HB1277 EngrossedLRB098 07116 EFG 37177 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 2-124, 14-131, 15-155, 16-158, and 18-131 as follows:
 
6    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
7    Sec. 2-124. Contributions by State.
8    (a) The State shall make contributions to the System by
9appropriations of amounts which, together with the
10contributions of participants, interest earned on investments,
11and other income will meet the cost of maintaining and
12administering the System on a 90% funded basis in accordance
13with actuarial recommendations.
14    (b) The Board shall determine the amount of State
15contributions required for each fiscal year on the basis of the
16actuarial tables and other assumptions adopted by the Board and
17the prescribed rate of interest, using the formula in
18subsection (c).
19    (c) For State fiscal years 2012 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 90% of
23the total actuarial liabilities of the System by the end of

 

 

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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
5entry age normal projected unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2006 is
13$4,157,000.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2007 is
16$5,220,300.
17    For each of State fiscal years 2008 through 2009, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20from the required State contribution for State fiscal year
212007, so that by State fiscal year 2011, the State is
22contributing at the rate otherwise required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010 is
25$10,454,000 and shall be made from the proceeds of bonds sold
26in fiscal year 2010 pursuant to Section 7.2 of the General

 

 

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1Obligation Bond Act, less (i) the pro rata share of bond sale
2expenses determined by the System's share of total bond
3proceeds, (ii) any amounts received from the General Revenue
4Fund in fiscal year 2010, and (iii) any reduction in bond
5proceeds due to the issuance of discounted bonds, if
6applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to Section 2-134 and shall be made from the proceeds
11of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
12the General Obligation Bond Act, less (i) the pro rata share of
13bond sale expenses determined by the System's share of total
14bond proceeds, (ii) any amounts received from the General
15Revenue Fund in fiscal year 2011, and (iii) any reduction in
16bond proceeds due to the issuance of discounted bonds, if
17applicable.
18    Beginning in State fiscal year 2046, the minimum State
19contribution for each fiscal year shall be the amount needed to
20maintain the total assets of the System at 90% of the total
21actuarial liabilities of the System.
22    Amounts received by the System pursuant to Section 25 of
23the Budget Stabilization Act or Section 8.12 of the State
24Finance Act in any fiscal year do not reduce and do not
25constitute payment of any portion of the minimum State
26contribution required under this Article in that fiscal year.

 

 

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1Such amounts shall not reduce, and shall not be included in the
2calculation of, the required State contributions under this
3Article in any future year until the System has reached a
4funding ratio of at least 90%. A reference in this Article to
5the "required State contribution" or any substantially similar
6term does not include or apply to any amounts payable to the
7System under Section 25 of the Budget Stabilization Act.
8    Notwithstanding any other provision of this Section, the
9required State contribution for State fiscal year 2005 and for
10fiscal year 2008 and each fiscal year thereafter, as calculated
11under this Section and certified under Section 2-134, shall not
12exceed an amount equal to (i) the amount of the required State
13contribution that would have been calculated under this Section
14for that fiscal year if the System had not received any
15payments under subsection (d) of Section 7.2 of the General
16Obligation Bond Act, minus (ii) the portion of the State's
17total debt service payments for that fiscal year on the bonds
18issued in fiscal year 2003 for the purposes of that Section
197.2, as determined and certified by the Comptroller, that is
20the same as the System's portion of the total moneys
21distributed under subsection (d) of Section 7.2 of the General
22Obligation Bond Act. In determining this maximum for State
23fiscal years 2008 through 2010, however, the amount referred to
24in item (i) shall be increased, as a percentage of the
25applicable employee payroll, in equal increments calculated
26from the sum of the required State contribution for State

 

 

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1fiscal year 2007 plus the applicable portion of the State's
2total debt service payments for fiscal year 2007 on the bonds
3issued in fiscal year 2003 for the purposes of Section 7.2 of
4the General Obligation Bond Act, so that, by State fiscal year
52011, the State is contributing at the rate otherwise required
6under this Section.
7    (d) For purposes of determining the required State
8contribution to the System, the value of the System's assets
9shall be equal to the actuarial value of the System's assets,
10which shall be calculated as follows:
11    As of June 30, 2008, the actuarial value of the System's
12assets shall be equal to the market value of the assets as of
13that date. In determining the actuarial value of the System's
14assets for fiscal years after June 30, 2008, any actuarial
15gains or losses from investment return incurred in a fiscal
16year shall be recognized in equal annual amounts over the
175-year period following that fiscal year.
18    (e) For purposes of determining the required State
19contribution to the system for a particular year, the actuarial
20value of assets shall be assumed to earn a rate of return equal
21to the system's actuarially assumed rate of return.
22(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
247-13-12.)
 
