98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB0035

 

Introduced 1/10/2013, by Sen. Daniel Biss

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Provisions, General Assembly, State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code. In the General Provisions Article, creates a cash balance plan for new hires of the State Universities and Teachers' Retirement Systems and for certain Tier II participants. Increases the retirement age for certain Tier I members and participants. Changes the conditions of eligibility for, and the amount of, automatic annual increases for Tier I retirees. Increases required employee contributions for Tier I members and participants. Limits pensionable salary for Tier I participants. Changes the required State contribution to each of the affected retirement systems so that those systems are 100% funded by 2043. Guarantees certain funding levels. In the State Universities and Downstate Teacher Articles, shifts costs to local employers. Makes other changes. Amends the State Finance Act. To the list of standardized items of appropriation, adds "State retirement contribution for annual normal cost" and "State retirement contribution for unfunded accrued liability". Defines those terms. Amends the Governor's Office of Management and Budget Act. Adds those terms to a list of classifications to be used in statements and estimates of expenditures submitted to the Office in connection with the preparation of a State budget. Amends the State Mandates Act to require implementation without reimbursement. Includes an inseverability provision. Makes other changes. Effective immediately.


LRB098 05472 JDS 35506 b

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

 

 

A BILL FOR

 

SB0035LRB098 05472 JDS 35506 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Governor's Office of Management and Budget
5Act is amended by changing Sections 7 and 8 as follows:
 
6    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
7    Sec. 7. All statements and estimates of expenditures
8submitted to the Office in connection with the preparation of a
9State budget, and any other estimates of expenditures,
10supporting requests for appropriations, shall be formulated
11according to the various functions and activities for which the
12respective department, office or institution of the State
13government (including the elective officers in the executive
14department and including the University of Illinois and the
15judicial department) is responsible. All such statements and
16estimates of expenditures relating to a particular function or
17activity shall be further formulated or subject to analysis in
18accordance with the following classification of objects:
19    (1) Personal services
20    (2) State contribution for employee group insurance
21    (3) Contractual services
22    (4) Travel
23    (5) Commodities

 

 

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

 

 

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1objects stated in Section 7 shall have the meanings ascribed to
2those items in Sections 24.12 and 24.13, respectively, of the
3State Finance Act.
4(Source: P.A. 82-325.)
 
5    Section 10. The State Finance Act is amended by changing
6Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
7    (30 ILCS 105/13)  (from Ch. 127, par. 149)
8    Sec. 13. The objects and purposes for which appropriations
9are made are classified and standardized by items as follows:
10    (1) Personal services;
11    (2) State contribution for employee group insurance;
12    (3) Contractual services;
13    (4) Travel;
14    (5) Commodities;
15    (6) Equipment;
16    (7) Permanent improvements;
17    (8) Land;
18    (9) Electronic Data Processing;
19    (10) Operation of automotive equipment;
20    (11) Telecommunications services;
21    (12) Contingencies;
22    (13) Reserve;
23    (14) Interest;
24    (15) Awards and Grants;

 

 

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

 

 

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1conformance with the applicable provisions of the Illinois
2Pension Code.
 
3    (30 ILCS 105/24.13 new)
4    Sec. 24.13. "State retirement contribution for unfunded
5accrued liability" defined. The term "State retirement
6contribution for unfunded accrued liability" means the portion
7of the total required State contribution to a retirement system
8for a fiscal year that is not included in the State retirement
9contribution for annual normal cost.
 
10    Section 15. The Budget Stabilization Act is amended by
11changing Section 20 as follows:
 
12    (30 ILCS 122/20)
13    Sec. 20. Pension Stabilization Fund.
14    (a) The Pension Stabilization Fund is hereby created as a
15special fund in the State treasury. Moneys in the fund shall be
16used for the sole purpose of making payments to the designated
17retirement systems as provided in Section 25.
18    (b) For each fiscal year when the General Assembly's
19appropriations and transfers or diversions as required by law
20from general funds do not exceed 99% of the estimated general
21funds revenues pursuant to subsection (a) of Section 10, the
22Comptroller shall transfer from the General Revenue Fund as
23provided by this Section a total amount equal to 0.5% of the

 

 

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1estimated general funds revenues to the Pension Stabilization
2Fund.
3    (c) For each fiscal year through State fiscal year 2013,
4when the General Assembly's appropriations and transfers or
5diversions as required by law from general funds do not exceed
698% of the estimated general funds revenues pursuant to
7subsection (b) of Section 10, the Comptroller shall transfer
8from the General Revenue Fund as provided by this Section a
9total amount equal to 1.0% of the estimated general funds
10revenues to the Pension Stabilization Fund.
11    (c-10) In State fiscal year 2020 and each fiscal year
12thereafter, the State Comptroller shall order transferred and
13the State Treasurer shall transfer $1,000,000,000 from the
14General Revenue Fund to the Pension Stabilization Fund.
15    (c-15) The transfers made pursuant to subsection (c-10) of
16this Section shall continue through State fiscal year 2045 or
17until each of the designated retirement systems, as defined in
18Section 25, has achieved the funding ratio prescribed by law
19for that retirement system, whichever occurs first; provided
20that those transfers shall not be made after any provision of
21this Act that is designated as inseverable in Section 97 of
22this Act is declared to be unconstitutional or invalid other
23than as applied.
24    (d) The Comptroller shall transfer 1/12 of the total amount
25to be transferred each fiscal year under this Section into the
26Pension Stabilization Fund on the first day of each month of

 

 

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1that fiscal year or as soon thereafter as possible; except that
2the final transfer of the fiscal year shall be made as soon as
3practical after the August 31 following the end of the fiscal
4year.
5    Until State fiscal year 2014, before Before the final
6transfer for a fiscal year is made, the Comptroller shall
7reconcile the estimated general funds revenues used in
8calculating the other transfers under this Section for that
9fiscal year with the actual general funds revenues for that
10fiscal year. The final transfer for the fiscal year shall be
11adjusted so that the total amount transferred under this
12Section for that fiscal year is equal to the percentage
13specified in subsection (b) or (c) of this Section, whichever
14is applicable, of the actual general funds revenues for that
15fiscal year. The actual general funds revenues for the fiscal
16year shall be calculated in a manner consistent with subsection
17(c) of Section 10 of this Act.
18(Source: P.A. 94-839, eff. 6-6-06.)
 
