98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB0001

 

Introduced 1/9/2013, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Provisions, General Assembly, Illinois Municipal Retirement Fund (IMRF), State Employee, State Universities, Downstate Teacher, and Judges Articles of the Illinois Pension Code. Contains a Part A, which is intended by the General Assembly as a stand-alone reform of the General Assembly, State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code and takes effect upon becoming law. Contains a Part B, which is intended to provide alternative provisions that take effect only if and when a corresponding portion of Part A is determined to be unconstitutional or otherwise invalid or unenforceable. In Part A, caps pensionable salary, temporarily suspends and reduces the amount of automatic annual increases, requires the systems to be 100% funded by 2043, and increases required employee contributions. In Part B, requires persons to make an election either to accept reductions in the amount of, as well as delays in eligibility for, automatic annual increases or to forgo certain healthcare benefits and future increases in pensionable income. Effective upon becoming law, except that specified portions of Part B take effect upon the date following the date upon which certain contingencies occur.


LRB098 05457 JDS 35491 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

SB0001LRB098 05457 JDS 35491 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
"PART A

 
5    Section A-3. The Illinois Public Labor Relations Act is
6amended by changing Sections 2, 4, 14, and 15 as follows:
 
7    (5 ILCS 315/2)  (from Ch. 48, par. 1602)
8    Sec. 2. Policy. It is the public policy of the State of
9Illinois to grant public employees full freedom of association,
10self-organization, and designation of representatives of their
11own choosing for the purpose of negotiating wages, hours and
12other conditions of employment or other mutual aid or
13protection.
14    It is the purpose of this Act to regulate labor relations
15between public employers and employees, including the
16designation of employee representatives, negotiation of wages,
17hours and other conditions of employment, and resolution of
18disputes arising under collective bargaining agreements.
19    It is the purpose of this Act to prescribe the legitimate
20rights of both public employees and public employers, to
21protect the public health and safety of the citizens of
22Illinois, and to provide peaceful and orderly procedures for

 

 

SB0001- 2 -LRB098 05457 JDS 35491 b

1protection of the rights of all. To prevent labor strife and to
2protect the public health and safety of the citizens of
3Illinois, all collective bargaining disputes involving persons
4designated by the Board as performing essential services and
5those persons defined herein as security employees shall be
6submitted to impartial arbitrators, who shall be authorized to
7issue awards in order to resolve such disputes; except that
8such arbitration and awards shall not alter or affect the
9changes, the impact of the changes, or the implementation of
10the changes set forth in this amendatory Act of the 98th
11General Assembly, which are prohibited subjects of bargaining.
12It is the public policy of the State of Illinois that where the
13right of employees to strike is prohibited by law, it is
14necessary to afford an alternate, expeditious, equitable and
15effective procedure for the resolution of labor disputes
16subject to approval procedures mandated by this Act. To that
17end, the provisions for such awards shall be liberally
18construed.
19(Source: P.A. 83-1012.)"; and
 
20    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
21    Sec. 4. Management Rights. Employers shall not be required
22to bargain over matters of inherent managerial policy, which
23shall include such areas of discretion or policy as the
24functions of the employer, standards of services, its overall
25budget, the organizational structure and selection of new

 

 

SB0001- 3 -LRB098 05457 JDS 35491 b

1employees, examination techniques and direction of employees.
2Employers, however, shall be required to bargain collectively
3with regard to policy matters directly affecting wages, hours
4and terms and conditions of employment as well as the impact
5thereon upon request by employee representatives, but
6excluding the changes, the impact of changes, and the
7implementation of the changes set forth in this amendatory Act
8of the 98th General Assembly, which are prohibited subjects of
9bargaining.
10    To preserve the rights of employers and exclusive
11representatives which have established collective bargaining
12relationships or negotiated collective bargaining agreements
13prior to the effective date of this Act, employers shall be
14required to bargain collectively with regard to any matter
15concerning wages, hours or conditions of employment about which
16they have bargained for and agreed to in a collective
17bargaining agreement prior to the effective date of this Act,
18but excluding the changes, the impact of changes, and the
19implementation of the changes set forth in this amendatory Act
20of the 98th General Assembly, which are prohibited subjects of
21bargaining.
22    The chief judge of the judicial circuit that employs a
23public employee who is a court reporter, as defined in the
24Court Reporters Act, has the authority to hire, appoint,
25promote, evaluate, discipline, and discharge court reporters
26within that judicial circuit.

 

 

SB0001- 4 -LRB098 05457 JDS 35491 b

1    Nothing in this amendatory Act of the 94th General Assembly
2shall be construed to intrude upon the judicial functions of
3any court. This amendatory Act of the 94th General Assembly
4applies only to nonjudicial administrative matters relating to
5the collective bargaining rights of court reporters.
6(Source: P.A. 94-98, eff. 7-1-05.)
 
7    (5 ILCS 315/14)  (from Ch. 48, par. 1614)
8    Sec. 14. Security Employee, Peace Officer and Fire Fighter
9Disputes.
10    (a) In the case of collective bargaining agreements
11involving units of security employees of a public employer,
12Peace Officer Units, or units of fire fighters or paramedics,
13and in the case of disputes under Section 18, unless the
14parties mutually agree to some other time limit, mediation
15shall commence 30 days prior to the expiration date of such
16agreement or at such later time as the mediation services
17chosen under subsection (b) of Section 12 can be provided to
18the parties. In the case of negotiations for an initial
19collective bargaining agreement, mediation shall commence upon
2015 days notice from either party or at such later time as the
21mediation services chosen pursuant to subsection (b) of Section
2212 can be provided to the parties. In mediation under this
23Section, if either party requests the use of mediation services
24from the Federal Mediation and Conciliation Service, the other
25party shall either join in such request or bear the additional

 

 

SB0001- 5 -LRB098 05457 JDS 35491 b

1cost of mediation services from another source. The mediator
2shall have a duty to keep the Board informed on the progress of
3the mediation. If any dispute has not been resolved within 15
4days after the first meeting of the parties and the mediator,
5or within such other time limit as may be mutually agreed upon
6by the parties, either the exclusive representative or employer
7may request of the other, in writing, arbitration, and shall
8submit a copy of the request to the Board.
9    (b) Within 10 days after such a request for arbitration has
10been made, the employer shall choose a delegate and the
11employees' exclusive representative shall choose a delegate to
12a panel of arbitration as provided in this Section. The
13employer and employees shall forthwith advise the other and the
14Board of their selections.
15    (c) Within 7 days after the request of either party, the
16parties shall request a panel of impartial arbitrators from
17which they shall select the neutral chairman according to the
18procedures provided in this Section. If the parties have agreed
19to a contract that contains a grievance resolution procedure as
20provided in Section 8, the chairman shall be selected using
21their agreed contract procedure unless they mutually agree to
22another procedure. If the parties fail to notify the Board of
23their selection of neutral chairman within 7 days after receipt
24of the list of impartial arbitrators, the Board shall appoint,
25at random, a neutral chairman from the list. In the absence of
26an agreed contract procedure for selecting an impartial

 

 

SB0001- 6 -LRB098 05457 JDS 35491 b

1arbitrator, either party may request a panel from the Board.
2Within 7 days of the request of either party, the Board shall
3select from the Public Employees Labor Mediation Roster 7
4persons who are on the labor arbitration panels of either the
5American Arbitration Association or the Federal Mediation and
6Conciliation Service, or who are members of the National
7Academy of Arbitrators, as nominees for impartial arbitrator of
8the arbitration panel. The parties may select an individual on
9the list provided by the Board or any other individual mutually
10agreed upon by the parties. Within 7 days following the receipt
11of the list, the parties shall notify the Board of the person
12they have selected. Unless the parties agree on an alternate
13selection procedure, they shall alternatively strike one name
14from the list provided by the Board until only one name
15remains. A coin toss shall determine which party shall strike
16the first name. If the parties fail to notify the Board in a
17timely manner of their selection for neutral chairman, the
18Board shall appoint a neutral chairman from the Illinois Public
19Employees Mediation/Arbitration Roster.
20    (d) The chairman shall call a hearing to begin within 15
21days and give reasonable notice of the time and place of the
22hearing. The hearing shall be held at the offices of the Board
23or at such other location as the Board deems appropriate. The
24chairman shall preside over the hearing and shall take
25testimony. Any oral or documentary evidence and other data
26deemed relevant by the arbitration panel may be received in

 

 

SB0001- 7 -LRB098 05457 JDS 35491 b

1evidence. The proceedings shall be informal. Technical rules of
2evidence shall not apply and the competency of the evidence
3shall not thereby be deemed impaired. A verbatim record of the
4proceedings shall be made and the arbitrator shall arrange for
5the necessary recording service. Transcripts may be ordered at
6the expense of the party ordering them, but the transcripts
7shall not be necessary for a decision by the arbitration panel.
8The expense of the proceedings, including a fee for the
9chairman, established in advance by the Board, shall be borne
10equally by each of the parties to the dispute. The delegates,
11if public officers or employees, shall continue on the payroll
12of the public employer without loss of pay. The hearing
13conducted by the arbitration panel may be adjourned from time
14to time, but unless otherwise agreed by the parties, shall be
15concluded within 30 days of the time of its commencement.
16Majority actions and rulings shall constitute the actions and
17rulings of the arbitration panel. Arbitration proceedings
18under this Section shall not be interrupted or terminated by
19reason of any unfair labor practice charge filed by either
20party at any time.
21    (e) The arbitration panel may administer oaths, require the
22attendance of witnesses, and the production of such books,
23papers, contracts, agreements and documents as may be deemed by
24it material to a just determination of the issues in dispute,
25and for such purpose may issue subpoenas. If any person refuses
26to obey a subpoena, or refuses to be sworn or to testify, or if

 

 

SB0001- 8 -LRB098 05457 JDS 35491 b

1any witness, party or attorney is guilty of any contempt while
2in attendance at any hearing, the arbitration panel may, or the
3attorney general if requested shall, invoke the aid of any
4circuit court within the jurisdiction in which the hearing is
5being held, which court shall issue an appropriate order. Any
6failure to obey the order may be punished by the court as
7contempt.
8    (f) At any time before the rendering of an award, the
9chairman of the arbitration panel, if he is of the opinion that
10it would be useful or beneficial to do so, may remand the
11dispute to the parties for further collective bargaining for a
12period not to exceed 2 weeks. If the dispute is remanded for
13further collective bargaining the time provisions of this Act
14shall be extended for a time period equal to that of the
15remand. The chairman of the panel of arbitration shall notify
16the Board of the remand.
17    (g) At or before the conclusion of the hearing held
18pursuant to subsection (d), the arbitration panel shall
19identify the economic issues in dispute, and direct each of the
20parties to submit, within such time limit as the panel shall
21prescribe, to the arbitration panel and to each other its last
22offer of settlement on each economic issue. The determination
23of the arbitration panel as to the issues in dispute and as to
24which of these issues are economic shall be conclusive. The
25arbitration panel, within 30 days after the conclusion of the
26hearing, or such further additional periods to which the

 

 

SB0001- 9 -LRB098 05457 JDS 35491 b

1parties may agree, shall make written findings of fact and
2promulgate a written opinion and shall mail or otherwise
3deliver a true copy thereof to the parties and their
4representatives and to the Board. As to each economic issue,
5the arbitration panel shall adopt the last offer of settlement
6which, in the opinion of the arbitration panel, more nearly
7complies with the applicable factors prescribed in subsection
8(h). The findings, opinions and order as to all other issues
9shall be based upon the applicable factors prescribed in
10subsection (h).
11    (h) Where there is no agreement between the parties, or
12where there is an agreement but the parties have begun
13negotiations or discussions looking to a new agreement or
14amendment of the existing agreement, and wage rates or other
15conditions of employment under the proposed new or amended
16agreement are in dispute, the arbitration panel shall base its
17findings, opinions and order upon the following factors, as
18applicable:
19        (1) The lawful authority of the employer.
20        (2) Stipulations of the parties.
21        (3) The interests and welfare of the public and the
22    financial ability of the unit of government to meet those
23    costs.
24        (4) Comparison of the wages, hours and conditions of
25    employment of the employees involved in the arbitration
26    proceeding with the wages, hours and conditions of

 

 

SB0001- 10 -LRB098 05457 JDS 35491 b

1    employment of other employees performing similar services
2    and with other employees generally:
3            (A) In public employment in comparable
4        communities.
5            (B) In private employment in comparable
6        communities.
7        (5) The average consumer prices for goods and services,
8    commonly known as the cost of living.
9        (6) The overall compensation presently received by the
10    employees, including direct wage compensation, vacations,
11    holidays and other excused time, insurance and pensions,
12    medical and hospitalization benefits, the continuity and
13    stability of employment and all other benefits received.
14        (7) Changes in any of the foregoing circumstances
15    during the pendency of the arbitration proceedings.
16        (8) Such other factors, not confined to the foregoing,
17    which are normally or traditionally taken into
18    consideration in the determination of wages, hours and
19    conditions of employment through voluntary collective
20    bargaining, mediation, fact-finding, arbitration or
21    otherwise between the parties, in the public service or in
22    private employment.
23    (i) In the case of peace officers, the arbitration decision
24shall be limited to wages, hours, and conditions of employment
25(which may include residency requirements in municipalities
26with a population under 1,000,000, but those residency

 

 

SB0001- 11 -LRB098 05457 JDS 35491 b

1requirements shall not allow residency outside of Illinois) and
2shall not include the following: i) residency requirements in
3municipalities with a population of at least 1,000,000; ii) the
4type of equipment, other than uniforms, issued or used; iii)
5manning; iv) the total number of employees employed by the
6department; v) mutual aid and assistance agreements to other
7units of government; and vi) the criterion pursuant to which
8force, including deadly force, can be used; and vii) the
9changes, the impact of the changes, and the implementation of
10the changes set forth in this amendatory Act of the 98th
11General Assembly, which are prohibited subjects of bargaining;
12provided, nothing herein shall preclude an arbitration
13decision regarding equipment or manning levels if such decision
14is based on a finding that the equipment or manning
15considerations in a specific work assignment involve a serious
16risk to the safety of a peace officer beyond that which is
17inherent in the normal performance of police duties. Limitation
18of the terms of the arbitration decision pursuant to this
19subsection shall not be construed to limit the factors upon
20which the decision may be based, as set forth in subsection
21(h).
22    In the case of fire fighter, and fire department or fire
23district paramedic matters, the arbitration decision shall be
24limited to wages, hours, and conditions of employment (which
25may include residency requirements in municipalities with a
26population under 1,000,000, but those residency requirements

 

 

SB0001- 12 -LRB098 05457 JDS 35491 b

1shall not allow residency outside of Illinois) and shall not
2include the following matters: i) residency requirements in
3municipalities with a population of at least 1,000,000; ii) the
4type of equipment (other than uniforms and fire fighter turnout
5gear) issued or used; iii) the total number of employees
6employed by the department; iv) mutual aid and assistance
7agreements to other units of government; and v) the criterion
8pursuant to which force, including deadly force, can be used;
9and vi) the changes, the impact of the changes, and the
10implementation of the changes set forth in this amendatory Act
11of the 98th General Assembly, which are prohibited subjects of
12bargaining; provided, however, nothing herein shall preclude
13an arbitration decision regarding equipment levels if such
14decision is based on a finding that the equipment
15considerations in a specific work assignment involve a serious
16risk to the safety of a fire fighter beyond that which is
17inherent in the normal performance of fire fighter duties.
18Limitation of the terms of the arbitration decision pursuant to
19this subsection shall not be construed to limit the facts upon
20which the decision may be based, as set forth in subsection
21(h).
22    The changes to this subsection (i) made by Public Act
2390-385 (relating to residency requirements) do not apply to
24persons who are employed by a combined department that performs
25both police and firefighting services; these persons shall be
26governed by the provisions of this subsection (i) relating to

 

 

SB0001- 13 -LRB098 05457 JDS 35491 b

1peace officers, as they existed before the amendment by Public
2Act 90-385.
3    To preserve historical bargaining rights, this subsection
4shall not apply to any provision of a fire fighter collective
5bargaining agreement in effect and applicable on the effective
6date of this Act; provided, however, nothing herein shall
7preclude arbitration with respect to any such provision.
8    In the case of security employees or employees deemed to be
9essential workers pursuant to Section 18 of this Act, an
10arbitration decision shall not alter or affect the changes, the
11impact of the changes, or the implementation of the changes set
12forth in this amendatory Act of the 98th General Assembly,
13which are prohibited subjects of bargaining.
14    (j) Arbitration procedures shall be deemed to be initiated
15by the filing of a letter requesting mediation as required
16under subsection (a) of this Section. The commencement of a new
17municipal fiscal year after the initiation of arbitration
18procedures under this Act, but before the arbitration decision,
19or its enforcement, shall not be deemed to render a dispute
20moot, or to otherwise impair the jurisdiction or authority of
21the arbitration panel or its decision. Increases in rates of
22compensation awarded by the arbitration panel may be effective
23only at the start of the fiscal year next commencing after the
24date of the arbitration award. If a new fiscal year has
25commenced either since the initiation of arbitration
26procedures under this Act or since any mutually agreed

 

 

SB0001- 14 -LRB098 05457 JDS 35491 b

1extension of the statutorily required period of mediation under
2this Act by the parties to the labor dispute causing a delay in
3the initiation of arbitration, the foregoing limitations shall
4be inapplicable, and such awarded increases may be retroactive
5to the commencement of the fiscal year, any other statute or
6charter provisions to the contrary, notwithstanding. At any
7time the parties, by stipulation, may amend or modify an award
8of arbitration.
9    (k) Orders of the arbitration panel shall be reviewable,
10upon appropriate petition by either the public employer or the
11exclusive bargaining representative, by the circuit court for
12the county in which the dispute arose or in which a majority of
13the affected employees reside, but only for reasons that the
14arbitration panel was without or exceeded its statutory
15authority; the order is arbitrary, or capricious; or the order
16was procured by fraud, collusion or other similar and unlawful
17means. Such petitions for review must be filed with the
18appropriate circuit court within 90 days following the issuance
19of the arbitration order. The pendency of such proceeding for
20review shall not automatically stay the order of the
21arbitration panel. The party against whom the final decision of
22any such court shall be adverse, if such court finds such
23appeal or petition to be frivolous, shall pay reasonable
24attorneys' fees and costs to the successful party as determined
25by said court in its discretion. If said court's decision
26affirms the award of money, such award, if retroactive, shall

 

 

SB0001- 15 -LRB098 05457 JDS 35491 b

1bear interest at the rate of 12 percent per annum from the
2effective retroactive date.
3    (l) During the pendency of proceedings before the
4arbitration panel, existing wages, hours, and other conditions
5of employment shall not be changed by action of either party
6without the consent of the other but a party may so consent
7without prejudice to his rights or position under this Act. The
8proceedings are deemed to be pending before the arbitration
9panel upon the initiation of arbitration procedures under this
10Act.
11    (m) Security officers of public employers, and Peace
12Officers, Fire Fighters and fire department and fire protection
13district paramedics, covered by this Section may not withhold
14services, nor may public employers lock out or prevent such
15employees from performing services at any time.
16    (n) All of the terms decided upon by the arbitration panel
17shall be included in an agreement to be submitted to the public
18employer's governing body for ratification and adoption by law,
19ordinance or the equivalent appropriate means.
20    The governing body shall review each term decided by the
21arbitration panel. If the governing body fails to reject one or
22more terms of the arbitration panel's decision by a 3/5 vote of
23those duly elected and qualified members of the governing body,
24within 20 days of issuance, or in the case of firefighters
25employed by a state university, at the next regularly scheduled
26meeting of the governing body after issuance, such term or

 

 

SB0001- 16 -LRB098 05457 JDS 35491 b

1terms shall become a part of the collective bargaining
2agreement of the parties. If the governing body affirmatively
3rejects one or more terms of the arbitration panel's decision,
4it must provide reasons for such rejection with respect to each
5term so rejected, within 20 days of such rejection and the
6parties shall return to the arbitration panel for further
7proceedings and issuance of a supplemental decision with
8respect to the rejected terms. Any supplemental decision by an
9arbitration panel or other decision maker agreed to by the
10parties shall be submitted to the governing body for
11ratification and adoption in accordance with the procedures and
12voting requirements set forth in this Section. The voting
13requirements of this subsection shall apply to all disputes
14submitted to arbitration pursuant to this Section
15notwithstanding any contrary voting requirements contained in
16any existing collective bargaining agreement between the
17parties.
18    (o) If the governing body of the employer votes to reject
19the panel's decision, the parties shall return to the panel
20within 30 days from the issuance of the reasons for rejection
21for further proceedings and issuance of a supplemental
22decision. All reasonable costs of such supplemental proceeding
23including the exclusive representative's reasonable attorney's
24fees, as established by the Board, shall be paid by the
25employer.
26    (p) Notwithstanding the provisions of this Section the

 

 

SB0001- 17 -LRB098 05457 JDS 35491 b

1employer and exclusive representative may agree to submit
2unresolved disputes concerning wages, hours, terms and
3conditions of employment to an alternative form of impasse
4resolution.
5(Source: P.A. 96-813, eff. 10-30-09.)
 
6    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
7    Sec. 15. Act Takes Precedence.
8    (a) In case of any conflict between the provisions of this
9Act and any other law (other than Section 5 of the State
10Employees Group Insurance Act of 1971 and other than the
11changes made to the Illinois Pension Code by Public Act 96-889
12and the changes, impact of changes, and the implementation of
13the changes made by this amendatory Act of the 98th 96th
14General Assembly), executive order or administrative
15regulation relating to wages, hours and conditions of
16employment and employment relations, the provisions of this Act
17or any collective bargaining agreement negotiated thereunder
18shall prevail and control. Nothing in this Act shall be
19construed to replace or diminish the rights of employees
20established by Sections 28 and 28a of the Metropolitan Transit
21Authority Act, Sections 2.15 through 2.19 of the Regional
22Transportation Authority Act. The provisions of this Act are
23subject to the changes made by this amendatory Act of the 98th
24General Assembly and Section 5 of the State Employees Group
25Insurance Act of 1971. Nothing in this Act shall be construed

 

 

SB0001- 18 -LRB098 05457 JDS 35491 b

1to replace the necessity of complaints against a sworn peace
2officer, as defined in Section 2(a) of the Uniform Peace
3Officer Disciplinary Act, from having a complaint supported by
4a sworn affidavit.
5    (b) Except as provided in subsection (a) above, any
6collective bargaining contract between a public employer and a
7labor organization executed pursuant to this Act shall
8supersede any contrary statutes, charters, ordinances, rules
9or regulations relating to wages, hours and conditions of
10employment and employment relations adopted by the public
11employer or its agents. Any collective bargaining agreement
12entered into prior to the effective date of this Act shall
13remain in full force during its duration.
14    (c) It is the public policy of this State, pursuant to
15paragraphs (h) and (i) of Section 6 of Article VII of the
16Illinois Constitution, that the provisions of this Act are the
17exclusive exercise by the State of powers and functions which
18might otherwise be exercised by home rule units. Such powers
19and functions may not be exercised concurrently, either
20directly or indirectly, by any unit of local government,
21including any home rule unit, except as otherwise authorized by
22this Act.
23(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
24    Section A-5. The Governor's Office of Management and Budget
25Act is amended by changing Sections 7 and 8 as follows:
 

 

 

SB0001- 19 -LRB098 05457 JDS 35491 b

1    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
2    Sec. 7. All statements and estimates of expenditures
3submitted to the Office in connection with the preparation of a
4State budget, and any other estimates of expenditures,
5supporting requests for appropriations, shall be formulated
6according to the various functions and activities for which the
7respective department, office or institution of the State
8government (including the elective officers in the executive
9department and including the University of Illinois and the
10judicial department) is responsible. All such statements and
11estimates of expenditures relating to a particular function or
12activity shall be further formulated or subject to analysis in
13accordance with the following classification of objects:
14    (1) Personal services
15    (2) State contribution for employee group insurance
16    (3) Contractual services
17    (4) Travel
18    (5) Commodities
19    (6) Equipment
20    (7) Permanent improvements
21    (8) Land
22    (9) Electronic Data Processing
23    (10) Telecommunication services
24    (11) Operation of Automotive Equipment
25    (12) Contingencies

 

 

SB0001- 20 -LRB098 05457 JDS 35491 b

1    (13) Reserve
2    (14) Interest
3    (15) Awards and Grants
4    (16) Debt Retirement
5    (17) Non-cost Charges.
6    (18) State retirement contribution for annual normal cost
7    (19) State retirement contribution for unfunded accrued
8liability.
9(Source: P.A. 93-25, eff. 6-20-03.)
 
10    (20 ILCS 3005/8)  (from Ch. 127, par. 418)
11    Sec. 8. When used in connection with a State budget or
12expenditure or estimate, items (1) through (16) in the
13classification of objects stated in Section 7 shall have the
14meanings ascribed to those items in Sections 14 through 24.7,
15respectively, of the State Finance Act. "An Act in relation to
16State finance", approved June 10, 1919, as amended.
17    When used in connection with a State budget or expenditure
18or estimate, items (18) and (19) in the classification of
19objects stated in Section 7 shall have the meanings ascribed to
20those items in Sections 24.12 and 24.13, respectively, of the
21State Finance Act.
22(Source: P.A. 82-325.)
 
23    Section A-10. The State Finance Act is amended by changing
24Section 13 and by adding Sections 24.12 and 24.13 as follows:
 

 

 

SB0001- 21 -LRB098 05457 JDS 35491 b

1    (30 ILCS 105/13)  (from Ch. 127, par. 149)
2    Sec. 13. The objects and purposes for which appropriations
3are made are classified and standardized by items as follows:
4    (1) Personal services;
5    (2) State contribution for employee group insurance;
6    (3) Contractual services;
7    (4) Travel;
8    (5) Commodities;
9    (6) Equipment;
10    (7) Permanent improvements;
11    (8) Land;
12    (9) Electronic Data Processing;
13    (10) Operation of automotive equipment;
14    (11) Telecommunications services;
15    (12) Contingencies;
16    (13) Reserve;
17    (14) Interest;
18    (15) Awards and Grants;
19    (16) Debt Retirement;
20    (17) Non-Cost Charges;
21    (18) State retirement contribution for annual normal cost;
22    (19) State retirement contribution for unfunded accrued
23liability;
24    (20) (18) Purchase Contract for Real Estate.
25    When an appropriation is made to an officer, department,

 

 

SB0001- 22 -LRB098 05457 JDS 35491 b

1institution, board, commission or other agency, or to a private
2association or corporation, in one or more of the items above
3specified, such appropriation shall be construed in accordance
4with the definitions and limitations specified in this Act,
5unless the appropriation act otherwise provides.
6    An appropriation for a purpose other than one specified and
7defined in this Act may be made only as an additional, separate
8and distinct item, specifically stating the object and purpose
9thereof.
10(Source: P.A. 84-263; 84-264.)
 
11    (30 ILCS 105/24.12 new)
12    Sec. 24.12. "State retirement contribution for annual
13normal cost" defined. The term "State retirement contribution
14for annual normal cost" means the portion of the total required
15State contribution to a retirement system for a fiscal year
16that represents the State's portion of the System's projected
17normal cost for that fiscal year, as determined and certified
18by the board of trustees of the retirement system in
19conformance with the applicable provisions of the Illinois
20Pension Code.
 
21    (30 ILCS 105/24.13 new)
22    Sec. 24.13. "State retirement contribution for unfunded
23accrued liability" defined. The term "State retirement
24contribution for unfunded accrued liability" means the portion

 

 

SB0001- 23 -LRB098 05457 JDS 35491 b

1of the total required State contribution to a retirement system
2for a fiscal year that is not included in the State retirement
3contribution for annual normal cost.
 
4    Section A-15. The Budget Stabilization Act is amended by
5changing Sections 20 and 25 as follows:
 
6    (30 ILCS 122/20)
7    Sec. 20. Pension Stabilization Fund.
8    (a) The Pension Stabilization Fund is hereby created as a
9special fund in the State treasury. Moneys in the fund shall be
10used for the sole purpose of making payments to the designated
11retirement systems as provided in Section 25.
12    (b) For each fiscal year when the General Assembly's
13appropriations and transfers or diversions as required by law
14from general funds do not exceed 99% of the estimated general
15funds revenues pursuant to subsection (a) of Section 10, the
16Comptroller shall transfer from the General Revenue Fund as
17provided by this Section a total amount equal to 0.5% of the
18estimated general funds revenues to the Pension Stabilization
19Fund.
20    (c) For each fiscal year through State fiscal year 2013,
21when the General Assembly's appropriations and transfers or
22diversions as required by law from general funds do not exceed
2398% of the estimated general funds revenues pursuant to
24subsection (b) of Section 10, the Comptroller shall transfer

 

 

SB0001- 24 -LRB098 05457 JDS 35491 b

1from the General Revenue Fund as provided by this Section a
2total amount equal to 1.0% of the estimated general funds
3revenues to the Pension Stabilization Fund.
4    (c-10) In State fiscal year 2020 and each fiscal year
5thereafter, the State Comptroller shall order transferred and
6the State Treasurer shall transfer $1,000,000,000 from the
7General Revenue Fund to the Pension Stabilization Fund.
8    (c-15) The transfers made pursuant to subsection (c-10) of
9this Section shall continue through State fiscal year 2045 or
10until each of the designated retirement systems, as defined in
11Section 25, has achieved the funding ratio prescribed by law
12for that retirement system, whichever occurs first; provided
13that those transfers shall not be made after any provision of
14this Act that is designated as inseverable in Section 97 of
15this Act is declared to be unconstitutional or invalid other
16than as applied.
17    (d) The Comptroller shall transfer 1/12 of the total amount
18to be transferred each fiscal year under this Section into the
19Pension Stabilization Fund on the first day of each month of
20that fiscal year or as soon thereafter as possible; except that
21the final transfer of the fiscal year shall be made as soon as
22practical after the August 31 following the end of the fiscal
23year.
24    Until State fiscal year 2014, before Before the final
25transfer for a fiscal year is made, the Comptroller shall
26reconcile the estimated general funds revenues used in

 

 

SB0001- 25 -LRB098 05457 JDS 35491 b

1calculating the other transfers under this Section for that
2fiscal year with the actual general funds revenues for that
3fiscal year. The final transfer for the fiscal year shall be
4adjusted so that the total amount transferred under this
5Section for that fiscal year is equal to the percentage
6specified in subsection (b) or (c) of this Section, whichever
7is applicable, of the actual general funds revenues for that
8fiscal year. The actual general funds revenues for the fiscal
9year shall be calculated in a manner consistent with subsection
10(c) of Section 10 of this Act.
11(Source: P.A. 94-839, eff. 6-6-06.)
 