25    (40 ILCS 5/14-131)

 

 

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1    Sec. 14-131. Contributions by State.
2    (a) The State shall make contributions to the System by
3appropriations of amounts which, together with other employer
4contributions from trust, federal, and other funds, employee
5contributions, investment income, and other income, will be
6sufficient to meet the cost of maintaining and administering
7the System on a 90% funded basis in accordance with actuarial
8recommendations.
9    For the purposes of this Section and Section 14-135.08,
10references to State contributions refer only to employer
11contributions and do not include employee contributions that
12are picked up or otherwise paid by the State or a department on
13behalf of the employee.
14    (b) The Board shall determine the total amount of State
15contributions required for each fiscal year on the basis of the
16actuarial tables and other assumptions adopted by the Board,
17using the formula in subsection (e).
18    The Board shall also determine a State contribution rate
19for each fiscal year, expressed as a percentage of payroll,
20based on the total required State contribution for that fiscal
21year (less the amount received by the System from
22appropriations under Section 8.12 of the State Finance Act and
23Section 1 of the State Pension Funds Continuing Appropriation
24Act, if any, for the fiscal year ending on the June 30
25immediately preceding the applicable November 15 certification
26deadline), the estimated payroll (including all forms of

 

 

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1compensation) for personal services rendered by eligible
2employees, and the recommendations of the actuary.
3    For the purposes of this Section and Section 14.1 of the
4State Finance Act, the term "eligible employees" includes
5employees who participate in the System, persons who may elect
6to participate in the System but have not so elected, persons
7who are serving a qualifying period that is required for
8participation, and annuitants employed by a department as
9described in subdivision (a)(1) or (a)(2) of Section 14-111.
10    (c) Contributions shall be made by the several departments
11for each pay period by warrants drawn by the State Comptroller
12against their respective funds or appropriations based upon
13vouchers stating the amount to be so contributed. These amounts
14shall be based on the full rate certified by the Board under
15Section 14-135.08 for that fiscal year. From the effective date
16of this amendatory Act of the 93rd General Assembly through the
17payment of the final payroll from fiscal year 2004
18appropriations, the several departments shall not make
19contributions for the remainder of fiscal year 2004 but shall
20instead make payments as required under subsection (a-1) of
21Section 14.1 of the State Finance Act. The several departments
22shall resume those contributions at the commencement of fiscal
23year 2005.
24    (c-1) Notwithstanding subsection (c) of this Section, for
25fiscal years 2010, 2012, and 2013 only, contributions by the
26several departments are not required to be made for General

 

 

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1Revenue Funds payrolls processed by the Comptroller. Payrolls
2paid by the several departments from all other State funds must
3continue to be processed pursuant to subsection (c) of this
4Section.
5    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
6or as soon as possible after the 15th day of each month, the
7Board shall submit vouchers for payment of State contributions
8to the System, in a total monthly amount of one-twelfth of the
9fiscal year General Revenue Fund contribution as certified by
10the System pursuant to Section 14-135.08 of the Illinois
11Pension Code.
12    (d) If an employee is paid from trust funds or federal
13funds, the department or other employer shall pay employer
14contributions from those funds to the System at the certified
15rate, unless the terms of the trust or the federal-State
16agreement preclude the use of the funds for that purpose, in
17which case the required employer contributions shall be paid by
18the State. From the effective date of this amendatory Act of
19the 93rd General Assembly through the payment of the final
20payroll from fiscal year 2004 appropriations, the department or
21other employer shall not pay contributions for the remainder of
22fiscal year 2004 but shall instead make payments as required
23under subsection (a-1) of Section 14.1 of the State Finance
24Act. The department or other employer shall resume payment of
25contributions at the commencement of fiscal year 2005.
26    (e) For State fiscal years 2012 through 2045, the minimum

 

 

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

 

 

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19.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
22002; 10.6% in FY 2003; and 10.8% in FY 2004.
3    Notwithstanding any other provision of this Article, the
4total required State contribution to the System for State
5fiscal year 2006 is $203,783,900.
6    Notwithstanding any other provision of this Article, the
7total required State contribution to the System for State
8fiscal year 2007 is $344,164,400.
9    For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State General Revenue Fund contribution for
17State fiscal year 2010 is $723,703,100 and shall be made from
18the proceeds of bonds sold in fiscal year 2010 pursuant to
19Section 7.2 of the General Obligation Bond Act, less (i) the
20pro rata share of bond sale expenses determined by the System's
21share of total bond proceeds, (ii) any amounts received from
22the General Revenue Fund in fiscal year 2010, and (iii) any
23reduction in bond proceeds due to the issuance of discounted
24bonds, if applicable.
25    Notwithstanding any other provision of this Article, the
26total required State General Revenue Fund contribution for

 

 

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1State fiscal year 2011 is the amount recertified by the System
2on or before April 1, 2011 pursuant to Section 14-135.08 and
3shall be made from the proceeds of bonds sold in fiscal year
42011 pursuant to Section 7.2 of the General Obligation Bond
5Act, less (i) the pro rata share of bond sale expenses
6determined by the System's share of total bond proceeds, (ii)
7any amounts received from the General Revenue Fund in fiscal
8year 2011, and (iii) any reduction in bond proceeds due to the
9issuance of discounted bonds, if applicable.
10    Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

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1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 14-135.08, shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (f) After the submission of all payments for eligible
26employees from personal services line items in fiscal year 2004

 

 

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1have been made, the Comptroller shall provide to the System a
2certification of the sum of all fiscal year 2004 expenditures
3for personal services that would have been covered by payments
4to the System under this Section if the provisions of this
5amendatory Act of the 93rd General Assembly had not been
6enacted. Upon receipt of the certification, the System shall
7determine the amount due to the System based on the full rate
8certified by the Board under Section 14-135.08 for fiscal year
92004 in order to meet the State's obligation under this
10Section. The System shall compare this amount due to the amount
11received by the System in fiscal year 2004 through payments
12under this Section and under Section 6z-61 of the State Finance
13Act. If the amount due is more than the amount received, the
14difference shall be termed the "Fiscal Year 2004 Shortfall" for
15purposes of this Section, and the Fiscal Year 2004 Shortfall
16shall be satisfied under Section 1.2 of the State Pension Funds
17Continuing Appropriation Act. If the amount due is less than
18the amount received, the difference shall be termed the "Fiscal
19Year 2004 Overpayment" for purposes of this Section, and the
20Fiscal Year 2004 Overpayment shall be repaid by the System to
21the Pension Contribution Fund as soon as practicable after the
22certification.
23    (g) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

