7or supervisory endorsement than is required for the teacher's
8previous position and (ii) to a position that has existed and
9been filled by a member for no less than one complete academic
10year and the salary increase from the promotion is an increase
11that results in an amount no greater than the lesser of the
12average salary paid for other similar positions in the district
13requiring the same certification or the amount stipulated in
14the collective bargaining agreement for a similar position
15requiring the same certification.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude any payment to the teacher from
18the State of Illinois or the State Board of Education over
19which the employer does not have discretion, notwithstanding
20that the payment is included in the computation of final
21average salary.
22    (h) When assessing payment for any amount due under
23subsection (f), the System shall exclude any salary increase
24described in subsection (g) of this Section given on or after
25July 1, 2011 but before July 1, 2014 under a contract or
26collective bargaining agreement entered into, amended, or

 

 

09800HB1166ham003- 87 -LRB098 08855 EFG 41978 a

1renewed on or after June 1, 2005 but before July 1, 2011.
2Notwithstanding any other provision of this Section, any
3payments made or salary increases given after June 30, 2014
4shall be used in assessing payment for any amount due under
5subsection (f) of this Section.
6    (i) The System shall prepare a report and file copies of
7the report with the Governor and the General Assembly by
8January 1, 2007 that contains all of the following information:
9        (1) The number of recalculations required by the
10    changes made to this Section by Public Act 94-1057 for each
11    employer.
12        (2) The dollar amount by which each employer's
13    contribution to the System was changed due to
14    recalculations required by Public Act 94-1057.
15        (3) The total amount the System received from each
16    employer as a result of the changes made to this Section by
17    Public Act 94-4.
18        (4) The increase in the required State contribution
19    resulting from the changes made to this Section by Public
20    Act 94-1057.
21    (j) For purposes of determining the required State
22contribution to the System, the value of the System's assets
23shall be equal to the actuarial value of the System's assets,
24which shall be calculated as follows:
25    As of June 30, 2008, the actuarial value of the System's
26assets shall be equal to the market value of the assets as of

 

 

09800HB1166ham003- 88 -LRB098 08855 EFG 41978 a

1that date. In determining the actuarial value of the System's
2assets for fiscal years after June 30, 2008, any actuarial
3gains or losses from investment return incurred in a fiscal
4year shall be recognized in equal annual amounts over the
55-year period following that fiscal year.
6    (k) For purposes of determining the required State
7contribution to the system for a particular year, the actuarial
8value of assets shall be assumed to earn a rate of return equal
9to the system's actuarially assumed rate of return.
10(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
126-18-12; 97-813, eff. 7-13-12.)
 
13    (40 ILCS 5/16-158.2 new)
14    Sec. 16-158.2. Obligations of State; funding guarantee.
15Pursuant to Article XIII, Section 5 of the 1970 Constitution of
16the State of Illinois, beginning on July 1, 2013, the State
17shall, as a retirement benefit to each participant and
18annuitant of the System be contractually obligated to the
19System (as a fiduciary and trustee of the participants and
20annuitants) to pay the annual required State contribution, as
21determined by the Board of the System using generally accepted
22actuarial principles, as is necessary to bring the total assets
23of the System up to 100% of the total actuarial liabilities of
24the System by the end of State fiscal year 2045. As a further
25retirement benefit and contractual obligation, each fiscal

 

 

09800HB1166ham003- 89 -LRB098 08855 EFG 41978 a

1year, the State shall pay to each designated retirement system
2the annual required State contribution certified by the Board
3for that fiscal year. Payments of the annual required State
4contribution for each fiscal year shall be made in equal
5monthly installments. Additionally, beginning in fiscal year
62014, State transfers to the Pension Stabilization Fund
7pursuant to Section 20 of the Budget Stabilization Act and
8payments to the System pursuant to Section 25 of the Budget
9Stabilization Act shall be further retirement benefits and
10contractual obligations. The transfers and payments prescribed
11in Sections 20 and 25 of the Budget Stabilization Act shall not
12be used by the retirement system when calculation any pension
13payment until the System has reached a funded level of 100%.
14This Section and the security it provides to participants and
15annuitants is intended to be, and is, a contractual right that
16is part of the pension benefits provided to the participants
17and annuitants. Notwithstanding anything to the contrary in the
18Court of Claims Act or any other law, a designated retirement
19system has the exclusive right to and shall bring a mandamus
20action in the Circuit Court of Sangamon County against the
21State to compel the State to make any installment of the annual
22required State contribution required by this Section,
23irrespective of other remedies that may be available to the
24System. Each member or annuitant of the System has the right to
25in any judicial district in which the System maintains an
26office if the System fails to bring an action specified in this

 

 

09800HB1166ham003- 90 -LRB098 08855 EFG 41978 a

1Section, irrespective of other remedies that may be available
2to the member or annuitant. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of payroll over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
 
7    Section 99. Effective date. This Act takes effect July 1,
82013.".