12    (30 ILCS 122/25)
13    Sec. 25. Transfers from the Pension Stabilization Fund.
14    (a) As used in this Section, "designated retirement
15systems" means:
16        (1) the State Employees' Retirement System of
17    Illinois;
18        (2) the Teachers' Retirement System of the State of
19    Illinois;
20        (3) the State Universities Retirement System;
21        (4) the Judges Retirement System of Illinois; and
22        (5) the General Assembly Retirement System.
23    (b) As soon as may be practical after any money is
24deposited into the Pension Stabilization Fund, the State
25Comptroller shall apportion the deposited amount among the

 

 

SB0001- 26 -LRB098 05457 JDS 35491 b

1designated retirement systems and the State Comptroller and
2State Treasurer shall pay the apportioned amounts to the
3designated retirement systems. The amount deposited shall be
4apportioned among the designated retirement systems in the same
5proportion as their respective portions of the total actuarial
6reserve deficiency of the designated retirement systems, as
7most recently determined by the Governor's Office of Management
8and Budget. Amounts received by a designated retirement system
9under this Section shall be used for funding the unfunded
10liabilities of the retirement system. Payments under this
11Section are authorized by the continuing appropriation under
12Section 1.7 of the State Pension Funds Continuing Appropriation
13Act.
14    (c) At the request of the State Comptroller, the Governor's
15Office of Management and Budget shall determine the individual
16and total actuarial reserve deficiencies of the designated
17retirement systems. For this purpose, the Governor's Office of
18Management and Budget shall consider the latest available audit
19and actuarial reports of each of the retirement systems and the
20relevant reports and statistics of the Public Pension Division
21of the Department of Financial and Professional Regulation.
22    (d) Payments to the designated retirement systems under
23this Section shall be in addition to, and not in lieu of, any
24State contributions required under Section 2-124, 14-131,
2515-155, 16-158, or 18-131 of the Illinois Pension Code.
26    Payments to the designated retirement systems under this

 

 

SB0001- 27 -LRB098 05457 JDS 35491 b

1Section, transferred after the effective date of this
2amendatory Act of the 98th General Assembly, do not reduce and
3do not constitute payment of any portion of the required State
4contribution under Article 2, 14, 15, 16, or 18 of the Illinois
5Pension Code in that fiscal year. Such amounts shall not
6reduce, and shall not be included in the calculation of, the
7required State Contribution under Article 2, 14, 15, 16, or 18
8of the Illinois Pension Code in any future year, until the
9designated retirement system has received payment of
10contributions pursuant to this Act.
11(Source: P.A. 94-839, eff. 6-6-06.)
 
12    Section A-20. The Illinois Pension Code is amended by
13changing Sections 1-103.3, 2-108, 2-119.1, 2-121.1, 2-124,
142-125, 2-126, 2-134, 2-162, 7-109, 14-103.10, 14-106, 14-114,
1514-131, 14-132, 14-133, 14-135.08, 14-152.1, 15-106, 15-107,
1615-111, 15-113.2, 15-136, 15-155, 15-156, 15-157, 15-165,
1715-198, 16-106, 16-121, 16-127, 16-133, 16-133.1, 16-152,
1816-158, 16-203, and 18-131 and by adding Sections 2-105.1,
192-105.2, 14-103.40, 14-103.41, 15-107.1, 15-107.2, 16-106.4,
2016-106.5, and 16-158.2 as follows:
 
21    (40 ILCS 5/1-103.3)
22    Sec. 1-103.3. Application of 1994 amendment; funding
23standard.
24    (a) The provisions of Public Act 88-593 this amendatory Act

 

 

SB0001- 28 -LRB098 05457 JDS 35491 b

1of 1994 that change the method of calculating, certifying, and
2paying the required State contributions to the retirement
3systems established under Articles 2, 14, 15, 16, and 18 shall
4first apply to the State contributions required for State
5fiscal year 1996.
6    (b) (Blank) The General Assembly declares that a funding
7ratio (the ratio of a retirement system's total assets to its
8total actuarial liabilities) of 90% is an appropriate goal for
9State-funded retirement systems in Illinois, and it finds that
10a funding ratio of 90% is now the generally-recognized norm
11throughout the nation for public employee retirement systems
12that are considered to be financially secure and funded in an
13appropriate and responsible manner.
14    (c) Every 5 years, beginning in 1999, the Commission on
15Government Forecasting and Accountability, in consultation
16with the affected retirement systems and the Governor's Office
17of Management and Budget (formerly Bureau of the Budget), shall
18consider and determine whether the funding goals 90% funding
19ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
20continue subsection (b) continues to represent an appropriate
21funding goals goal for those State-funded retirement systems in
22Illinois, and it shall report its findings and recommendations
23on this subject to the Governor and the General Assembly.
24(Source: P.A. 93-1067, eff. 1-15-05.)
 
25    (40 ILCS 5/2-105.1 new)

 

 

SB0001- 29 -LRB098 05457 JDS 35491 b

1    Sec. 2-105.1. Tier I participant."Tier I participant": A
2participant who first became a participant before January 1,
32011.
 
4    (40 ILCS 5/2-105.2 new)
5    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
6former Tier I participant who is receiving a retirement
7annuity.
 
8    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
9    Sec. 2-108. Salary. "Salary": (1) For members of the
10General Assembly, the total compensation paid to the member by
11the State for one year of service, including the additional
12amounts, if any, paid to the member as an officer pursuant to
13Section 1 of "An Act in relation to the compensation and
14emoluments of the members of the General Assembly", approved
15December 6, 1907, as now or hereafter amended.
16    (2) For the State executive officers specified in Section
172-105, the total compensation paid to the member for one year
18of service.
19    (3) For members of the System who are participants under
20Section 2-117.1, or who are serving as Clerk or Assistant Clerk
21of the House of Representatives or Secretary or Assistant
22Secretary of the Senate, the total compensation paid to the
23member for one year of service, but not to exceed the salary of
24the highest salaried officer of the General Assembly.

 

 

SB0001- 30 -LRB098 05457 JDS 35491 b

1    However, in the event that federal law results in any
2participant receiving imputed income based on the value of
3group term life insurance provided by the State, such imputed
4income shall not be included in salary for the purposes of this
5Article.
6    Notwithstanding any other provision of this Code, the
7salary of a Tier I participant for the purposes of this Code
8shall not exceed, for periods of service in a term of office
9beginning on or after the effective date of this amendatory Act
10of the 98th General Assembly, the greater of (i) the annual
11contribution and benefit base established for the applicable
12year by the Commissioner of Social Security under the federal
13Social Security Act or (ii) the annual salary of the
14participant during the 365 days immediately preceding the
15effective date of this Section.
16(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
17    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
18    Sec. 2-119.1. Automatic increase in retirement annuity.
19    (a) Except as provided in subsections (a-1) and (a-2), a A
20participant who retires after June 30, 1967, and who has not
21received an initial increase under this Section before the
22effective date of this amendatory Act of 1991, shall, in
23January or July next following the first anniversary of
24retirement, whichever occurs first, and in the same month of
25each year thereafter, but in no event prior to age 60, have the

 

 

SB0001- 31 -LRB098 05457 JDS 35491 b

1amount of the originally granted retirement annuity increased
2as follows: for each year through 1971, 1 1/2%; for each year
3from 1972 through 1979, 2%; and for 1980 and each year
4thereafter, 3%. Annuitants who have received an initial
5increase under this subsection prior to the effective date of
6this amendatory Act of 1991 shall continue to receive their
7annual increases in the same month as the initial increase.
8    (a-1) Notwithstanding any other provision of this Article,
9for a Tier I retiree, the amount of each automatic increase in
10retirement annuity occurring on or after the effective date of
11this amendatory Act of the 98th General Assembly shall be the
12lesser of (i) $750 or (ii) 3% of the total annuity payable at
13the time of the increase, including previous increases granted.
14    (a-2) Notwithstanding any other provision of this Article,
15the System shall not grant any new or additional automatic
16increase in retirement annuity to a Tier I retiree on or after
17the effective date of this amendatory Act of the 98th General
18Assembly and before January 1, 2017.
19    Notwithstanding any other provision of this Article, the
20System shall not grant any new or additional automatic increase
21in retirement annuity to a Tier I retiree who has not yet
22attained the age of 67, regardless of any age augmentation
23granted under this Article as an early retirement incentive.
24    If on the effective date of this amendatory Act of the 98th
25General Assembly a Tier I retiree has already received an
26annual increase under this Section but does not yet meet the

 

 

SB0001- 32 -LRB098 05457 JDS 35491 b

1new eligibility requirements of this subsection, the annual
2increases already received shall continue in force, but no
3additional annual increase shall be granted until the Tier I
4retiree meets the new eligibility requirements.
5    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
6and (a-2) apply without regard to whether or not the Tier I
7retiree is in active service under this Article on or after the
8effective date of this amendatory Act of the 98th General
9Assembly.
10    (b) Beginning January 1, 1990, for eligible participants
11who remain in service after attaining 20 years of creditable
12service, the 3% increases provided under subsection (a) shall
13begin to accrue on the January 1 next following the date upon
14which the participant (1) attains age 55, or (2) attains 20
15years of creditable service, whichever occurs later, and shall
16continue to accrue while the participant remains in service;
17such increases shall become payable on January 1 or July 1,
18whichever occurs first, next following the first anniversary of
19retirement. For any person who has service credit in the System
20for the entire period from January 15, 1969 through December
2131, 1992, regardless of the date of termination of service, the
22reference to age 55 in clause (1) of this subsection (b) shall
23be deemed to mean age 50.
24    This subsection (b) does not apply to any person who first
25becomes a member of the System after August 8, 2003 (the
26effective date of Public Act 93-494) this amendatory Act of the

 

 

SB0001- 33 -LRB098 05457 JDS 35491 b

193rd General Assembly.
2    (b-5) Notwithstanding any other provision of this Article,
3a participant who first becomes a participant on or after
4January 1, 2011 (the effective date of Public Act 96-889)
5shall, in January or July next following the first anniversary
6of retirement, whichever occurs first, and in the same month of
7each year thereafter, but in no event prior to age 67, have the
8amount of the originally granted retirement annuity then being
9paid increased by 3% or one-half the annual unadjusted
10percentage increase in the Consumer Price Index for All Urban
11Consumers as determined by the Public Pension Division of the
12Department of Insurance under subsection (a) of Section
132-108.1, whichever is less. The changes made to this subsection
14by this amendatory Act of the 98th General Assembly do not
15apply to any automatic annual increase granted under this
16subsection before the effective date of this amendatory Act.
17    (c) The foregoing provisions relating to automatic
18increases are not applicable to a participant who retires
19before having made contributions (at the rate prescribed in
20Section 2-126) for automatic increases for less than the
21equivalent of one full year. However, in order to be eligible
22for the automatic increases, such a participant may make
23arrangements to pay to the system the amount required to bring
24the total contributions for the automatic increase to the
25equivalent of one year's contributions based upon his or her
26last salary.

 

 

SB0001- 34 -LRB098 05457 JDS 35491 b

1    (d) A participant who terminated service prior to July 1,
21967, with at least 14 years of service is entitled to an
3increase in retirement annuity beginning January, 1976, and to
4additional increases in January of each year thereafter.
5    The initial increase shall be 1 1/2% of the originally
6granted retirement annuity multiplied by the number of full
7years that the annuitant was in receipt of such annuity prior
8to January 1, 1972, plus 2% of the originally granted
9retirement annuity for each year after that date. The
10subsequent annual increases shall be at the rate of 2% of the
11originally granted retirement annuity for each year through
121979 and at the rate of 3% for 1980 and thereafter.
13    (e) Beginning January 1, 1990, all automatic annual
14increases payable under this Section shall be calculated as a
15percentage of the total annuity payable at the time of the
16increase, including previous increases granted under this
17Article.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/2-121.1)  (from Ch. 108 1/2, par. 2-121.1)
20    Sec. 2-121.1. Survivor's annuity - amount.
21    (a) A surviving spouse shall be entitled to 66 2/3% of the
22amount of retirement annuity to which the participant or
23annuitant was entitled on the date of death, without regard to
24whether the participant had attained age 55 prior to his or her
25death, subject to a minimum payment of 10% of salary. If a

 

 

SB0001- 35 -LRB098 05457 JDS 35491 b

1surviving spouse, regardless of age, has in his or her care at
2the date of death any eligible child or children of the
3participant, the survivor's annuity shall be the greater of the
4following: (1) 66 2/3% of the amount of retirement annuity to
5which the participant or annuitant was entitled on the date of
6death, or (2) 30% of the participant's salary increased by 10%
7of salary on account of each such child, subject to a total
8payment for the surviving spouse and children of 50% of salary.
9If eligible children survive but there is no surviving spouse,
10or if the surviving spouse dies or becomes disqualified by
11remarriage while eligible children survive, each eligible
12child shall be entitled to an annuity of 20% of salary, subject
13to a maximum total payment for all such children of 50% of
14salary.
15    However, the survivor's annuity payable under this Section
16shall not be less than 100% of the amount of retirement annuity
17to which the participant or annuitant was entitled on the date
18of death, if he or she is survived by a dependent disabled
19child.
20    The salary to be used for determining these benefits shall
21be the salary used for determining the amount of retirement
22annuity as provided in Section 2-119.01.
23    (b) Upon the death of a participant after the termination
24of service or upon death of an annuitant, the maximum total
25payment to a surviving spouse and eligible children, or to
26eligible children alone if there is no surviving spouse, shall

 

 

SB0001- 36 -LRB098 05457 JDS 35491 b

1be 75% of the retirement annuity to which the participant or
2annuitant was entitled, unless there is a dependent disabled
3child among the survivors.
4    (c) When a child ceases to be an eligible child, the
5annuity to that child, or to the surviving spouse on account of
6that child, shall thereupon cease, and the annuity payable to
7the surviving spouse or other eligible children shall be
8recalculated if necessary.
9    Upon the ineligibility of the last eligible child, the
10annuity shall immediately revert to the amount payable upon
11death of a participant or annuitant who leaves no eligible
12children. If the surviving spouse is then under age 50, the
13annuity as revised shall be deferred until the attainment of
14age 50.
15    (d) Beginning January 1, 1990, every survivor's annuity
16shall be increased (1) on each January 1 occurring on or after
17the commencement of the annuity if the deceased member died
18while receiving a retirement annuity, or (2) in other cases, on
19each January 1 occurring on or after the first anniversary of
20the commencement of the annuity, by an amount equal to 3% of
21the current amount of the annuity, including any previous
22increases under this Article. Such increases shall apply
23without regard to whether the deceased member was in service on
24or after the effective date of this amendatory Act of 1991, but
25shall not accrue for any period prior to January 1, 1990.
26    (d-5) Notwithstanding any other provision of this Article,

 

 

SB0001- 37 -LRB098 05457 JDS 35491 b

1the initial survivor's annuity of a survivor of a participant
2who first becomes a participant on or after January 1, 2011
3(the effective date of Public Act 96-889) shall be in the
4amount of 66 2/3% of the amount of the retirement annuity to
5which the participant or annuitant was entitled on the date of
6death and shall be increased (1) on each January 1 occurring on
7or after the commencement of the annuity if the deceased member
8died while receiving a retirement annuity or (2) in other
9cases, on each January 1 occurring on or after the first
10anniversary of the commencement of the annuity, by an amount
11equal to 3% or one-half the annual unadjusted percentage
12increase in the Consumer Price Index for All Urban Consumers as
13determined by the Public Pension Division of the Department of
14Insurance under subsection (a) of Section 2-108.1, whichever is
15less, of the originally granted survivor's annuity then being
16paid. The changes made to this subsection by this amendatory
17Act of the 98th General Assembly do not apply to any automatic
18annual increase granted under this subsection before the
19effective date of this amendatory Act.
20    (e) Notwithstanding any other provision of this Article,
21beginning January 1, 1990, the minimum survivor's annuity
22payable to any person who is entitled to receive a survivor's
23annuity under this Article shall be $300 per month, without
24regard to whether or not the deceased participant was in
25service on the effective date of this amendatory Act of 1989.
26    (f) In the case of a proportional survivor's annuity

 

 

SB0001- 38 -LRB098 05457 JDS 35491 b

1arising under the Retirement Systems Reciprocal Act where the
2amount payable by the System on January 1, 1993 is less than
3$300 per month, the amount payable by the System shall be
4increased beginning on that date by a monthly amount equal to
5$2 for each full year that has expired since the annuity began.
6(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
7    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
8    Sec. 2-124. Contributions by State.
9    (a) The State shall make contributions to the System by
10appropriations of amounts which, together with the
11contributions of participants, interest earned on investments,
12and other income will meet the cost of maintaining and
13administering the System on a 100% 90% funded basis in
14accordance with actuarial recommendations by the end of State
15fiscal year 2043.
16    (b) The Board shall determine the amount of State
17contributions required for each fiscal year on the basis of the
18actuarial tables and other assumptions adopted by the Board and
19the prescribed rate of interest, using the formula in
20subsection (c).
21    (c) For State fiscal years 2014 through 2043, 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
24equal to the sum of (1) the State's portion of the projected
25normal cost for that fiscal year, plus (2) an amount sufficient

 

 

SB0001- 39 -LRB098 05457 JDS 35491 b

1to bring the total assets of the System up to 100% of the total
2actuarial liabilities of the System by the end of State fiscal
3year 2043. In making these determinations, the required State
4contribution shall be calculated each year as a level
5percentage of payroll over the years remaining to and including
6fiscal year 2043 and shall be determined under the projected
7unit credit actuarial cost method.
8    For State fiscal years 2012 and 2013 through 2045, the
9minimum contribution to the System to be made by the State for
10each fiscal year shall be an amount determined by the System to
11be sufficient to bring the total assets of the System up to 90%
12of the total actuarial liabilities of the System by the end of
13State fiscal year 2045. In making these determinations, the
14required State contribution shall be calculated each year as a
15level percentage of payroll over the years remaining to and
16including fiscal year 2045 and shall be determined under the
17projected unit credit actuarial cost method.
18    For State fiscal years 1996 through 2005, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21so that by State fiscal year 2011, the State is contributing at
22the rate required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2006 is
25$4,157,000.
26    Notwithstanding any other provision of this Article, the

 

 

SB0001- 40 -LRB098 05457 JDS 35491 b

1total required State contribution for State fiscal year 2007 is
2$5,220,300.
3    For each of State fiscal years 2008 through 2009, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6from the required State contribution for State fiscal year
72007, so that by State fiscal year 2011, the State is
8contributing at the rate otherwise required under this Section.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2010 is
11$10,454,000 and shall be made from the proceeds of bonds sold
12in fiscal year 2010 pursuant to Section 7.2 of the General
13Obligation Bond Act, less (i) the pro rata share of bond sale
14expenses determined by the System's share of total bond
15proceeds, (ii) any amounts received from the General Revenue
16Fund in fiscal year 2010, and (iii) any reduction in bond
17proceeds due to the issuance of discounted bonds, if
18applicable.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2011 is
21the amount recertified by the System on or before April 1, 2011
22pursuant to Section 2-134 and shall be made from the proceeds
23of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
24the General Obligation Bond Act, less (i) the pro rata share of
25bond sale expenses determined by the System's share of total
26bond proceeds, (ii) any amounts received from the General

 

 

SB0001- 41 -LRB098 05457 JDS 35491 b

1Revenue Fund in fiscal year 2011, and (iii) any reduction in
2bond proceeds due to the issuance of discounted bonds, if
3applicable.
4    Beginning in State fiscal year 2044, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 100% of the total
7actuarial liabilities of the System.
8    Beginning in State fiscal year 2046, the minimum State
9contribution for each fiscal year shall be the amount needed to
10maintain the total assets of the System at 90% of the total
11actuarial liabilities of the System.
12    Amounts received by the System pursuant to Section 25 of
13the Budget Stabilization Act or Section 8.12 of the State
14Finance Act in any fiscal year do not reduce and do not
15constitute payment of any portion of the minimum State
16contribution required under this Article in that fiscal year.
17Such amounts shall not reduce, and shall not be included in the
18calculation of, the required State contributions under this
19Article in any future year until the System has reached a
20funding ratio of at least 100% 90%. A reference in this Article
21to the "required State contribution" or any substantially
22similar term does not include or apply to any amounts payable
23to the System under Section 25 of the Budget Stabilization Act.
24    Notwithstanding any other provision of this Code or the
25Budget Stabilization Act, amounts transferred to the System
26pursuant to the Budget Stabilization Act after the effective

 

 

SB0001- 42 -LRB098 05457 JDS 35491 b

1date of this amendatory Act of the 98th General Assembly do not
2reduce and do not constitute payment of any portion of the
3required State contribution under this Article in that fiscal
4year. Such amounts shall not reduce, and shall not be included
5in the calculation of, the required State contributions under
6this Article in any future year until the System has received
7payment of contributions pursuant to the Budget Stabilization
8Act.
9    Notwithstanding any other provision of this Section, the
10required State contribution for State fiscal year 2005 and for
11fiscal year 2008 and each fiscal year thereafter through State
12fiscal year 2013, as calculated under this Section and
13certified under Section 2-134, shall not exceed an amount equal
14to (i) the amount of the required State contribution that would
15have been calculated under this Section for that fiscal year if
16the System had not received any payments under subsection (d)
17of Section 7.2 of the General Obligation Bond Act, minus (ii)
18the portion of the State's total debt service payments for that
19fiscal year on the bonds issued in fiscal year 2003 for the
20purposes of that Section 7.2, as determined and certified by
21the Comptroller, that is the same as the System's portion of
22the total moneys distributed under subsection (d) of Section
237.2 of the General Obligation Bond Act. In determining this
24maximum for State fiscal years 2008 through 2010, however, the
25amount referred to in item (i) shall be increased, as a
26percentage of the applicable employee payroll, in equal

 

 

SB0001- 43 -LRB098 05457 JDS 35491 b

1increments calculated from the sum of the required State
2contribution for State fiscal year 2007 plus the applicable
3portion of the State's total debt service payments for fiscal
4year 2007 on the bonds issued in fiscal year 2003 for the
5purposes of Section 7.2 of the General Obligation Bond Act, so
6that, by State fiscal year 2011, the State is contributing at
7the rate otherwise required under this Section.
8    (d) For purposes of determining the required State
9contribution to the System, the value of the System's assets
10shall be equal to the actuarial value of the System's assets,
11which shall be calculated as follows:
12    As of June 30, 2008, the actuarial value of the System's
13assets shall be equal to the market value of the assets as of
14that date. In determining the actuarial value of the System's
15assets for fiscal years after June 30, 2008, any actuarial
16gains or losses from investment return incurred in a fiscal
17year shall be recognized in equal annual amounts over the
185-year period following that fiscal year.
19    (e) For purposes of determining the required State
20contribution to the system for a particular year, the actuarial
21value of assets shall be assumed to earn a rate of return equal
22to the system's actuarially assumed rate of return.
23(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
257-13-12.)
 

 

 

SB0001- 44 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
2    Sec. 2-125. Obligations of State; funding guarantee.
3    (a) The payment of (1) the required State contributions,
4(2) all benefits granted under this system and (3) all expenses
5of administration and operation are obligations of the State to
6the extent specified in this Article.
7    (b) All income, interest and dividends derived from
8deposits and investments shall be credited to the account of
9the system in the State Treasury and used to pay benefits under
10this Article.
11    (c) Beginning July 1, 2013, the State shall be
12contractually obligated to contribute to the System under
13Section 2-124 in each State fiscal year an amount not less than
14the sum of (i) the State's normal cost for that year and (ii)
15the portion of the unfunded accrued liability assigned to that
16year by law in accordance with a schedule that distributes
17payments equitably over a reasonable period of time and in
18accordance with accepted actuarial practices. The obligations
19created under this subsection (c) are contractual obligations
20protected and enforceable under Article I, Section 16 and
21Article XIII, Section 5 of the Illinois Constitution.
22    Notwithstanding any other provision of law, if the State
23fails to pay in a State fiscal year the amount guaranteed under
24this subsection, the System may bring a mandamus action in the
25Circuit Court of Sangamon County to compel the State to make
26that payment, irrespective of other remedies that may be

 

 

SB0001- 45 -LRB098 05457 JDS 35491 b

1available to the System. In ordering the State to make the
2required payment, the court may order a reasonable payment
3schedule to enable the State to make the required payment
4without significantly imperiling the public health, safety, or
5welfare.
6    Any payments required to be made by the State pursuant to
7this subsection (c) are expressly subordinated to the payment
8of the principal, interest, and premium, if any, on any bonded
9debt obligation of the State or any other State-created entity,
10either currently outstanding or to be issued, for which the
11source of repayment or security thereon is derived directly or
12indirectly from tax revenues collected by the State or any
13other State-created entity. Payments on such bonded
14obligations include any statutory fund transfers or other
15prefunding mechanisms or formulas set forth, now or hereafter,
16in State law or bond indentures, into debt service funds or
17accounts of the State related to such bonded obligations,
18consistent with the payment schedules associated with such
19obligations.
20(Source: P.A. 83-1440.)
 
21    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
22    Sec. 2-126. Contributions by participants.
23    (a) Each participant shall contribute toward the cost of
24his or her retirement annuity a percentage of each payment of
25salary received by him or her for service as a member as

 

 

SB0001- 46 -LRB098 05457 JDS 35491 b

1follows: for service between October 31, 1947 and January 1,
21959, 5%; for service between January 1, 1959 and June 30,
31969, 6%; for service between July 1, 1969 and January 10,
41973, 6 1/2%; for service after January 10, 1973, 7%; for
5service after December 31, 1981, 8 1/2%.
6    (a-5) In addition to the contributions otherwise required
7under this Article, each Tier I participant shall also make the
8following contributions toward the cost of his or her
9retirement annuity from each payment of salary received by him
10or her for service as a member:
11        (1) beginning July 1, 2013 and through June 30, 2014,
12    1% of salary; and
13        (2) beginning on July 1, 2014, 2% of salary.
14    (b) Beginning August 2, 1949, each male participant, and
15from July 1, 1971, each female participant shall contribute
16towards the cost of the survivor's annuity 2% of salary.
17    A participant who has no eligible survivor's annuity
18beneficiary may elect to cease making contributions for
19survivor's annuity under this subsection. A survivor's annuity
20shall not be payable upon the death of a person who has made
21this election, unless prior to that death the election has been
22revoked and the amount of the contributions that would have
23been paid under this subsection in the absence of the election
24is paid to the System, together with interest at the rate of 4%
25per year from the date the contributions would have been made
26to the date of payment.

 

 

SB0001- 47 -LRB098 05457 JDS 35491 b

1    (c) Beginning July 1, 1967, each participant shall
2contribute 1% of salary towards the cost of automatic increase
3in annuity provided in Section 2-119.1. These contributions
4shall be made concurrently with contributions for retirement
5annuity purposes.
6    (d) In addition, each participant serving as an officer of
7the General Assembly shall contribute, for the same purposes
8and at the same rates as are required of a regular participant,
9on each additional payment received as an officer. If the
10participant serves as an officer for at least 2 but less than 4
11years, he or she shall contribute an amount equal to the amount
12that would have been contributed had the participant served as
13an officer for 4 years. Persons who serve as officers in the
1487th General Assembly but cannot receive the additional payment
15to officers because of the ban on increases in salary during
16their terms may nonetheless make contributions based on those
17additional payments for the purpose of having the additional
18payments included in their highest salary for annuity purposes;
19however, persons electing to make these additional
20contributions must also pay an amount representing the
21corresponding employer contributions, as calculated by the
22System.
23    (e) Notwithstanding any other provision of this Article,
24the required contribution of a participant who first becomes a
25participant on or after January 1, 2011 shall not exceed the
26contribution that would be due under this Article if that

 

 

SB0001- 48 -LRB098 05457 JDS 35491 b

1participant's highest salary for annuity purposes were
2$106,800, plus any increases in that amount under Section
32-108.1.
4(Source: P.A. 96-1490, eff. 1-1-11.)
 
5    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
6    Sec. 2-134. To certify required State contributions and
7submit vouchers.
8    (a) The Board shall certify to the Governor on or before
9December 15 of each year through until December 15, 2011 the
10amount of the required State contribution to the System for the
11next fiscal year and shall specifically identify the System's
12projected State normal cost for that fiscal year. The
13certification shall include a copy of the actuarial
14recommendations upon which it is based and shall specifically
15identify the System's projected State normal cost for that
16fiscal year.
17    (a-5) On or before November 1 of each year, beginning
18November 1, 2012, the Board shall submit to the State Actuary,
19the Governor, and the General Assembly a proposed certification
20of the amount of the required State contribution to the System
21for the next fiscal year, along with all of the actuarial
22assumptions, calculations, and data upon which that proposed
23certification is based. On or before January 1 of each year,
24beginning January 1, 2013, the State Actuary shall issue a
25preliminary report concerning the proposed certification and

 

 

SB0001- 49 -LRB098 05457 JDS 35491 b

1identifying, if necessary, recommended changes in actuarial
2assumptions that the Board must consider before finalizing its
3certification of the required State contributions.
4    On or before January 15, 2013 and every January 15
5thereafter, the Board shall certify to the Governor and the
6General Assembly the amount of the required State contribution
7for the next fiscal year. The Board's certification shall
8include a copy of the actuarial recommendations upon which it
9is based and shall specifically identify the System's projected
10State normal cost for that fiscal year. The Board's
11certification must note any deviations from the State Actuary's
12recommended changes, the reason or reasons for not following
13the State Actuary's recommended changes, and the fiscal impact
14of not following the State Actuary's recommended changes on the
15required State contribution.
16    (a-7) On or before May 1, 2004, the Board shall recalculate
17and recertify 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.