 

 

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1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (h) For purposes of determining the required State
9contribution to the System for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the System's actuarially assumed rate of return.
12    (i) After the submission of all payments for eligible
13employees from personal services line items paid from the
14General Revenue Fund in fiscal year 2010 have been made, the
15Comptroller shall provide to the System a certification of the
16sum of all fiscal year 2010 expenditures for personal services
17that would have been covered by payments to the System under
18this Section if the provisions of this amendatory Act of the
1996th General Assembly had not been enacted. Upon receipt of the
20certification, the System shall determine the amount due to the
21System based on the full rate certified by the Board under
22Section 14-135.08 for fiscal year 2010 in order to meet the
23State's obligation under this Section. The System shall compare
24this amount due to the amount received by the System in fiscal
25year 2010 through payments under this Section. If the amount
26due is more than the amount received, the difference shall be

 

 

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1termed the "Fiscal Year 2010 Shortfall" for purposes of this
2Section, and the Fiscal Year 2010 Shortfall shall be satisfied
3under Section 1.2 of the State Pension Funds Continuing
4Appropriation Act. If the amount due is less than the amount
5received, the difference shall be termed the "Fiscal Year 2010
6Overpayment" for purposes of this Section, and the Fiscal Year
72010 Overpayment shall be repaid by the System to the General
8Revenue Fund as soon as practicable after the certification.
9    (j) After the submission of all payments for eligible
10employees from personal services line items paid from the
11General Revenue Fund in fiscal year 2011 have been made, the
12Comptroller shall provide to the System a certification of the
13sum of all fiscal year 2011 expenditures for personal services
14that would have been covered by payments to the System under
15this Section if the provisions of this amendatory Act of the
1696th General Assembly had not been enacted. Upon receipt of the
17certification, the System shall determine the amount due to the
18System based on the full rate certified by the Board under
19Section 14-135.08 for fiscal year 2011 in order to meet the
20State's obligation under this Section. The System shall compare
21this amount due to the amount received by the System in fiscal
22year 2011 through payments under this Section. If the amount
23due is more than the amount received, the difference shall be
24termed the "Fiscal Year 2011 Shortfall" for purposes of this
25Section, and the Fiscal Year 2011 Shortfall shall be satisfied
26under Section 1.2 of the State Pension Funds Continuing

 

 

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1Appropriation Act. If the amount due is less than the amount
2received, the difference shall be termed the "Fiscal Year 2011
3Overpayment" for purposes of this Section, and the Fiscal Year
42011 Overpayment shall be repaid by the System to the General
5Revenue Fund as soon as practicable after the certification.
6    (k) For fiscal years 2012 and 2013 only, after the
7submission of all payments for eligible employees from personal
8services line items paid from the General Revenue Fund in the
9fiscal year have been made, the Comptroller shall provide to
10the System a certification of the sum of all expenditures in
11the fiscal year for personal services. Upon receipt of the
12certification, the System shall determine the amount due to the
13System based on the full rate certified by the Board under
14Section 14-135.08 for the fiscal year in order to meet the
15State's obligation under this Section. The System shall compare
16this amount due to the amount received by the System for the
17fiscal year. If the amount due is more than the amount
18received, the difference shall be termed the "Prior Fiscal Year
19Shortfall" for purposes of this Section, and the Prior Fiscal
20Year Shortfall shall be satisfied under Section 1.2 of the
21State Pension Funds Continuing Appropriation Act. If the amount
22due is less than the amount received, the difference shall be
23termed the "Prior Fiscal Year Overpayment" for purposes of this
24Section, and the Prior Fiscal Year Overpayment shall be repaid
25by the System to the General Revenue Fund as soon as
26practicable after the certification.

 

 

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1(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
296-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
31-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
4eff. 6-30-12.)
 
5    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
6    Sec. 15-155. Employer contributions.
7    (a) The State of Illinois shall make contributions by
8appropriations of amounts which, together with the other
9employer contributions from trust, federal, and other funds,
10employee contributions, income from investments, and other
11income of this System, will be sufficient to meet the cost of
12maintaining and administering the System on a 90% funded basis
13in accordance with actuarial recommendations.
14    The Board shall determine the amount of State contributions
15required for each fiscal year on the basis of the actuarial
16tables and other assumptions adopted by the Board and the
17recommendations of the actuary, using the formula in subsection
18(a-1).
19    (a-1) For State fiscal years 2012 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 90% of
23the 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

 

 

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1level percentage of payroll over the years remaining to and
2including fiscal year 2045 and shall be determined under the
3entry age normal projected unit credit actuarial cost method.
4    For State fiscal years 1996 through 2005, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7so that by State fiscal year 2011, the State is contributing at
8the rate required under this Section.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2006 is
11$166,641,900.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2007 is
14$252,064,100.
15    For each of State fiscal years 2008 through 2009, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18from the required State contribution for State fiscal year
192007, so that by State fiscal year 2011, the State is
20contributing at the rate otherwise required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2010 is
23$702,514,000 and shall be made from the State Pensions Fund and
24proceeds of bonds sold in fiscal year 2010 pursuant to Section
257.2 of the General Obligation Bond Act, less (i) the pro rata
26share of bond sale expenses determined by the System's share of