19    Section 20. The Illinois Pension Code is amended by
20changing Sections 1-103.3, 1-160, 2-108, 2-119, 2-119.1,
212-121.1, 2-124, 2-125, 2-126, 2-134, 2-162, 14-103.10, 14-107,
2214-108, 14-110, 14-114, 14-131, 14-132, 14-133, 14-135.08,
2314-152.1, 15-111, 15-113.6, 15-113.7, 15-135, 15-136, 15-155,
2415-156, 15-157, 15-165, 15-198, 16-121, 16-132, 16-133,
2516-133.1, 16-152, 16-158, 16-158.1, 16-203, 20-121, 20-123,

 

 

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120-124, and 20-125 and by adding Sections 1-161, 2-105.1,
22-105.2, 14-103.40, 14-103.41, 15-107.1, 15-107.2, 15-155.1,
316-106.4, 16-106.5, and 16-158.2 as follows:
 
4    (40 ILCS 5/1-103.3)
5    Sec. 1-103.3. Application of 1994 amendment; funding
6standard.
7    (a) The provisions of Public Act 88-593 this amendatory Act
8of 1994 that change the method of calculating, certifying, and
9paying the required State contributions to the retirement
10systems established under Articles 2, 14, 15, 16, and 18 shall
11first apply to the State contributions required for State
12fiscal year 1996.
13    (b) (Blank) The General Assembly declares that a funding
14ratio (the ratio of a retirement system's total assets to its
15total actuarial liabilities) of 90% is an appropriate goal for
16State-funded retirement systems in Illinois, and it finds that
17a funding ratio of 90% is now the generally-recognized norm
18throughout the nation for public employee retirement systems
19that are considered to be financially secure and funded in an
20appropriate and responsible manner.
21    (c) Every 5 years, beginning in 1999, the Commission on
22Government Forecasting and Accountability, in consultation
23with the affected retirement systems and the Governor's Office
24of Management and Budget (formerly Bureau of the Budget), shall
25consider and determine whether the funding goals 90% funding

 

 

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1ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
2continue subsection (b) continues to represent an appropriate
3funding goals goal for those State-funded retirement systems in
4Illinois, and it shall report its findings and recommendations
5on this subject to the Governor and the General Assembly.
6(Source: P.A. 93-1067, eff. 1-15-05.)
 
7    (40 ILCS 5/1-160)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
14or 18 of this Code, notwithstanding any other provision of this
15Code to the contrary, but do not apply (i) to any self-managed
16plan established under this Code, (ii) to any person with
17respect to service as a sheriff's law enforcement employee
18under Article 7, (iii) to any person with respect to service
19for which the person participates in the cash balance plan
20established under Section 1-161, or (iv) to any participant of
21the retirement plan established under Section 22-101.
22    A person subject to this Section with respect to service
23under the State Universities Retirement System may irrevocably
24elect to transfer to the cash balance plan under Section 1-161
25with respect to service under the State Universities Retirement

 

 

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1System by filing with the State Universities Retirement System
2by December 31, 2013, in the manner required by that System,
3his or her irrevocable written election to transfer to the cash
4balance plan. A person subject to this Section who returns to
5active service under Article 15 after November 1, 2013 shall
6have 60 days after returning to active service to make this
7election. Participation in the cash balance plan shall begin no
8earlier than July 1, 2013. For a person who transfers to the
9cash balance plan, the benefits that would otherwise be payable
10under this Section with respect to service in the State
11Universities Retirement System shall instead be payable as
12provided in the cash balance plan.
13    A person subject to this Section with respect to service
14under the Teachers' Retirement System of the State of Illinois
15may irrevocably elect to transfer to the cash balance plan
16under Section 1-161 with respect to service under the Teachers'
17Retirement System of the State of Illinois by filing with the
18Teachers' Retirement System of the State of Illinois by
19December 31, 2013, in the manner required by that System, his
20or her irrevocable written election to transfer to the cash
21balance plan. A person subject to this Section who returns to
22active service under Article 16 after November 1, 2013 shall
23have 60 days after returning to active service to make this
24election. Participation in the cash balance plan shall begin no
25earlier than July 1, 2013. For a person who transfers to the
26cash balance plan, the benefits that would otherwise be payable

 

 

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1under this Section with respect to service in the Teachers'
2Retirement System of the State of Illinois shall instead be
3payable as provided in the cash balance plan.
4    (b) "Final average salary" means the average monthly (or
5annual) salary obtained by dividing the total salary or
6earnings calculated under the Article applicable to the member
7or participant during the 96 consecutive months (or 8
8consecutive years) of service within the last 120 months (or 10
9years) of service in which the total salary or earnings
10calculated under the applicable Article was the highest by the
11number of months (or years) of service in that period. For the
12purposes of a person who first becomes a member or participant
13of any retirement system or pension fund to which this Section
14applies on or after January 1, 2011, in this Code, "final
15average salary" shall be substituted for the following:
16        (1) In Articles 7 (except for service as sheriff's law
17    enforcement employees) and 15, "final rate of earnings".
18        (2) In Articles 8, 9, 10, 11, and 12, "highest average
19    annual salary for any 4 consecutive years within the last
20    10 years of service immediately preceding the date of
21    withdrawal".
22        (3) In Article 13, "average final salary".
23        (4) In Article 14, "final average compensation".
24        (5) In Article 17, "average salary".
25        (6) In Section 22-207, "wages or salary received by him
26    at the date of retirement or discharge".

 

 

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1    (b-5) Beginning on January 1, 2011, for all purposes under
2this Code (including without limitation the calculation of
3benefits and employee contributions), the annual earnings,
4salary, or wages (based on the plan year) of a member or
5participant to whom this Section applies shall not exceed
6$106,800; however, that amount shall annually thereafter be
7increased by the lesser of (i) 3% of that amount, including all
8previous adjustments, or (ii) one-half the annual unadjusted
9percentage increase (but not less than zero) in the consumer
10price index-u for the 12 months ending with the September
11preceding each November 1, including all previous adjustments.
12    For the purposes of this Section, "consumer price index-u"
13means the index published by the Bureau of Labor Statistics of
14the United States Department of Labor that measures the average
15change in prices of goods and services purchased by all urban
16consumers, United States city average, all items, 1982-84 =
17100. The new amount resulting from each annual adjustment shall
18be determined by the Public Pension Division of the Department
19of Insurance and made available to the boards of the retirement
20systems and pension funds by November 1 of each year.
21    (c) A member or participant is entitled to a retirement
22annuity upon written application if he or she has attained age
2367 and has at least 10 years of service credit and is otherwise
24eligible under the requirements of the applicable Article.
25    A member or participant who has attained age 62 and has at
26least 10 years of service credit and is otherwise eligible

 

 

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1under the requirements of the applicable Article may elect to
2receive the lower retirement annuity provided in subsection (d)
3of this Section.
4    (d) The retirement annuity of a member or participant who
5is retiring after attaining age 62 with at least 10 years of
6service credit shall be reduced by one-half of 1% for each full
7month that the member's age is under age 67.
8    (e) Any retirement annuity or supplemental annuity shall be
9subject to annual increases on the January 1 occurring either
10on or after the attainment of age 67 or the first anniversary
11of the annuity start date, whichever is later. Each annual
12increase shall be calculated at 3% or one-half the annual
13unadjusted percentage increase (but not less than zero) in the
14consumer price index-u for the 12 months ending with the
15September preceding each November 1, whichever is less, of the
16originally granted retirement annuity. If the annual
17unadjusted percentage change in the consumer price index-u for
18the 12 months ending with the September preceding each November
191 is zero or there is a decrease, then the annuity shall not be
20increased.
21    (f) The initial survivor's or widow's annuity of an
22otherwise eligible survivor or widow of a retired member or
23participant who first became a member or participant on or
24after January 1, 2011 shall be in the amount of 66 2/3% of the
25retired member's or participant's retirement annuity at the
26date of death. In the case of the death of a member or

 

 