 

 

SB0001- 50 -LRB098 05457 JDS 35491 b

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    (b) Beginning in State fiscal year 1996, on or as soon as
8possible after the 15th day of each month the Board shall
9submit vouchers for payment of State contributions to the
10System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a). From the effective date of this amendatory Act of the 93rd
13General Assembly through June 30, 2004, the Board shall not
14submit vouchers for the remainder of fiscal year 2004 in excess
15of the fiscal year 2004 certified contribution amount
16determined under this Section after taking into consideration
17the transfer to the System under subsection (d) of Section
186z-61 of the State Finance Act. These vouchers shall be paid by
19the State Comptroller and Treasurer by warrants drawn on the
20funds appropriated to the System for that fiscal year. If in
21any month the amount remaining unexpended from all other
22appropriations to the System for the applicable fiscal year
23(including the appropriations to the System under Section 8.12
24of the State Finance Act and Section 1 of the State Pension
25Funds Continuing Appropriation Act) is less than the amount
26lawfully vouchered under this Section, the difference shall be

 

 

SB0001- 51 -LRB098 05457 JDS 35491 b

1paid from the General Revenue Fund under the continuing
2appropriation authority provided in Section 1.1 of the State
3Pension Funds Continuing Appropriation Act.
4    (c) The full amount of any annual appropriation for the
5System for State fiscal year 1995 shall be transferred and made
6available to the System at the beginning of that fiscal year at
7the request of the Board. Any excess funds remaining at the end
8of any fiscal year from appropriations shall be retained by the
9System as a general reserve to meet the System's accrued
10liabilities.
11(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1297-694, eff. 6-18-12.)
 
13    (40 ILCS 5/2-162)
14    Sec. 2-162. Application and expiration of new benefit
15increases.
16    (a) As used in this Section, "new benefit increase" means
17an increase in the amount of any benefit provided under this
18Article, or an expansion of the conditions of eligibility for
19any benefit under this Article, that results from an amendment
20to this Code that takes effect after the effective date of this
21amendatory Act of the 94th General Assembly. "New benefit
22increase", however, does not include any benefit increase
23resulting from the changes made to this Article by this
24amendatory Act of the 98th General Assembly.
25    (b) Notwithstanding any other provision of this Code or any

 

 

SB0001- 52 -LRB098 05457 JDS 35491 b

1subsequent amendment to this Code, every new benefit increase
2is subject to this Section and shall be deemed to be granted
3only in conformance with and contingent upon compliance with
4the provisions of this Section.
5    (c) The Public Act enacting a new benefit increase must
6identify and provide for payment to the System of additional
7funding at least sufficient to fund the resulting annual
8increase in cost to the System as it accrues.
9    Every new benefit increase is contingent upon the General
10Assembly providing the additional funding required under this
11subsection. The Commission on Government Forecasting and
12Accountability shall analyze whether adequate additional
13funding has been provided for the new benefit increase and
14shall report its analysis to the Public Pension Division of the
15Department of Financial and Professional Regulation. A new
16benefit increase created by a Public Act that does not include
17the additional funding required under this subsection is null
18and void. If the Public Pension Division determines that the
19additional funding provided for a new benefit increase under
20this subsection is or has become inadequate, it may so certify
21to the Governor and the State Comptroller and, in the absence
22of corrective action by the General Assembly, the new benefit
23increase shall expire at the end of the fiscal year in which
24the certification is made.
25    (d) Every new benefit increase shall expire 5 years after
26its effective date or on such earlier date as may be specified

 

 

SB0001- 53 -LRB098 05457 JDS 35491 b

1in the language enacting the new benefit increase or provided
2under subsection (c). This does not prevent the General
3Assembly from extending or re-creating a new benefit increase
4by law.
5    (e) Except as otherwise provided in the language creating
6the new benefit increase, a new benefit increase that expires
7under this Section continues to apply to persons who applied
8and qualified for the affected benefit while the new benefit
9increase was in effect and to the affected beneficiaries and
10alternate payees of such persons, but does not apply to any
11other person, including without limitation a person who
12continues in service after the expiration date and did not
13apply and qualify for the affected benefit while the new
14benefit increase was in effect.
15(Source: P.A. 94-4, eff. 6-1-05.)
 
16    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
17    Sec. 7-109. Employee.
18    (1) "Employee" means any person who:
19        (a) 1. Receives earnings as payment for the performance
20        of personal services or official duties out of the
21        general fund of a municipality, or out of any special
22        fund or funds controlled by a municipality, or by an
23        instrumentality thereof, or a participating
24        instrumentality, including, in counties, the fees or
25        earnings of any county fee office; and

 

 

SB0001- 54 -LRB098 05457 JDS 35491 b

1            2. Under the usual common law rules applicable in
2        determining the employer-employee relationship, has
3        the status of an employee with a municipality, or any
4        instrumentality thereof, or a participating
5        instrumentality, including aldermen, county
6        supervisors and other persons (excepting those
7        employed as independent contractors) who are paid
8        compensation, fees, allowances or other emolument for
9        official duties, and, in counties, the several county
10        fee offices.
11        (b) Serves as a township treasurer appointed under the
12    School Code, as heretofore or hereafter amended, and who
13    receives for such services regular compensation as
14    distinguished from per diem compensation, and any regular
15    employee in the office of any township treasurer whether or
16    not his earnings are paid from the income of the permanent
17    township fund or from funds subject to distribution to the
18    several school districts and parts of school districts as
19    provided in the School Code, or from both such sources; or
20    is the chief executive officer, chief educational officer,
21    chief fiscal officer, or other employee of a Financial
22    Oversight Panel established pursuant to Article 1H of the
23    School Code, other than a superintendent or certified
24    school business official, except that such person shall not
25    be treated as an employee under this Section if that person
26    has negotiated with the Financial Oversight Panel, in

 

 

SB0001- 55 -LRB098 05457 JDS 35491 b

1    conjunction with the school district, a contractual
2    agreement for exclusion from this Section.
3        (c) Holds an elective office in a municipality,
4    instrumentality thereof or participating instrumentality.
5    (2) "Employee" does not include persons who:
6        (a) Are eligible for inclusion under any of the
7    following laws:
8            1. "An Act in relation to an Illinois State
9        Teachers' Pension and Retirement Fund", approved May
10        27, 1915, as amended;
11            2. Articles 15 and 16 of this Code.
12        However, such persons shall be included as employees to
13    the extent of earnings that are not eligible for inclusion
14    under the foregoing laws for services not of an
15    instructional nature of any kind.
16        However, any member of the armed forces who is employed
17    as a teacher of subjects in the Reserve Officers Training
18    Corps of any school and who is not certified under the law
19    governing the certification of teachers shall be included
20    as an employee.
21        (b) Are designated by the governing body of a
22    municipality in which a pension fund is required by law to
23    be established for policemen or firemen, respectively, as
24    performing police or fire protection duties, except that
25    when such persons are the heads of the police or fire
26    department and are not eligible to be included within any

 

 

SB0001- 56 -LRB098 05457 JDS 35491 b

1    such pension fund, they shall be included within this
2    Article; provided, that such persons shall not be excluded
3    to the extent of concurrent service and earnings not
4    designated as being for police or fire protection duties.
5    However, (i) any head of a police department who was a
6    participant under this Article immediately before October
7    1, 1977 and did not elect, under Section 3-109 of this Act,
8    to participate in a police pension fund shall be an
9    "employee", and (ii) any chief of police who elects to
10    participate in this Fund under Section 3-109.1 of this
11    Code, regardless of whether such person continues to be
12    employed as chief of police or is employed in some other
13    rank or capacity within the police department, shall be an
14    employee under this Article for so long as such person is
15    employed to perform police duties by a participating
16    municipality and has not lawfully rescinded that election.
17        (c) After August 26, 2011 (the effective date of Public
18    Act 97-609), are contributors to or eligible to contribute
19    to a Taft-Hartley pension plan established on or before
20    June 1, 2011 and are employees of a theatre, arena, or
21    convention center that is located in a municipality located
22    in a county with a population greater than 5,000,000, and
23    to which the participating municipality is required to
24    contribute as the person's employer based on earnings from
25    the municipality. Nothing in this paragraph shall affect
26    service credit or creditable service for any period of

 

 

SB0001- 57 -LRB098 05457 JDS 35491 b

1    service prior to August 26, 2011, and this paragraph shall
2    not apply to individuals who are participating in the Fund
3    prior to August 26, 2011.
4        (d) Become an employee of any of the following
5    participating instrumentalities on or after the effective
6    date of this amendatory Act of the 98th General Assembly:
7    the Illinois Municipal League; the Illinois Association of
8    Park Districts; the Illinois Supervisors, County
9    Commissioners and Superintendents of Highways Association;
10    an association, or not-for-profit corporation, membership
11    in which is authorized under Section 85-15 of the Township
12    Code; the United Counties Council; or the Will County
13    Governmental League.
14    (3) All persons, including, without limitation, public
15defenders and probation officers, who receive earnings from
16general or special funds of a county for performance of
17personal services or official duties within the territorial
18limits of the county, are employees of the county (unless
19excluded by subsection (2) of this Section) notwithstanding
20that they may be appointed by and are subject to the direction
21of a person or persons other than a county board or a county
22officer. It is hereby established that an employer-employee
23relationship under the usual common law rules exists between
24such employees and the county paying their salaries by reason
25of the fact that the county boards fix their rates of
26compensation, appropriate funds for payment of their earnings

 

 

SB0001- 58 -LRB098 05457 JDS 35491 b

1and otherwise exercise control over them. This finding and this
2amendatory Act shall apply to all such employees from the date
3of appointment whether such date is prior to or after the
4effective date of this amendatory Act and is intended to
5clarify existing law pertaining to their status as
6participating employees in the Fund.
7(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
897-813, eff. 7-13-12.)
 
9    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
10    Sec. 14-103.10. Compensation.
11    (a) For periods of service prior to January 1, 1978, the
12full rate of salary or wages payable to an employee for
13personal services performed if he worked the full normal
14working period for his position, subject to the following
15maximum amounts: (1) prior to July 1, 1951, $400 per month or
16$4,800 per year; (2) between July 1, 1951 and June 30, 1957
17inclusive, $625 per month or $7,500 per year; (3) beginning
18July 1, 1957, no limitation.
19    In the case of service of an employee in a position
20involving part-time employment, compensation shall be
21determined according to the employees' earnings record.
22    (b) For periods of service on and after January 1, 1978,
23all remuneration for personal services performed defined as
24"wages" under the Social Security Enabling Act, including that
25part of such remuneration which is in excess of any maximum

 

 

SB0001- 59 -LRB098 05457 JDS 35491 b

1limitation provided in such Act, and including any benefits
2received by an employee under a sick pay plan in effect before
3January 1, 1981, but excluding lump sum salary payments:
4        (1) for vacation,
5        (2) for accumulated unused sick leave,
6        (3) upon discharge or dismissal,
7        (4) for approved holidays.
8    (c) For periods of service on or after December 16, 1978,
9compensation also includes any benefits, other than lump sum
10salary payments made at termination of employment, which an
11employee receives or is eligible to receive under a sick pay
12plan authorized by law.
13    (d) For periods of service after September 30, 1985,
14compensation also includes any remuneration for personal
15services not included as "wages" under the Social Security
16Enabling Act, which is deducted for purposes of participation
17in a program established pursuant to Section 125 of the
18Internal Revenue Code or its successor laws.
19    (e) For members for which Section 1-160 applies for periods
20of service on and after January 1, 2011, all remuneration for
21personal services performed defined as "wages" under the Social
22Security Enabling Act, excluding remuneration that is in excess
23of the annual earnings, salary, or wages of a member or
24participant, as provided in subsection (b-5) of Section 1-160,
25but including any benefits received by an employee under a sick
26pay plan in effect before January 1, 1981. Compensation shall

 

 

SB0001- 60 -LRB098 05457 JDS 35491 b

1exclude lump sum salary payments:
2        (1) for vacation;
3        (2) for accumulated unused sick leave;
4        (3) upon discharge or dismissal; and
5        (4) for approved holidays.
6    (f) Notwithstanding any other provision of this Code, the
7compensation of a Tier I member for the purposes of this Code
8shall not exceed, for periods of service on or after the
9effective date of this amendatory Act of the 98th General
10Assembly, the greater of (i) the annual contribution and
11benefit base established for the applicable year by the
12Commissioner of Social Security under the federal Social
13Security Act or (ii) the annual compensation of the member
14during the 365 days immediately preceding the effective date of
15this Section; except that this limitation does not apply to a
16member's compensation that is determined under an employment
17contract or collective bargaining agreement that is in effect
18on the effective date of this amendatory Act of the 98th
19General Assembly and has not been amended or renewed after that
20date.
21    (g) Notwithstanding the other provisions of this Section,
22for an employee who first becomes a participant on or after the
23effective date of this amendatory Act of the 98th General
24Assembly, "compensation" does not include any payments or
25reimbursements for travel vouchers.
26(Source: P.A. 96-1490, eff. 1-1-11.)
 

 

 

SB0001- 61 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/14-103.40 new)
2    Sec. 14-103.40. Tier I member. "Tier I member": A member of
3this System who first became a member or participant before
4January 1, 2011 under any reciprocal retirement system or
5pension fund established under this Code other than a
6retirement system or pension fund established under Article 2,
73, 4, 5, 6, or 18 of this Code.
 
8    (40 ILCS 5/14-103.41 new)
9    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
10Tier I member who is receiving a retirement annuity.
 
11    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
12    Sec. 14-106. Membership service credit.
13    (a) After January 1, 1944, all service of a member since he
14last became a member with respect to which contributions are
15made shall count as membership service; provided, that for
16service on and after July 1, 1950, 12 months of service shall
17constitute a year of membership service, the completion of 15
18days or more of service during any month shall constitute 1
19month of membership service, 8 to 15 days shall constitute 1/2
20month of membership service and less than 8 days shall
21constitute 1/4 month of membership service. The payroll record
22of each department shall constitute conclusive evidence of the
23record of service rendered by a member.

 

 

SB0001- 62 -LRB098 05457 JDS 35491 b

1    (b) For a member who is employed and paid on an
2academic-year basis rather than on a 12-month annual basis,
3employment for a full academic year shall constitute a full
4year of membership service, except that the member shall not
5receive more than one year of membership service credit (plus
6any additional service credit granted for unused sick leave)
7for service during any 12-month period. This subsection (b)
8applies to all such service for which the member has not begun
9to receive a retirement annuity before January 1, 2001.
10    (c) A member who first participated in this System before
11the effective date of this amendatory Act of the 98th General
12Assembly shall be entitled to additional service credit, under
13rules prescribed by the Board, for accumulated unused sick
14leave credited to his account in the last Department on the
15date of withdrawal from service or for any period for which he
16would have been eligible to receive benefits under a sick pay
17plan authorized by law, if he had suffered a sickness or
18accident on the date of withdrawal from service. It shall be
19the responsibility of the last Department to certify to the
20Board the length of time salary or benefits would have been
21paid to the member based upon the accumulated unused sick leave
22or the applicable sick pay plan if he had become entitled
23thereto because of sickness on the date that his status as an
24employee terminated. This period of service credit granted
25under this paragraph shall not be considered in determining the
26date the retirement annuity is to begin, or final average

 

 

SB0001- 63 -LRB098 05457 JDS 35491 b

1compensation.
2    Service credit is not available for unused sick leave
3accumulated by a person who first participates in this System
4on or after the effective date of this amendatory Act of the
598th General Assembly.
6(Source: P.A. 92-14, eff. 6-28-01.)
 
7    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
8    Sec. 14-114. Automatic increase in retirement annuity.
9    (a) Except as provided in subsections (a-1) and (a-2), any
10Any person receiving a retirement annuity under this Article
11who retires having attained age 60, or who retires before age
1260 having at least 35 years of creditable service, or who
13retires on or after January 1, 2001 at an age which, when added
14to the number of years of his or her creditable service, equals
15at least 85, shall, on January 1 next following the first full
16year of retirement, have the amount of the then fixed and
17payable monthly retirement annuity increased 3%. Any person
18receiving a retirement annuity under this Article who retires
19before attainment of age 60 and with less than (i) 35 years of
20creditable service if retirement is before January 1, 2001, or
21(ii) the number of years of creditable service which, when
22added to the member's age, would equal 85, if retirement is on
23or after January 1, 2001, shall have the amount of the fixed
24and payable retirement annuity increased by 3% on the January 1
25occurring on or next following (1) attainment of age 60, or (2)

 

 

SB0001- 64 -LRB098 05457 JDS 35491 b

1the first anniversary of retirement, whichever occurs later.
2However, for persons who receive the alternative retirement
3annuity under Section 14-110, references in this subsection (a)
4to attainment of age 60 shall be deemed to refer to attainment
5of age 55. For a person receiving early retirement incentives
6under Section 14-108.3 whose retirement annuity began after
7January 1, 1992 pursuant to an extension granted under
8subsection (e) of that Section, the first anniversary of
9retirement shall be deemed to be January 1, 1993. For a person
10who retires on or after June 28, 2001 and on or before October
111, 2001, and whose retirement annuity is calculated, in whole
12or in part, under Section 14-110 or subsection (g) or (h) of
13Section 14-108, the first anniversary of retirement shall be
14deemed to be January 1, 2002.
15    On each January 1 following the date of the initial
16increase under this subsection, the employee's monthly
17retirement annuity shall be increased by an additional 3%.
18    Beginning January 1, 1990 and except as provided in
19subsections (a-1) and (a-2), all automatic annual increases
20payable under this Section shall be calculated as a percentage
21of the total annuity payable at the time of the increase,
22including previous increases granted under this Article.
23    (a-1) Notwithstanding any other provision of this Article,
24for a Tier I retiree, the amount of each automatic increase in
25retirement annuity occurring on or after the effective date of
26this amendatory Act of the 98th General Assembly shall be the

 

 

SB0001- 65 -LRB098 05457 JDS 35491 b

1lesser of (i) $600 ($750 if the annuity is based primarily upon
2service as a noncovered employee) or (ii) 3% of the total
3annuity payable at the time of the increase, including previous
4increases granted.
5    (a-2) Notwithstanding any other provision of this Article,
6the System shall not grant any new or additional automatic
7increase in retirement annuity to a Tier I retiree on or after
8the effective date of this amendatory Act of the 98th General
9Assembly and before January 1, 2017.
10    Notwithstanding any other provision of this Article, the
11System shall not grant any new or additional automatic increase
12in retirement annuity to a Tier I retiree who has not yet
13attained the age of 67, regardless of any age augmentation
14granted under this Article as an early retirement incentive.
15    If on the effective date of this amendatory Act of the 98th
16General Assembly a Tier I retiree has already received an
17annual increase under this Section but does not yet meet the
18new eligibility requirements of this subsection, the annual
19increases already received shall continue in force, but no
20additional annual increase shall be granted until the Tier I
21retiree meets the new eligibility requirements.
22    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
23and (a-2) apply without regard to whether or not the Tier I
24retiree is in active service under this Article on or after the
25effective date of this amendatory Act of the 98th General
26Assembly.

 

 

SB0001- 66 -LRB098 05457 JDS 35491 b

1    (b) The provisions of subsection (a) of this Section shall
2be applicable to an employee only if the employee makes the
3additional contributions required after December 31, 1969 for
4the purpose of the automatic increases for not less than the
5equivalent of one full year. If an employee becomes an
6annuitant before his additional contributions equal one full
7year's contributions based on his salary at the date of
8retirement, the employee may pay the necessary balance of the
9contributions to the system, without interest, and be eligible
10for the increasing annuity authorized by this Section.
11    (c) The provisions of subsection (a) of this Section shall
12not be applicable to any annuitant who is on retirement on
13December 31, 1969, and thereafter returns to State service,
14unless the member has established at least one year of
15additional creditable service following reentry into service.
16    (d) In addition to other increases which may be provided by
17this Section, on January 1, 1981 any annuitant who was
18receiving a retirement annuity on or before January 1, 1971
19shall have his retirement annuity then being paid increased $1
20per month for each year of creditable service. On January 1,
211982, any annuitant who began receiving a retirement annuity on
22or before January 1, 1977, shall have his retirement annuity
23then being paid increased $1 per month for each year of
24creditable service.
25    On January 1, 1987, any annuitant who began receiving a
26retirement annuity on or before January 1, 1977, shall have the

 

 

SB0001- 67 -LRB098 05457 JDS 35491 b

1monthly retirement annuity increased by an amount equal to 8
2per year of creditable service times the number of years that
3have elapsed since the annuity began.
4    (e) Every person who receives the alternative retirement
5annuity under Section 14-110 and who is eligible to receive the
63% increase under subsection (a) on January 1, 1986, shall also
7receive on that date a one-time increase in retirement annuity
8equal to the difference between (1) his actual retirement
9annuity on that date, including any increases received under
10subsection (a), and (2) the amount of retirement annuity he
11would have received on that date if the amendments to
12subsection (a) made by Public Act 84-162 had been in effect
13since the date of his retirement.
14(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1592-651, eff. 7-11-02.)
 
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
24actuarial recommendations by the end of State fiscal year 2043.
25    For the purposes of this Section and Section 14-135.08,

 

 

SB0001- 68 -LRB098 05457 JDS 35491 b

1references to State contributions refer only to employer
2contributions and do not include employee contributions that
3are picked up or otherwise paid by the State or a department on
4behalf of the employee.
5    (b) The Board shall determine the total amount of State
6contributions required for each fiscal year on the basis of the
7actuarial tables and other assumptions adopted by the Board,
8using the formula in subsection (e).
9    The Board shall also determine a State contribution rate
10for each fiscal year, expressed as a percentage of payroll,
11based on the total required State contribution for that fiscal
12year (less the amount received by the System from
13appropriations under Section 8.12 of the State Finance Act and
14Section 1 of the State Pension Funds Continuing Appropriation
15Act, if any, for the fiscal year ending on the June 30
16immediately preceding the applicable November 15 certification
17deadline), the estimated payroll (including all forms of
18compensation) for personal services rendered by eligible
19employees, and the recommendations of the actuary.
20    For the purposes of this Section and Section 14.1 of the
21State Finance Act, the term "eligible employees" includes
22employees who participate in the System, persons who may elect
23to participate in the System but have not so elected, persons
24who are serving a qualifying period that is required for
25participation, and annuitants employed by a department as
26described in subdivision (a)(1) or (a)(2) of Section 14-111.

 

 

SB0001- 69 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 70 -LRB098 05457 JDS 35491 b

1the System pursuant to Section 14-135.08 of the Illinois
2Pension Code.
3    (d) If an employee is paid from trust funds or federal
4funds, the department or other employer shall pay employer
5contributions from those funds to the System at the certified
6rate, unless the terms of the trust or the federal-State
7agreement preclude the use of the funds for that purpose, in
8which case the required employer contributions shall be paid by
9the State. From the effective date of this amendatory Act of
10the 93rd General Assembly through the payment of the final
11payroll from fiscal year 2004 appropriations, the department or
12other employer shall not pay contributions for the remainder of
13fiscal year 2004 but shall instead make payments as required
14under subsection (a-1) of Section 14.1 of the State Finance
15Act. The department or other employer shall resume payment of
16contributions at the commencement of fiscal year 2005.
17    (e) For State fiscal years 2014 through 2043, 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
20equal to the sum of (1) the State's portion of the projected
21normal cost for that fiscal year, plus (2) an amount sufficient
22to bring the total assets of the System up to 100% of the total
23actuarial liabilities of the System by the end of State fiscal
24year 2043. In making these determinations, the required State
25contribution shall be calculated each year as a level
26percentage of payroll over the years remaining to and including

 

 

SB0001- 71 -LRB098 05457 JDS 35491 b

1fiscal year 2043 and shall be determined under the projected
2unit credit actuarial cost method.
3For State fiscal years 2012 and 2013 through 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

 

 

SB0001- 72 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 73 -LRB098 05457 JDS 35491 b

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 2044, the minimum State
14contribution for each fiscal year shall be the amount needed to
15maintain the total assets of the System at 100% of the total
16actuarial liabilities of the System.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 90% of the total
20actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

SB0001- 74 -LRB098 05457 JDS 35491 b

1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 100% 90%. A reference in this Article
4to the "required State contribution" or any substantially
5similar term does not include or apply to any amounts payable
6to the System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Code or the
8Budget Stabilization Act, amounts transferred to the System
9pursuant to the Budget Stabilization Act after the effective
10date of this amendatory Act of the 98th General Assembly do not
11reduce and do not constitute payment of any portion of the
12required State contribution under this Article in that fiscal
13year. Such amounts shall not reduce, and shall not be included
14in the calculation of, the required State contributions under
15this Article in any future year until the System has received
16payment of contributions pursuant to the Budget Stabilization
17Act.
18    Notwithstanding any other provision of this Section, the
19required State contribution for State fiscal year 2005 and for
20fiscal year 2008 and each fiscal year thereafter through State
21fiscal year 2013, as calculated under this Section and
22certified under Section 14-135.08, shall not exceed an amount
23equal to (i) the amount of the required State contribution that
24would have been calculated under this Section for that fiscal
25year if the System had not received any payments under
26subsection (d) of Section 7.2 of the General Obligation Bond

 

 

SB0001- 75 -LRB098 05457 JDS 35491 b

1Act, minus (ii) the portion of the State's total debt service
2payments for that fiscal year on the bonds issued in fiscal
3year 2003 for the purposes of that Section 7.2, as determined
4and certified by the Comptroller, that is the same as the
5System's portion of the total moneys distributed under
6subsection (d) of Section 7.2 of the General Obligation Bond
7Act. In determining this maximum for State fiscal years 2008
8through 2010, however, the amount referred to in item (i) shall
9be increased, as a percentage of the applicable employee
10payroll, in equal increments calculated from the sum of the
11required State contribution for State fiscal year 2007 plus the
12applicable portion of the State's total debt service payments
13for fiscal year 2007 on the bonds issued in fiscal year 2003
14for the purposes of Section 7.2 of the General Obligation Bond
15Act, so that, by State fiscal year 2011, the State is
16contributing at the rate otherwise required under this Section.
17    (f) After the submission of all payments for eligible
18employees from personal services line items in fiscal year 2004
19have been made, the Comptroller shall provide to the System a
20certification of the sum of all fiscal year 2004 expenditures
21for personal services that would have been covered by payments
22to the System under this Section if the provisions of this
23amendatory Act of the 93rd General Assembly had not been
24enacted. Upon receipt of the certification, the System shall
25determine the amount due to the System based on the full rate
26certified by the Board under Section 14-135.08 for fiscal year

 

 

SB0001- 76 -LRB098 05457 JDS 35491 b

12004 in order to meet the State's obligation under this
2Section. The System shall compare this amount due to the amount
3received by the System in fiscal year 2004 through payments
4under this Section and under Section 6z-61 of the State Finance
5Act. If the amount due is more than the amount received, the
6difference shall be termed the "Fiscal Year 2004 Shortfall" for
7purposes of this Section, and the Fiscal Year 2004 Shortfall
8shall be satisfied under Section 1.2 of the State Pension Funds
9Continuing Appropriation Act. If the amount due is less than
10the amount received, the difference shall be termed the "Fiscal
11Year 2004 Overpayment" for purposes of this Section, and the
12Fiscal Year 2004 Overpayment shall be repaid by the System to
13the Pension Contribution Fund as soon as practicable after the
14certification.
15    (g) For purposes of determining the required State
16contribution to the System, the value of the System's assets
17shall be equal to the actuarial value of the System's assets,
18which shall be calculated as follows:
19    As of June 30, 2008, the actuarial value of the System's
20assets shall be equal to the market value of the assets as of
21that date. In determining the actuarial value of the System's
22assets for fiscal years after June 30, 2008, any actuarial
23gains or losses from investment return incurred in a fiscal
24year shall be recognized in equal annual amounts over the
255-year period following that fiscal year.
26    (h) For purposes of determining the required State

 

 

SB0001- 77 -LRB098 05457 JDS 35491 b

1contribution to the System for a particular year, the actuarial
2value of assets shall be assumed to earn a rate of return equal
3to the System's actuarially assumed rate of return.
4    (i) After the submission of all payments for eligible
5employees from personal services line items paid from the
6General Revenue Fund in fiscal year 2010 have been made, the
7Comptroller shall provide to the System a certification of the
8sum of all fiscal year 2010 expenditures for personal services
9that would have been covered by payments to the System under
10this Section if the provisions of this amendatory Act of the
1196th General Assembly had not been enacted. 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 fiscal year 2010 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 in fiscal
17year 2010 through payments under this Section. If the amount
18due is more than the amount received, the difference shall be
19termed the "Fiscal Year 2010 Shortfall" for purposes of this
20Section, and the Fiscal Year 2010 Shortfall shall be satisfied
21under Section 1.2 of the State Pension Funds Continuing
22Appropriation Act. If the amount due is less than the amount
23received, the difference shall be termed the "Fiscal Year 2010
24Overpayment" for purposes of this Section, and the Fiscal Year
252010 Overpayment shall be repaid by the System to the General
26Revenue Fund as soon as practicable after the certification.

 

 

SB0001- 78 -LRB098 05457 JDS 35491 b

1    (j) After the submission of all payments for eligible
2employees from personal services line items paid from the
3General Revenue Fund in fiscal year 2011 have been made, the
4Comptroller shall provide to the System a certification of the
5sum of all fiscal year 2011 expenditures for personal services
6that would have been covered by payments to the System under
7this Section if the provisions of this amendatory Act of the
896th General Assembly had not been enacted. Upon receipt of the
9certification, the System shall determine the amount due to the
10System based on the full rate certified by the Board under
11Section 14-135.08 for fiscal year 2011 in order to meet the
12State's obligation under this Section. The System shall compare
13this amount due to the amount received by the System in fiscal
14year 2011 through payments under this Section. If the amount
15due is more than the amount received, the difference shall be
16termed the "Fiscal Year 2011 Shortfall" for purposes of this
17Section, and the Fiscal Year 2011 Shortfall shall be satisfied
18under Section 1.2 of the State Pension Funds Continuing
19Appropriation Act. If the amount due is less than the amount
20received, the difference shall be termed the "Fiscal Year 2011
21Overpayment" for purposes of this Section, and the Fiscal Year
222011 Overpayment shall be repaid by the System to the General
23Revenue Fund as soon as practicable after the certification.
24    (k) For fiscal years 2012 and 2013 only, after the
25submission of all payments for eligible employees from personal
26services line items paid from the General Revenue Fund in the

 

 

SB0001- 79 -LRB098 05457 JDS 35491 b

1fiscal year have been made, the Comptroller shall provide to
2the System a certification of the sum of all expenditures in
3the fiscal year for personal services. Upon receipt of the
4certification, the System shall determine the amount due to the
5System based on the full rate certified by the Board under
6Section 14-135.08 for the fiscal year in order to meet the
7State's obligation under this Section. The System shall compare
8this amount due to the amount received by the System for the
9fiscal year. If the amount due is more than the amount
10received, the difference shall be termed the "Prior Fiscal Year
11Shortfall" for purposes of this Section, and the Prior Fiscal
12Year Shortfall shall be satisfied under Section 1.2 of the
13State Pension Funds Continuing Appropriation Act. If the amount
14due is less than the amount received, the difference shall be
15termed the "Prior Fiscal Year Overpayment" for purposes of this
16Section, and the Prior Fiscal Year Overpayment shall be repaid
17by the System to the General Revenue Fund as soon as
18practicable after the certification.
19(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
2096-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
211-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
22eff. 6-30-12.)
 