 

 

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1total bond proceeds, (ii) any amounts received from the General
2Revenue Fund in fiscal year 2010, (iii) any reduction in bond
3proceeds due to the issuance of discounted bonds, if
4applicable.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2011 is
7the amount recertified by the System on or before April 1, 2011
8pursuant to Section 15-165 and shall be made from the State
9Pensions Fund and proceeds of bonds sold in fiscal year 2011
10pursuant to Section 7.2 of the General Obligation Bond Act,
11less (i) the pro rata share of bond sale expenses determined by
12the System's share of total bond proceeds, (ii) any amounts
13received from the General Revenue Fund in fiscal year 2011, and
14(iii) any reduction in bond proceeds due to the issuance of
15discounted bonds, if applicable.
16    Beginning in State fiscal year 2046, the minimum State
17contribution for each fiscal year shall be the amount needed to
18maintain the total assets of the System at 90% of the total
19actuarial liabilities of the System.
20    Amounts received by the System pursuant to Section 25 of
21the Budget Stabilization Act or Section 8.12 of the State
22Finance Act in any fiscal year do not reduce and do not
23constitute payment of any portion of the minimum State
24contribution required under this Article in that fiscal year.
25Such amounts shall not reduce, and shall not be included in the
26calculation of, the required State contributions under this

 

 

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1Article in any future year until the System has reached a
2funding ratio of at least 90%. A reference in this Article to
3the "required State contribution" or any substantially similar
4term does not include or apply to any amounts payable to the
5System under Section 25 of the Budget Stabilization Act.
6    Notwithstanding any other provision of this Section, the
7required State contribution for State fiscal year 2005 and for
8fiscal year 2008 and each fiscal year thereafter, as calculated
9under this Section and certified under Section 15-165, shall
10not exceed an amount equal to (i) the amount of the required
11State contribution that would have been calculated under this
12Section for that fiscal year if the System had not received any
13payments under subsection (d) of Section 7.2 of the General
14Obligation Bond Act, minus (ii) the portion of the State's
15total debt service payments for that fiscal year on the bonds
16issued in fiscal year 2003 for the purposes of that Section
177.2, as determined and certified by the Comptroller, that is
18the same as the System's portion of the total moneys
19distributed under subsection (d) of Section 7.2 of the General
20Obligation Bond Act. In determining this maximum for State
21fiscal years 2008 through 2010, however, the amount referred to
22in item (i) shall be increased, as a percentage of the
23applicable employee payroll, in equal increments calculated
24from the sum of the required State contribution for State
25fiscal year 2007 plus the applicable portion of the State's
26total debt service payments for fiscal year 2007 on the bonds

 

 

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1issued in fiscal year 2003 for the purposes of Section 7.2 of
2the General Obligation Bond Act, so that, by State fiscal year
32011, the State is contributing at the rate otherwise required
4under this Section.
5    (b) If an employee is paid from trust or federal funds, the
6employer shall pay to the Board contributions from those funds
7which are sufficient to cover the accruing normal costs on
8behalf of the employee. However, universities having employees
9who are compensated out of local auxiliary funds, income funds,
10or service enterprise funds are not required to pay such
11contributions on behalf of those employees. The local auxiliary
12funds, income funds, and service enterprise funds of
13universities shall not be considered trust funds for the
14purpose of this Article, but funds of alumni associations,
15foundations, and athletic associations which are affiliated
16with the universities included as employers under this Article
17and other employers which do not receive State appropriations
18are considered to be trust funds for the purpose of this
19Article.
20    (b-1) The City of Urbana and the City of Champaign shall
21each make employer contributions to this System for their
22respective firefighter employees who participate in this
23System pursuant to subsection (h) of Section 15-107. The rate
24of contributions to be made by those municipalities shall be
25determined annually by the Board on the basis of the actuarial
26assumptions adopted by the Board and the recommendations of the

 

 

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

 

 

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

 

 

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1amount of the payment and bill the employer for that amount.
2The bill shall specify the calculations used to determine the
3amount due. If the employer disputes the amount of the bill, it
4may, within 30 days after receipt of the bill, apply to the
5System in writing for a recalculation. The application must
6specify in detail the grounds of the dispute and, if the
7employer asserts that the calculation is subject to subsection
8(h) or (i) of this Section, must include an affidavit setting
9forth and attesting to all facts within the employer's
10knowledge that are pertinent to the applicability of subsection
11(h) or (i). Upon receiving a timely application for
12recalculation, the System shall review the application and, if
13appropriate, recalculate the amount due.
14    The employer contributions required under this subsection
15(g) (f) may be paid in the form of a lump sum within 90 days
16after receipt of the bill. If the employer contributions are
17not paid within 90 days after receipt of the bill, then
18interest will be charged at a rate equal to the System's annual
19actuarially assumed rate of return on investment compounded
20annually from the 91st day after receipt of the bill. Payments
21must be concluded within 3 years after the employer's receipt
22of the bill.
23    (h) This subsection (h) applies only to payments made or
24salary increases given on or after June 1, 2005 but before July
251, 2011. The changes made by Public Act 94-1057 shall not
26require the System to refund any payments received before July