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1participant who has not retired and who first became a member
2or participant on or after January 1, 2011, eligibility for a
3survivor's or widow's annuity shall be determined by the
4applicable Article of this Code. The initial benefit shall be
566 2/3% of the earned annuity without a reduction due to age. A
6child's annuity of an otherwise eligible child shall be in the
7amount prescribed under each Article if applicable. Any
8survivor's or widow's annuity shall be increased (1) on each
9January 1 occurring on or after the commencement of the annuity
10if the deceased member died while receiving a retirement
11annuity or (2) in other cases, on each January 1 occurring
12after the first anniversary of the commencement of the annuity.
13Each annual increase shall be calculated at 3% or one-half the
14annual unadjusted percentage increase (but not less than zero)
15in the consumer price index-u for the 12 months ending with the
16September preceding each November 1, whichever is less, of the
17originally granted survivor's annuity. If the annual
18unadjusted percentage change in the consumer price index-u for
19the 12 months ending with the September preceding each November
201 is zero or there is a decrease, then the annuity shall not be
21increased.
22    (g) The benefits in Section 14-110 apply only if the person
23is a State policeman, a fire fighter in the fire protection
24service of a department, or a security employee of the
25Department of Corrections or the Department of Juvenile
26Justice, as those terms are defined in subsection (c) (b) of

 

 

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1Section 14-110. A person who meets the requirements of this
2Section is entitled to an annuity calculated under the
3provisions of Section 14-110, in lieu of the regular or minimum
4retirement annuity, only if the person has withdrawn from
5service with not less than 20 years of eligible creditable
6service and has attained age 60, regardless of whether the
7attainment of age 60 occurs while the person is still in
8service.
9    (h) If a person who first becomes a member or a participant
10of a retirement system or pension fund subject to this Section
11on or after January 1, 2011 is receiving a retirement annuity
12or retirement pension under that system or fund and becomes a
13member or participant under any other system or fund created by
14this Code and is employed on a full-time basis, except for
15those members or participants exempted from the provisions of
16this Section under subsection (a) of this Section, then the
17person's retirement annuity or retirement pension under that
18system or fund shall be suspended during that employment. Upon
19termination of that employment, the person's retirement
20annuity or retirement pension payments shall resume and be
21recalculated if recalculation is provided for under the
22applicable Article of this Code.
23    If a person who first becomes a member of a retirement
24system or pension fund subject to this Section on or after
25January 1, 2012 and is receiving a retirement annuity or
26retirement pension under that system or fund and accepts on a

 

 

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1contractual basis a position to provide services to a
2governmental entity from which he or she has retired, then that
3person's annuity or retirement pension earned as an active
4employee of the employer shall be suspended during that
5contractual service. A person receiving an annuity or
6retirement pension under this Code shall notify the pension
7fund or retirement system from which he or she is receiving an
8annuity or retirement pension, as well as his or her
9contractual employer, of his or her retirement status before
10accepting contractual employment. A person who fails to submit
11such notification shall be guilty of a Class A misdemeanor and
12required to pay a fine of $1,000. Upon termination of that
13contractual employment, the person's retirement annuity or
14retirement pension payments shall resume and, if appropriate,
15be recalculated under the applicable provisions of this Code.
16    (i) Notwithstanding any other provision of this Section, a
17person who first becomes a participant of the retirement system
18established under Article 15 on or after January 1, 2011 shall
19have the option to enroll in the self-managed plan created
20under Section 15-158.2 of this Code.
21    (j) In the case of a conflict between the provisions of
22this Section and any other provision of this Code, the
23provisions of this Section shall control.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
2597-609, eff. 1-1-12.)
 

 

 

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1    (40 ILCS 5/1-161 new)
2    Sec. 1-161. Cash Balance Plan.
3    (a) Participation and Applicability. This Section applies
4to all new cash balance plan participants and all legacy Tier
5II participants.
6    (b) Title. The package of benefits provided under this
7Section may be referred to as the "cash balance plan". Persons
8subject to the provisions of this Section may be referred to as
9"participants in the cash balance plan" or, in this Section,
10simply as "participants".
11    (b-5) Definitions. As used in this Section:
12    "Account" means the notional cash balance account
13established under this Section by the applicable retirement
14system for a participant in the cash balance plan.
15    "Eligible child" means:
16        (1) with respect to a participant in the retirement
17    system established under Article 15 of this Code, a person
18    who would be eligible for a survivors insurance benefit as
19    a dependent unmarried child under Article 15 of this Code
20    if the deceased participant had been a participant in the
21    traditional benefit package; or
22        (2) with respect to a participant in the retirement
23    system established under Article 16, an eligible child as
24    defined in subdivision (a)(4) of Section 16-140 of this
25    Code who would be eligible for survivors' benefits if the
26    deceased participant had not been subject to this Section.

 

 

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1    "Eligible parent" means:
2        (1) with respect to a participant in the retirement
3    system established under Article 15 of this Code, a person
4    who would be eligible for a survivors insurance benefit as
5    a dependent parent under Article 15 of this Code if the
6    deceased participant had been a participant in the
7    traditional benefit package; or
8        (2) with respect to a participant in the retirement
9    system established under Article 16, a dependent parent as
10    defined in subdivision (a)(5) of Section 16-140 of this
11    Code who would be eligible for survivors' benefits if the
12    deceased participant had not been subject to this Section.
13    "Eligible surviving spouse" means:
14        (1) with respect to a participant in the retirement
15    system established under Article 15 of this Code, a person
16    who would be eligible for a survivors annuity as a
17    surviving spouse under Article 15 of this Code if the
18    deceased participant had been a participant in the
19    traditional benefit package; or
20        (2) with respect to a participant in the retirement
21    system established under Article 16, a dependent
22    beneficiary as defined in subdivision (a)(3)(A) or
23    (a)(3)(A-1) of Section 16-140 of this Code who would be
24    eligible for survivors' benefits payable in the form of an
25    annuity if the deceased participant had not been subject to
26    this Section.

 

 

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1    "Eligible survivor" means:
2        (1) with respect to a participant in the retirement
3    system established under Article 15 of this Code, a person
4    who would be eligible for survivors insurance benefits as a
5    survivors insurance beneficiary (as defined in Section
6    15-131 of this Code) if the deceased participant had been a
7    participant in the traditional benefit package; or
8        (2) with respect to a participant in the retirement
9    system established under Article 16, a person who would be
10    eligible for survivors' benefits under Article 16 of this
11    Code if the deceased participant had not been subject to
12    this Section.
13    "Salary" means "earnings" as defined in Article 15 or
14"salary" as defined in Article 16, whichever is applicable.
15    "Legacy Tier II participant" means a person who was subject
16to Section 1-160 with respect to service under Article 15 or 16
17of this Code and who irrevocably elects to participate in the
18cash balance plan created under this Section. That election
19must be made in writing, in the manner provided by the
20applicable retirement system.
21    "New cash balance plan participant" means a person who, on
22or after July 1, 2013, first begins to participate in the
23retirement system established under Article 15 or 16 of this
24Code.
25    (c) Cash Balance Account. A notional cash balance account
26shall be established by the applicable retirement system for

 

 