23    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
24    Sec. 14-132. Obligations of State; funding guarantee.
25    (a) The payment of the required department contributions,

 

 

SB0001- 80 -LRB098 05457 JDS 35491 b

1all allowances, annuities, benefits granted under this
2Article, and all expenses of administration of the system are
3obligations of the State of Illinois to the extent specified in
4this Article.
5    (b) All income of the system shall be credited to a
6separate account for this system in the State treasury and
7shall be used to pay allowances, annuities, benefits and
8administration expense.
9    (c) Beginning July 1, 2013, the State shall be
10contractually obligated to contribute to the System under
11Section 14-131 in each State fiscal year an amount not less
12than the sum of (i) the State's normal cost for that year and
13(ii) the portion of the unfunded accrued liability assigned to
14that year by law in accordance with a schedule that distributes
15payments equitably over a reasonable period of time and in
16accordance with accepted actuarial practices. The obligations
17created under this subsection (c) are contractual obligations
18protected and enforceable under Article I, Section 16 and
19Article XIII, Section 5 of the Illinois Constitution.
20    Notwithstanding any other provision of law, if the State
21fails to pay in a State fiscal year the amount guaranteed under
22this subsection, the System may bring a mandamus action in the
23Circuit Court of Sangamon County to compel the State to make
24that payment, irrespective of other remedies that may be
25available to the System. In ordering the State to make the
26required payment, the court may order a reasonable payment

 

 

SB0001- 81 -LRB098 05457 JDS 35491 b

1schedule to enable the State to make the required payment
2without significantly imperiling the public health, safety, or
3welfare.
4    Any payments required to be made by the State pursuant to
5this subsection (c) are expressly subordinated to the payment
6of the principal, interest, and premium, if any, on any bonded
7debt obligation of the State or any other State-created entity,
8either currently outstanding or to be issued, for which the
9source of repayment or security thereon is derived directly or
10indirectly from tax revenues collected by the State or any
11other State-created entity. Payments on such bonded
12obligations include any statutory fund transfers or other
13prefunding mechanisms or formulas set forth, now or hereafter,
14in State law or bond indentures, into debt service funds or
15accounts of the State related to such bonded obligations,
16consistent with the payment schedules associated with such
17obligations.
18(Source: P.A. 80-841.)
 
19    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
20    Sec. 14-133. Contributions on behalf of members.
21    (a) Each participating employee shall make contributions
22to the System, based on the employee's compensation, as
23follows:
24        (1) Covered employees, except as indicated below, 3.5%
25    for retirement annuity, and 0.5% for a widow or survivors

 

 

SB0001- 82 -LRB098 05457 JDS 35491 b

1    annuity;
2        (2) Noncovered employees, except as indicated below,
3    7% for retirement annuity and 1% for a widow or survivors
4    annuity;
5        (3) Noncovered employees serving in a position in which
6    "eligible creditable service" as defined in Section 14-110
7    may be earned, 1% for a widow or survivors annuity plus the
8    following amount for retirement annuity: 8.5% through
9    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
10    in 2004 and thereafter;
11        (4) Covered employees serving in a position in which
12    "eligible creditable service" as defined in Section 14-110
13    may be earned, 0.5% for a widow or survivors annuity plus
14    the following amount for retirement annuity: 5% through
15    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
16    and thereafter;
17        (5) Each security employee of the Department of
18    Corrections or of the Department of Human Services who is a
19    covered employee, 0.5% for a widow or survivors annuity
20    plus the following amount for retirement annuity: 5%
21    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
22    in 2004 and thereafter;
23        (6) Each security employee of the Department of
24    Corrections or of the Department of Human Services who is
25    not a covered employee, 1% for a widow or survivors annuity
26    plus the following amount for retirement annuity: 8.5%

 

 

SB0001- 83 -LRB098 05457 JDS 35491 b

1    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
2    11.5% in 2004 and thereafter.
3    (a-5) In addition to the contributions otherwise required
4under this Article, each Tier I member shall also make the
5following contributions for retirement annuity from each
6payment of compensation:
7        (1) beginning July 1, 2013 and through June 30, 2014,
8    1% of compensation; and
9        (2) beginning on July 1, 2014, 2% of compensation.
10    (b) Contributions shall be in the form of a deduction from
11compensation and shall be made notwithstanding that the
12compensation paid in cash to the employee shall be reduced
13thereby below the minimum prescribed by law or regulation. Each
14member is deemed to consent and agree to the deductions from
15compensation provided for in this Article, and shall receipt in
16full for salary or compensation.
17(Source: P.A. 92-14, eff. 6-28-01.)
 
18    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
19    Sec. 14-135.08. To certify required State contributions.
20    (a) To certify to the Governor and to each department, on
21or before November 15 of each year through until November 15,
222011, the required rate for State contributions to the System
23for the next State fiscal year, as determined under subsection
24(b) of Section 14-131. The certification to the Governor under
25this subsection (a) shall include a copy of the actuarial

 

 

SB0001- 84 -LRB098 05457 JDS 35491 b

1recommendations upon which the rate is based and shall
2specifically identify the System's projected State normal cost
3for that fiscal year.
4    (a-5) On or before November 1 of each year, beginning
5November 1, 2012, the Board shall submit to the State Actuary,
6the Governor, and the General Assembly a proposed certification
7of the amount of the required State contribution to the System
8for the next fiscal year, along with all of the actuarial
9assumptions, calculations, and data upon which that proposed
10certification is based. On or before January 1 of each year,
11beginning January 1, 2013, the State Actuary shall issue a
12preliminary report concerning the proposed certification and
13identifying, if necessary, recommended changes in actuarial
14assumptions that the Board must consider before finalizing its
15certification of the required State contributions.
16    On or before January 15, 2013 and each January 15
17thereafter, the Board shall certify to the Governor and the
18General Assembly the amount of the required State contribution
19for the next fiscal year. The certification shall include a
20copy of the actuarial recommendations upon which it is based
21and shall specifically identify the System's projected State
22normal cost for that fiscal year. The Board's certification
23must note any deviations from the State Actuary's recommended
24changes, the reason or reasons for not following the State
25Actuary's recommended changes, and the fiscal impact of not
26following the State Actuary's recommended changes on the

 

 

SB0001- 85 -LRB098 05457 JDS 35491 b

1required State contribution.
2    (b) The certifications under subsections (a) and (a-5)
3shall include an additional amount necessary to pay all
4principal of and interest on those general obligation bonds due
5the next fiscal year authorized by Section 7.2(a) of the
6General Obligation Bond Act and issued to provide the proceeds
7deposited by the State with the System in July 2003,
8representing deposits other than amounts reserved under
9Section 7.2(c) of the General Obligation Bond Act. For State
10fiscal year 2005, the Board shall make a supplemental
11certification of the additional amount necessary to pay all
12principal of and interest on those general obligation bonds due
13in State fiscal years 2004 and 2005 authorized by Section
147.2(a) of the General Obligation Bond Act and issued to provide
15the proceeds deposited by the State with the System in July
162003, representing deposits other than amounts reserved under
17Section 7.2(c) of the General Obligation Bond Act, as soon as
18practical after the effective date of this amendatory Act of
19the 93rd General Assembly.
20    On or before May 1, 2004, the Board shall recalculate and
21recertify to the Governor and to each department the amount of
22the required State contribution to the System and the required
23rates for State contributions to the System for State fiscal
24year 2005, taking into account the amounts appropriated to and
25received by the System under subsection (d) of Section 7.2 of
26the General Obligation Bond Act.

 

 

SB0001- 86 -LRB098 05457 JDS 35491 b

1    On or before July 1, 2005, the Board shall recalculate and
2recertify to the Governor and to each department the amount of
3the required State contribution to the System and the required
4rates for State contributions to the System for State fiscal
5year 2006, taking into account the changes in required State
6contributions made by this amendatory Act of the 94th General
7Assembly.
8    On or before April 1, 2011, the Board shall recalculate and
9recertify to the Governor and to each department the amount of
10the required State contribution to the System for State fiscal
11year 2011, applying the changes made by Public Act 96-889 to
12the System's assets and liabilities as of June 30, 2009 as
13though Public Act 96-889 was approved on that date.
14(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1597-694, eff. 6-18-12.)
 
16    (40 ILCS 5/14-152.1)
17    Sec. 14-152.1. Application and expiration of new benefit
18increases.
19    (a) As used in this Section, "new benefit increase" means
20an increase in the amount of any benefit provided under this
21Article, or an expansion of the conditions of eligibility for
22any benefit under this Article, that results from an amendment
23to this Code that takes effect after June 1, 2005 (the
24effective date of Public Act 94-4). "New benefit increase",
25however, does not include any benefit increase resulting from

 

 

SB0001- 87 -LRB098 05457 JDS 35491 b

1the changes made to this Article by Public Act 96-37 or by this
2amendatory Act of the 98th 96th General Assembly.
3    (b) Notwithstanding any other provision of this Code or any
4subsequent amendment to this Code, every new benefit increase
5is subject to this Section and shall be deemed to be granted
6only in conformance with and contingent upon compliance with
7the provisions of this Section.
8    (c) The Public Act enacting a new benefit increase must
9identify and provide for payment to the System of additional
10funding at least sufficient to fund the resulting annual
11increase in cost to the System as it accrues.
12    Every new benefit increase is contingent upon the General
13Assembly providing the additional funding required under this
14subsection. The Commission on Government Forecasting and
15Accountability shall analyze whether adequate additional
16funding has been provided for the new benefit increase and
17shall report its analysis to the Public Pension Division of the
18Department of Financial and Professional Regulation. A new
19benefit increase created by a Public Act that does not include
20the additional funding required under this subsection is null
21and void. If the Public Pension Division determines that the
22additional funding provided for a new benefit increase under
23this subsection is or has become inadequate, it may so certify
24to the Governor and the State Comptroller and, in the absence
25of corrective action by the General Assembly, the new benefit
26increase shall expire at the end of the fiscal year in which

 

 

SB0001- 88 -LRB098 05457 JDS 35491 b

1the certification is made.
2    (d) Every new benefit increase shall expire 5 years after
3its effective date or on such earlier date as may be specified
4in the language enacting the new benefit increase or provided
5under subsection (c). This does not prevent the General
6Assembly from extending or re-creating a new benefit increase
7by law.
8    (e) Except as otherwise provided in the language creating
9the new benefit increase, a new benefit increase that expires
10under this Section continues to apply to persons who applied
11and qualified for the affected benefit while the new benefit
12increase was in effect and to the affected beneficiaries and
13alternate payees of such persons, but does not apply to any
14other person, including without limitation a person who
15continues in service after the expiration date and did not
16apply and qualify for the affected benefit while the new
17benefit increase was in effect.
18(Source: P.A. 96-37, eff. 7-13-09.)
 
19    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
20    Sec. 15-106. Employer. "Employer": The University of
21Illinois, Southern Illinois University, Chicago State
22University, Eastern Illinois University, Governors State
23University, Illinois State University, Northeastern Illinois
24University, Northern Illinois University, Western Illinois
25University, the State Board of Higher Education, the Illinois

 

 

SB0001- 89 -LRB098 05457 JDS 35491 b

1Mathematics and Science Academy, the University Civil Service
2Merit Board, the Board of Trustees of the State Universities
3Retirement System, the Illinois Community College Board,
4community college boards, any association of community college
5boards organized under Section 3-55 of the Public Community
6College Act, the Board of Examiners established under the
7Illinois Public Accounting Act, and, only during the period for
8which employer contributions required under Section 15-155 are
9paid, the following organizations: the alumni associations,
10the foundations and the athletic associations which are
11affiliated with the universities and colleges included in this
12Section as employers. An individual that begins employment
13after the effective date of this amendatory Act of the 98th
14General Assembly with an entity not defined as an employer in
15this Section shall not be deemed an employee for the purposes
16of this Article with respect to that employment and shall not
17be eligible to participate in the System with respect to that
18employment; provided, however, that those individuals who are
19both employed and already participants in the System on the
20effective date of this amendatory Act of the 98th General
21Assembly shall be allowed to continue as participants in the
22System for the duration of that employment.
23    Notwithstanding any provision of law to the contrary, an
24individual who begins employment with any of the following
25employers on or after the effective date of this amendatory Act
26of the 98th General Assembly shall not be deemed an employee

 

 

SB0001- 90 -LRB098 05457 JDS 35491 b

1and shall not be eligible to participate in the System with
2respect to that employment: any association of community
3college boards organized under Section 3-55 of the Public
4Community College Act, the Association of Illinois
5Middle-Grade Schools, the Illinois Association of School
6Administrators, the Illinois Association for Supervision and
7Curriculum Development, the Illinois Principals Association,
8the Illinois Association of School Business Officials, or the
9Illinois Special Olympics; provided, however, that those
10individuals who are both employed and already participants in
11the System on the effective date of this amendatory Act of the
1298th General Assembly shall be allowed to continue as
13participants in the System for the duration of that employment.
14    A department as defined in Section 14-103.04 is an employer
15for any person appointed by the Governor under the Civil
16Administrative Code of Illinois who is a participating employee
17as defined in Section 15-109. The Department of Central
18Management Services is an employer with respect to persons
19employed by the State Board of Higher Education in positions
20with the Illinois Century Network as of June 30, 2004 who
21remain continuously employed after that date by the Department
22of Central Management Services in positions with the Illinois
23Century Network, the Bureau of Communication and Computer
24Services, or, if applicable, any successor bureau.
25    The cities of Champaign and Urbana shall be considered
26employers, but only during the period for which contributions

 

 

SB0001- 91 -LRB098 05457 JDS 35491 b

1are required to be made under subsection (b-1) of Section
215-155 and only with respect to individuals described in
3subsection (h) of Section 15-107.
4(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
5Sec. 999.)
 
6    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
7    Sec. 15-107. Employee.
8    (a) "Employee" means any member of the educational,
9administrative, secretarial, clerical, mechanical, labor or
10other staff of an employer whose employment is permanent and
11continuous or who is employed in a position in which services
12are expected to be rendered on a continuous basis for at least
134 months or one academic term, whichever is less, who (A)
14receives payment for personal services on a warrant issued
15pursuant to a payroll voucher certified by an employer and
16drawn by the State Comptroller upon the State Treasurer or by
17an employer upon trust, federal or other funds, or (B) is on a
18leave of absence without pay. Employment which is irregular,
19intermittent or temporary shall not be considered continuous
20for purposes of this paragraph.
21    However, a person is not an "employee" if he or she:
22        (1) is a student enrolled in and regularly attending
23    classes in a college or university which is an employer,
24    and is employed on a temporary basis at less than full
25    time;

 

 

SB0001- 92 -LRB098 05457 JDS 35491 b

1        (2) is currently receiving a retirement annuity or a
2    disability retirement annuity under Section 15-153.2 from
3    this System;
4        (3) is on a military leave of absence;
5        (4) is eligible to participate in the Federal Civil
6    Service Retirement System and is currently making
7    contributions to that system based upon earnings paid by an
8    employer;
9        (5) is on leave of absence without pay for more than 60
10    days immediately following termination of disability
11    benefits under this Article;
12        (6) is hired after June 30, 1979 as a public service
13    employment program participant under the Federal
14    Comprehensive Employment and Training Act and receives
15    earnings in whole or in part from funds provided under that
16    Act; or
17        (7) is employed on or after July 1, 1991 to perform
18    services that are excluded by subdivision (a)(7)(f) or
19    (a)(19) of Section 210 of the federal Social Security Act
20    from the definition of employment given in that Section (42
21    U.S.C. 410).
22    (b) Any employer may, by filing a written notice with the
23board, exclude from the definition of "employee" all persons
24employed pursuant to a federally funded contract entered into
25after July 1, 1982 with a federal military department in a
26program providing training in military courses to federal

 

 

SB0001- 93 -LRB098 05457 JDS 35491 b

1military personnel on a military site owned by the United
2States Government, if this exclusion is not prohibited by the
3federally funded contract or federal laws or rules governing
4the administration of the contract.
5    (c) Any person appointed by the Governor under the Civil
6Administrative Code of the State is an employee, if he or she
7is a participant in this system on the effective date of the
8appointment.
9    (d) A participant on lay-off status under civil service
10rules is considered an employee for not more than 120 days from
11the date of the lay-off.
12    (e) A participant is considered an employee during (1) the
13first 60 days of disability leave, (2) the period, not to
14exceed one year, in which his or her eligibility for disability
15benefits is being considered by the board or reviewed by the
16courts, and (3) the period he or she receives disability
17benefits under the provisions of Section 15-152, workers'
18compensation or occupational disease benefits, or disability
19income under an insurance contract financed wholly or partially
20by the employer.
21    (f) Absences without pay, other than formal leaves of
22absence, of less than 30 calendar days, are not considered as
23an interruption of a person's status as an employee. If such
24absences during any period of 12 months exceed 30 work days,
25the employee status of the person is considered as interrupted
26as of the 31st work day.

 

 

SB0001- 94 -LRB098 05457 JDS 35491 b

1    (g) A staff member whose employment contract requires
2services during an academic term is to be considered an
3employee during the summer and other vacation periods, unless
4he or she declines an employment contract for the succeeding
5academic term or his or her employment status is otherwise
6terminated, and he or she receives no earnings during these
7periods.
8    (h) An individual who was a participating employee employed
9in the fire department of the University of Illinois's
10Champaign-Urbana campus immediately prior to the elimination
11of that fire department and who immediately after the
12elimination of that fire department became employed by the fire
13department of the City of Urbana or the City of Champaign shall
14continue to be considered as an employee for purposes of this
15Article for so long as the individual remains employed as a
16firefighter by the City of Urbana or the City of Champaign. The
17individual shall cease to be considered an employee under this
18subsection (h) upon the first termination of the individual's
19employment as a firefighter by the City of Urbana or the City
20of Champaign.
21    (i) An individual who is employed on a full-time basis as
22an officer or employee of a statewide teacher organization that
23serves System participants or an officer of a national teacher
24organization that serves System participants may participate
25in the System and shall be deemed an employee, provided that
26(1) the individual has previously earned creditable service

 

 

SB0001- 95 -LRB098 05457 JDS 35491 b

1under this Article, (2) the individual files with the System an
2irrevocable election to become a participant before the
3effective date of this amendatory Act of the 97th General
4Assembly, (3) the individual does not receive credit for that
5employment under any other Article of this Code, and (4) the
6individual first became a full-time employee of the teacher
7organization and becomes a participant before the effective
8date of this amendatory Act of the 97th General Assembly. An
9employee under this subsection (i) is responsible for paying to
10the System both (A) employee contributions based on the actual
11compensation received for service with the teacher
12organization and (B) employer contributions equal to the normal
13costs (as defined in Section 15-155) resulting from that
14service; all or any part of these contributions may be paid on
15the employee's behalf or picked up for tax purposes (if
16authorized under federal law) by the teacher organization.
17    A person who is an employee as defined in this subsection
18(i) may establish service credit for similar employment prior
19to becoming an employee under this subsection by paying to the
20System for that employment the contributions specified in this
21subsection, plus interest at the effective rate from the date
22of service to the date of payment. However, credit shall not be
23granted under this subsection for any such prior employment for
24which the applicant received credit under any other provision
25of this Code, or during which the applicant was on a leave of
26absence under Section 15-113.2.

 

 

SB0001- 96 -LRB098 05457 JDS 35491 b

1    (j) A person employed by the State Board of Higher
2Education in a position with the Illinois Century Network as of
3June 30, 2004 shall be considered to be an employee for so long
4as he or she remains continuously employed after that date by
5the Department of Central Management Services in a position
6with the Illinois Century Network, the Bureau of Communication
7and Computer Services, or, if applicable, any successor bureau
8and meets the requirements of subsection (a).
9    (k) In the case of doubt as to whether any person is an
10employee within the meaning of this Section, the decision of
11the Board shall be final.
12(Source: P.A. 97-651, eff. 1-5-12.)
 
13    (40 ILCS 5/15-107.1 new)
14    Sec. 15-107.1. Tier I participant. "Tier I participant": A
15participant under this Article, other than a participant in the
16self-managed plan under Section 15-158.2, who first became a
17member or participant before January 1, 2011 under any
18reciprocal retirement system or pension fund established under
19this Code other than a retirement system or pension fund
20established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/15-107.2 new)
22    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
23Tier I participant who is receiving a retirement annuity.
24    A person does not become a Tier I retiree by virtue of

 

 

SB0001- 97 -LRB098 05457 JDS 35491 b

1receiving a reversionary, survivors, beneficiary, or
2disability annuity.
 
3    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
4    Sec. 15-111. Earnings. "Earnings": An amount paid for
5personal services equal to the sum of the basic compensation
6plus extra compensation for summer teaching, overtime or other
7extra service. For periods for which an employee receives
8service credit under subsection (c) of Section 15-113.1 or
9Section 15-113.2, earnings are equal to the basic compensation
10on which contributions are paid by the employee during such
11periods. Compensation for employment which is irregular,
12intermittent and temporary shall not be considered earnings,
13unless the participant is also receiving earnings from the
14employer as an employee under Section 15-107.
15    With respect to transition pay paid by the University of
16Illinois to a person who was a participating employee employed
17in the fire department of the University of Illinois's
18Champaign-Urbana campus immediately prior to the elimination
19of that fire department:
20        (1) "Earnings" includes transition pay paid to the
21    employee on or after the effective date of this amendatory
22    Act of the 91st General Assembly.
23        (2) "Earnings" includes transition pay paid to the
24    employee before the effective date of this amendatory Act
25    of the 91st General Assembly only if (i) employee

 

 

SB0001- 98 -LRB098 05457 JDS 35491 b

1    contributions under Section 15-157 have been withheld from
2    that transition pay or (ii) the employee pays to the System
3    before January 1, 2001 an amount representing employee
4    contributions under Section 15-157 on that transition pay.
5    Employee contributions under item (ii) may be paid in a
6    lump sum, by withholding from additional transition pay
7    accruing before January 1, 2001, or in any other manner
8    approved by the System. Upon payment of the employee
9    contributions on transition pay, the corresponding
10    employer contributions become an obligation of the State.
11    Notwithstanding any other provision of this Code, the
12earnings of a Tier I participant for the purposes of this Code
13shall not exceed, for periods of service on or after the
14effective date of this amendatory Act of the 98th General
15Assembly, the greater of (i) the annual contribution and
16benefit base established for the applicable year by the
17Commissioner of Social Security under the federal Social
18Security Act or (ii) the annual earnings of the participant
19during the 365 days immediately preceding the effective date of
20this Section; except that this limitation does not apply to a
21participant's earnings that are determined under an employment
22contract or collective bargaining agreement that is in effect
23on the effective date of this amendatory Act of the 98th
24General Assembly and has not been amended or renewed after that
25date.
26(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

SB0001- 99 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
2    Sec. 15-113.2. Service for leaves of absence. "Service for
3leaves of absence" includes those periods of leaves of absence
4at less than 50% pay, except military leave and periods of
5disability leave in excess of 60 days, for which the employee
6pays the contributions required under Section 15-157 in
7accordance with rules prescribed by the board based upon the
8employee's basic compensation on the date the leave begins, or
9in the case of leave for service with a teacher organization,
10based upon the actual compensation received by the employee for
11such service after January 26, 1988, if the employee so elects
12within 30 days of that date or the date the leave for service
13with a teacher organization begins, whichever is later;
14provided that the employee (1) returns to employment covered by
15this system at the expiration of the leave, or within 30 days
16after the termination of a disability which occurs during the
17leave and continues this employment at a percentage of time
18equal to or greater than the percentage of time immediately
19preceding the leave of absence for at least 8 consecutive
20months or a period equal to the period of the leave, whichever
21is less, or (2) is precluded from meeting the foregoing
22conditions because of disability or death. If service credit is
23denied because the employee fails to meet these conditions, the
24contributions covering the leave of absence shall be refunded
25without interest. The return to employment condition does not

 

 

SB0001- 100 -LRB098 05457 JDS 35491 b

1apply if the leave of absence is for service with a teacher
2organization.
3    Service credit provided under this Section shall not exceed
43 years in any period of 10 years, unless the employee is on
5special leave granted by the employer for service with a
6teacher organization. Commencing with the fourth year in any
7period of 10 years, a participant on such special leave is also
8required to pay employer contributions equal to the normal cost
9as defined in Section 15-155, based upon the employee's basic
10compensation on the date the leave begins, or based upon the
11actual compensation received by the employee for service with a
12teacher organization if the employee has so elected.
13    Notwithstanding any other provision of this Article, a
14participant shall not be eligible to make contributions or
15receive service credit for a leave of absence for service with
16a teacher organization if that leave of absence for service
17with a teacher organization begins on or after the effective
18date of this amendatory Act of the 98th General Assembly.
19(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
20    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
21    Sec. 15-136. Retirement annuities - Amount. The provisions
22of this Section 15-136 apply only to those participants who are
23participating in the traditional benefit package or the
24portable benefit package and do not apply to participants who
25are participating in the self-managed plan.

 

 

SB0001- 101 -LRB098 05457 JDS 35491 b

1    (a) The amount of a participant's retirement annuity,
2expressed in the form of a single-life annuity, shall be
3determined by whichever of the following rules is applicable
4and provides the largest annuity:
5    Rule 1: The retirement annuity shall be 1.67% of final rate
6of earnings for each of the first 10 years of service, 1.90%
7for each of the next 10 years of service, 2.10% for each year
8of service in excess of 20 but not exceeding 30, and 2.30% for
9each year in excess of 30; or for persons who retire on or
10after January 1, 1998, 2.2% of the final rate of earnings for
11each year of service.
12    Rule 2: The retirement annuity shall be the sum of the
13following, determined from amounts credited to the participant
14in accordance with the actuarial tables and the effective rate
15of interest in effect at the time the retirement annuity
16begins:
17        (i) the normal annuity which can be provided on an
18    actuarially equivalent basis, by the accumulated normal
19    contributions as of the date the annuity begins;
20        (ii) an annuity from employer contributions of an
21    amount equal to that which can be provided on an
22    actuarially equivalent basis from the accumulated normal
23    contributions made by the participant under Section
24    15-113.6 and Section 15-113.7 plus 1.4 times all other
25    accumulated normal contributions made by the participant;
26    and

 

 

SB0001- 102 -LRB098 05457 JDS 35491 b

1        (iii) the annuity that can be provided on an
2    actuarially equivalent basis from the entire contribution
3    made by the participant under Section 15-113.3.
4    For the purpose of calculating an annuity under this Rule
52, the contribution required under subsection (c-5) of Section
615-157 shall not be considered when determining the
7participant's accumulated normal contributions under clause
8(i) or the employer contribution under clause (ii).
9    With respect to a police officer or firefighter who retires
10on or after August 14, 1998, the accumulated normal
11contributions taken into account under clauses (i) and (ii) of
12this Rule 2 shall include the additional normal contributions
13made by the police officer or firefighter under Section
1415-157(a).
15    The amount of a retirement annuity calculated under this
16Rule 2 shall be computed solely on the basis of the
17participant's accumulated normal contributions, as specified
18in this Rule and defined in Section 15-116. Neither an employee
19or employer contribution for early retirement under Section
2015-136.2 nor any other employer contribution shall be used in
21the calculation of the amount of a retirement annuity under
22this Rule 2.
23    This amendatory Act of the 91st General Assembly is a
24clarification of existing law and applies to every participant
25and annuitant without regard to whether status as an employee
26terminates before the effective date of this amendatory Act.