 

 

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131, 2006 (the effective date of Public Act 94-1057).
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude earnings increases paid to
4participants under contracts or collective bargaining
5agreements entered into, amended, or renewed before June 1,
62005.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude earnings increases paid to a
9participant at a time when the participant is 10 or more years
10from retirement eligibility under Section 15-135.
11    When assessing payment for any amount due under subsection
12(g), the System shall exclude earnings increases resulting from
13overload work, including a contract for summer teaching, or
14overtime when the employer has certified to the System, and the
15System has approved the certification, that: (i) in the case of
16overloads (A) the overload work is for the sole purpose of
17academic instruction in excess of the standard number of
18instruction hours for a full-time employee occurring during the
19academic year that the overload is paid and (B) the earnings
20increases are equal to or less than the rate of pay for
21academic instruction computed using the participant's current
22salary rate and work schedule; and (ii) in the case of
23overtime, the overtime was necessary for the educational
24mission.
25    When assessing payment for any amount due under subsection
26(g), the System shall exclude any earnings increase resulting

 

 

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

 

 

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

 

 

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1    (l) For purposes of determining the required State
2contribution to the System, the value of the System's assets
3shall be equal to the actuarial value of the System's assets,
4which shall be calculated as follows:
5    As of June 30, 2008, the actuarial value of the System's
6assets shall be equal to the market value of the assets as of
7that date. In determining the actuarial value of the System's
8assets for fiscal years after June 30, 2008, any actuarial
9gains or losses from investment return incurred in a fiscal
10year shall be recognized in equal annual amounts over the
115-year period following that fiscal year.
12    (m) For purposes of determining the required State
13contribution to the system for a particular year, the actuarial
14value of assets shall be assumed to earn a rate of return equal
15to the system's actuarially assumed rate of return.
16(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
187-13-12; revised 10-17-12.)
 
19    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
20    Sec. 16-158. Contributions by State and other employing
21units.
22    (a) The State shall make contributions to the System by
23means of appropriations from the Common School Fund and other
24State funds of amounts which, together with other employer
25contributions, employee contributions, investment income, and

 

 

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1other income, will be sufficient to meet the cost of
2maintaining and administering the System on a 90% funded basis
3in accordance with actuarial recommendations.
4    The Board shall determine the amount of State contributions
5required for each fiscal year on the basis of the actuarial
6tables and other assumptions adopted by the Board and the
7recommendations of the actuary, using the formula in subsection
8(b-3).
9    (a-1) Annually, on or before November 15 until November 15,
102011, the Board shall certify to the Governor the amount of the
11required State contribution for the coming fiscal year. The
12certification under this subsection (a-1) shall include a copy
13of the actuarial recommendations upon which it is based and
14shall specifically identify the System's projected State
15normal cost for that fiscal year.
16    On or before May 1, 2004, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2005, taking
19into account the amounts appropriated to and received by the
20System under subsection (d) of Section 7.2 of the General
21Obligation Bond Act.
22    On or before July 1, 2005, the Board shall recalculate and
23recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2006, taking
25into account the changes in required State contributions made
26by this amendatory Act of the 94th General Assembly.

 

 

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1    On or before April 1, 2011, the Board shall recalculate and
2recertify to the Governor the amount of the required State
3contribution to the System for State fiscal year 2011, applying
4the changes made by Public Act 96-889 to the System's assets
5and liabilities as of June 30, 2009 as though Public Act 96-889
6was approved on that date.
7    (a-5) On or before November 1 of each year, beginning
8November 1, 2012, the Board shall submit to the State Actuary,
9the Governor, and the General Assembly a proposed certification
10of the amount of the required State contribution to the System
11for the next fiscal year, along with all of the actuarial
12assumptions, calculations, and data upon which that proposed
13certification is based. On or before January 1 of each year,
14beginning January 1, 2013, the State Actuary shall issue a
15preliminary report concerning the proposed certification and
16identifying, if necessary, recommended changes in actuarial
17assumptions that the Board must consider before finalizing its
18certification of the required State contributions. On or before
19January 15, 2013 and each January 15 thereafter, the Board
20shall certify to the Governor and the General Assembly the
21amount of the required State contribution for the next fiscal
22year. The Board's certification must note any deviations from
23the State Actuary's recommended changes, the reason or reasons
24for not following the State Actuary's recommended changes, and
25the fiscal impact of not following the State Actuary's
26recommended changes on the required State contribution.

 

 

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1    (b) Through State fiscal year 1995, the State contributions
2shall be paid to the System in accordance with Section 18-7 of
3the School Code.
4    (b-1) Beginning in State fiscal year 1996, on the 15th day
5of each month, or as soon thereafter as may be practicable, the
6Board shall submit vouchers for payment of State contributions
7to the System, in a total monthly amount of one-twelfth of the
8required annual State contribution certified under subsection
9(a-1). From the effective date of this amendatory Act of the
1093rd General Assembly through June 30, 2004, the Board shall
11not submit vouchers for the remainder of fiscal year 2004 in
12excess of the fiscal year 2004 certified contribution amount
13determined under this Section after taking into consideration
14the transfer to the System under subsection (a) of Section
156z-61 of the State Finance Act. These vouchers shall be paid by
16the State Comptroller and Treasurer by warrants drawn on the
17funds appropriated to the System for that fiscal year.
18    If in any month the amount remaining unexpended from all
19other appropriations to the System for the applicable fiscal
20year (including the appropriations to the System under Section
218.12 of the State Finance Act and Section 1 of the State
22Pension Funds Continuing Appropriation Act) is less than the
23amount lawfully vouchered under this subsection, the
24difference shall be paid from the Common School Fund under the
25continuing appropriation authority provided in Section 1.1 of
26the State Pension Funds Continuing Appropriation Act.