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1each participant in the cash balance plan. The account is
2notional and does not contain any actual money segregated from
3the commingled assets of the retirement system. The cash
4balance in the account is to be used in calculating benefits as
5provided in this Section, but is not to be used in the
6calculation of any refund, transfer, or other benefit under the
7applicable Article of this Code.
8    If a person participates in the cash balance plan with
9respect to service under more than one retirement system, each
10retirement system shall establish a separate cash balance
11account for the participant, and the participant shall be
12entitled to separate benefits from each retirement system based
13upon the participant's service and cash balance account under
14that retirement system. References in this Section to a
15participant's account mean the account established by, and
16related to his or her service under, the applicable retirement
17system.
18    The amounts to be credited to the cash balance account
19shall include (i) amounts contributed by or on behalf of the
20participant as employee contributions, (ii) notional employer
21contributions and notional amounts based on optional employer
22contributions, and (iii) interest credit that is attributable
23to the account, all as provided in this Section.
24    The amounts to be debited from the cash balance account
25shall include (i) amounts representing contributions for
26disability benefits, (ii) amounts representing contributions

 

 

SB0035- 21 -LRB098 05472 JDS 35506 b

1for survivor benefits not based on the cash balance account,
2and (iii) upon a return to service after retirement, amounts
3representing each payment of retirement annuity following the
4latest retirement and preceding the return to service, all as
5provided in this Section.
6    The applicable retirement system shall give to each
7participant in the cash balance plan who has not yet retired
8annual notice of the balance in the participant's cash balance
9account.
10    (c-5) Initial Account Balance for Legacy Tier II
11Participants. The applicable retirement system shall establish
12an initial account balance for each legacy Tier II participant
13when he or she begins participation in the cash balance plan.
14The initial account balance shall be an amount equal to the
15refund that the participant would be eligible to receive under
16the applicable Article of this Code if the participant
17terminated employment on that date and elected a refund of
18contributions. If a legacy Tier II participant has purchased
19service credit prior to irrevocably electing to participate in
20the cash balance plan created under this Section, then the
21initial account balance shall include an amount equal to the
22contributions made by the participant to purchase that service
23credit.
24    By accepting the initial account balance, the participant
25relinquishes the right to any benefits (including survivor
26benefits) that would otherwise be payable under Section 1-160

 

 

SB0035- 22 -LRB098 05472 JDS 35506 b

1with respect to service in the applicable retirement system,
2but does not forfeit any service credit earned with respect to
3such service.
4    (d) Employee Contributions. New cash balance plan
5participants and legacy Tier II participants shall make
6employee contributions to the applicable retirement system at
7the rates required under the applicable Article of this Code.
8The amount of each contribution shall be credited to the
9participant's cash balance account after the retirement
10system's receipt and reconciliation of the contribution.
11    (e) Notional Employer Contributions. Upon crediting each
12employee contribution under subsection (d), an amount
13representing the corresponding employer contribution shall be
14credited to the participant's cash balance account. Notional
15employer contributions shall be 6.2% of salary.
16    The notional employer contribution to be credited to the
17participant's account is not the same as the actual employer
18contributions required under subsection (o) and the provisions
19of the applicable Article of this Code.
20    (e-1) Notional Amount Based on Optional Employer
21Contributions. If an employer agrees to make optional employer
22contributions under subsection (p), then, for the period
23specified in the agreement, an amount representing the
24percentage of salary specified in the agreement shall be
25credited to the cash balance account of each affected
26participant after receipt and reconciliation of the

 

 

SB0035- 23 -LRB098 05472 JDS 35506 b

1corresponding employee contribution under subsection (d).
2    The notional amount to be credited to the participant's
3account is not the same amount as the actual optional employer
4contribution required under subsection (p) and the provisions
5of the applicable Article of this Code.
6    (f) Interest Credit. An interest credit shall be determined
7by the retirement system in accordance with this Section and
8credited to the participant's cash balance account for each
9fiscal year in which there is a positive balance in that
10account; except that no additional interest credit shall be
11credited while an annuity based on the account is being paid.
12The interest credit amount shall be a percentage of the average
13balance in the cash balance account during that fiscal year,
14and shall be calculated on June 30.
15    The percentage shall be the assumed treasury rate for the
16previous fiscal year, unless neither the retirement system's
17actual rate of investment earnings for the previous fiscal year
18nor the retirement system's actual rate of investment earnings
19for the five-year period ending at the end of the previous
20fiscal year is less than the assumed treasury rate.
21    If both the retirement system's actual rate of investment
22earnings for the previous fiscal year and the actual rate of
23investment earnings for the five-year period ending at the end
24of the previous fiscal year are at least the assumed treasury
25rate, then the percentage shall be:
26        (i) the assumed treasury rate, plus

 

 

SB0035- 24 -LRB098 05472 JDS 35506 b

1        (ii) two-thirds of the amount of the actual rate of
2    investment earnings for the previous fiscal year that
3    exceeds the assumed treasury rate.
4However, in no event shall the percentage applied under this
5subsection exceed 10%.
6    For the purposes of this subsection only, "previous fiscal
7year" means the fiscal year ending one year before the interest
8rate is calculated.
9    For the purposes of this subsection only, "assumed treasury
10rate" means the average annual yield of the 30-year U.S.
11Treasury Bond over the previous fiscal year, but not less than
124%.
13    When a person applies for a retirement annuity under
14subsection (g) or a surviving spouse's annuity under subsection
15(k), the retirement system shall calculate the initial annuity
16without applying an interest credit for the portion of the
17fiscal year before the initial annuity payment date. On the
18first June 30 occurring on or after the initial annuity payment
19date, the retirement system shall (1) calculate a prorated
20interest credit for the portion of the fiscal year before the
21initial annuity payment date, (2) credit the prorated amount to
22the participant's account, and (3) recalculate the amount of
23the annuity from the initial annuity payment date. The
24retirement system shall pay to the annuitant in a lump-sum,
25without interest, the difference, for the portion of the fiscal
26year on and after the initial annuity payment, between the

 

 

SB0035- 25 -LRB098 05472 JDS 35506 b

1original annuity amount and the annuity amount as recalculated
2under this subsection.
3    (f-10) Distribution after Termination of Employment. After
4termination of the participant's active employment with at
5least 5 years of service credit under the applicable retirement
6system but prior to applying for an annuity under this Section,
7a participant in the cash balance plan or an eligible surviving
8spouse under subsection (k) may make an irrevocable election to
9receive a distribution from the applicable retirement system in
10an amount not to exceed 40% of the balance in the participant's
11account in the form of a direct rollover to another qualified
12plan, to the extent allowed by federal law. Only one
13distribution under this subsection may be made with respect to
14a participant's cash balance account.
15    Upon payment of the distribution, the amount distributed
16shall be debited from the participant's cash balance account.
17The remaining balance in the account shall be used for the
18determination of the other benefits provided to the participant
19or eligible surviving spouse under this Section. Once a
20distribution under this subsection (f-10) has been paid,
21neither the participant nor an eligible survivor may repay the
22amount distributed or reinstate any benefit arising under this
23Section from the distributed amount.
24    (f-15) Refund. In lieu of receiving a distribution under
25subsection (f-10) or a retirement annuity under subsection (g),
26at any time after terminating active employment under the

 

 

SB0035- 26 -LRB098 05472 JDS 35506 b

1applicable retirement system, a participant in the cash balance
2plan may elect to receive a refund under this subsection. The
3refund shall consist of an amount equal to the amount of all
4employee contributions credited to the participant's account,
5but shall not include any interest credit or employer
6contributions. If the participant so requests, the refund may
7be paid in the form of a direct rollover to another qualified
8plan, to the extent allowed by federal law and in accordance
9with the rules of the applicable retirement system.
10    Upon payment of the refund, the participant's notional cash
11balance account is closed, and the participant's credits in the
12applicable retirement system are terminated. A person who
13receives a refund under this subsection forfeits all rights
14under the applicable retirement system, including any right to
15repay refunded amounts and to reinstate any benefit under that
16retirement system.
17    An eligible surviving spouse under subsection (k) may elect
18to receive a refund under this subsection in lieu of a
19survivor's annuity unless a distribution has been made under
20subsection (f-10) with respect to the participant's cash
21balance account.
22    (g) Retirement Annuity. A participant in the cash balance
23plan may begin collecting a retirement annuity at age 59 1/2,
24but not before reaching the age of 59 1/2 and not before the
25date of termination of active employment under the applicable
26retirement system.