 

 

SB0001- 103 -LRB098 05457 JDS 35491 b

1    This Rule 2 does not apply to a person who first becomes an
2employee under this Article on or after July 1, 2005.
3    Rule 3: The retirement annuity of a participant who is
4employed at least one-half time during the period on which his
5or her final rate of earnings is based, shall be equal to the
6participant's years of service not to exceed 30, multiplied by
7(1) $96 if the participant's final rate of earnings is less
8than $3,500, (2) $108 if the final rate of earnings is at least
9$3,500 but less than $4,500, (3) $120 if the final rate of
10earnings is at least $4,500 but less than $5,500, (4) $132 if
11the final rate of earnings is at least $5,500 but less than
12$6,500, (5) $144 if the final rate of earnings is at least
13$6,500 but less than $7,500, (6) $156 if the final rate of
14earnings is at least $7,500 but less than $8,500, (7) $168 if
15the final rate of earnings is at least $8,500 but less than
16$9,500, and (8) $180 if the final rate of earnings is $9,500 or
17more, except that the annuity for those persons having made an
18election under Section 15-154(a-1) shall be calculated and
19payable under the portable retirement benefit program pursuant
20to the provisions of Section 15-136.4.
21    Rule 4: A participant who is at least age 50 and has 25 or
22more years of service as a police officer or firefighter, and a
23participant who is age 55 or over and has at least 20 but less
24than 25 years of service as a police officer or firefighter,
25shall be entitled to a retirement annuity of 2 1/4% of the
26final rate of earnings for each of the first 10 years of

 

 

SB0001- 104 -LRB098 05457 JDS 35491 b

1service as a police officer or firefighter, 2 1/2% for each of
2the next 10 years of service as a police officer or
3firefighter, and 2 3/4% for each year of service as a police
4officer or firefighter in excess of 20. The retirement annuity
5for all other service shall be computed under Rule 1.
6    For purposes of this Rule 4, a participant's service as a
7firefighter shall also include the following:
8        (i) service that is performed while the person is an
9    employee under subsection (h) of Section 15-107; and
10        (ii) in the case of an individual who was a
11    participating employee employed in the fire department of
12    the University of Illinois's Champaign-Urbana campus
13    immediately prior to the elimination of that fire
14    department and who immediately after the elimination of
15    that fire department transferred to another job with the
16    University of Illinois, service performed as an employee of
17    the University of Illinois in a position other than police
18    officer or firefighter, from the date of that transfer
19    until the employee's next termination of service with the
20    University of Illinois.
21    Rule 5: The retirement annuity of a participant who elected
22early retirement under the provisions of Section 15-136.2 and
23who, on or before February 16, 1995, brought administrative
24proceedings pursuant to the administrative rules adopted by the
25System to challenge the calculation of his or her retirement
26annuity shall be the sum of the following, determined from

 

 

SB0001- 105 -LRB098 05457 JDS 35491 b

1amounts credited to the participant in accordance with the
2actuarial tables and the prescribed rate of interest in effect
3at the time the retirement annuity begins:
4        (i) the normal annuity which can be provided on an
5    actuarially equivalent basis, by the accumulated normal
6    contributions as of the date the annuity begins; and
7        (ii) an annuity from employer contributions of an
8    amount equal to that which can be provided on an
9    actuarially equivalent basis from the accumulated normal
10    contributions made by the participant under Section
11    15-113.6 and Section 15-113.7 plus 1.4 times all other
12    accumulated normal contributions made by the participant;
13    and
14        (iii) an annuity which can be provided on an
15    actuarially equivalent basis from the employee
16    contribution for early retirement under Section 15-136.2,
17    and an annuity from employer contributions of an amount
18    equal to that which can be provided on an actuarially
19    equivalent basis from the employee contribution for early
20    retirement under Section 15-136.2.
21    In no event shall a retirement annuity under this Rule 5 be
22lower than the amount obtained by adding (1) the monthly amount
23obtained by dividing the combined employee and employer
24contributions made under Section 15-136.2 by the System's
25annuity factor for the age of the participant at the beginning
26of the annuity payment period and (2) the amount equal to the

 

 

SB0001- 106 -LRB098 05457 JDS 35491 b

1participant's annuity if calculated under Rule 1, reduced under
2Section 15-136(b) as if no contributions had been made under
3Section 15-136.2.
4    With respect to a participant who is qualified for a
5retirement annuity under this Rule 5 whose retirement annuity
6began before the effective date of this amendatory Act of the
791st General Assembly, and for whom an employee contribution
8was made under Section 15-136.2, the System shall recalculate
9the retirement annuity under this Rule 5 and shall pay any
10additional amounts due in the manner provided in Section
1115-186.1 for benefits mistakenly set too low.
12    The amount of a retirement annuity calculated under this
13Rule 5 shall be computed solely on the basis of those
14contributions specifically set forth in this Rule 5. Except as
15provided in clause (iii) of this Rule 5, neither an employee
16nor employer contribution for early retirement under Section
1715-136.2, nor any other employer contribution, shall be used in
18the calculation of the amount of a retirement annuity under
19this Rule 5.
20    The General Assembly has adopted the changes set forth in
21Section 25 of this amendatory Act of the 91st General Assembly
22in recognition that the decision of the Appellate Court for the
23Fourth District in Mattis v. State Universities Retirement
24System et al. might be deemed to give some right to the
25plaintiff in that case. The changes made by Section 25 of this
26amendatory Act of the 91st General Assembly are a legislative

 

 

SB0001- 107 -LRB098 05457 JDS 35491 b

1implementation of the decision of the Appellate Court for the
2Fourth District in Mattis v. State Universities Retirement
3System et al. with respect to that plaintiff.
4    The changes made by Section 25 of this amendatory Act of
5the 91st General Assembly apply without regard to whether the
6person is in service as an employee on or after its effective
7date.
8    (b) The retirement annuity provided under Rules 1 and 3
9above shall be reduced by 1/2 of 1% for each month the
10participant is under age 60 at the time of retirement. However,
11this reduction shall not apply in the following cases:
12        (1) For a disabled participant whose disability
13    benefits have been discontinued because he or she has
14    exhausted eligibility for disability benefits under clause
15    (6) of Section 15-152;
16        (2) For a participant who has at least the number of
17    years of service required to retire at any age under
18    subsection (a) of Section 15-135; or
19        (3) For that portion of a retirement annuity which has
20    been provided on account of service of the participant
21    during periods when he or she performed the duties of a
22    police officer or firefighter, if these duties were
23    performed for at least 5 years immediately preceding the
24    date the retirement annuity is to begin.
25    (c) The maximum retirement annuity provided under Rules 1,
262, 4, and 5 shall be the lesser of (1) the annual limit of

 

 

SB0001- 108 -LRB098 05457 JDS 35491 b

1benefits as specified in Section 415 of the Internal Revenue
2Code of 1986, as such Section may be amended from time to time
3and as such benefit limits shall be adjusted by the
4Commissioner of Internal Revenue, and (2) 80% of final rate of
5earnings.
6    (d) Subject to the provisions of subsections (d-1) and
7(d-2), an An annuitant whose status as an employee terminates
8after August 14, 1969 shall receive automatic increases in his
9or her retirement annuity as follows:
10    Effective January 1 immediately following the date the
11retirement annuity begins, the annuitant shall receive an
12increase in his or her monthly retirement annuity of 0.125% of
13the monthly retirement annuity provided under Rule 1, Rule 2,
14Rule 3, Rule 4, or Rule 5, contained in this Section,
15multiplied by the number of full months which elapsed from the
16date the retirement annuity payments began to January 1, 1972,
17plus 0.1667% of such annuity, multiplied by the number of full
18months which elapsed from January 1, 1972, or the date the
19retirement annuity payments began, whichever is later, to
20January 1, 1978, plus 0.25% of such annuity multiplied by the
21number of full months which elapsed from January 1, 1978, or
22the date the retirement annuity payments began, whichever is
23later, to the effective date of the increase.
24    The annuitant shall receive an increase in his or her
25monthly retirement annuity on each January 1 thereafter during
26the annuitant's life of 3% of the monthly annuity provided

 

 

SB0001- 109 -LRB098 05457 JDS 35491 b

1under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
2this Section. The change made under this subsection by P.A.
381-970 is effective January 1, 1980 and applies to each
4annuitant whose status as an employee terminates before or
5after that date.
6    Beginning January 1, 1990 and except as provided in
7subsections (d-1) and (d-2), all automatic annual increases
8payable under this Section shall be calculated as a percentage
9of the total annuity payable at the time of the increase,
10including all increases previously granted under this Article.
11    The change made in this subsection by P.A. 85-1008 is
12effective January 26, 1988, and is applicable without regard to
13whether status as an employee terminated before that date.
14    (d-1) Notwithstanding any other provision of this Article,
15for a Tier I retiree, the amount of each automatic increase in
16retirement annuity occurring on or after the effective date of
17this amendatory Act of the 98th General Assembly shall be the
18lesser of (i) $750 or (ii) 3% of the total annuity payable at
19the time of the increase, including previous increases granted.
20    (d-2) Notwithstanding any other provision of this Article,
21the System shall not grant any new or additional automatic
22increase in retirement annuity to a Tier I retiree on or after
23the effective date of this amendatory Act of the 98th General
24Assembly and before January 1, 2017.
25    Notwithstanding any other provision of this Article, the
26System shall not grant any new or additional automatic increase

 

 

SB0001- 110 -LRB098 05457 JDS 35491 b

1in retirement annuity to a Tier I retiree who has not yet
2attained the age of 67, regardless of any age augmentation
3granted under this Article as an early retirement incentive.
4    If on the effective date of this amendatory Act of the 98th
5General Assembly a Tier I retiree has already received an
6annual increase under this Section but does not yet meet the
7new eligibility requirements of this subsection, the annual
8increases already received shall continue in force, but no
9additional annual increase shall be granted until the Tier I
10retiree meets the new eligibility requirements.
11    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
12and (d-2) apply without regard to whether or not the Tier I
13retiree is in active service under this Article on or after the
14effective date of this amendatory Act of the 98th General
15Assembly.
16    (e) If, on January 1, 1987, or the date the retirement
17annuity payment period begins, whichever is later, the sum of
18the retirement annuity provided under Rule 1 or Rule 2 of this
19Section and the automatic annual increases provided under the
20preceding subsection or Section 15-136.1, amounts to less than
21the retirement annuity which would be provided by Rule 3, the
22retirement annuity shall be increased as of January 1, 1987, or
23the date the retirement annuity payment period begins,
24whichever is later, to the amount which would be provided by
25Rule 3 of this Section. Such increased amount shall be
26considered as the retirement annuity in determining benefits

 

 

SB0001- 111 -LRB098 05457 JDS 35491 b

1provided under other Sections of this Article. This paragraph
2applies without regard to whether status as an employee
3terminated before the effective date of this amendatory Act of
41987, provided that the annuitant was employed at least
5one-half time during the period on which the final rate of
6earnings was based.
7    (f) A participant is entitled to such additional annuity as
8may be provided on an actuarially equivalent basis, by any
9accumulated additional contributions to his or her credit.
10However, the additional contributions made by the participant
11toward the automatic increases in annuity provided under this
12Section and the contributions made under subsection (c-5) of
13Section 15-157 by this amendatory Act of the 98th General
14Assembly shall not be taken into account in determining the
15amount of such additional annuity.
16    (g) If, (1) by law, a function of a governmental unit, as
17defined by Section 20-107 of this Code, is transferred in whole
18or in part to an employer, and (2) a participant transfers
19employment from such governmental unit to such employer within
206 months after the transfer of the function, and (3) the sum of
21(A) the annuity payable to the participant under Rule 1, 2, or
223 of this Section (B) all proportional annuities payable to the
23participant by all other retirement systems covered by Article
2420, and (C) the initial primary insurance amount to which the
25participant is entitled under the Social Security Act, is less
26than the retirement annuity which would have been payable if

 

 

SB0001- 112 -LRB098 05457 JDS 35491 b

1all of the participant's pension credits validated under
2Section 20-109 had been validated under this system, a
3supplemental annuity equal to the difference in such amounts
4shall be payable to the participant.
5    (h) On January 1, 1981, an annuitant who was receiving a
6retirement annuity on or before January 1, 1971 shall have his
7or her retirement annuity then being paid increased $1 per
8month for each year of creditable service. On January 1, 1982,
9an annuitant whose retirement annuity began on or before
10January 1, 1977, shall have his or her retirement annuity then
11being paid increased $1 per month for each year of creditable
12service.
13    (i) On January 1, 1987, any annuitant whose retirement
14annuity began on or before January 1, 1977, shall have the
15monthly retirement annuity increased by an amount equal to 8
16per year of creditable service times the number of years that
17have elapsed since the annuity began.
18(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
19    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
20    Sec. 15-155. Employer contributions.
21    (a) The State of Illinois shall make contributions by
22appropriations of amounts which, together with the other
23employer contributions from trust, federal, and other funds,
24employee contributions, income from investments, and other
25income of this System, will be sufficient to meet the cost of

 

 

SB0001- 113 -LRB098 05457 JDS 35491 b

1maintaining and administering the System on a 100% 90% funded
2basis in accordance with actuarial recommendations by the end
3of State fiscal year 2043.
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(a-1).
9    (a-1) For State fiscal years 2014 through 2043, the minimum
10contribution to the System to be made by the State for each
11fiscal year shall be an amount determined by the System to be
12equal to the sum of (1) the State's portion of the projected
13normal cost for that fiscal year, plus (2) an amount sufficient
14to bring the total assets of the System up to 100% of the total
15actuarial liabilities of the System by the end of State fiscal
16year 2043. In making these determinations, the required State
17contribution shall be calculated each year as a level
18percentage of payroll over the years remaining to and including
19fiscal year 2043 and shall be determined under the projected
20unit credit actuarial cost method.
21    For State fiscal year 2044 and thereafter, the minimum
22State contribution for each fiscal year shall be the amount
23needed to maintain the total assets of the System at 100% of
24the total actuarial liabilities of the System.
25    For State fiscal years 2012 and 2013 through 2045, the
26minimum contribution to the System to be made by the State for

 

 

SB0001- 114 -LRB098 05457 JDS 35491 b

1each fiscal year shall be an amount determined by the System to
2be sufficient to bring the total assets of the System up to 90%
3of the total actuarial liabilities of the System by the end of
4State fiscal year 2045. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2045 and shall be determined under the
8projected unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$166,641,900.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$252,064,100.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

SB0001- 115 -LRB098 05457 JDS 35491 b

1total required State contribution for State fiscal year 2010 is
2$702,514,000 and shall be made from the State Pensions Fund and
3proceeds of bonds sold in fiscal year 2010 pursuant to Section
47.2 of the General Obligation Bond Act, less (i) the pro rata
5share of bond sale expenses determined by the System's share of
6total bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2010, (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2011 is
12the amount recertified by the System on or before April 1, 2011
13pursuant to Section 15-165 and shall be made from the State
14Pensions Fund and proceeds of bonds sold in fiscal year 2011
15pursuant to Section 7.2 of the General Obligation Bond Act,
16less (i) the pro rata share of bond sale expenses determined by
17the System's share of total bond proceeds, (ii) any amounts
18received from the General Revenue Fund in fiscal year 2011, and
19(iii) any reduction in bond proceeds due to the issuance of
20discounted bonds, if applicable.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

SB0001- 116 -LRB098 05457 JDS 35491 b

1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 100% 90%. A reference in this Article
8to the "required State contribution" or any substantially
9similar term does not include or apply to any amounts payable
10to the System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Code or the
12Budget Stabilization Act, amounts transferred to the System
13pursuant to the Budget Stabilization Act after the effective
14date of this amendatory Act of the 98th General Assembly do not
15reduce and do not constitute payment of any portion of the
16required State contribution under this Article in that fiscal
17year. Such amounts shall not reduce, and shall not be included
18in the calculation of, the required State contributions under
19this Article in any future year until the System has received
20payment of contributions pursuant to the Budget Stabilization
21Act.
22    Notwithstanding any other provision of this Section, the
23required State contribution for State fiscal year 2005 and for
24fiscal year 2008 and each fiscal year thereafter through State
25fiscal year 2013, as calculated under this Section and
26certified under Section 15-165, shall not exceed an amount

 

 

SB0001- 117 -LRB098 05457 JDS 35491 b

1equal to (i) the amount of the required State contribution that
2would have been calculated under this Section for that fiscal
3year if the System had not received any payments under
4subsection (d) of Section 7.2 of the General Obligation Bond
5Act, minus (ii) the portion of the State's total debt service
6payments for that fiscal year on the bonds issued in fiscal
7year 2003 for the purposes of that Section 7.2, as determined
8and certified by the Comptroller, that is the same as the
9System's portion of the total moneys distributed under
10subsection (d) of Section 7.2 of the General Obligation Bond
11Act. In determining this maximum for State fiscal years 2008
12through 2010, however, the amount referred to in item (i) shall
13be increased, as a percentage of the applicable employee
14payroll, in equal increments calculated from the sum of the
15required State contribution for State fiscal year 2007 plus the
16applicable portion of the State's total debt service payments
17for fiscal year 2007 on the bonds issued in fiscal year 2003
18for the purposes of Section 7.2 of the General Obligation Bond
19Act, so that, by State fiscal year 2011, the State is
20contributing at the rate otherwise required under this Section.
21    (b) If an employee is paid from trust or federal funds, the
22employer shall pay to the Board contributions from those funds
23which are sufficient to cover the accruing normal costs on
24behalf of the employee. However, universities having employees
25who are compensated out of local auxiliary funds, income funds,
26or service enterprise funds are not required to pay such

 

 

SB0001- 118 -LRB098 05457 JDS 35491 b

1contributions on behalf of those employees. The local auxiliary
2funds, income funds, and service enterprise funds of
3universities shall not be considered trust funds for the
4purpose of this Article, but funds of alumni associations,
5foundations, and athletic associations which are affiliated
6with the universities included as employers under this Article
7and other employers which do not receive State appropriations
8are considered to be trust funds for the purpose of this
9Article.
10    (b-1) The City of Urbana and the City of Champaign shall
11each make employer contributions to this System for their
12respective firefighter employees who participate in this
13System pursuant to subsection (h) of Section 15-107. The rate
14of contributions to be made by those municipalities shall be
15determined annually by the Board on the basis of the actuarial
16assumptions adopted by the Board and the recommendations of the
17actuary, and shall be expressed as a percentage of salary for
18each such employee. The Board shall certify the rate to the
19affected municipalities as soon as may be practical. The
20employer contributions required under this subsection shall be
21remitted by the municipality to the System at the same time and
22in the same manner as employee contributions.
23    (c) Through State fiscal year 1995: The total employer
24contribution shall be apportioned among the various funds of
25the State and other employers, whether trust, federal, or other
26funds, in accordance with actuarial procedures approved by the

 

 

SB0001- 119 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 120 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 121 -LRB098 05457 JDS 35491 b

1(h) or (i). Upon receiving a timely application for
2recalculation, the System shall review the application and, if
3appropriate, recalculate the amount due.
4    The employer contributions required under this subsection
5(g) (f) may be paid in the form of a lump sum within 90 days
6after receipt of the bill. If the employer contributions are
7not paid within 90 days after receipt of the bill, then
8interest will be charged at a rate equal to the System's annual
9actuarially assumed rate of return on investment compounded
10annually from the 91st day after receipt of the bill. Payments
11must be concluded within 3 years after the employer's receipt
12of the bill.
13    (h) This subsection (h) applies only to payments made or
14salary increases given on or after June 1, 2005 but before July
151, 2011. The changes made by Public Act 94-1057 shall not
16require the System to refund any payments received before July
1731, 2006 (the effective date of Public Act 94-1057).
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases paid to
20participants under contracts or collective bargaining
21agreements entered into, amended, or renewed before June 1,
222005.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to a
25participant at a time when the participant is 10 or more years
26from retirement eligibility under Section 15-135.

 

 

SB0001- 122 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 123 -LRB098 05457 JDS 35491 b

1that results in an amount no greater than the average salary
2paid for other similar positions.
3    (i) When assessing payment for any amount due under
4subsection (g), the System shall exclude any salary increase
5described in subsection (h) of this Section given on or after
6July 1, 2011 but before July 1, 2014 under a contract or
7collective bargaining agreement entered into, amended, or
8renewed on or after June 1, 2005 but before July 1, 2011.
9Notwithstanding any other provision of this Section, any
10payments made or salary increases given after June 30, 2014
11shall be used in assessing payment for any amount due under
12subsection (g) of this Section.
13    (j) The System shall prepare a report and file copies of
14the report with the Governor and the General Assembly by
15January 1, 2007 that contains all of the following information:
16        (1) The number of recalculations required by the
17    changes made to this Section by Public Act 94-1057 for each
18    employer.
19        (2) The dollar amount by which each employer's
20    contribution to the System was changed due to
21    recalculations required by Public Act 94-1057.
22        (3) The total amount the System received from each
23    employer as a result of the changes made to this Section by
24    Public Act 94-4.
25        (4) The increase in the required State contribution
26    resulting from the changes made to this Section by Public

 

 

SB0001- 124 -LRB098 05457 JDS 35491 b

1    Act 94-1057.
2    (k) The Illinois Community College Board shall adopt rules
3for recommending lists of promotional positions submitted to
4the Board by community colleges and for reviewing the
5promotional lists on an annual basis. When recommending
6promotional lists, the Board shall consider the similarity of
7the positions submitted to those positions recognized for State
8universities by the State Universities Civil Service System.
9The Illinois Community College Board shall file a copy of its
10findings with the System. The System shall consider the
11findings of the Illinois Community College Board when making
12determinations under this Section. The System shall not exclude
13any earnings increases resulting from a promotion when the
14promotion was not submitted by a community college. Nothing in
15this subsection (k) shall require any community college to
16submit any information to the Community College Board.
17    (l) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

SB0001- 125 -LRB098 05457 JDS 35491 b

15-year period following that fiscal year.
2    (m) For purposes of determining the required State
3contribution to the system for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the system's actuarially assumed rate of return.
6(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
87-13-12; revised 10-17-12.)
 
9    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
10    Sec. 15-156. Obligations of State; funding guarantees.
11    (a) The payment of (1) the required State contributions,
12(2) all benefits granted under this system and (3) all expenses
13in connection with the administration and operation thereof are
14obligations of the State of Illinois to the extent specified in
15this Article. The accumulated employee normal, additional and
16survivors insurance contributions credited to the accounts of
17active and inactive participants shall not be used to pay the
18State's share of the obligations.
19    (b) Beginning July 1, 2013, the State shall be
20contractually obligated to contribute to the System under
21Section 15-155 in each State fiscal year an amount not less
22than the sum of (i) the State's normal cost for that year and
23(ii) the portion of the unfunded accrued liability assigned to
24that year by law in accordance with a schedule that distributes
25payments equitably over a reasonable period of time and in

 

 

SB0001- 126 -LRB098 05457 JDS 35491 b

1accordance with accepted actuarial practices. The obligations
2created under this subsection (b) are contractual obligations
3protected and enforceable under Article I, Section 16 and
4Article XIII, Section 5 of the Illinois Constitution.
5    Notwithstanding any other provision of law, if the State
6fails to pay in a State fiscal year the amount guaranteed under
7this subsection, the System may bring a mandamus action in the
8Circuit Court of Sangamon County to compel the State to make
9that payment, irrespective of other remedies that may be
10available to the System. In ordering the State to make the
11required payment, the court may order a reasonable payment
12schedule to enable the State to make the required payment
13without significantly imperiling the public health, safety, or
14welfare.
15    Any payments required to be made by the State pursuant to
16this subsection (b) are expressly subordinated to the payment
17of the principal, interest, and premium, if any, on any bonded
18debt obligation of the State or any other State-created entity,
19either currently outstanding or to be issued, for which the
20source of repayment or security thereon is derived directly or
21indirectly from tax revenues collected by the State or any
22other State-created entity. Payments on such bonded
23obligations include any statutory fund transfers or other
24prefunding mechanisms or formulas set forth, now or hereafter,
25in State law or bond indentures, into debt service funds or
26accounts of the State related to such bonded obligations,

 

 

SB0001- 127 -LRB098 05457 JDS 35491 b

1consistent with the payment schedules associated with such
2obligations.
3(Source: P.A. 83-1440.)
 
4    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
5    Sec. 15-157. Employee Contributions.
6    (a) Each participating employee shall make contributions
7towards the retirement benefits payable under the retirement
8program applicable to the employee from each payment of
9earnings applicable to employment under this system on and
10after the date of becoming a participant as follows: Prior to
11September 1, 1949, 3 1/2% of earnings; from September 1, 1949
12to August 31, 1955, 5%; from September 1, 1955 to August 31,
131969, 6%; from September 1, 1969, 6 1/2%. These contributions
14are to be considered as normal contributions for purposes of
15this Article.
16    Each participant who is a police officer or firefighter
17shall make normal contributions of 8% of each payment of
18earnings applicable to employment as a police officer or
19firefighter under this system on or after September 1, 1981,
20unless he or she files with the board within 60 days after the
21effective date of this amendatory Act of 1991 or 60 days after
22the board receives notice that he or she is employed as a
23police officer or firefighter, whichever is later, a written
24notice waiving the retirement formula provided by Rule 4 of
25Section 15-136. This waiver shall be irrevocable. If a

 

 

SB0001- 128 -LRB098 05457 JDS 35491 b

1participant had met the conditions set forth in Section
215-132.1 prior to the effective date of this amendatory Act of
31991 but failed to make the additional normal contributions
4required by this paragraph, he or she may elect to pay the
5additional contributions plus compound interest at the
6effective rate. If such payment is received by the board, the
7service shall be considered as police officer service in
8calculating the retirement annuity under Rule 4 of Section
915-136. While performing service described in clause (i) or
10(ii) of Rule 4 of Section 15-136, a participating employee
11shall be deemed to be employed as a firefighter for the purpose
12of determining the rate of employee contributions under this
13Section.
14    (b) Starting September 1, 1969, each participating
15employee shall make additional contributions of 1/2 of 1% of
16earnings to finance a portion of the cost of the annual
17increases in retirement annuity provided under Section 15-136,
18except that with respect to participants in the self-managed
19plan this additional contribution shall be used to finance the
20benefits obtained under that retirement program.
21    (c) In addition to the amounts described in subsections (a)
22and (b) of this Section, each participating employee shall make
23contributions of 1% of earnings applicable under this system on
24and after August 1, 1959. The contributions made under this
25subsection (c) shall be considered as survivor's insurance
26contributions for purposes of this Article if the employee is

 

 

SB0001- 129 -LRB098 05457 JDS 35491 b

1covered under the traditional benefit package, and such
2contributions shall be considered as additional contributions
3for purposes of this Article if the employee is participating
4in the self-managed plan or has elected to participate in the
5portable benefit package and has completed the applicable
6one-year waiting period. Contributions in excess of $80 during
7any fiscal year beginning before August 31, 1969 and in excess
8of $120 during any fiscal year thereafter until September 1,
91971 shall be considered as additional contributions for
10purposes of this Article.
11    (c-5) In addition to the contributions otherwise required
12under this Article, each Tier I participant shall also make the
13following contributions toward the retirement benefits payable
14under the retirement program applicable to the employee from
15each payment of earnings applicable to employment under this
16system:
17        (1) beginning July 1, 2013 and through June 30, 2014,
18    1% of earnings; and
19        (2) beginning on July 1, 2014, 2% of earnings.
20    Except as otherwise specified, these contributions are to
21be considered as normal contributions for purposes of this
22Article.
23    (d) If the board by board rule so permits and subject to
24such conditions and limitations as may be specified in its
25rules, a participant may make other additional contributions of
26such percentage of earnings or amounts as the participant shall

 

 

SB0001- 130 -LRB098 05457 JDS 35491 b

1elect in a written notice thereof received by the board.
2    (e) That fraction of a participant's total accumulated
3normal contributions, the numerator of which is equal to the
4number of years of service in excess of that which is required
5to qualify for the maximum retirement annuity, and the
6denominator of which is equal to the total service of the
7participant, shall be considered as accumulated additional
8contributions. The determination of the applicable maximum
9annuity and the adjustment in contributions required by this
10provision shall be made as of the date of the participant's
11retirement.
12    (f) Notwithstanding the foregoing, a participating
13employee shall not be required to make contributions under this
14Section after the date upon which continuance of such
15contributions would otherwise cause his or her retirement
16annuity to exceed the maximum retirement annuity as specified
17in clause (1) of subsection (c) of Section 15-136.
18    (g) A participating employee may make contributions for the
19purchase of service credit under this Article.
20(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
21eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
2290-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
23    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
24    Sec. 15-165. To certify amounts and submit vouchers.
25    (a) The Board shall certify to the Governor on or before

 

 

SB0001- 131 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 132 -LRB098 05457 JDS 35491 b

1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year,
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions.
12    On or before January 15, 2013 and each January 15
13thereafter, the Board shall certify to the Governor and the
14General Assembly the amount of the required State contribution
15for the next fiscal year. The certification shall include a
16copy of the actuarial recommendations upon which it is based
17and shall specifically identify the System's projected State
18normal cost for that fiscal year and the projected State cost
19for the self-managed plan for that fiscal year. The Board's
20certification must note, in a written response to the State
21Actuary, any deviations from the State Actuary's recommended
22changes, the reason or reasons for not following the State
23Actuary's recommended changes, and the fiscal impact of not
24following the State Actuary's recommended changes on the
25required State contribution.
26    (b) The Board shall certify to the State Comptroller or

 

 

SB0001- 133 -LRB098 05457 JDS 35491 b

1employer, as the case may be, from time to time, by its
2president and secretary, with its seal attached, the amounts
3payable to the System from the various funds.
4    (c) Beginning in State fiscal year 1996, on or as soon as
5possible after the 15th day of each month the Board shall
6submit vouchers for payment of State contributions to the
7System, in a total monthly amount of one-twelfth of the
8required annual State contribution certified under subsection
9(a). From the effective date of this amendatory Act of the 93rd
10General Assembly through June 30, 2004, the Board shall not
11submit vouchers for the remainder of fiscal year 2004 in excess
12of the fiscal year 2004 certified contribution amount
13determined under this Section after taking into consideration
14the transfer to the System under subsection (b) 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 Section, the difference
24shall be paid from the General Revenue Fund under the
25continuing appropriation authority provided in Section 1.1 of
26the State Pension Funds Continuing Appropriation Act.

 

 

SB0001- 134 -LRB098 05457 JDS 35491 b

1    (d) So long as the payments received are the full amount
2lawfully vouchered under this Section, payments received by the
3System under this Section shall be applied first toward the
4employer contribution to the self-managed plan established
5under Section 15-158.2. Payments shall be applied second toward
6the employer's portion of the normal costs of the System, as
7defined in subsection (f) of Section 15-155. The balance shall
8be applied toward the unfunded actuarial liabilities of the
9System.
10    (e) In the event that the System does not receive, as a
11result of legislative enactment or otherwise, payments
12sufficient to fully fund the employer contribution to the
13self-managed plan established under Section 15-158.2 and to
14fully fund that portion of the employer's portion of the normal
15costs of the System, as calculated in accordance with Section
1615-155(a-1), then any payments received shall be applied
17proportionately to the optional retirement program established
18under Section 15-158.2 and to the employer's portion of the
19normal costs of the System, as calculated in accordance with
20Section 15-155(a-1).
21(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2297-694, eff. 6-18-12.)
 
23    (40 ILCS 5/15-198)
24    Sec. 15-198. Application and expiration of new benefit
25increases.