 

 

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1    (b-2) Allocations from the Common School Fund apportioned
2to school districts not coming under this System shall not be
3diminished or affected by the provisions of this Article.
4    (b-3) For State fiscal years 2012 through 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
13entry age normal projected 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; except that in the
19following specified State fiscal years, the State contribution
20to the System shall not be less than the following indicated
21percentages of the applicable employee payroll, even if the
22indicated percentage will produce a State contribution in
23excess of the amount otherwise required under this subsection
24and subsection (a), and notwithstanding any contrary
25certification made under subsection (a-1) before the effective
26date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%

 

 

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1in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
22003; and 13.56% in FY 2004.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2006 is
5$534,627,700.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2007 is
8$738,014,500.
9    For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2010 is
17$2,089,268,000 and shall be made from the proceeds of bonds
18sold in fiscal year 2010 pursuant to Section 7.2 of the General
19Obligation Bond Act, less (i) the pro rata share of bond sale
20expenses determined by the System's share of total bond
21proceeds, (ii) any amounts received from the Common School Fund
22in fiscal year 2010, and (iii) any reduction in bond proceeds
23due to the issuance of discounted bonds, if applicable.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2011 is
26the amount recertified by the System on or before April 1, 2011

 

 

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

 

 

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

 

 

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12011, the State is contributing at the rate otherwise required
2under this Section.
3    (c) Payment of the required State contributions and of all
4pensions, retirement annuities, death benefits, refunds, and
5other benefits granted under or assumed by this System, and all
6expenses in connection with the administration and operation
7thereof, are obligations of the State.
8    If members are paid from special trust or federal funds
9which are administered by the employing unit, whether school
10district or other unit, the employing unit shall pay to the
11System from such funds the full accruing retirement costs based
12upon that service, as determined by the System. Employer
13contributions, based on salary paid to members from federal
14funds, may be forwarded by the distributing agency of the State
15of Illinois to the System prior to allocation, in an amount
16determined in accordance with guidelines established by such
17agency and the System.
18    (d) Effective July 1, 1986, any employer of a teacher as
19defined in paragraph (8) of Section 16-106 shall pay the
20employer's normal cost of benefits based upon the teacher's
21service, in addition to employee contributions, as determined
22by the System. Such employer contributions shall be forwarded
23monthly in accordance with guidelines established by the
24System.
25    However, with respect to benefits granted under Section
2616-133.4 or 16-133.5 to a teacher as defined in paragraph (8)

 

 

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1of Section 16-106, the employer's contribution shall be 12%
2(rather than 20%) of the member's highest annual salary rate
3for each year of creditable service granted, and the employer
4shall also pay the required employee contribution on behalf of
5the teacher. For the purposes of Sections 16-133.4 and
616-133.5, a teacher as defined in paragraph (8) of Section
716-106 who is serving in that capacity while on leave of
8absence from another employer under this Article shall not be
9considered an employee of the employer from which the teacher
10is on leave.
11    (e) Beginning July 1, 1998, every employer of a teacher
12shall pay to the System an employer contribution computed as
13follows:
14        (1) Beginning July 1, 1998 through June 30, 1999, the
15    employer contribution shall be equal to 0.3% of each
16    teacher's salary.
17        (2) Beginning July 1, 1999 and thereafter, the employer
18    contribution shall be equal to 0.58% of each teacher's
19    salary.
20The school district or other employing unit may pay these
21employer contributions out of any source of funding available
22for that purpose and shall forward the contributions to the
23System on the schedule established for the payment of member
24contributions.
25    These employer contributions are intended to offset a
26portion of the cost to the System of the increases in

 

 

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1retirement benefits resulting from this amendatory Act of 1998.
2    Each employer of teachers is entitled to a credit against
3the contributions required under this subsection (e) with
4respect to salaries paid to teachers for the period January 1,
52002 through June 30, 2003, equal to the amount paid by that
6employer under subsection (a-5) of Section 6.6 of the State
7Employees Group Insurance Act of 1971 with respect to salaries
8paid to teachers for that period.
9    The additional 1% employee contribution required under
10Section 16-152 by this amendatory Act of 1998 is the
11responsibility of the teacher and not the teacher's employer,
12unless the employer agrees, through collective bargaining or
13otherwise, to make the contribution on behalf of the teacher.
14    If an employer is required by a contract in effect on May
151, 1998 between the employer and an employee organization to
16pay, on behalf of all its full-time employees covered by this
17Article, all mandatory employee contributions required under
18this Article, then the employer shall be excused from paying
19the employer contribution required under this subsection (e)
20for the balance of the term of that contract. The employer and
21the employee organization shall jointly certify to the System
22the existence of the contractual requirement, in such form as
23the System may prescribe. This exclusion shall cease upon the
24termination, extension, or renewal of the contract at any time
25after May 1, 1998.
26    (f) If the amount of a teacher's salary for any school year

 

 