 

 

SB0035- 27 -LRB098 05472 JDS 35506 b

1    The amount of the retirement annuity shall be calculated by
2the retirement system, based on the balance in the cash balance
3account, the assumption of future investment returns as
4specified in this subsection, the participant's election to
5have a lifetime surviving spouse's annuity as specified in this
6subsection, the annual increase in retirement annuity as
7specified in subsection (h), the annual increase in survivor's
8annuity as specified in subsection (l), and any actuarial
9assumptions and tables adopted by the board of the retirement
10system for this purpose. The calculation shall be designed to
11determine, on an actuarially equivalent basis, the amount of
12retirement annuity that will result in total annuity payments
13being equal to the total balance in the participant's account
14on the date when the last payment of retirement annuity (or
15surviving spouse's annuity, if the participant elects to
16provide for a surviving spouse's annuity pursuant to this
17subsection) is anticipated to be paid under the relevant
18actuarial assumptions.
19    For the purpose of calculating retirement annuities,
20future investment returns shall be assumed to be a percentage
21equal to the average yield of the 30-year U.S. Treasury Bond
22over the 5 fiscal years prior to the calculation of the initial
23retirement annuity, plus 200 basis points; but not less than 4%
24nor more than 8%.
25    A retirement annuity or surviving spouse's annuity
26provided under this subsection shall be a life annuity and

 

 

SB0035- 28 -LRB098 05472 JDS 35506 b

1shall not expire for the reason that the total amount paid has
2reached or exceeded the account balance.
3    The annuity payment shall begin on the date specified by
4the participant submitting a written application, which date
5shall not be prior to termination of employment or more than
6one year before the application is received by the board;
7however, if the participant is not an employee of an employer
8participating in the applicable retirement system or in a
9participating system as defined in Article 20 of this Code on
10April 1 of the calendar year next following the calendar year
11in which the participant attains age 70 1/2, the annuity
12payment period shall begin on that date regardless of whether
13an application has been filed.
14    The participant may elect, in the participant's written
15application for retirement, to receive a reduced retirement
16annuity payable for his or her life and to have a surviving
17spouse's annuity in a monthly amount equal to 50%, 75%, or 100%
18of that reduced monthly amount, to be paid to his or her
19eligible surviving spouse, commencing upon the participant's
20death.
21    When the final payment of the retirement annuity (or
22surviving spouse's annuity, if the participant elects to
23provide for a surviving spouse's annuity pursuant to this
24subsection) has been paid, the account shall be closed. When
25the participant has died and there are no longer any eligible
26survivors, any unused employee contributions shall be

 

 

SB0035- 29 -LRB098 05472 JDS 35506 b

1forfeited to the applicable retirement system.
2    (h) Annual Increase in Retirement Annuity. The retirement
3annuity shall be subject to an automatic annual increase in an
4amount equal to 3% of the originally granted annuity on each
5January 1 occurring on or after the first anniversary of the
6annuity start date. Automatic annual increases in a surviving
7spouse's annuity provided under subsection (g) shall be in
8accordance with subsection (k-5) of this Section.
9    (i) Disability Benefits. The disability benefits provided
10under the applicable retirement system apply to new cash
11balance plan participants and legacy Tier II participants in
12the cash balance plan, subject to and in accordance with the
13eligibility and other provisions of the applicable Article.
14    Retirement due to disability under Section 15-153.2 or
1516-149.2 shall be deemed a disability benefit for the purposes
16of this Section and shall apply to new cash balance plan
17participants and legacy Tier II participants.
18    The board of the retirement system shall designate
19annually, as a percentage of salary, an amount representing the
20anticipated average cost of providing disability benefits for
21participants. The amount so designated shall not exceed 1% of
22the participant's salary and shall be deducted annually from
23the account of each participant receiving salary.
24    (j) Return to Service. Upon a return to service under the
25same retirement system after beginning to receive a retirement
26annuity under the cash balance plan, the retirement annuity

 

 

SB0035- 30 -LRB098 05472 JDS 35506 b

1shall be suspended and active participation in the cash balance
2plan shall resume. Upon termination of the employment, the
3retirement annuity shall resume in an amount to be recalculated
4in accordance with subsection (g), taking into effect the
5changes in the cash balance account. If a retired annuitant
6returns to service, his or her notional cash balance account
7shall thereupon be decreased by amounts representing each
8payment of retirement annuity following the latest retirement
9and preceding the return to service.
10    (k) Surviving Spouse's Annuity - Death before Retirement.
11In the case of the death of a new cash balance plan participant
12or legacy Tier II participant who had less than 5 years of
13service under the applicable Article and had not begun
14receiving a retirement annuity or taken a refund under
15subsection (f-15), the eligible surviving spouse shall be
16entitled only to a refund of employee contributions under
17subsection (f-15).
18    In the case of the death of a new cash balance plan
19participant or legacy Tier II participant who had at least 5
20years of service under the applicable Article and had not begun
21receiving a retirement annuity or taken a refund under
22subsection (f-15), the eligible surviving spouse shall, upon
23written application, be entitled to receive a surviving
24spouse's annuity beginning at age 59 1/2 (regardless of the
25existence of dependent eligible children). The surviving
26spouse's annuity shall be equal to 66 2/3% of the amount of

 

 

SB0035- 31 -LRB098 05472 JDS 35506 b

1retirement annuity that the deceased participant would have
2been entitled to if he or she had retired on the date of death
3having attained age 59 1/2 and without having elected to take a
4reduced annuity to provide a surviving spouse's annuity.
5    At any time before beginning to receive a surviving
6spouse's annuity under this subsection, the eligible surviving
7spouse may claim a distribution under subsection (f-10) or a
8refund under subsection (f-15). The deceased participant's
9account shall continue to receive interest credit until the
10eligible surviving spouse begins to receive a surviving
11spouse's annuity or receives a refund of employee contributions
12under subsection (f-15).
13    A surviving spouse's annuity provided under this
14subsection shall be a life annuity and shall not expire for the
15reason that the amount paid has reached or exceeded the account
16balance. When the final payment of the surviving spouse's
17annuity has been paid, the account shall be closed. When the
18participant has died and there are no longer any eligible
19survivors, any unused employee contributions shall be
20forfeited to the applicable retirement system.
21    (k-5) Annual Increase in Surviving Spouse's Annuity. A
22surviving spouse's annuity granted under subsection (g) or (k)
23shall be subject to an automatic annual increase in an amount
24equal to 3% of the originally granted annuity on each January 1
25occurring on or after the first anniversary of the annuity
26start date.