 

 

SB0001- 135 -LRB098 05457 JDS 35491 b

1    (a) As used in this Section, "new benefit increase" means
2an increase in the amount of any benefit provided under this
3Article, or an expansion of the conditions of eligibility for
4any benefit under this Article or Article 1, that results from
5an amendment to this Code that takes effect after the effective
6date of this amendatory Act of the 94th General Assembly. "New
7benefit increase", however, does not include any benefit
8increase resulting from the changes made to this Article or
9Article 1 by this amendatory Act of the 98th General Assembly.
10    (b) Notwithstanding any other provision of this Code or any
11subsequent amendment to this Code, every new benefit increase
12is subject to this Section and shall be deemed to be granted
13only in conformance with and contingent upon compliance with
14the provisions of this Section.
15    (c) The Public Act enacting a new benefit increase must
16identify and provide for payment to the System of additional
17funding at least sufficient to fund the resulting annual
18increase in cost to the System as it accrues.
19    Every new benefit increase is contingent upon the General
20Assembly providing the additional funding required under this
21subsection. The Commission on Government Forecasting and
22Accountability shall analyze whether adequate additional
23funding has been provided for the new benefit increase and
24shall report its analysis to the Public Pension Division of the
25Department of Financial and Professional Regulation. A new
26benefit increase created by a Public Act that does not include

 

 

SB0001- 136 -LRB098 05457 JDS 35491 b

1the additional funding required under this subsection is null
2and void. If the Public Pension Division determines that the
3additional funding provided for a new benefit increase under
4this subsection is or has become inadequate, it may so certify
5to the Governor and the State Comptroller and, in the absence
6of corrective action by the General Assembly, the new benefit
7increase shall expire at the end of the fiscal year in which
8the certification is made.
9    (d) Every new benefit increase shall expire 5 years after
10its effective date or on such earlier date as may be specified
11in the language enacting the new benefit increase or provided
12under subsection (c). This does not prevent the General
13Assembly from extending or re-creating a new benefit increase
14by law.
15    (e) Except as otherwise provided in the language creating
16the new benefit increase, a new benefit increase that expires
17under this Section continues to apply to persons who applied
18and qualified for the affected benefit while the new benefit
19increase was in effect and to the affected beneficiaries and
20alternate payees of such persons, but does not apply to any
21other person, including without limitation a person who
22continues in service after the expiration date and did not
23apply and qualify for the affected benefit while the new
24benefit increase was in effect.
25(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

SB0001- 137 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
2    Sec. 16-106. Teacher. "Teacher": The following
3individuals, provided that, for employment prior to July 1,
41990, they are employed on a full-time basis, or if not
5full-time, on a permanent and continuous basis in a position in
6which services are expected to be rendered for at least one
7school term:
8        (1) Any educational, administrative, professional or
9    other staff employed in the public common schools included
10    within this system in a position requiring certification
11    under the law governing the certification of teachers;
12        (2) Any educational, administrative, professional or
13    other staff employed in any facility of the Department of
14    Children and Family Services or the Department of Human
15    Services, in a position requiring certification under the
16    law governing the certification of teachers, and any person
17    who (i) works in such a position for the Department of
18    Corrections, (ii) was a member of this System on May 31,
19    1987, and (iii) did not elect to become a member of the
20    State Employees' Retirement System pursuant to Section
21    14-108.2 of this Code; except that "teacher" does not
22    include any person who (A) becomes a security employee of
23    the Department of Human Services, as defined in Section
24    14-110, after June 28, 2001 (the effective date of Public
25    Act 92-14), or (B) becomes a member of the State Employees'
26    Retirement System pursuant to Section 14-108.2c of this

 

 

SB0001- 138 -LRB098 05457 JDS 35491 b

1    Code;
2        (3) Any regional superintendent of schools, assistant
3    regional superintendent of schools, State Superintendent
4    of Education; any person employed by the State Board of
5    Education as an executive; any executive of the boards
6    engaged in the service of public common school education in
7    school districts covered under this system of which the
8    State Superintendent of Education is an ex-officio member;
9        (4) Any employee of a school board association
10    operating in compliance with Article 23 of the School Code
11    who is certificated under the law governing the
12    certification of teachers, provided that he or she becomes
13    such an employee before the effective date of this
14    amendatory Act of the 98th General Assembly;
15        (5) Any person employed by the retirement system who:
16            (i) was an employee of and a participant in the
17        system on August 17, 2001 (the effective date of Public
18        Act 92-416), or
19            (ii) becomes an employee of the system on or after
20        August 17, 2001;
21        (6) Any educational, administrative, professional or
22    other staff employed by and under the supervision and
23    control of a regional superintendent of schools, provided
24    such employment position requires the person to be
25    certificated under the law governing the certification of
26    teachers and is in an educational program serving 2 or more

 

 

SB0001- 139 -LRB098 05457 JDS 35491 b

1    districts in accordance with a joint agreement authorized
2    by the School Code or by federal legislation;
3        (7) Any educational, administrative, professional or
4    other staff employed in an educational program serving 2 or
5    more school districts in accordance with a joint agreement
6    authorized by the School Code or by federal legislation and
7    in a position requiring certification under the laws
8    governing the certification of teachers;
9        (8) Any officer or employee of a statewide teacher
10    organization or officer of a national teacher organization
11    who is certified under the law governing certification of
12    teachers, provided: (i) the individual had previously
13    established creditable service under this Article, (ii)
14    the individual files with the system an irrevocable
15    election to become a member before the effective date of
16    this amendatory Act of the 97th General Assembly, (iii) the
17    individual does not receive credit for such service under
18    any other Article of this Code, and (iv) the individual
19    first became an officer or employee of the teacher
20    organization and becomes a member before the effective date
21    of this amendatory Act of the 97th General Assembly;
22        (9) Any educational, administrative, professional, or
23    other staff employed in a charter school operating in
24    compliance with the Charter Schools Law who is certificated
25    under the law governing the certification of teachers; .
26        (10) Any person employed, on the effective date of this

 

 

SB0001- 140 -LRB098 05457 JDS 35491 b

1    amendatory Act of the 94th General Assembly, by the
2    Macon-Piatt Regional Office of Education in a
3    birth-through-age-three pilot program receiving funds
4    under Section 2-389 of the School Code who is required by
5    the Macon-Piatt Regional Office of Education to hold a
6    teaching certificate, provided that the Macon-Piatt
7    Regional Office of Education makes an election, within 6
8    months after the effective date of this amendatory Act of
9    the 94th General Assembly, to have the person participate
10    in the system. Any service established prior to the
11    effective date of this amendatory Act of the 94th General
12    Assembly for service as an employee of the Macon-Piatt
13    Regional Office of Education in a birth-through-age-three
14    pilot program receiving funds under Section 2-389 of the
15    School Code shall be considered service as a teacher if
16    employee and employer contributions have been received by
17    the system and the system has not refunded those
18    contributions.
19    An annuitant receiving a retirement annuity under this
20Article or under Article 17 of this Code who is employed by a
21board of education or other employer as permitted under Section
2216-118 or 16-150.1 is not a "teacher" for purposes of this
23Article. A person who has received a single-sum retirement
24benefit under Section 16-136.4 of this Article is not a
25"teacher" for purposes of this Article.
26(Source: P.A. 97-651, eff. 1-5-12; revised 8-3-12.)
 

 

 

SB0001- 141 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/16-106.4 new)
2    Sec. 16-106.4. Tier I member. "Tier I member": A member
3under this Article who first became a member or participant
4before January 1, 2011 under any reciprocal retirement system
5or pension fund established under this Code other than a
6retirement system or pension fund established under Article 2,
73, 4, 5, 6, or 18 of this Code.
 
8    (40 ILCS 5/16-106.5 new)
9    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
10Tier I member who is receiving a retirement annuity.
 
11    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
12    Sec. 16-121. Salary. "Salary": The actual compensation
13received by a teacher during any school year and recognized by
14the system in accordance with rules of the board. For purposes
15of this Section, "school year" includes the regular school term
16plus any additional period for which a teacher is compensated
17and such compensation is recognized by the rules of the board.
18    Notwithstanding any other provision of this Code, the
19salary of a Tier I member for the purposes of this Code shall
20not exceed, for periods of service on or after the effective
21date of this amendatory Act of the 98th General Assembly, the
22greater of (i) the annual contribution and benefit base
23established for the applicable year by the Commissioner of

 

 

SB0001- 142 -LRB098 05457 JDS 35491 b

1Social Security under the federal Social Security Act or (ii)
2the annual salary of the member during the 365 days immediately
3preceding the effective date of this Section; except that this
4limitation does not apply to a member's salary that is
5determined under an employment contract or collective
6bargaining agreement that is in effect on the effective date of
7this amendatory Act of the 98th General Assembly and has not
8been amended or renewed after that date.
9(Source: P.A. 84-1028.)
 
10    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
11    Sec. 16-127. Computation of creditable service.
12    (a) Each member shall receive regular credit for all
13service as a teacher from the date membership begins, for which
14satisfactory evidence is supplied and all contributions have
15been paid.
16    (b) The following periods of service shall earn optional
17credit and each member shall receive credit for all such
18service for which satisfactory evidence is supplied and all
19contributions have been paid as of the date specified:
20        (1) Prior service as a teacher.
21        (2) Service in a capacity essentially similar or
22    equivalent to that of a teacher, in the public common
23    schools in school districts in this State not included
24    within the provisions of this System, or of any other
25    State, territory, dependency or possession of the United

 

 

SB0001- 143 -LRB098 05457 JDS 35491 b

1    States, or in schools operated by or under the auspices of
2    the United States, or under the auspices of any agency or
3    department of any other State, and service during any
4    period of professional speech correction or special
5    education experience for a public agency within this State
6    or any other State, territory, dependency or possession of
7    the United States, and service prior to February 1, 1951 as
8    a recreation worker for the Illinois Department of Public
9    Safety, for a period not exceeding the lesser of 2/5 of the
10    total creditable service of the member or 10 years. The
11    maximum service of 10 years which is allowable under this
12    paragraph shall be reduced by the service credit which is
13    validated by other retirement systems under paragraph (i)
14    of Section 15-113 and paragraph 1 of Section 17-133. Credit
15    granted under this paragraph may not be used in
16    determination of a retirement annuity or disability
17    benefits unless the member has at least 5 years of
18    creditable service earned subsequent to this employment
19    with one or more of the following systems: Teachers'
20    Retirement System of the State of Illinois, State
21    Universities Retirement System, and the Public School
22    Teachers' Pension and Retirement Fund of Chicago. Whenever
23    such service credit exceeds the maximum allowed for all
24    purposes of this Article, the first service rendered in
25    point of time shall be considered. The changes to this
26    subdivision (b)(2) made by Public Act 86-272 shall apply

 

 

SB0001- 144 -LRB098 05457 JDS 35491 b

1    not only to persons who on or after its effective date
2    (August 23, 1989) are in service as a teacher under the
3    System, but also to persons whose status as such a teacher
4    terminated prior to such effective date, whether or not
5    such person is an annuitant on that date.
6        (3) Any periods immediately following teaching
7    service, under this System or under Article 17, (or
8    immediately following service prior to February 1, 1951 as
9    a recreation worker for the Illinois Department of Public
10    Safety) spent in active service with the military forces of
11    the United States; periods spent in educational programs
12    that prepare for return to teaching sponsored by the
13    federal government following such active military service;
14    if a teacher returns to teaching service within one
15    calendar year after discharge or after the completion of
16    the educational program, a further period, not exceeding
17    one calendar year, between time spent in military service
18    or in such educational programs and the return to
19    employment as a teacher under this System; and a period of
20    up to 2 years of active military service not immediately
21    following employment as a teacher.
22        The changes to this Section and Section 16-128 relating
23    to military service made by P.A. 87-794 shall apply not
24    only to persons who on or after its effective date are in
25    service as a teacher under the System, but also to persons
26    whose status as a teacher terminated prior to that date,

 

 

SB0001- 145 -LRB098 05457 JDS 35491 b

1    whether or not the person is an annuitant on that date. In
2    the case of an annuitant who applies for credit allowable
3    under this Section for a period of military service that
4    did not immediately follow employment, and who has made the
5    required contributions for such credit, the annuity shall
6    be recalculated to include the additional service credit,
7    with the increase taking effect on the date the System
8    received written notification of the annuitant's intent to
9    purchase the credit, if payment of all the required
10    contributions is made within 60 days of such notice, or
11    else on the first annuity payment date following the date
12    of payment of the required contributions. In calculating
13    the automatic annual increase for an annuity that has been
14    recalculated under this Section, the increase attributable
15    to the additional service allowable under P.A. 87-794 shall
16    be included in the calculation of automatic annual
17    increases accruing after the effective date of the
18    recalculation.
19        Credit for military service shall be determined as
20    follows: if entry occurs during the months of July, August,
21    or September and the member was a teacher at the end of the
22    immediately preceding school term, credit shall be granted
23    from July 1 of the year in which he or she entered service;
24    if entry occurs during the school term and the teacher was
25    in teaching service at the beginning of the school term,
26    credit shall be granted from July 1 of such year. In all

 

 

SB0001- 146 -LRB098 05457 JDS 35491 b

1    other cases where credit for military service is allowed,
2    credit shall be granted from the date of entry into the
3    service.
4        The total period of military service for which credit
5    is granted shall not exceed 5 years for any member unless
6    the service: (A) is validated before July 1, 1964, and (B)
7    does not extend beyond July 1, 1963. Credit for military
8    service shall be granted under this Section only if not
9    more than 5 years of the military service for which credit
10    is granted under this Section is used by the member to
11    qualify for a military retirement allotment from any branch
12    of the armed forces of the United States. The changes to
13    this subdivision (b)(3) made by Public Act 86-272 shall
14    apply not only to persons who on or after its effective
15    date (August 23, 1989) are in service as a teacher under
16    the System, but also to persons whose status as such a
17    teacher terminated prior to such effective date, whether or
18    not such person is an annuitant on that date.
19        (4) Any periods served as a member of the General
20    Assembly.
21        (5)(i) Any periods for which a teacher, as defined in
22    Section 16-106, is granted a leave of absence, provided he
23    or she returns to teaching service creditable under this
24    System or the State Universities Retirement System
25    following the leave; (ii) periods during which a teacher is
26    involuntarily laid off from teaching, provided he or she

 

 

SB0001- 147 -LRB098 05457 JDS 35491 b

1    returns to teaching following the lay-off; (iii) periods
2    prior to July 1, 1983 during which a teacher ceased covered
3    employment due to pregnancy, provided that the teacher
4    returned to teaching service creditable under this System
5    or the State Universities Retirement System following the
6    pregnancy and submits evidence satisfactory to the Board
7    documenting that the employment ceased due to pregnancy;
8    and (iv) periods prior to July 1, 1983 during which a
9    teacher ceased covered employment for the purpose of
10    adopting an infant under 3 years of age or caring for a
11    newly adopted infant under 3 years of age, provided that
12    the teacher returned to teaching service creditable under
13    this System or the State Universities Retirement System
14    following the adoption and submits evidence satisfactory
15    to the Board documenting that the employment ceased for the
16    purpose of adopting an infant under 3 years of age or
17    caring for a newly adopted infant under 3 years of age.
18    However, total credit under this paragraph (5) may not
19    exceed 3 years.
20        Any qualified member or annuitant may apply for credit
21    under item (iii) or (iv) of this paragraph (5) without
22    regard to whether service was terminated before the
23    effective date of this amendatory Act of 1997. In the case
24    of an annuitant who establishes credit under item (iii) or
25    (iv), the annuity shall be recalculated to include the
26    additional service credit. The increase in annuity shall

 

 

SB0001- 148 -LRB098 05457 JDS 35491 b

1    take effect on the date the System receives written
2    notification of the annuitant's intent to purchase the
3    credit, if the required evidence is submitted and the
4    required contribution paid within 60 days of that
5    notification, otherwise on the first annuity payment date
6    following the System's receipt of the required evidence and
7    contribution. The increase in an annuity recalculated
8    under this provision shall be included in the calculation
9    of automatic annual increases in the annuity accruing after
10    the effective date of the recalculation.
11        Optional credit may be purchased under this subsection
12    (b)(5) for periods during which a teacher has been granted
13    a leave of absence pursuant to Section 24-13 of the School
14    Code. A teacher whose service under this Article terminated
15    prior to the effective date of P.A. 86-1488 shall be
16    eligible to purchase such optional credit. If a teacher who
17    purchases this optional credit is already receiving a
18    retirement annuity under this Article, the annuity shall be
19    recalculated as if the annuitant had applied for the leave
20    of absence credit at the time of retirement. The difference
21    between the entitled annuity and the actual annuity shall
22    be credited to the purchase of the optional credit. The
23    remainder of the purchase cost of the optional credit shall
24    be paid on or before April 1, 1992.
25        The change in this paragraph made by Public Act 86-273
26    shall be applicable to teachers who retire after June 1,

 

 

SB0001- 149 -LRB098 05457 JDS 35491 b

1    1989, as well as to teachers who are in service on that
2    date.
3        (6) Any days of unused and uncompensated accumulated
4    sick leave earned by a teacher who first became a
5    participant in the System before the effective date of this
6    amendatory Act of the 98th General Assembly. The service
7    credit granted under this paragraph shall be the ratio of
8    the number of unused and uncompensated accumulated sick
9    leave days to 170 days, subject to a maximum of 2 years of
10    service credit. Prior to the member's retirement, each
11    former employer shall certify to the System the number of
12    unused and uncompensated accumulated sick leave days
13    credited to the member at the time of termination of
14    service. The period of unused sick leave shall not be
15    considered in determining the effective date of
16    retirement. A member is not required to make contributions
17    in order to obtain service credit for unused sick leave.
18        Credit for sick leave shall, at retirement, be granted
19    by the System for any retiring regional or assistant
20    regional superintendent of schools who first became a
21    participant in this System before the effective date of
22    this amendatory Act of the 98th General Assembly at the
23    rate of 6 days per year of creditable service or portion
24    thereof established while serving as such superintendent
25    or assistant superintendent.
26    Service credit is not available for unused sick leave

 

 

SB0001- 150 -LRB098 05457 JDS 35491 b

1accumulated by a teacher who first becomes a participant in
2this System on or after the effective date of this amendatory
3Act of the 98th General Assembly.
4        (7) Periods prior to February 1, 1987 served as an
5    employee of the Illinois Mathematics and Science Academy
6    for which credit has not been terminated under Section
7    15-113.9 of this Code.
8        (8) Service as a substitute teacher for work performed
9    prior to July 1, 1990.
10        (9) Service as a part-time teacher for work performed
11    prior to July 1, 1990.
12        (10) Up to 2 years of employment with Southern Illinois
13    University - Carbondale from September 1, 1959 to August
14    31, 1961, or with Governors State University from September
15    1, 1972 to August 31, 1974, for which the teacher has no
16    credit under Article 15. To receive credit under this item
17    (10), a teacher must apply in writing to the Board and pay
18    the required contributions before May 1, 1993 and have at
19    least 12 years of service credit under this Article.
20    (b-1) A member may establish optional credit for up to 2
21years of service as a teacher or administrator employed by a
22private school recognized by the Illinois State Board of
23Education, provided that the teacher (i) was certified under
24the law governing the certification of teachers at the time the
25service was rendered, (ii) applies in writing on or after
26August 1, 2009 and on or before August 1, 2012, (iii) supplies

 

 

SB0001- 151 -LRB098 05457 JDS 35491 b

1satisfactory evidence of the employment, (iv) completes at
2least 10 years of contributing service as a teacher as defined
3in Section 16-106, and (v) pays the contribution required in
4subsection (d-5) of Section 16-128. The member may apply for
5credit under this subsection and pay the required contribution
6before completing the 10 years of contributing service required
7under item (iv), but the credit may not be used until the item
8(iv) contributing service requirement has been met.
9    (c) The service credits specified in this Section shall be
10granted only if: (1) such service credits are not used for
11credit in any other statutory tax-supported public employee
12retirement system other than the federal Social Security
13program; and (2) the member makes the required contributions as
14specified in Section 16-128. Except as provided in subsection
15(b-1) of this Section, the service credit shall be effective as
16of the date the required contributions are completed.
17    Any service credits granted under this Section shall
18terminate upon cessation of membership for any cause.
19    Credit may not be granted under this Section covering any
20period for which an age retirement or disability retirement
21allowance has been paid.
22(Source: P.A. 96-546, eff. 8-17-09.)
 
23    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
24    Sec. 16-133. Retirement annuity; amount.
25    (a) The amount of the retirement annuity shall be (i) in

 

 

SB0001- 152 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 153 -LRB098 05457 JDS 35491 b

1        For the purpose of calculating the sum provided under
2    this paragraph (A), the contribution required under
3    subsection (a-5) of Section 16-152 shall not be considered
4    when determining the amount of the member's accumulated
5    contributions under subparagraph (1) or (2).
6        This paragraph (A) does not apply to a person who first
7    becomes a teacher under this Article on or after July 1,
8    2005.
9        (B) An amount consisting of the greater of the
10    following:
11            (1) For creditable service earned before July 1,
12        1998 that has not been augmented under Section
13        16-129.1: 1.67% of final average salary for each of the
14        first 10 years of creditable service, 1.90% of final
15        average salary for each year in excess of 10 but not
16        exceeding 20, 2.10% of final average salary for each
17        year in excess of 20 but not exceeding 30, and 2.30% of
18        final average salary for each year in excess of 30; and
19            For creditable service earned on or after July 1,
20        1998 by a member who has at least 24 years of
21        creditable service on July 1, 1998 and who does not
22        elect to augment service under Section 16-129.1: 2.2%
23        of final average salary for each year of creditable
24        service earned on or after July 1, 1998 but before the
25        member reaches a total of 30 years of creditable
26        service and 2.3% of final average salary for each year

 

 

SB0001- 154 -LRB098 05457 JDS 35491 b

1        of creditable service earned on or after July 1, 1998
2        and after the member reaches a total of 30 years of
3        creditable service; and
4            For all other creditable service: 2.2% of final
5        average salary for each year of creditable service; or
6            (2) 1.5% of final average salary for each year of
7        creditable service plus the sum $7.50 for each of the
8        first 20 years of creditable service.
9    The amount of the retirement annuity determined under this
10    paragraph (B) shall be reduced by 1/2 of 1% for each month
11    that the member is less than age 60 at the time the
12    retirement annuity begins. However, this reduction shall
13    not apply (i) if the member has at least 35 years of
14    creditable service, or (ii) if the member retires on
15    account of disability under Section 16-149.2 of this
16    Article with at least 20 years of creditable service, or
17    (iii) if the member (1) has earned during the period
18    immediately preceding the last day of service at least one
19    year of contributing creditable service as an employee of a
20    department as defined in Section 14-103.04, (2) has earned
21    at least 5 years of contributing creditable service as an
22    employee of a department as defined in Section 14-103.04,
23    (3) retires on or after January 1, 2001, and (4) retires
24    having attained an age which, when added to the number of
25    years of his or her total creditable service, equals at
26    least 85. Portions of years shall be counted as decimal

 

 

SB0001- 155 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 156 -LRB098 05457 JDS 35491 b

1paragraph (B) of this Section shall be 75% of final average
2salary.
3    (f) A member retiring after the effective date of this
4amendatory Act of 1998 shall receive a pension equal to 75% of
5final average salary if the member is qualified to receive a
6retirement annuity equal to at least 74.6% of final average
7salary under this Article or as proportional annuities under
8Article 20 of this Code.
9(Source: P.A. 94-4, eff. 6-1-05.)
 
10    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
11    Sec. 16-133.1. Automatic annual increase in annuity.
12    (a) Each member with creditable service and retiring on or
13after August 26, 1969 is entitled to the automatic annual
14increases in annuity provided under this Section while
15receiving a retirement annuity or disability retirement
16annuity from the system.
17    An annuitant shall first be entitled to an initial increase
18under this Section on the January 1 next following the first
19anniversary of retirement, or January 1 of the year next
20following attainment of age 61, whichever is later. At such
21time, the system shall pay an initial increase determined as
22follows or as provided in subsections (a-1) and (a-2):
23        (1) 1.5% of the originally granted retirement annuity
24    or disability retirement annuity multiplied by the number
25    of years elapsed, if any, from the date of retirement until

 

 

SB0001- 157 -LRB098 05457 JDS 35491 b

1    January 1, 1972, plus
2        (2) 2% of the originally granted annuity multiplied by
3    the number of years elapsed, if any, from the date of
4    retirement or January 1, 1972, whichever is later, until
5    January 1, 1978, plus
6        (3) 3% of the originally granted annuity multiplied by
7    the number of years elapsed from the date of retirement or
8    January 1, 1978, whichever is later, until the effective
9    date of the initial increase.
10However, the initial annual increase calculated under this
11Section for the recipient of a disability retirement annuity
12granted under Section 16-149.2 shall be reduced by an amount
13equal to the total of all increases in that annuity received
14under Section 16-149.5 (but not exceeding 100% of the amount of
15the initial increase otherwise provided under this Section).
16    Following the initial increase, automatic annual increases
17in annuity shall be payable on each January 1 thereafter during
18the lifetime of the annuitant, determined as a percentage of
19the originally granted retirement annuity or disability
20retirement annuity for increases granted prior to January 1,
211990, and calculated as a percentage of the total amount of
22annuity, including previous increases under this Section, for
23increases granted on or after January 1, 1990, as follows: 1.5%
24for periods prior to January 1, 1972, 2% for periods after
25December 31, 1971 and prior to January 1, 1978, and 3% for
26periods after December 31, 1977, or as provided in subsections

 

 

SB0001- 158 -LRB098 05457 JDS 35491 b

1(a-1) and (a-2).
2    (a-1) Notwithstanding any other provision of this Article,
3for a Tier I retiree, the amount of each automatic increase in
4retirement annuity occurring on or after the effective date of
5this amendatory Act of the 98th General Assembly shall be the
6lesser of (i) $750 or (ii) 3% of the total annuity payable at
7the time of the increase, including previous increases granted.
8    (a-2) Notwithstanding any other provision of this Article,
9the System shall not grant any new or additional automatic
10increase in retirement annuity to a Tier I retiree on or after
11the effective date of this amendatory Act of the 98th General
12Assembly and before January 1, 2017.
13    Notwithstanding any other provision of this Article, the
14System shall not grant any new or additional automatic increase
15in retirement annuity to a Tier I retiree who has not yet
16attained the age of 67, regardless of any age augmentation
17granted under this Article as an early retirement incentive.
18    If on the effective date of this amendatory Act of the 98th
19General Assembly a Tier I retiree has already received an
20annual increase under this Section but does not yet meet the
21new eligibility requirements of this subsection, the annual
22increases already received shall continue in force, but no
23additional annual increase shall be granted until the Tier I
24retiree meets the new eligibility requirements.
25    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
26and (a-2) apply without regard to whether or not the Tier I

 

 

SB0001- 159 -LRB098 05457 JDS 35491 b

1retiree is in active service under this Article on or after the
2effective date of this amendatory Act of the 98th General
3Assembly.
4    (b) The automatic annual increases in annuity provided
5under this Section shall not be applicable unless a member has
6made contributions toward such increases for a period
7equivalent to one full year of creditable service. If a member
8contributes for service performed after August 26, 1969 but the
9member becomes an annuitant before such contributions amount to
10one full year's contributions based on the salary at the date
11of retirement, he or she may pay the necessary balance of the
12contributions to the system and be eligible for the automatic
13annual increases in annuity provided under this Section.
14    (c) Each member shall make contributions toward the cost of
15the automatic annual increases in annuity as provided under
16Section 16-152.
17    (d) An annuitant receiving a retirement annuity or
18disability retirement annuity on July 1, 1969, who subsequently
19re-enters service as a teacher is eligible for the automatic
20annual increases in annuity provided under this Section if he
21or she renders at least one year of creditable service
22following the latest re-entry.
23    (e) In addition to the automatic annual increases in
24annuity provided under this Section, an annuitant who meets the
25service requirements of this Section and whose retirement
26annuity or disability retirement annuity began on or before

 

 

SB0001- 160 -LRB098 05457 JDS 35491 b

1January 1, 1971 shall receive, on January 1, 1981, an increase
2in the annuity then being paid of one dollar per month for each
3year of creditable service. On January 1, 1982, an annuitant
4whose retirement annuity or disability retirement annuity
5began on or before January 1, 1977 shall receive an increase in
6the annuity then being paid of one dollar per month for each
7year of creditable service.
8    On January 1, 1987, any annuitant whose retirement annuity
9began on or before January 1, 1977, shall receive an increase
10in the monthly retirement annuity equal to 8 per year of
11creditable service times the number of years that have elapsed
12since the annuity began.
13(Source: P.A. 91-927, eff. 12-14-00.)
 