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1used to determine final average salary exceeds the member's
2annual full-time salary rate with the same employer for the
3previous school year by more than 6%, the teacher's employer
4shall pay to the System, in addition to all other payments
5required under this Section and in accordance with guidelines
6established by the System, the present value of the increase in
7benefits resulting from the portion of the increase in salary
8that is in excess of 6%. This present value shall be computed
9by the System on the basis of the actuarial assumptions and
10tables used in the most recent actuarial valuation of the
11System that is available at the time of the computation. If a
12teacher's salary for the 2005-2006 school year is used to
13determine final average salary under this subsection (f), then
14the changes made to this subsection (f) by Public Act 94-1057
15shall apply in calculating whether the increase in his or her
16salary is in excess of 6%. For the purposes of this Section,
17change in employment under Section 10-21.12 of the School Code
18on or after June 1, 2005 shall constitute a change in employer.
19The System may require the employer to provide any pertinent
20information or documentation. The changes made to this
21subsection (f) by this amendatory Act of the 94th General
22Assembly apply without regard to whether the teacher was in
23service on or after its effective date.
24    Whenever it determines that a payment is or may be required
25under this subsection, the System shall calculate the amount of
26the payment and bill the employer for that amount. The bill

 

 

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1shall specify the calculations used to determine the amount
2due. If the employer disputes the amount of the bill, it may,
3within 30 days after receipt of the bill, apply to the System
4in writing for a recalculation. The application must specify in
5detail the grounds of the dispute and, if the employer asserts
6that the calculation is subject to subsection (g) or (h) of
7this Section, must include an affidavit setting forth and
8attesting to all facts within the employer's knowledge that are
9pertinent to the applicability of that subsection. Upon
10receiving a timely application for recalculation, the System
11shall review the application and, if appropriate, recalculate
12the amount due.
13    The employer contributions required under this subsection
14(f) may be paid in the form of a lump sum within 90 days after
15receipt of the bill. If the employer contributions are not paid
16within 90 days after receipt of the bill, then interest will be
17charged at a rate equal to the System's annual actuarially
18assumed rate of return on investment compounded annually from
19the 91st day after receipt of the bill. Payments must be
20concluded within 3 years after the employer's receipt of the
21bill.
22    (g) This subsection (g) applies only to payments made or
23salary increases given on or after June 1, 2005 but before July
241, 2011. The changes made by Public Act 94-1057 shall not
25require the System to refund any payments received before July
2631, 2006 (the effective date of Public Act 94-1057).

 

 

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1    When assessing payment for any amount due under subsection
2(f), the System shall exclude salary increases paid to teachers
3under contracts or collective bargaining agreements entered
4into, amended, or renewed before June 1, 2005.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude salary increases paid to a
7teacher at a time when the teacher is 10 or more years from
8retirement eligibility under Section 16-132 or 16-133.2.
9    When assessing payment for any amount due under subsection
10(f), the System shall exclude salary increases resulting from
11overload work, including summer school, when the school
12district has certified to the System, and the System has
13approved the certification, that (i) the overload work is for
14the sole purpose of classroom instruction in excess of the
15standard number of classes for a full-time teacher in a school
16district during a school year and (ii) the salary increases are
17equal to or less than the rate of pay for classroom instruction
18computed on the teacher's current salary and work schedule.
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude a salary increase resulting from
21a promotion (i) for which the employee is required to hold a
22certificate or supervisory endorsement issued by the State
23Teacher Certification Board that is a different certification
24or supervisory endorsement than is required for the teacher's
25previous position and (ii) to a position that has existed and
26been filled by a member for no less than one complete academic

 

 

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1year and the salary increase from the promotion is an increase
2that results in an amount no greater than the lesser of the
3average salary paid for other similar positions in the district
4requiring the same certification or the amount stipulated in
5the collective bargaining agreement for a similar position
6requiring the same certification.
7    When assessing payment for any amount due under subsection
8(f), the System shall exclude any payment to the teacher from
9the State of Illinois or the State Board of Education over
10which the employer does not have discretion, notwithstanding
11that the payment is included in the computation of final
12average salary.
13    (h) When assessing payment for any amount due under
14subsection (f), the System shall exclude any salary increase
15described in subsection (g) of this Section given on or after
16July 1, 2011 but before July 1, 2014 under a contract or
17collective bargaining agreement entered into, amended, or
18renewed on or after June 1, 2005 but before July 1, 2011.
19Notwithstanding any other provision of this Section, any
20payments made or salary increases given after June 30, 2014
21shall be used in assessing payment for any amount due under
22subsection (f) of this Section.
23    (i) The System shall prepare a report and file copies of
24the report with the Governor and the General Assembly by
25January 1, 2007 that contains all of the following information:
26        (1) The number of recalculations required by the

 

 

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1    changes made to this Section by Public Act 94-1057 for each
2    employer.
3        (2) The dollar amount by which each employer's
4    contribution to the System was changed due to
5    recalculations required by Public Act 94-1057.
6        (3) The total amount the System received from each
7    employer as a result of the changes made to this Section by
8    Public Act 94-4.
9        (4) The increase in the required State contribution
10    resulting from the changes made to this Section by Public
11    Act 94-1057.
12    (j) For purposes of determining the required State
13contribution to the System, the value of the System's assets
14shall be equal to the actuarial value of the System's assets,
15which shall be calculated as follows:
16    As of June 30, 2008, the actuarial value of the System's
17assets shall be equal to the market value of the assets as of
18that date. In determining the actuarial value of the System's
19assets for fiscal years after June 30, 2008, any actuarial
20gains or losses from investment return incurred in a fiscal
21year shall be recognized in equal annual amounts over the
225-year period following that fiscal year.
23    (k) For purposes of determining the required State
24contribution to the system for a particular year, the actuarial
25value of assets shall be assumed to earn a rate of return equal
26to the system's actuarially assumed rate of return.