 

 

SB0035- 32 -LRB098 05472 JDS 35506 b

1    (l) Benefits for Eligible Children and Eligible Parents.
2Upon the death of a participant in the cash balance plan, an
3eligible child or eligible parent may be entitled to receive
4death benefits and survivors insurance benefits under Article
515 or survivors' benefits under Article 16 of this Code. These
6benefits shall be deemed to be "survivor benefits not based on
7the cash balance account" for the purposes of this Section.
8    Eligibility for these benefits shall be determined under
9this Section and the applicable Article of this Code, including
10without limitation any provision restricting eligibility on
11the basis of (i) an election to receive a lump-sum death
12benefit or (ii) a permitted designation of a different or
13alternate beneficiary.
14    The amount of these benefits shall be determined under this
15Section and the applicable Article of this Code, including
16without limitation any limitation on the minimum or maximum
17amount of such benefits, individually or in combination. In
18applying any limitation on the minimum or maximum amount of
19such benefits that depends on the existence or amount of a
20benefit payable to the surviving spouse, the retirement system
21shall use the amount of surviving spouse annuity payable by the
22retirement system under this Section rather than the amount
23otherwise provided under the applicable Article. Under no
24circumstance shall the sum of the benefits payable to all
25eligible survivors of a particular deceased participant by the
26applicable retirement system in accordance with this Section

 

 

SB0035- 33 -LRB098 05472 JDS 35506 b

1exceed the sum of the benefits that would be payable to all
2eligible survivors if the deceased participant had not been
3subject to this Section.
4The board of the retirement system shall designate annually, as
5a percentage of salary, an amount representing the anticipated
6average cost of providing survivor benefits not based on the
7cash balance account for dependent children and dependent
8parents of deceased participants in the cash balance plan. The
9amount so designated shall not exceed 1% of the cash balance
10plan participant's salary and shall be deducted annually from
11the account of each participant receiving salary.
12    (m) Applicability of Provisions. The following provisions,
13if and as they exist in this Code, do not apply to participants
14in the cash balance plan with respect to participation in the
15cash balance plan, except as they are specifically provided for
16in this Section:
17        (1) minimum service or vesting requirements (other
18    than as provided in this Section);
19        (2) provisions limiting a retirement annuity to a
20    specified percentage of salary;
21        (3) provisions authorizing a minimum retirement or
22    survivor's annuity or a supplemental annuity (except as
23    provided in subsection (l) of this Section with respect to
24    eligible children and eligible parents);
25        (4) provisions authorizing any form of annuity not
26    authorized under this Section;

 

 

SB0035- 34 -LRB098 05472 JDS 35506 b

1        (5) provisions authorizing a reversionary annuity
2    (other than a surviving spouse's annuity under subsection
3    (g));
4        (6) provisions authorizing a refund of employee
5    contributions upon termination of service (except as
6    provided in this Section) or any lump-sum payout in lieu of
7    a retirement annuity or survivor's benefit (other than
8    lump-sum death benefits and other than the distribution
9    under subsection (f-10) and the refund under subsection
10    (f-15) of this Section);
11        (7) provisions authorizing optional service credits or
12    the payment of optional additional contributions (other
13    than the optional employer contributions specifically
14    authorized in subsection (e-1)); or
15        (8) a level income option.
16    The Retirement Systems Reciprocal Act applies to
17participants in the cash balance plan who qualify under Article
1820 of this Code, but it does not affect the calculation of
19benefits payable under this Section.
20    The other provisions of this Code continue to apply to
21participants in the cash balance plan, to the extent that they
22do not conflict with this Section. In the case of a conflict
23between the provisions of this Section and any other provision
24of this Code, the provisions of this Section control.
25    (n) Rules. The Board of Trustees of the applicable
26retirement system may adopt rules and procedures for the

 

 

SB0035- 35 -LRB098 05472 JDS 35506 b

1implementation of this Section, including but not limited to
2determinations of how to integrate the administration of this
3Section with the requirements of the applicable Article and any
4other applicable provisions of this Code.
5    (o) Actual Employer Contributions. Payment of employer
6contributions with respect to participants in the cash balance
7plan shall be the responsibility of the actual employer. These
8contributions shall be determined under and paid in accordance
9with the provisions of Sections 15-155 and 16-158.
10    (p) Actual Optional Employer Contributions. An employer
11may agree with the applicable retirement system to make
12optional employer contributions to the system on behalf of
13employees who are participants in the cash balance plan, to the
14extent permitted by federal law and in accordance with the
15rules and procedures of the system.
16    Any such agreement must apply to all employees of the
17employer who are participants in the cash balance plan. The
18agreement shall be filed in writing with the applicable
19retirement system, and shall specify (i) the additional
20percentage of salary to be credited to the accounts of the
21employees, (ii) the period during which the optional employer
22contributions will apply, and (iii) that the employer agrees to
23pay to the applicable retirement system the employer's normal
24cost of the benefits resulting from those credited amounts, as
25well as any unfunded accrued liability resulting from the cost
26of those benefits, all as determined by the system in

 

 

SB0035- 36 -LRB098 05472 JDS 35506 b

1accordance with the applicable Article.
2    (q) Prospective Modification. The provisions set forth in
3this Section are subject to prospective changes made by law
4provided that any such changes shall not apply to any benefits
5accrued under this Section prior to the effective date of any
6amendatory Act of the General Assembly.
7    (r) Qualified Plan Status. No provision of this Section
8shall be interpreted in a way that would cause the applicable
9retirement system to cease to be a qualified plan under the
10Internal Revenue Code of 1986.
 
11    (40 ILCS 5/2-105.1 new)
12    Sec. 2-105.1. Tier I participant."Tier I participant": A
13participant who first became a participant before January 1,
142011.
 
15    (40 ILCS 5/2-105.2 new)
16    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
17former Tier I participant who is receiving a retirement
18annuity.
 
19    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
20    Sec. 2-108. Salary. "Salary": (1) For members of the
21General Assembly, the total compensation paid to the member by
22the State for one year of service, including the additional
23amounts, if any, paid to the member as an officer pursuant to

 

 

SB0035- 37 -LRB098 05472 JDS 35506 b

1Section 1 of "An Act in relation to the compensation and
2emoluments of the members of the General Assembly", approved
3December 6, 1907, as now or hereafter amended.
4    (2) For the State executive officers specified in Section
52-105, the total compensation paid to the member for one year
6of service.
7    (3) For members of the System who are participants under
8Section 2-117.1, or who are serving as Clerk or Assistant Clerk
9of the House of Representatives or Secretary or Assistant
10Secretary of the Senate, the total compensation paid to the
11member for one year of service, but not to exceed the salary of
12the highest salaried officer of the General Assembly.
13    However, in the event that federal law results in any
14participant receiving imputed income based on the value of
15group term life insurance provided by the State, such imputed
16income shall not be included in salary for the purposes of this
17Article.
18    Notwithstanding any other provision of this Code, the
19salary of a Tier I participant for the purposes of this Code
20shall not exceed, for periods of service in a term of office
21beginning on or after the effective date of this amendatory Act
22of the 98th General Assembly, the annual contribution and
23benefit base established for the applicable year by the
24Commissioner of Social Security under the federal Social
25Security Act.
26(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 

 

 