14    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
15    Sec. 16-152. Contributions by members.
16    (a) Each member shall make contributions for membership
17service to this System as follows:
18        (1) Effective July 1, 1998, contributions of 7.50% of
19    salary towards the cost of the retirement annuity. Such
20    contributions shall be deemed "normal contributions".
21        (2) Effective July 1, 1969, contributions of 1/2 of 1%
22    of salary toward the cost of the automatic annual increase
23    in retirement annuity provided under Section 16-133.1.
24        (3) Effective July 24, 1959, contributions of 1% of
25    salary towards the cost of survivor benefits. Such

 

 

SB0001- 161 -LRB098 05457 JDS 35491 b

1    contributions shall not be credited to the individual
2    account of the member and shall not be subject to refund
3    except as provided under Section 16-143.2.
4        (4) Effective July 1, 2005, contributions of 0.40% of
5    salary toward the cost of the early retirement without
6    discount option provided under Section 16-133.2. This
7    contribution shall cease upon termination of the early
8    retirement without discount option as provided in Section
9    16-176.
10    (a-5) In addition to the contributions otherwise required
11under this Article, each Tier I member shall also make the
12following contributions toward the cost of the retirement
13annuity from each payment of salary:
14        (1) beginning July 1, 2013 and through June 30, 2014,
15    1% of salary; and
16        (2) beginning on July 1, 2014, 2% of salary.
17    Except as otherwise specified, these contributions are to
18be considered as normal contributions for purposes of this
19Article.
20    (b) The minimum required contribution for any year of
21full-time teaching service shall be $192.
22    (c) Contributions shall not be required of any annuitant
23receiving a retirement annuity who is given employment as
24permitted under Section 16-118 or 16-150.1.
25    (d) A person who (i) was a member before July 1, 1998, (ii)
26retires with more than 34 years of creditable service, and

 

 

SB0001- 162 -LRB098 05457 JDS 35491 b

1(iii) does not elect to qualify for the augmented rate under
2Section 16-129.1 shall be entitled, at the time of retirement,
3to receive a partial refund of contributions made under this
4Section for service occurring after the later of June 30, 1998
5or attainment of 34 years of creditable service, in an amount
6equal to 1.00% of the salary upon which those contributions
7were based.
8    (e) A member's contributions toward the cost of early
9retirement without discount made under item (a)(4) of this
10Section shall not be refunded if the member has elected early
11retirement without discount under Section 16-133.2 and has
12begun to receive a retirement annuity under this Article
13calculated in accordance with that election. Otherwise, a
14member's contributions toward the cost of early retirement
15without discount made under item (a)(4) of this Section shall
16be refunded according to whichever one of the following
17circumstances occurs first:
18        (1) The contributions shall be refunded to the member,
19    without interest, within 120 days after the member's
20    retirement annuity commences, if the member does not elect
21    early retirement without discount under Section 16-133.2.
22        (2) The contributions shall be included, without
23    interest, in any refund claimed by the member under Section
24    16-151.
25        (3) The contributions shall be refunded to the member's
26    designated beneficiary (or if there is no beneficiary, to

 

 

SB0001- 163 -LRB098 05457 JDS 35491 b

1    the member's estate), without interest, if the member dies
2    without having begun to receive a retirement annuity under
3    this Article.
4        (4) The contributions shall be refunded to the member,
5    without interest, within 120 days after the early
6    retirement without discount option provided under Section
7    16-133.2 is terminated under Section 16-176.
8(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
9    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
10    Sec. 16-158. Contributions by State and other employing
11units.
12    (a) The State shall make contributions to the System by
13means of appropriations from the Common School Fund and other
14State funds of amounts which, together with other employer
15contributions, employee contributions, investment income, and
16other income, will be sufficient to meet the cost of
17maintaining and administering the System on a 100% 90% funded
18basis in accordance with actuarial recommendations by the end
19of State fiscal year 2043.
20    The Board shall determine the amount of State contributions
21required for each fiscal year on the basis of the actuarial
22tables and other assumptions adopted by the Board and the
23recommendations of the actuary, using the formula in subsection
24(b-3).
25    (a-1) Annually, on or before November 15 through until

 

 

SB0001- 164 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 165 -LRB098 05457 JDS 35491 b

1of the amount of the required State contribution to the System
2for the next fiscal year, along with all of the actuarial
3assumptions, calculations, and data upon which that proposed
4certification is based. On or before January 1 of each year,
5beginning January 1, 2013, the State Actuary shall issue a
6preliminary report concerning the proposed certification and
7identifying, if necessary, recommended changes in actuarial
8assumptions that the Board must consider before finalizing its
9certification of the required State contributions.
10    On or before January 15, 2013 and each January 15
11thereafter, the Board shall certify to the Governor and the
12General Assembly the amount of the required State contribution
13for the next fiscal year. The certification shall include a
14copy of the actuarial recommendations upon which it is based
15and shall specifically identify the System's projected State
16normal cost for that fiscal year. The Board's certification
17must note any deviations from the State Actuary's recommended
18changes, the reason or reasons for not following the State
19Actuary's recommended changes, and the fiscal impact of not
20following the State Actuary's recommended changes on the
21required State contribution.
22    (b) Through State fiscal year 1995, the State contributions
23shall be paid to the System in accordance with Section 18-7 of
24the School Code.
25    (b-1) Beginning in State fiscal year 1996, on the 15th day
26of each month, or as soon thereafter as may be practicable, the

 

 

SB0001- 166 -LRB098 05457 JDS 35491 b

1Board shall submit vouchers for payment of State contributions
2to the System, in a total monthly amount of one-twelfth of the
3required annual State contribution certified under subsection
4(a-1). From the effective date of this amendatory Act of the
593rd General Assembly through June 30, 2004, the Board shall
6not submit vouchers for the remainder of fiscal year 2004 in
7excess of the fiscal year 2004 certified contribution amount
8determined under this Section after taking into consideration
9the transfer to the System under subsection (a) of Section
106z-61 of the State Finance Act. These vouchers shall be paid by
11the State Comptroller and Treasurer by warrants drawn on the
12funds appropriated to the System for that fiscal year.
13    If in any month the amount remaining unexpended from all
14other appropriations to the System for the applicable fiscal
15year (including the appropriations to the System under Section
168.12 of the State Finance Act and Section 1 of the State
17Pension Funds Continuing Appropriation Act) is less than the
18amount lawfully vouchered under this subsection, the
19difference shall be paid from the Common School Fund under the
20continuing appropriation authority provided in Section 1.1 of
21the State Pension Funds Continuing Appropriation Act.
22    (b-2) Allocations from the Common School Fund apportioned
23to school districts not coming under this System shall not be
24diminished or affected by the provisions of this Article.
25    (b-3) For State fiscal years 2014 through 2043, the minimum
26contribution to the System to be made by the State for each

 

 

SB0001- 167 -LRB098 05457 JDS 35491 b

1fiscal year shall be an amount determined by the System to be
2equal to the sum of (1) the State's portion of the projected
3normal cost for that fiscal year, plus (2) an amount sufficient
4to bring the total assets of the System up to 100% of the total
5actuarial liabilities of the System by the end of State fiscal
6year 2043. In making these determinations, the required State
7contribution shall be calculated each year as a level
8percentage of payroll over the years remaining to and including
9fiscal year 2043 and shall be determined under the projected
10unit credit actuarial cost method.
11    For State fiscal year 2044 and thereafter, the minimum
12State contribution for each fiscal year shall be the amount
13needed to maintain the total assets of the System at 100% of
14the total actuarial liabilities of the System.
15    For State fiscal years 2012 and 2013 through 2045, the
16minimum contribution to the System to be made by the State for
17each fiscal year shall be an amount determined by the System to
18be sufficient to bring the total assets of the System up to 90%
19of the total actuarial liabilities of the System by the end of
20State fiscal year 2045. In making these determinations, the
21required State contribution shall be calculated each year as a
22level percentage of payroll over the years remaining to and
23including fiscal year 2045 and shall be determined under the
24projected unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

SB0001- 168 -LRB098 05457 JDS 35491 b

1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section; except that in the
4following specified State fiscal years, the State contribution
5to the System shall not be less than the following indicated
6percentages of the applicable employee payroll, even if the
7indicated percentage will produce a State contribution in
8excess of the amount otherwise required under this subsection
9and subsection (a), and notwithstanding any contrary
10certification made under subsection (a-1) before the effective
11date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
12in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
132003; and 13.56% in FY 2004.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$534,627,700.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$738,014,500.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

SB0001- 169 -LRB098 05457 JDS 35491 b

1total required State contribution for State fiscal year 2010 is
2$2,089,268,000 and shall be made from the proceeds of bonds
3sold in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the Common School Fund
7in fiscal year 2010, and (iii) any reduction in bond proceeds
8due to the issuance of discounted bonds, if applicable.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to subsection (a-1) of this Section and shall be made
13from the proceeds of bonds sold in fiscal year 2011 pursuant to
14Section 7.2 of the General Obligation Bond Act, less (i) the
15pro rata share of bond sale expenses determined by the System's
16share of total bond proceeds, (ii) any amounts received from
17the Common School Fund in fiscal year 2011, and (iii) any
18reduction in bond proceeds due to the issuance of discounted
19bonds, if applicable. This amount shall include, in addition to
20the amount certified by the System, an amount necessary to meet
21employer contributions required by the State as an employer
22under paragraph (e) of this Section, which may also be used by
23the System for contributions required by paragraph (a) of
24Section 16-127.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

SB0001- 170 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 171 -LRB098 05457 JDS 35491 b

1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter through State
3fiscal year 2013, as calculated under this Section and
4certified under subsection (a-1), shall not exceed an amount
5equal to (i) the amount of the required State contribution that
6would have been calculated under this Section for that fiscal
7year if the System had not received any payments under
8subsection (d) of Section 7.2 of the General Obligation Bond
9Act, minus (ii) the portion of the State's total debt service
10payments for that fiscal year on the bonds issued in fiscal
11year 2003 for the purposes of that Section 7.2, as determined
12and certified by the Comptroller, that is the same as the
13System's portion of the total moneys distributed under
14subsection (d) of Section 7.2 of the General Obligation Bond
15Act. In determining this maximum for State fiscal years 2008
16through 2010, however, the amount referred to in item (i) shall
17be increased, as a percentage of the applicable employee
18payroll, in equal increments calculated from the sum of the
19required State contribution for State fiscal year 2007 plus the
20applicable portion of the State's total debt service payments
21for fiscal year 2007 on the bonds issued in fiscal year 2003
22for the purposes of Section 7.2 of the General Obligation Bond
23Act, so that, by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    (c) Payment of the required State contributions and of all
26pensions, retirement annuities, death benefits, refunds, and

 

 

SB0001- 172 -LRB098 05457 JDS 35491 b

1other benefits granted under or assumed by this System, and all
2expenses in connection with the administration and operation
3thereof, are obligations of the State.
4    If members are paid from special trust or federal funds
5which are administered by the employing unit, whether school
6district or other unit, the employing unit shall pay to the
7System from such funds the full accruing retirement costs based
8upon that service, as determined by the System. Employer
9contributions, based on salary paid to members from federal
10funds, may be forwarded by the distributing agency of the State
11of Illinois to the System prior to allocation, in an amount
12determined in accordance with guidelines established by such
13agency and the System.
14    (d) Effective July 1, 1986, any employer of a teacher as
15defined in paragraph (8) of Section 16-106 shall pay the
16employer's normal cost of benefits based upon the teacher's
17service, in addition to employee contributions, as determined
18by the System. Such employer contributions shall be forwarded
19monthly in accordance with guidelines established by the
20System.
21    However, with respect to benefits granted under Section
2216-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
23of Section 16-106, the employer's contribution shall be 12%
24(rather than 20%) of the member's highest annual salary rate
25for each year of creditable service granted, and the employer
26shall also pay the required employee contribution on behalf of

 

 

SB0001- 173 -LRB098 05457 JDS 35491 b

1the teacher. For the purposes of Sections 16-133.4 and
216-133.5, a teacher as defined in paragraph (8) of Section
316-106 who is serving in that capacity while on leave of
4absence from another employer under this Article shall not be
5considered an employee of the employer from which the teacher
6is on leave.
7    (e) Beginning July 1, 1998, every employer of a teacher
8shall pay to the System an employer contribution computed as
9follows:
10        (1) Beginning July 1, 1998 through June 30, 1999, the
11    employer contribution shall be equal to 0.3% of each
12    teacher's salary.
13        (2) Beginning July 1, 1999 and thereafter, the employer
14    contribution shall be equal to 0.58% of each teacher's
15    salary.
16The school district or other employing unit may pay these
17employer contributions out of any source of funding available
18for that purpose and shall forward the contributions to the
19System on the schedule established for the payment of member
20contributions.
21    These employer contributions are intended to offset a
22portion of the cost to the System of the increases in
23retirement benefits resulting from this amendatory Act of 1998.
24    Each employer of teachers is entitled to a credit against
25the contributions required under this subsection (e) with
26respect to salaries paid to teachers for the period January 1,

 

 

SB0001- 174 -LRB098 05457 JDS 35491 b

12002 through June 30, 2003, equal to the amount paid by that
2employer under subsection (a-5) of Section 6.6 of the State
3Employees Group Insurance Act of 1971 with respect to salaries
4paid to teachers for that period.
5    The additional 1% employee contribution required under
6Section 16-152 by this amendatory Act of 1998 is the
7responsibility of the teacher and not the teacher's employer,
8unless the employer agrees, through collective bargaining or
9otherwise, to make the contribution on behalf of the teacher.
10    If an employer is required by a contract in effect on May
111, 1998 between the employer and an employee organization to
12pay, on behalf of all its full-time employees covered by this
13Article, all mandatory employee contributions required under
14this Article, then the employer shall be excused from paying
15the employer contribution required under this subsection (e)
16for the balance of the term of that contract. The employer and
17the employee organization shall jointly certify to the System
18the existence of the contractual requirement, in such form as
19the System may prescribe. This exclusion shall cease upon the
20termination, extension, or renewal of the contract at any time
21after May 1, 1998.
22    (f) If the amount of a teacher's salary for any school year
23used to determine final average salary exceeds the member's
24annual full-time salary rate with the same employer for the
25previous school year by more than 6%, the teacher's employer
26shall pay to the System, in addition to all other payments

 

 

SB0001- 175 -LRB098 05457 JDS 35491 b

1required under this Section and in accordance with guidelines
2established by the System, the present value of the increase in
3benefits resulting from the portion of the increase in salary
4that is in excess of 6%. This present value shall be computed
5by the System on the basis of the actuarial assumptions and
6tables used in the most recent actuarial valuation of the
7System that is available at the time of the computation. If a
8teacher's salary for the 2005-2006 school year is used to
9determine final average salary under this subsection (f), then
10the changes made to this subsection (f) by Public Act 94-1057
11shall apply in calculating whether the increase in his or her
12salary is in excess of 6%. For the purposes of this Section,
13change in employment under Section 10-21.12 of the School Code
14on or after June 1, 2005 shall constitute a change in employer.
15The System may require the employer to provide any pertinent
16information or documentation. The changes made to this
17subsection (f) by this amendatory Act of the 94th General
18Assembly apply without regard to whether the teacher was in
19service on or after its effective date.
20    Whenever it determines that a payment is or may be required
21under this subsection, the System shall calculate the amount of
22the payment and bill the employer for that amount. The bill
23shall specify the calculations used to determine the amount
24due. If the employer disputes the amount of the bill, it may,
25within 30 days after receipt of the bill, apply to the System
26in writing for a recalculation. The application must specify in

 

 

SB0001- 176 -LRB098 05457 JDS 35491 b

1detail the grounds of the dispute and, if the employer asserts
2that the calculation is subject to subsection (g) or (h) of
3this Section, must include an affidavit setting forth and
4attesting to all facts within the employer's knowledge that are
5pertinent to the applicability of that subsection. Upon
6receiving a timely application for recalculation, the System
7shall review the application and, if appropriate, recalculate
8the amount due.
9    The employer contributions required under this subsection
10(f) may be paid in the form of a lump sum within 90 days after
11receipt of the bill. If the employer contributions are not paid
12within 90 days after receipt of the bill, then interest will be
13charged at a rate equal to the System's annual actuarially
14assumed rate of return on investment compounded annually from
15the 91st day after receipt of the bill. Payments must be
16concluded within 3 years after the employer's receipt of the
17bill.
18    (g) This subsection (g) applies only to payments made or
19salary increases given on or after June 1, 2005 but before July
201, 2011. The changes made by Public Act 94-1057 shall not
21require the System to refund any payments received before July
2231, 2006 (the effective date of Public Act 94-1057).
23    When assessing payment for any amount due under subsection
24(f), the System shall exclude salary increases paid to teachers
25under contracts or collective bargaining agreements entered
26into, amended, or renewed before June 1, 2005.

 

 

SB0001- 177 -LRB098 05457 JDS 35491 b

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

 

 

SB0001- 178 -LRB098 05457 JDS 35491 b

1the collective bargaining agreement for a similar position
2requiring the same certification.
3    When assessing payment for any amount due under subsection
4(f), the System shall exclude any payment to the teacher from
5the State of Illinois or the State Board of Education over
6which the employer does not have discretion, notwithstanding
7that the payment is included in the computation of final
8average salary.
9    (h) When assessing payment for any amount due under
10subsection (f), the System shall exclude any salary increase
11described in subsection (g) of this Section given on or after
12July 1, 2011 but before July 1, 2014 under a contract or
13collective bargaining agreement entered into, amended, or
14renewed on or after June 1, 2005 but before July 1, 2011.
15Notwithstanding any other provision of this Section, any
16payments made or salary increases given after June 30, 2014
17shall be used in assessing payment for any amount due under
18subsection (f) of this Section.
19    (i) The System shall prepare a report and file copies of
20the report with the Governor and the General Assembly by
21January 1, 2007 that contains all of the following information:
22        (1) The number of recalculations required by the
23    changes made to this Section by Public Act 94-1057 for each
24    employer.
25        (2) The dollar amount by which each employer's
26    contribution to the System was changed due to

 

 

SB0001- 179 -LRB098 05457 JDS 35491 b

1    recalculations required by Public Act 94-1057.
2        (3) The total amount the System received from each
3    employer as a result of the changes made to this Section by
4    Public Act 94-4.
5        (4) The increase in the required State contribution
6    resulting from the changes made to this Section by Public
7    Act 94-1057.
8    (j) For purposes of determining the required State
9contribution to the System, the value of the System's assets
10shall be equal to the actuarial value of the System's assets,
11which shall be calculated as follows:
12    As of June 30, 2008, the actuarial value of the System's
13assets shall be equal to the market value of the assets as of
14that date. In determining the actuarial value of the System's
15assets for fiscal years after June 30, 2008, any actuarial
16gains or losses from investment return incurred in a fiscal
17year shall be recognized in equal annual amounts over the
185-year period following that fiscal year.
19    (k) For purposes of determining the required State
20contribution to the system for a particular year, the actuarial
21value of assets shall be assumed to earn a rate of return equal
22to the system's actuarially assumed rate of return.
23(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
256-18-12; 97-813, eff. 7-13-12.)
 

 

 

SB0001- 180 -LRB098 05457 JDS 35491 b

1    (40 ILCS 5/16-158.2 new)
2    Sec. 16-158.2. Obligations of State; funding guarantee.
3    Beginning July 1, 2013, the State shall be contractually
4obligated to contribute to the System under Section 16-158 in
5each State fiscal year an amount not less than the sum of (i)
6the State's normal cost for that year and (ii) the portion of
7the unfunded accrued liability assigned to that year by law in
8accordance with a schedule that distributes payments equitably
9over a reasonable period of time and in accordance with
10accepted actuarial practices. The obligations created under
11this subsection (b) are contractual obligations protected and
12enforceable under Article I, Section 16 and Article XIII,
13Section 5 of the Illinois Constitution.
14    Notwithstanding any other provision of law, if the State
15fails to pay in a State fiscal year the amount guaranteed under
16this subsection, the System may bring a mandamus action in the
17Circuit Court of Sangamon County to compel the State to make
18that payment, irrespective of other remedies that may be
19available to the System. In ordering the State to make the
20required payment, the court may order a reasonable payment
21schedule to enable the State to make the required payment
22without significantly imperiling the public health, safety, or
23welfare.
24    Any payments required to be made by the State pursuant to
25this Section are expressly subordinated to the payment of the
26principal, interest, and premium, if any, on any bonded debt

 

 

SB0001- 181 -LRB098 05457 JDS 35491 b

1obligation of the State or any other State-created entity,
2either currently outstanding or to be issued, for which the
3source of repayment or security thereon is derived directly or
4indirectly from tax revenues collected by the State or any
5other State-created entity. Payments on such bonded
6obligations include any statutory fund transfers or other
7prefunding mechanisms or formulas set forth, now or hereafter,
8in State law or bond indentures, into debt service funds or
9accounts of the State related to such bonded obligations,
10consistent with the payment schedules associated with such
11obligations.
 
12    (40 ILCS 5/16-203)
13    Sec. 16-203. Application and expiration of new benefit
14increases.
15    (a) As used in this Section, "new benefit increase" means
16an increase in the amount of any benefit provided under this
17Article, or an expansion of the conditions of eligibility for
18any benefit under this Article, that results from an amendment
19to this Code that takes effect after June 1, 2005 (the
20effective date of Public Act 94-4). "New benefit increase",
21however, does not include any benefit increase resulting from
22the changes made to this Article or Article 1 by Public Act
2395-910 or this amendatory Act of the 98th 95th General
24Assembly.
25    (b) Notwithstanding any other provision of this Code or any

 

 

SB0001- 182 -LRB098 05457 JDS 35491 b

1subsequent amendment to this Code, every new benefit increase
2is subject to this Section and shall be deemed to be granted
3only in conformance with and contingent upon compliance with
4the provisions of this Section.
5    (c) The Public Act enacting a new benefit increase must
6identify and provide for payment to the System of additional
7funding at least sufficient to fund the resulting annual
8increase in cost to the System as it accrues.
9    Every new benefit increase is contingent upon the General
10Assembly providing the additional funding required under this
11subsection. The Commission on Government Forecasting and
12Accountability shall analyze whether adequate additional
13funding has been provided for the new benefit increase and
14shall report its analysis to the Public Pension Division of the
15Department of Financial and Professional Regulation. A new
16benefit increase created by a Public Act that does not include
17the additional funding required under this subsection is null
18and void. If the Public Pension Division determines that the
19additional funding provided for a new benefit increase under
20this subsection is or has become inadequate, it may so certify
21to the Governor and the State Comptroller and, in the absence
22of corrective action by the General Assembly, the new benefit
23increase shall expire at the end of the fiscal year in which
24the certification is made.
25    (d) Every new benefit increase shall expire 5 years after
26its effective date or on such earlier date as may be specified

 

 

SB0001- 183 -LRB098 05457 JDS 35491 b

1in the language enacting the new benefit increase or provided
2under subsection (c). This does not prevent the General
3Assembly from extending or re-creating a new benefit increase
4by law.
5    (e) Except as otherwise provided in the language creating
6the new benefit increase, a new benefit increase that expires
7under this Section continues to apply to persons who applied
8and qualified for the affected benefit while the new benefit
9increase was in effect and to the affected beneficiaries and
10alternate payees of such persons, but does not apply to any
11other person, including without limitation a person who
12continues in service after the expiration date and did not
13apply and qualify for the affected benefit while the new
14benefit increase was in effect.
15(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
16    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
17    Sec. 18-131. Financing; employer contributions.
18    (a) The State of Illinois shall make contributions to this
19System by appropriations of the amounts which, together with
20the contributions of participants, net earnings on
21investments, and other income, will meet the costs of
22maintaining and administering this System on a 90% funded basis
23in accordance with actuarial recommendations.
24    (b) The Board shall determine the amount of State
25contributions required for each fiscal year on the basis of the

 

 

SB0001- 184 -LRB098 05457 JDS 35491 b

1actuarial tables and other assumptions adopted by the Board and
2the prescribed rate of interest, using the formula in
3subsection (c).
4    (c) 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
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$29,189,400.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2007 is
24$35,236,800.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

SB0001- 185 -LRB098 05457 JDS 35491 b

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$78,832,000 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 18-140 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

 

 

SB0001- 186 -LRB098 05457 JDS 35491 b

1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 90% of the total
3actuarial 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 90%. A reference in this Article to
13the "required State contribution" or any substantially similar
14term does not include or apply to any amounts payable to the
15System 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.

 

 

SB0001- 187 -LRB098 05457 JDS 35491 b

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, as calculated
4under this Section and certified under Section 18-140, shall
5not exceed an amount equal to (i) the amount of the required
6State contribution that would have been calculated under this
7Section for that fiscal year if the System had not received any
8payments under subsection (d) of Section 7.2 of the General
9Obligation Bond Act, minus (ii) the portion of the State's
10total debt service payments for that fiscal year on the bonds
11issued in fiscal year 2003 for the purposes of that Section
127.2, as determined and certified by the Comptroller, that is
13the same as the System's portion of the total moneys
14distributed under subsection (d) of Section 7.2 of the General
15Obligation Bond Act. In determining this maximum for State
16fiscal years 2008 through 2010, however, the amount referred to
17in item (i) shall be increased, as a percentage of the
18applicable employee payroll, in equal increments calculated
19from the sum of the required State contribution for State
20fiscal year 2007 plus the applicable portion of the State's
21total debt service payments for fiscal year 2007 on the bonds
22issued in fiscal year 2003 for the purposes of Section 7.2 of
23the General Obligation Bond Act, so that, by State fiscal year
242011, the State is contributing at the rate otherwise required
25under this Section.
26    (d) For purposes of determining the required State

 

 

SB0001- 188 -LRB098 05457 JDS 35491 b

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    Section A-25. The Illinois Educational Labor Relations Act
19is amended by changing Sections 4 and 17 as follows:
 
20    (115 ILCS 5/4)  (from Ch. 48, par. 1704)
21    Sec. 4. Employer rights. Employers shall not be required to
22bargain over matters of inherent managerial policy, which shall
23include such areas of discretion or policy as the functions of
24the employer, standards of services, its overall budget, the

 

 

SB0001- 189 -LRB098 05457 JDS 35491 b

1organizational structure and selection of new employees and
2direction of employees. Employers, however, shall be required
3to bargain collectively with regard to policy matters directly
4affecting wages, hours and terms and conditions of employment
5as well as the impact thereon upon request by employee
6representatives, but excluding the changes, the impact of
7changes, and the implementation of the changes set forth in
8this amendatory Act of the 98th General Assembly. To preserve
9the rights of employers and exclusive representatives which
10have established collective bargaining relationships or
11negotiated collective bargaining agreements prior to the
12effective date of this Act, employers shall be required to
13bargain collectively with regard to any matter concerning
14wages, hours or conditions of employment about which they have
15bargained for and agreed to in a collective bargaining
16agreement prior to the effective date of this Act, but
17excluding the changes, the impact of changes, and the
18implementation of the changes set forth in this amendatory Act
19of the 98th General Assembly.
20(Source: P.A. 83-1014.)
 
21    (115 ILCS 5/17)  (from Ch. 48, par. 1717)
22    Sec. 17. Effect on other laws. In case of any conflict
23between the provisions of this Act and any other law (other
24than the changes, the impact of changes, and the implementation
25of the changes made to the Illinois Pension Code by this

 

 

SB0001- 190 -LRB098 05457 JDS 35491 b

1amendatory Act of the 98th General Assembly), executive order
2or administrative regulation, the provisions of this Act shall
3prevail and control. The provisions of this Act are subject to
4the changes made by this amendatory Act of the 98th General
5Assembly. Nothing in this Act shall be construed to replace or
6diminish the rights of employees established by Section 36d of
7"An Act to create the State Universities Civil Service System",
8approved May 11, 1905, as amended or modified.
9(Source: P.A. 83-1014.)
 
10    Section A-90. The State Mandates Act is amended by adding
11Section 8.37 as follows:
 
12    (30 ILCS 805/8.37 new)
13    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
14of this Act, no reimbursement by the State is required for the
15implementation of any mandate created by this amendatory Act of
16the 98th General Assembly.
 
17    Section A-90. The State Mandates Act is amended by adding
18Section 8.36 as follows:
 
19    Section A-97. Severability and inseverability. The changes
20made by this Part A to Acts other than the Illinois Pension
21Code are severable from the other changes made by this Act. The
22changes made by this Part A to an Article of the Illinois

 

 

SB0001- 191 -LRB098 05457 JDS 35491 b

1Pension Code are severable from the changes made by this Part A
2to another Article of the Illinois Pension Code. However, the
3changes made by this Part A in an Article of the Illinois
4Pension Code that relate to (i) automatic annual increases,
5(ii) employee or member contributions, (iii) State or employer
6contributions, (iv) State funding guarantees, or (v) salary,
7earnings, or compensation are mutually dependent and
8inseverable.
 
9
PART B

 
10    Section B-1. The Illinois Pension Code is amended by adding
11Section 1-103.5 as follows:
 
12    (40 ILCS 5/1-103.5 new)
13    Sec. 1-103.5. Explanation of House Bill 3865.
14    (a) Part A of House Bill 3865 is intended by the General
15Assembly as a stand-alone reform of certain Articles of this
16Code, which takes effect upon becoming law. Part B of House
17Bill 3865 contains alternative provisions that take effect only
18if and when a corresponding portion of Part A is determined to
19be unconstitutional or otherwise invalid or unenforceable.
20    (b) If one or more of the changes made in Part A to
21portions of a specific Article of the Illinois Pension Code
22that are designated as inseverable under Section 97 of Part A
23are determined to be unconstitutional or otherwise invalid by a

 

 

SB0001- 192 -LRB098 05457 JDS 35491 b

1final judgment of the Illinois Supreme Court or by a final
2unappealable judgment of the Illinois Appellate Court or a
3court of competent jurisdiction, then the invalid provisions of
4Part A and the provisions of Part A that are inseverable from
5those provisions shall be superseded by the Sections of Part B
6that take effect due to that invalidity.
 
7    Section B-5. If and only if Section B-30, B-35, B-40, or
8B-45 of this Part B take effect, then the Illinois Public Labor
9Relations Act is amended by changing Sections 4 and 15 as
10follows:
 
11    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
12    Sec. 4. Management Rights. Employers shall not be required
13to bargain over matters of inherent managerial policy, which
14shall include such areas of discretion or policy as the
15functions of the employer, standards of services, its overall
16budget, the organizational structure and selection of new
17employees, examination techniques and direction of employees.
18Employers, however, shall be required to bargain collectively
19with regard to policy matters directly affecting wages (but
20subject to any applicable restrictions in Section 14-106.5,
2115-132.9, or 16-122.9 of the Illinois Pension Code), hours and
22terms and conditions of employment as well as the impact
23thereon upon request by employee representatives, but
24excluding the changes, the impact of changes, and the

 

 

SB0001- 193 -LRB098 05457 JDS 35491 b

1implementation of the changes set forth in this amendatory Act
2of the 98th General Assembly.
3    To preserve the rights of employers and exclusive
4representatives which have established collective bargaining
5relationships or negotiated collective bargaining agreements
6prior to the effective date of this Act, employers shall be
7required to bargain collectively with regard to any matter
8concerning wages (but subject to any applicable restrictions in
9Section 14-106.5, 15-132.9, or 16-122.9 of the Illinois Pension
10Code), hours or conditions of employment about which they have
11bargained for and agreed to in a collective bargaining
12agreement prior to the effective date of this Act, but
13excluding the changes, the impact of changes, and the
14implementation of the changes set forth in this amendatory Act
15of the 98th General Assembly.
16    The chief judge of the judicial circuit that employs a
17public employee who is a court reporter, as defined in the
18Court Reporters Act, has the authority to hire, appoint,
19promote, evaluate, discipline, and discharge court reporters
20within that judicial circuit.
21    Nothing in this amendatory Act of the 94th General Assembly
22shall be construed to intrude upon the judicial functions of
23any court. This amendatory Act of the 94th General Assembly
24applies only to nonjudicial administrative matters relating to
25the collective bargaining rights of court reporters.
26(Source: P.A. 94-98, eff. 7-1-05.)
 