 

 

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1(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
36-18-12; 97-813, eff. 7-13-12.)
 
4    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
5    Sec. 18-131. Financing; employer contributions.
6    (a) The State of Illinois shall make contributions to this
7System by appropriations of the amounts which, together with
8the contributions of participants, net earnings on
9investments, and other income, will meet the costs of
10maintaining and administering this System on a 90% funded basis
11in accordance with actuarial recommendations.
12    (b) The Board shall determine the amount of State
13contributions required for each fiscal year on the basis of the
14actuarial tables and other assumptions adopted by the Board and
15the prescribed rate of interest, using the formula in
16subsection (c).
17    (c) For State fiscal years 2012 through 2045, the minimum
18contribution to the System to be made by the State for each
19fiscal year shall be an amount determined by the System to be
20sufficient to bring the total assets of the System up to 90% of
21the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the

 

 

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1entry age normal projected unit credit actuarial cost method.
2    For State fiscal years 1996 through 2005, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5so that by State fiscal year 2011, the State is contributing at
6the rate required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2006 is
9$29,189,400.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2007 is
12$35,236,800.
13    For each of State fiscal years 2008 through 2009, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16from the required State contribution for State fiscal year
172007, so that by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2010 is
21$78,832,000 and shall be made from the proceeds of bonds sold
22in fiscal year 2010 pursuant to Section 7.2 of the General
23Obligation Bond Act, less (i) the pro rata share of bond sale
24expenses determined by the System's share of total bond
25proceeds, (ii) any amounts received from the General Revenue
26Fund in fiscal year 2010, and (iii) any reduction in bond

 

 

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1proceeds due to the issuance of discounted bonds, if
2applicable.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2011 is
5the amount recertified by the System on or before April 1, 2011
6pursuant to Section 18-140 and shall be made from the proceeds
7of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
8the General Obligation Bond Act, less (i) the pro rata share of
9bond sale expenses determined by the System's share of total
10bond proceeds, (ii) any amounts received from the General
11Revenue Fund in fiscal year 2011, and (iii) any reduction in
12bond proceeds due to the issuance of discounted bonds, if
13applicable.
14    Beginning in State fiscal year 2046, the minimum State
15contribution for each fiscal year shall be the amount needed to
16maintain the total assets of the System at 90% of the total
17actuarial liabilities of the System.
18    Amounts received by the System pursuant to Section 25 of
19the Budget Stabilization Act or Section 8.12 of the State
20Finance Act in any fiscal year do not reduce and do not
21constitute payment of any portion of the minimum State
22contribution required under this Article in that fiscal year.
23Such amounts shall not reduce, and shall not be included in the
24calculation of, the required State contributions under this
25Article in any future year until the System has reached a
26funding ratio of at least 90%. A reference in this Article to

 

 

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1the "required State contribution" or any substantially similar
2term does not include or apply to any amounts payable to the
3System under Section 25 of the Budget Stabilization Act.
4    Notwithstanding any other provision of this Section, the
5required State contribution for State fiscal year 2005 and for
6fiscal year 2008 and each fiscal year thereafter, as calculated
7under this Section and certified under Section 18-140, shall
8not exceed an amount equal to (i) the amount of the required
9State contribution that would have been calculated under this
10Section for that fiscal year if the System had not received any
11payments under subsection (d) of Section 7.2 of the General
12Obligation Bond Act, minus (ii) the portion of the State's
13total debt service payments for that fiscal year on the bonds
14issued in fiscal year 2003 for the purposes of that Section
157.2, as determined and certified by the Comptroller, that is
16the same as the System's portion of the total moneys
17distributed under subsection (d) of Section 7.2 of the General
18Obligation Bond Act. In determining this maximum for State
19fiscal years 2008 through 2010, however, the amount referred to
20in item (i) shall be increased, as a percentage of the
21applicable employee payroll, in equal increments calculated
22from the sum of the required State contribution for State
23fiscal year 2007 plus the applicable portion of the State's
24total debt service payments for fiscal year 2007 on the bonds
25issued in fiscal year 2003 for the purposes of Section 7.2 of
26the General Obligation Bond Act, so that, by State fiscal year

 

 

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12011, the State is contributing at the rate otherwise required
2under this Section.
3    (d) For purposes of determining the required State
4contribution to the System, the value of the System's assets
5shall be equal to the actuarial value of the System's assets,
6which shall be calculated as follows:
7    As of June 30, 2008, the actuarial value of the System's
8assets shall be equal to the market value of the assets as of
9that date. In determining the actuarial value of the System's
10assets for fiscal years after June 30, 2008, any actuarial
11gains or losses from investment return incurred in a fiscal
12year shall be recognized in equal annual amounts over the
135-year period following that fiscal year.
14    (e) For purposes of determining the required State
15contribution to the system for a particular year, the actuarial
16value of assets shall be assumed to earn a rate of return equal
17to the system's actuarially assumed rate of return.
18(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1996-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
207-13-12.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.