SB0035- 38 -LRB098 05472 JDS 35506 b

1    (40 ILCS 5/2-119)  (from Ch. 108 1/2, par. 2-119)
2    Sec. 2-119. Retirement annuity - conditions for
3eligibility.
4    (a) A participant whose service as a member is terminated,
5regardless of age or cause, is entitled to a retirement annuity
6beginning on the date specified by the participant in a written
7application subject to the following conditions:
8        1. The date the annuity begins does not precede the
9    date of final termination of service, or is not more than
10    30 days before the receipt of the application by the board
11    in the case of annuities based on disability or one year
12    before the receipt of the application in the case of
13    annuities based on attained age;
14        2. The participant meets one of the following
15    eligibility requirements:
16        For a participant who first becomes a participant of
17    this System before January 1, 2011 (the effective date of
18    Public Act 96-889):
19            (A) He or she has attained age 55 and has at least
20        8 years of service credit;
21            (B) He or she has attained age 62 and terminated
22        service after July 1, 1971 with at least 4 years of
23        service credit; or
24            (C) He or she has completed 8 years of service and
25        has become permanently disabled and as a consequence,

 

 

SB0035- 39 -LRB098 05472 JDS 35506 b

1        is unable to perform the duties of his or her office.
2        For a participant who first becomes a participant of
3    this System on or after January 1, 2011 (the effective date
4    of Public Act 96-889), he or she has attained age 67 and
5    has at least 8 years of service credit.
6    (a-5) Notwithstanding subsection (a) of this Section, for a
7Tier I participant who begins receiving a retirement annuity
8under this Section after July 1, 2013:
9        (1) If the Tier I participant is at least 45 years old
10    on the effective date of this amendatory Act of the 98th
11    General Assembly, then the references to age 55 and 62 in
12    subsection (a) of this Section remain unchanged.
13        (2) If the Tier I participant is at least 40 but less
14    than 45 years old on the effective date of this amendatory
15    Act of the 98th General Assembly, then the references to
16    age 55 and 62 in subsection (a) of this Section are
17    increased by one year.
18        (3) If the Tier I participant is at least 35 but less
19    than 40 years old on the effective date of this amendatory
20    Act of the 98th General Assembly, then the references to
21    age 55 and 62 in subsection (a) of this Section are
22    increased by 3 years.
23        (4) If the Tier I participant is less than 35 years old
24    on the effective date of this amendatory Act of the 98th
25    General Assembly, then the references to age 55 and 62 in
26    subsection (a) of this Section are increased by 5 years.

 

 

SB0035- 40 -LRB098 05472 JDS 35506 b

1    Notwithstanding Section 1-103.1, this subsection (a-5)
2applies without regard to whether or not the Tier I member is
3in active service under this Article on or after the effective
4date of this amendatory Act of the 98th General Assembly.
5    (a-5) A participant who first becomes a participant of this
6System on or after January 1, 2011 (the effective date of
7Public Act 96-889) who has attained age 62 and has at least 8
8years of service credit may elect to receive the lower
9retirement annuity provided in paragraph (c) of Section
102-119.01 of this Code.
11    (b) A participant shall be considered permanently disabled
12only if: (1) disability occurs while in service and is of such
13a nature as to prevent him or her from reasonably performing
14the duties of his or her office at the time; and (2) the board
15has received a written certificate by at least 2 licensed
16physicians appointed by the board stating that the member is
17disabled and that the disability is likely to be permanent.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
20    Sec. 2-119.1. Automatic increase in retirement annuity.
21    (a) Except as provided in subsections (a-1) and (a-2), a A
22participant who retires after June 30, 1967, and who has not
23received an initial increase under this Section before the
24effective date of this amendatory Act of 1991, shall, in
25January or July next following the first anniversary of

 

 

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1retirement, whichever occurs first, and in the same month of
2each year thereafter, but in no event prior to age 60, have the
3amount of the originally granted retirement annuity increased
4as follows: for each year through 1971, 1 1/2%; for each year
5from 1972 through 1979, 2%; and for 1980 and each year
6thereafter, 3%. Annuitants who have received an initial
7increase under this subsection prior to the effective date of
8this amendatory Act of 1991 shall continue to receive their
9annual increases in the same month as the initial increase.
10    (a-1) Notwithstanding any other provision of this Article,
11for a Tier I retiree, the amount of each automatic annual
12increase in retirement annuity occurring on or after the
13effective date of this amendatory Act of the 98th General
14Assembly shall be the lesser of $750 or 3% of the total annuity
15payable at the time of the increase, including previous
16increases granted.
17    (a-2) Notwithstanding any other provision of this Article,
18for a Tier I retiree, the monthly retirement annuity shall
19first be subject to annual increases on the January 1 occurring
20on or next after the attainment of age 67 or the January 1
21occurring on or next after the fifth anniversary of the annuity
22start date, whichever occurs earlier. If on the effective date
23of this amendatory Act of the 98th General Assembly a Tier I
24retiree has already received an annual increase under this
25Section but does not yet meet the new eligibility requirements
26of this subsection, the annual increases already received shall

 

 

SB0035- 42 -LRB098 05472 JDS 35506 b

1continue in force, but no additional annual increase shall be
2granted until the Tier I retiree meets the new eligibility
3requirements.
4    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
5and (a-2) apply without regard to whether or not the Tier I
6retiree is in active service under this Article on or after the
7effective date of this amendatory Act of the 98th General
8Assembly.
9    (b) Beginning January 1, 1990, for eligible participants
10who remain in service after attaining 20 years of creditable
11service, the 3% increases provided under subsection (a) shall
12begin to accrue on the January 1 next following the date upon
13which the participant (1) attains age 55, or (2) attains 20
14years of creditable service, whichever occurs later, and shall
15continue to accrue while the participant remains in service;
16such increases shall become payable on January 1 or July 1,
17whichever occurs first, next following the first anniversary of
18retirement. For any person who has service credit in the System
19for the entire period from January 15, 1969 through December
2031, 1992, regardless of the date of termination of service, the
21reference to age 55 in clause (1) of this subsection (b) shall
22be deemed to mean age 50.
23    This subsection (b) does not apply to any person who first
24becomes a member of the System after August 8, 2003 (the
25effective date of Public Act 93-494) this amendatory Act of the
2693rd General Assembly.

 

 

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1    (b-5) Notwithstanding any other provision of this Article,
2a participant who first becomes a participant on or after
3January 1, 2011 (the effective date of Public Act 96-889)
4shall, in January or July next following the first anniversary
5of retirement, whichever occurs first, and in the same month of
6each year thereafter, but in no event prior to age 67, have the
7amount of the originally granted retirement annuity then being
8paid increased by 3% or one-half the annual unadjusted
9percentage increase in the Consumer Price Index for All Urban
10Consumers as determined by the Public Pension Division of the
11Department of Insurance under subsection (a) of Section
122-108.1, whichever is less. The changes made to this subsection
13by this amendatory Act of the 98th General Assembly do not
14apply to any automatic annual increase granted under this
15subsection before the effective date of this amendatory Act.
16    (c) The foregoing provisions relating to automatic
17increases are not applicable to a participant who retires
18before having made contributions (at the rate prescribed in
19Section 2-126) for automatic increases for less than the
20equivalent of one full year. However, in order to be eligible
21for the automatic increases, such a participant may make
22arrangements to pay to the system the amount required to bring
23the total contributions for the automatic increase to the
24equivalent of one year's contributions based upon his or her
25last salary.
26    (d) A participant who terminated service prior to July 1,