 

 

SB0001- 194 -LRB098 05457 JDS 35491 b

1    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
2    Sec. 15. Act Takes Precedence.
3    (a) In case of any conflict between the provisions of this
4Act and any other law (other than Section 5 of the State
5Employees Group Insurance Act of 1971 and other than the
6changes made to the Illinois Pension Code by Public Act 96-889
7and the changes, impact of changes, and the implementation of
8the changes made to the Illinois Pension Code and the State
9Employees Group Insurance Act of 1971 by this amendatory Act of
10the 98th 96th General Assembly), executive order or
11administrative regulation relating to wages, hours and
12conditions of employment and employment relations, the
13provisions of this Act or any collective bargaining agreement
14negotiated thereunder shall prevail and control. Nothing in
15this Act shall be construed to replace or diminish the rights
16of employees established by Sections 28 and 28a of the
17Metropolitan Transit Authority Act, Sections 2.15 through 2.19
18of the Regional Transportation Authority Act. The provisions of
19this Act are subject to the changes made by this amendatory Act
20of the 98th General Assembly, including Sections 14-106.5,
2115-132.9, and 16-122.9 of the Illinois Pension Code, and
22Section 5 of the State Employees Group Insurance Act of 1971.
23Nothing in this Act shall be construed to replace the necessity
24of complaints against a sworn peace officer, as defined in
25Section 2(a) of the Uniform Peace Officer Disciplinary Act,

 

 

SB0001- 195 -LRB098 05457 JDS 35491 b

1from having a complaint supported by a sworn affidavit.
2    (b) Except as provided in subsection (a) above, any
3collective bargaining contract between a public employer and a
4labor organization executed pursuant to this Act shall
5supersede any contrary statutes, charters, ordinances, rules
6or regulations relating to wages, hours and conditions of
7employment and employment relations adopted by the public
8employer or its agents. Any collective bargaining agreement
9entered into prior to the effective date of this Act shall
10remain in full force during its duration.
11    (c) It is the public policy of this State, pursuant to
12paragraphs (h) and (i) of Section 6 of Article VII of the
13Illinois Constitution, that the provisions of this Act are the
14exclusive exercise by the State of powers and functions which
15might otherwise be exercised by home rule units. Such powers
16and functions may not be exercised concurrently, either
17directly or indirectly, by any unit of local government,
18including any home rule unit, except as otherwise authorized by
19this Act.
20(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
21    Section B-10. If and only if any of the changes made by
22Title A of this Act to provisions in Article 15 of the Illinois
23Pension Code concerning (i) automatic annual increases, (ii)
24employee or member contributions, (iii) State or employer
25contributions, (iv) State funding guarantees, or (v) salary,

 

 

SB0001- 196 -LRB098 05457 JDS 35491 b

1earnings, or compensation is declared to be unconstitutional or
2otherwise invalid, then the State Employees Group Insurance Act
3of 1971 is amended by changing Sections 6.9 and 6.10 and by
4adding 6.10A as follows:
 
5    (5 ILCS 375/6.9)
6    Sec. 6.9. Health benefits for community college benefit
7recipients and community college dependent beneficiaries.
8    (a) Purpose. It is the purpose of this amendatory Act of
91997 to establish a uniform program of health benefits for
10community college benefit recipients and their dependent
11beneficiaries under the administration of the Department of
12Central Management Services.
13    (b) Creation of program. Beginning July 1, 1999, the
14Department of Central Management Services shall be responsible
15for administering a program of health benefits for community
16college benefit recipients and community college dependent
17beneficiaries under this Section. The State Universities
18Retirement System and the boards of trustees of the various
19community college districts shall cooperate with the
20Department in this endeavor.
21    (c) Eligibility. All community college benefit recipients
22and community college dependent beneficiaries shall be
23eligible to participate in the program established under this
24Section, without any interruption or delay in coverage or
25limitation as to pre-existing medical conditions. Eligibility

 

 

SB0001- 197 -LRB098 05457 JDS 35491 b

1to participate shall be determined by the State Universities
2Retirement System. Eligibility information shall be
3communicated to the Department of Central Management Services
4in a format acceptable to the Department.
5    (d) Coverage. The health benefit coverage provided under
6this Section shall be a program of health, dental, and vision
7benefits.
8    The program of health benefits under this Section may
9include any or all of the benefit limitations, including but
10not limited to a reduction in benefits based on eligibility for
11federal medicare benefits, that are provided under subsection
12(a) of Section 6 of this Act for other health benefit programs
13under this Act.
14    (e) Insurance rates and premiums. The Director shall
15determine the insurance rates and premiums for community
16college benefit recipients and community college dependent
17beneficiaries. Rates and premiums may be based in part on age
18and eligibility for federal Medicare coverage. The Director
19shall also determine premiums that will allow for the
20establishment of an actuarially sound reserve for this program.
21    The cost of health benefits under the program shall be paid
22as follows:
23        (1) For a community college benefit recipient, costs
24    shall be an amount equal to the difference between the
25    projected costs of health benefits under the program and
26    projected contributions from community college districts,

 

 

SB0001- 198 -LRB098 05457 JDS 35491 b

1    active contributors, and other income of the program. Other
2    income of the program shall exclude contributions made by
3    the State to retire unpaid claims of the program up to 75%
4    of the total insurance rate shall be paid from the
5    Community College Health Insurance Security Fund.
6        (2) The balance of the rate of insurance, including the
7    entire premium for any coverage for community college
8    dependent beneficiaries that has been elected, shall be
9    paid by deductions authorized by the community college
10    benefit recipient to be withheld from his or her monthly
11    annuity or benefit payment from the State Universities
12    Retirement System; except that (i) if the balance of the
13    cost of coverage exceeds the amount of the monthly annuity
14    or benefit payment, the difference shall be paid directly
15    to the State Universities Retirement System by the
16    community college benefit recipient, and (ii) all or part
17    of the balance of the cost of coverage may, at the option
18    of the board of trustees of the community college district,
19    be paid to the State Universities Retirement System by the
20    board of the community college district from which the
21    community college benefit recipient retired. The State
22    Universities Retirement System shall promptly deposit all
23    moneys withheld by or paid to it under this subdivision
24    (e)(2) into the Community College Health Insurance
25    Security Fund. These moneys shall not be considered assets
26    of the State Universities Retirement System.

 

 

SB0001- 199 -LRB098 05457 JDS 35491 b

1    (f) Financing. All revenues arising from the
2administration of the health benefit program established under
3this Section shall be deposited into the Community College
4Health Insurance Security Fund, which is hereby created as a
5nonappropriated trust fund to be held outside the State
6Treasury, with the State Treasurer as custodian. Any interest
7earned on moneys in the Community College Health Insurance
8Security Fund shall be deposited into the Fund.
9    Moneys in the Community College Health Insurance Security
10Fund shall be used only to pay the costs of the health benefit
11program established under this Section, including associated
12administrative costs and the establishment of a program
13reserve. Beginning January 1, 1999, the Department of Central
14Management Services may make expenditures from the Community
15College Health Insurance Security Fund for those costs.
16    (g) Contract for benefits. The Director shall by contract,
17self-insurance, or otherwise make available the program of
18health benefits for community college benefit recipients and
19their community college dependent beneficiaries that is
20provided for in this Section. The contract or other arrangement
21for the provision of these health benefits shall be on terms
22deemed by the Director to be in the best interest of the State
23of Illinois and the community college benefit recipients based
24on, but not limited to, such criteria as administrative cost,
25service capabilities of the carrier or other contractor, and
26the costs of the benefits.

 

 

SB0001- 200 -LRB098 05457 JDS 35491 b

1    (h) Continuation of program. It is the intention of the
2General Assembly that the program of health benefits provided
3under this Section be maintained on an ongoing, affordable
4basis. The program of health benefits provided under this
5Section may be amended by the State and is not intended to be a
6pension or retirement benefit subject to protection under
7Article XIII, Section 5 of the Illinois Constitution.
8    (i) Other health benefit plans. A health benefit plan
9provided by a community college district (other than a
10community college district subject to Article VII of the Public
11Community College Act) under the terms of a collective
12bargaining agreement in effect on or prior to the effective
13date of this amendatory Act of 1997 shall continue in force
14according to the terms of that agreement, unless otherwise
15mutually agreed by the parties to that agreement and the
16affected retiree. A community college benefit recipient or
17community college dependent beneficiary whose coverage under
18such a plan expires shall be eligible to begin participating in
19the program established under this Section without any
20interruption or delay in coverage or limitation as to
21pre-existing medical conditions.
22    This Act does not prohibit any community college district
23from offering additional health benefits for its retirees or
24their dependents or survivors.
25(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 

 

 

SB0001- 201 -LRB098 05457 JDS 35491 b

1    (5 ILCS 375/6.10)
2    Sec. 6.10. Contributions to the Community College Health
3Insurance Security Fund.
4
5    (a) Beginning January 1, 1999, every active contributor of
6the State Universities Retirement System (established under
7Article 15 of the Illinois Pension Code) who (1) is a full-time
8employee of a community college district (other than a
9community college district subject to Article VII of the Public
10Community College Act) or an association of community college
11boards and (2) is not an employee as defined in Section 3 of
12this Act shall make contributions toward the cost of community
13college annuitant and survivor health benefits at the rate of
140.50% of salary. Beginning with the first State fiscal year to
15occur after the end of the election period specified in Section
1615-132.9, the contribution rate under this subsection (a) shall
17be 1.25% of salary. Beginning with the second State fiscal year
18to occur after the end of the election period specified in
19Section 15-132.9, the contribution rate under this subsection
20(a) shall be a percentage of salary determined by the
21Department of Central Management Services, or its successor, by
22rule, which in each fiscal year shall not exceed 108% of the
23percentage of salary actually required to be contributed in the
24previous fiscal year. However, the required contribution rate
25determined by the Department or its successor under this
26subsection (a) shall equal the required contribution rate

 

 

SB0001- 202 -LRB098 05457 JDS 35491 b

1determined by the Department or its successor under subsection
2(b) of this Section.
3    These contributions shall be deducted by the employer and
4paid to the State Universities Retirement System as service
5agent for the Department of Central Management Services. The
6System may use the same processes for collecting the
7contributions required by this subsection that it uses to
8collect the contributions received from those employees under
9Section 15-157 of the Illinois Pension Code. An employer may
10agree to pick up or pay the contributions required under this
11subsection on behalf of the employee; such contributions shall
12be deemed to have been paid by the employee.
13    The State Universities Retirement System shall promptly
14deposit all moneys collected under this subsection (a) into the
15Community College Health Insurance Security Fund created in
16Section 6.9 of this Act. The moneys collected under this
17Section shall be used only for the purposes authorized in
18Section 6.9 of this Act and shall not be considered to be
19assets of the State Universities Retirement System.
20Contributions made under this Section are not transferable to
21other pension funds or retirement systems and are not
22refundable upon termination of service.
23    (b) Beginning January 1, 1999, every community college
24district (other than a community college district subject to
25Article VII of the Public Community College Act) or association
26of community college boards that is an employer under the State

 

 

SB0001- 203 -LRB098 05457 JDS 35491 b

1Universities Retirement System shall contribute toward the
2cost of the community college health benefits provided under
3Section 6.9 of this Act an amount equal to 0.50% of the salary
4paid to its full-time employees who participate in the State
5Universities Retirement System and are not members as defined
6in Section 3 of this Act. Beginning with the first State fiscal
7year to occur after the end of the election period specified in
8Section 15-132.9, the contribution rate under this subsection
9(b) shall be 1.25% of salary. Beginning with the second State
10fiscal year to occur after the end of the election period
11specified in Section 15-132.9, the contribution rate under this
12subsection (b) shall be a percentage of salary determined by
13the Department of Central Management Services, or its
14successor, by rule, which in each fiscal year shall not exceed
15108% of the percentage of salary actually required to be
16contributed in the previous fiscal year. However, the required
17contribution rate determined by the Department or its successor
18under this subsection (b) shall equal the required contribution
19rate determined by the Department or its successor under
20subsection (a) of this Section.
21    These contributions shall be paid by the employer to the
22State Universities Retirement System as service agent for the
23Department of Central Management Services. The System may use
24the same processes for collecting the contributions required by
25this subsection that it uses to collect the contributions
26received from those employers under Section 15-155 of the

 

 

SB0001- 204 -LRB098 05457 JDS 35491 b

1Illinois Pension Code.
2    The State Universities Retirement System shall promptly
3deposit all moneys collected under this subsection (b) into the
4Community College Health Insurance Security Fund created in
5Section 6.9 of this Act. The moneys collected under this
6Section shall be used only for the purposes authorized in
7Section 6.9 of this Act and shall not be considered to be
8assets of the State Universities Retirement System.
9Contributions made under this Section are not transferable to
10other pension funds or retirement systems and are not
11refundable upon termination of service.
12    The Department of Healthcare and Family Services, or any
13successor agency designated to procure healthcare contracts
14pursuant to this Act, is authorized to establish funds,
15separate accounts provided by any bank or banks as defined by
16the Illinois Banking Act, or separate accounts provided by any
17savings and loan association or associations as defined by the
18Illinois Savings and Loan Act of 1985 to be held by the
19Director, outside the State treasury, for the purpose of
20receiving the transfer of moneys from the Community College
21Health Insurance Security Fund. The Department may promulgate
22rules further defining the methodology for the transfers. Any
23interest earned by moneys in the funds or accounts shall inure
24to the Community College Health Insurance Security Fund. The
25transferred moneys, and interest accrued thereon, shall be used
26exclusively for transfers to administrative service

 

 

SB0001- 205 -LRB098 05457 JDS 35491 b

1organizations or their financial institutions for payments of
2claims to claimants and providers under the self-insurance
3health plan. The transferred moneys, and interest accrued
4thereon, shall not be used for any other purpose including, but
5not limited to, reimbursement of administration fees due the
6administrative service organization pursuant to its contract
7or contracts with the Department.
8    (c) On or before November 15 of each year, the Board of
9Trustees of the State Universities Retirement System shall
10certify to the Governor, the Director of Central Management
11Services, and the State Comptroller its estimate of the total
12amount of contributions to be paid under subsection (a) of this
13Section for the next fiscal year, except that no certification
14shall be made under this subsection (c) on or after the
15effective date of the changes made to this Section by this
16amendatory Act of the 98th General Assembly. Beginning in
17fiscal year 2008, the amount certified shall be decreased or
18increased each year by the amount that the actual active
19employee contributions either fell short of or exceeded the
20estimate used by the Board in making the certification for the
21previous fiscal year. The State Universities Retirement System
22shall calculate the amount of actual active employee
23contributions in fiscal years 1999 through 2005. Based upon
24this calculation, the fiscal year 2008 certification shall
25include an amount equal to the cumulative amount that the
26actual active employee contributions either fell short of or

 

 

SB0001- 206 -LRB098 05457 JDS 35491 b

1exceeded the estimate used by the Board in making the
2certification for those fiscal years. The certification shall
3include a detailed explanation of the methods and information
4that the Board relied upon in preparing its estimate. As soon
5as possible after the effective date of this Section, the Board
6shall submit its estimate for fiscal year 1999.
7    (d) Beginning in fiscal year 1999, on the first day of each
8month, or as soon thereafter as may be practical, the State
9Treasurer and the State Comptroller shall transfer from the
10General Revenue Fund to the Community College Health Insurance
11Security Fund 1/12 of the annual amount appropriated for that
12fiscal year to the State Comptroller for deposit into the
13Community College Health Insurance Security Fund under Section
141.4 of the State Pension Funds Continuing Appropriation Act.
15    (e) Except where otherwise specified in this Section, the
16definitions that apply to Article 15 of the Illinois Pension
17Code apply to this Section.
18(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
19    (5 ILCS 375/6.10A new)
20    Sec. 6.10A. City colleges; optional participation in
21program of health benefits. Notwithstanding any other
22provision of this Act, the Department of Central Management
23Services shall adopt rules authorizing optional participation
24in the program of health benefits for community college benefit
25recipients and community college dependent beneficiaries by

 

 

SB0001- 207 -LRB098 05457 JDS 35491 b

1any person who is otherwise ineligible to participate in that
2program solely as a result of that or another person's
3employment with a community college district subject to Article
4VII of the Public Community College Act.
 
5    Section B-12. If and only if any of the changes made by
6Title A of this Act to provisions in Article 2, 14, 15, or 16 of
7the Illinois Pension Code concerning (i) automatic annual
8increases, (ii) employee or member contributions, (iii) State
9or employer contributions, (iv) State funding guarantees, or
10(v) salary, earnings, or compensation is declared to be
11unconstitutional or otherwise invalid, then the State
12Employees Group Insurance Act of 1971 is amended by adding
13Section 6.16 as follows:
 
14    (5 ILCS 375/6.16 new)
15    Sec. 6.16. Health benefit election for Tier I employees and
16Tier I retirees.
17    (a) For purposes of this Section:
18    "Eligible Tier I employee" means an individual who makes or
19is deemed to have made an election under paragraph (1) of
20subsection (a) of Section 2-110.3, 14-106.5, 15-132.9, or
2116-122.9 of the Illinois Pension Code.
22    "Eligible Tier I retiree" means an individual who makes or
23is deemed to have made an election under paragraph (1) of
24subsection (a-5) of Section 2-110.3, 14-106.5, 15-132.9, or

 

 

SB0001- 208 -LRB098 05457 JDS 35491 b

116-122.9 of the Illinois Pension Code.
2    "Program of health benefits" means (i) a health plan, as
3defined in subsection (o) of Section 3 of this Act, that is
4designed and contracted for by the Director under this Act or
5any successor Act or (ii) if administration of that health plan
6is transferred to a trust established by the State or an
7independent Board in order to provide health benefits to a
8class of a persons that includes eligible Tier I retirees, then
9the plan of health benefits provided through that trust.
10    (b) As adequate and legal consideration for making the
11election under paragraph (1) of subsection (a) or (a-5) of
12Section 2-110.3, 14-106.5, 15-132.9, or 16-122.9 of the
13Illinois Pension Code, each eligible Tier I employee and each
14eligible Tier I retiree shall receive a vested and enforceable
15contractual right to participate in a program of health
16benefits while he or she qualifies as an annuitant or retired
17employee. That right also extends to such a person's dependents
18and survivors who are eligible under the applicable program of
19health benefits.
20    (c) Notwithstanding subsection (b), eligible Tier I
21employees and eligible Tier I retirees may be required to make
22contributions toward the cost of coverage under a program of
23health benefits.
24    (d) The vested and enforceable contractual right to a
25program of health benefits is not offered as, and shall not be
26considered, a pension benefit under Article XIII, Section 5 of

 

 

SB0001- 209 -LRB098 05457 JDS 35491 b

1the Illinois Constitution, the Illinois Pension Code, or any
2subsequent or successor enactment providing pension benefits.
3    (e) Notwithstanding any other provision of this Act, a Tier
4I employee or Tier I retiree who has made an election under
5paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
614-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code
7shall not be entitled to participate in the program of health
8benefits as an annuitant or retired employee receiving a
9retirement annuity, regardless of any contrary election
10pursuant to any of those Sections under any other retirement
11system.
12    Notwithstanding any other provision of this Act, a Tier I
13employee who is not entitled to participate in the program of
14health benefits as an annuitant or retired employee receiving a
15retirement annuity, due to an election under paragraph (2) of
16subsection (a) or (a-5) of Section 2-110.3, 14-106.5, 15-132.9,
17or 16-122.9 of the Illinois Pension Code shall not be required
18to make contributions toward the program of health benefits
19while he or she is an employee or active contributor. However,
20an active employee may be required to make contributions toward
21health benefits he or she receives during active service.
22    (f) The Department shall coordinate with each retirement
23system administering an election in accordance with this
24amendatory Act of the 98th General Assembly to provide
25information concerning the impact of the election of health
26benefits. Each System shall include information prepared by the

 

 

SB0001- 210 -LRB098 05457 JDS 35491 b

1Department in the required election packet. The Department
2shall make information available to Tier I employees and Tier I
3retirees through video materials, group presentations,
4consultation by telephone or other electronic means, or any
5combination of these methods.
 
6    Section B-15. If and only if Section B-30, B-35, B-40, or
7B-45 of this Part B take effect, then the Governor's Office of
8Management and Budget Act is amended by changing Sections 7 and
98 as follows:
 
10    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
11    Sec. 7. All statements and estimates of expenditures
12submitted to the Office in connection with the preparation of a
13State budget, and any other estimates of expenditures,
14supporting requests for appropriations, shall be formulated
15according to the various functions and activities for which the
16respective department, office or institution of the State
17government (including the elective officers in the executive
18department and including the University of Illinois and the
19judicial department) is responsible. All such statements and
20estimates of expenditures relating to a particular function or
21activity shall be further formulated or subject to analysis in
22accordance with the following classification of objects:
23    (1) Personal services
24    (2) State contribution for employee group insurance

 

 

SB0001- 211 -LRB098 05457 JDS 35491 b

1    (3) Contractual services
2    (4) Travel
3    (5) Commodities
4    (6) Equipment
5    (7) Permanent improvements
6    (8) Land
7    (9) Electronic Data Processing
8    (10) Telecommunication services
9    (11) Operation of Automotive Equipment
10    (12) Contingencies
11    (13) Reserve
12    (14) Interest
13    (15) Awards and Grants
14    (16) Debt Retirement
15    (17) Non-cost Charges.
16    (18) State retirement contribution for annual normal cost
17    (19) State retirement contribution for unfunded accrued
18liability.
19(Source: P.A. 93-25, eff. 6-20-03.)
 
20    (20 ILCS 3005/8)  (from Ch. 127, par. 418)
21    Sec. 8. When used in connection with a State budget or
22expenditure or estimate, items (1) through (16) in the
23classification of objects stated in Section 7 shall have the
24meanings ascribed to those items in Sections 14 through 24.7,
25respectively, of the State Finance Act. "An Act in relation to

 

 

SB0001- 212 -LRB098 05457 JDS 35491 b

1State finance", approved June 10, 1919, as amended.
2    When used in connection with a State budget or expenditure
3or estimate, items (18) and (19) in the classification of
4objects stated in Section 7 shall have the meanings ascribed to
5those items in Sections 24.12 and 24.13, respectively, of the
6State Finance Act.
7(Source: P.A. 82-325.)
 
8    Section B-20. If and only if Section B-30, B-35, B-40, or
9B-45 of this Part B take effect, then the State Finance Act is
10amended by changing Section 13 and by adding Sections 24.12 and
1124.13 as follows:
 
12    (30 ILCS 105/13)  (from Ch. 127, par. 149)
13    Sec. 13. The objects and purposes for which appropriations
14are made are classified and standardized by items as follows:
15    (1) Personal services;
16    (2) State contribution for employee group insurance;
17    (3) Contractual services;
18    (4) Travel;
19    (5) Commodities;
20    (6) Equipment;
21    (7) Permanent improvements;
22    (8) Land;
23    (9) Electronic Data Processing;
24    (10) Operation of automotive equipment;

 

 

SB0001- 213 -LRB098 05457 JDS 35491 b

1    (11) Telecommunications services;
2    (12) Contingencies;
3    (13) Reserve;
4    (14) Interest;
5    (15) Awards and Grants;
6    (16) Debt Retirement;
7    (17) Non-Cost Charges;
8    (18) State retirement contribution for annual normal cost;
9    (19) State retirement contribution for unfunded accrued
10liability;
11    (20) (18) Purchase Contract for Real Estate.
12    When an appropriation is made to an officer, department,
13institution, board, commission or other agency, or to a private
14association or corporation, in one or more of the items above
15specified, such appropriation shall be construed in accordance
16with the definitions and limitations specified in this Act,
17unless the appropriation act otherwise provides.
18    An appropriation for a purpose other than one specified and
19defined in this Act may be made only as an additional, separate
20and distinct item, specifically stating the object and purpose
21thereof.
22(Source: P.A. 84-263; 84-264.)
 
23    (30 ILCS 105/24.12 new)
24    Sec. 24.12. "State retirement contribution for annual
25normal cost" defined. The term "State retirement contribution

 

 

SB0001- 214 -LRB098 05457 JDS 35491 b

1for annual normal cost" means the portion of the total required
2State contribution to a retirement system for a fiscal year
3that represents the State's portion of the System's projected
4normal cost for that fiscal year, as determined and certified
5by the board of trustees of the retirement system in
6conformance with the applicable provisions of the Illinois
7Pension Code.
 
8    (30 ILCS 105/24.13 new)
9    Sec. 24.13. "State retirement contribution for unfunded
10accrued liability" defined. The term "State retirement
11contribution for unfunded accrued liability" means the portion
12of the total required State contribution to a retirement system
13for a fiscal year that is not included in the State retirement
14contribution for annual normal cost.
 
15    Section B-25. If and only if Section B-35, B-40, or B-45 of
16this Part B take effect, then the Illinois Pension Code is
17amended by changing Section 1-103.3 and adding Section 1-162 as
18follows:
 
19    (40 ILCS 5/1-103.3)
20    Sec. 1-103.3. Application of 1994 amendment; funding
21standard.
22    (a) The provisions of Public Act 88-593 this amendatory Act
23of 1994 that change the method of calculating, certifying, and

 

 

SB0001- 215 -LRB098 05457 JDS 35491 b

1paying the required State contributions to the retirement
2systems established under Articles 2, 14, 15, 16, and 18 shall
3first apply to the State contributions required for State
4fiscal year 1996.
5    (b) (Blank). The General Assembly declares that a funding
6ratio (the ratio of a retirement system's total assets to its
7total actuarial liabilities) of 90% is an appropriate goal for
8State-funded retirement systems in Illinois, and it finds that
9a funding ratio of 90% is now the generally-recognized norm
10throughout the nation for public employee retirement systems
11that are considered to be financially secure and funded in an
12appropriate and responsible manner.
13    (c) Every 5 years, beginning in 1999, the Commission on
14Government Forecasting and Accountability, in consultation
15with the affected retirement systems and the Governor's Office
16of Management and Budget (formerly Bureau of the Budget), shall
17consider and determine whether the funding goals 90% funding
18ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
19continue subsection (b) continues to represent an appropriate
20funding goals goal for State-funded retirement systems in
21Illinois, and it shall report its findings and recommendations
22on this subject to the Governor and the General Assembly.
23(Source: P.A. 93-1067, eff. 1-15-05.)
 
24    (40 ILCS 5/1-162 new)
25    Sec. 1-162. Optional cash balance plan.

 

 

SB0001- 216 -LRB098 05457 JDS 35491 b

1    (a) Participation and Applicability. Beginning 12 months
2after the effective date of this Section, any Tier I employee
3who has made the election under paragraph (1) of subsection (a)
4or (a-5) of Section 14-106.5, 15-132.9, or 16-122.9 may elect
5to participate in the optional cash balance plan created under
6this Section.
7    The Board of Trustees of the applicable retirement system
8shall promulgate rules to create an annual election wherein a
9person eligible to participate in the optional cash balance
10plan may elect to participate, and an active employee who is a
11participant in the plan may elect to cease active
12participation. The election to cease active participation
13shall not disqualify the employee from eligibility to receive
14an interest credit under subsection (f), a distribution upon
15termination under subsection (f-10), a refund under subsection
16(f-15), a retirement annuity under subsection (g), or a
17survivor's annuity under subsection (k), or from eligibility to
18resume active participation in the optional cash balance plan
19in a subsequent year.
20    (b) Title. The package of benefits provided under this
21Section may be referred to as the "optional cash balance plan".
22Persons subject to the provisions of this Section may be
23referred to as "participants in the optional cash balance
24plan".
25    (b-5) Definitions. As used in this Section:
26    "Account" means the notional cash balance account

 

 

SB0001- 217 -LRB098 05457 JDS 35491 b

1established under this Section for a participant in the
2optional cash balance plan.
3    "Salary" means "compensation" as defined in Article 14,
4"earnings" as defined in Article 15, and "salary" as defined in
5Article 15, whichever is applicable, without regard to the
6limitation in subsection (b-5) of Section 1-160.
7    "Tier I employee" means a person who is a Tier I employee
8under the applicable Article of this Code.
9    (c) Cash Balance Account. A notional cash balance account
10shall be established by the applicable retirement system for
11each participant in the optional cash balance plan. The account
12is notional and does not contain any actual money segregated
13from the commingled assets of the retirement system. The cash
14balance in the account is to be used in calculating benefits as
15provided in this Section, but is not to be used in the
16calculation of any refund, transfer, or other benefit under the
17applicable Article of this Code.
18    The amounts to be credited to the cash balance account
19shall consist of (i) amounts contributed by or on behalf of the
20participant as employee contributions, (ii) notional employer
21contributions, and (iii) interest credit that is attributable
22to the account, all as provided in this Section.
23    Whenever necessary for the prompt calculation or
24administration, or when the System lacks information necessary
25to the calculation or administration otherwise required of or
26for a benefit under this Section, the applicable retirement

 

 

SB0001- 218 -LRB098 05457 JDS 35491 b

1system may estimate an amount to be credited to or debited from
2a participant's cash balance account and then adjust the amount
3so credited or debited when more accurate information becomes
4available.
5    The applicable retirement system shall give to each
6participant in the optional cash balance plan who has not yet
7retired annual notice of (1) the balance in the participant's
8cash balance account and (2) an estimate of the retirement
9annuity that will be payable to the participant if he or she
10retires at age 59 1/2.
11    (d) Employee Contributions. In addition to the other
12contributions required under the applicable Article, each
13participant shall make contributions to the applicable
14retirement system at the rate of 2% of each payment of salary.
15The amount of each contribution shall be credited to the
16participant's cash balance account upon receipt and after the
17retirement system's reconciliation of the contribution.
18    (e) Optional Employer Contributions. Employers may make
19optional additional contributions to the applicable retirement
20system on behalf of their employees who are participants in the
21optional cash balance plan in accordance with procedures
22prescribed by the retirement system, to the extent permitted by
23federal law and the rules prescribed by the retirement system.
24The optional additional contributions under this subsection
25are actual monetary contributions to the retirement system, and
26the amount of each optional additional contribution shall be

 

 

SB0001- 219 -LRB098 05457 JDS 35491 b

1credited to the participant's cash balance account upon receipt
2and after the retirement system's reconciliation of the
3contribution.
4    (f) Interest Credit. An amount representing earnings on
5investments shall be determined by the retirement system in
6accordance with this Section and credited to the participant's
7cash balance account for each fiscal year in which there is a
8positive balance in that account; except that no additional
9interest credit shall be credited while an annuity based on the
10account is being paid. The interest credit amount shall be a
11percentage of the average quarterly balance in the cash balance
12account during that fiscal year, and shall be calculated on
13June 30.
14    The percentage shall be the assumed treasury rate for the
15previous fiscal year, unless neither the retirement system's
16actual rate of investment earnings for the previous fiscal year
17nor the retirement system's actual rate of investment earnings
18for the five-year period ending at the end of the previous
19fiscal year is less than the assumed treasury rate.
20    If both the retirement system's actual rate of investment
21earnings for the previous fiscal year and the actual rate of
22investment earnings for the five-year period ending at the end
23of the previous fiscal year are at least the assumed treasury
24rate, then the percentage shall be:
25        (i) the assumed treasury rate, plus
26        (ii) two-thirds of the amount of the actual rate of

 

 

SB0001- 220 -LRB098 05457 JDS 35491 b

1    investment earnings for the previous fiscal year that
2    exceeds the assumed treasury rate.
3However, in no event shall the percentage applied under this
4subsection exceed 10%.
5    For the purposes of this subsection only, "previous fiscal
6year" means fiscal year ending one year before the interest
7rate is calculated.
8    For the purposes of this subsection only, "assumed treasury
9rate" means the average annual yield of the 30-year U.S.
10Treasury Bond over the previous fiscal year, but not less than
114%.
12    When a person applies for a benefit under this Section, the
13retirement system shall apply an interest credit based on a
14proration of an estimate of what the interest credit will be
15for the relevant year. When the retirement system certifies the
16