 

 

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11967, with at least 14 years of service is entitled to an
2increase in retirement annuity beginning January, 1976, and to
3additional increases in January of each year thereafter.
4    The initial increase shall be 1 1/2% of the originally
5granted retirement annuity multiplied by the number of full
6years that the annuitant was in receipt of such annuity prior
7to January 1, 1972, plus 2% of the originally granted
8retirement annuity for each year after that date. The
9subsequent annual increases shall be at the rate of 2% of the
10originally granted retirement annuity for each year through
111979 and at the rate of 3% for 1980 and thereafter.
12    (e) Beginning January 1, 1990, all automatic annual
13increases payable under this Section shall be calculated as a
14percentage of the total annuity payable at the time of the
15increase, including previous increases granted under this
16Article.
17(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
18    (40 ILCS 5/2-121.1)  (from Ch. 108 1/2, par. 2-121.1)
19    Sec. 2-121.1. Survivor's annuity - amount.
20    (a) A surviving spouse shall be entitled to 66 2/3% of the
21amount of retirement annuity to which the participant or
22annuitant was entitled on the date of death, without regard to
23whether the participant had attained age 55 prior to his or her
24death, subject to a minimum payment of 10% of salary. If a
25surviving spouse, regardless of age, has in his or her care at

 

 

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1the date of death any eligible child or children of the
2participant, the survivor's annuity shall be the greater of the
3following: (1) 66 2/3% of the amount of retirement annuity to
4which the participant or annuitant was entitled on the date of
5death, or (2) 30% of the participant's salary increased by 10%
6of salary on account of each such child, subject to a total
7payment for the surviving spouse and children of 50% of salary.
8If eligible children survive but there is no surviving spouse,
9or if the surviving spouse dies or becomes disqualified by
10remarriage while eligible children survive, each eligible
11child shall be entitled to an annuity of 20% of salary, subject
12to a maximum total payment for all such children of 50% of
13salary.
14    However, the survivor's annuity payable under this Section
15shall not be less than 100% of the amount of retirement annuity
16to which the participant or annuitant was entitled on the date
17of death, if he or she is survived by a dependent disabled
18child.
19    The salary to be used for determining these benefits shall
20be the salary used for determining the amount of retirement
21annuity as provided in Section 2-119.01.
22    (b) Upon the death of a participant after the termination
23of service or upon death of an annuitant, the maximum total
24payment to a surviving spouse and eligible children, or to
25eligible children alone if there is no surviving spouse, shall
26be 75% of the retirement annuity to which the participant or

 

 

SB0035- 46 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 47 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 48 -LRB098 05472 JDS 35506 b

1amount payable by the System on January 1, 1993 is less than
2$300 per month, the amount payable by the System shall be
3increased beginning on that date by a monthly amount equal to
4$2 for each full year that has expired since the annuity began.
5(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
6    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
7    Sec. 2-124. Contributions by State.
8    (a) The State shall make contributions to the System by
9appropriations of amounts which, together with the
10contributions of participants, interest earned on investments,
11and other income will meet the cost of maintaining and
12administering the System on a 100% 90% funded basis in
13accordance with actuarial recommendations by the end of State
14fiscal year 2043.
15    (b) The Board shall determine the amount of State
16contributions required for each fiscal year on the basis of the
17actuarial tables and other assumptions adopted by the Board and
18the prescribed rate of interest, using the formula in
19subsection (c).
20    (c) For State fiscal years 2014 through 2043, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23equal to the sum of (1) the State's portion of the projected
24normal cost for that fiscal year, plus (2) an amount sufficient
25to bring the total assets of the System up to 100% of the total

 

 

SB0035- 49 -LRB098 05472 JDS 35506 b

1actuarial liabilities of the System by the end of State fiscal
2year 2043. In making these determinations, the required State
3contribution shall be calculated each year as a level
4percentage of payroll over the years remaining to and including
5fiscal year 2043 and shall be determined under the projected
6unit credit actuarial cost method.
7    For State fiscal years 2012 and 2013 through 2045, the
8minimum contribution to the System to be made by the State for
9each fiscal year shall be an amount determined by the System to
10be sufficient to bring the total assets of the System up to 90%
11of the total actuarial liabilities of the System by the end of
12State fiscal year 2045. In making these determinations, the
13required State contribution shall be calculated each year as a
14level percentage of payroll over the years remaining to and
15including fiscal year 2045 and shall be determined under the
16projected unit credit actuarial cost method.
17    For State fiscal years 1996 through 2005, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20so that by State fiscal year 2011, the State is contributing at
21the rate required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2006 is
24$4,157,000.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2007 is

 

 

SB0035- 50 -LRB098 05472 JDS 35506 b

1$5,220,300.
2    For each of State fiscal years 2008 through 2009, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5from the required State contribution for State fiscal year
62007, so that by State fiscal year 2011, the State is
7contributing at the rate otherwise required under this Section.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2010 is
10$10,454,000 and shall be made from the proceeds of bonds sold
11in fiscal year 2010 pursuant to Section 7.2 of the General
12Obligation Bond Act, less (i) the pro rata share of bond sale
13expenses determined by the System's share of total bond
14proceeds, (ii) any amounts received from the General Revenue
15Fund in fiscal year 2010, and (iii) any reduction in bond
16proceeds due to the issuance of discounted bonds, if
17applicable.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2011 is
20the amount recertified by the System on or before April 1, 2011
21pursuant to Section 2-134 and shall be made from the proceeds
22of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
23the General Obligation Bond Act, less (i) the pro rata share of
24bond sale expenses determined by the System's share of total
25bond proceeds, (ii) any amounts received from the General
26Revenue Fund in fiscal year 2011, and (iii) any reduction in

 

 

SB0035- 51 -LRB098 05472 JDS 35506 b

1bond proceeds due to the issuance of discounted bonds, if
2applicable.
3    Beginning in State fiscal year 2044, the minimum State
4contribution for each fiscal year shall be the amount needed to
5maintain the total assets of the System at 100% of the total
6actuarial liabilities of the System.
7    Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 100% 90%. A reference in this Article
20to the "required State contribution" or any substantially
21similar term does not include or apply to any amounts payable
22to the System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter through State
26fiscal year 2013, as calculated under this Section and

 

 

SB0035- 52 -LRB098 05472 JDS 35506 b

1certified under Section 2-134, shall not exceed an amount equal
2to (i) the amount of the required State contribution that would
3have been calculated under this Section for that fiscal year if
4the System had not received any payments under subsection (d)
5of Section 7.2 of the General Obligation Bond Act, minus (ii)
6the portion of the State's total debt service payments for that
7fiscal year on the bonds issued in fiscal year 2003 for the
8purposes of that Section 7.2, as determined and certified by
9the Comptroller, that is the same as the System's portion of
10the total moneys distributed under subsection (d) of Section
117.2 of the General Obligation Bond Act. In determining this
12maximum for State fiscal years 2008 through 2010, however, the
13amount referred to in item (i) shall be increased, as a
14percentage of the applicable employee payroll, in equal
15increments calculated from the sum of the required State
16contribution for State fiscal year 2007 plus the applicable
17portion of the State's total debt service payments for fiscal
18year 2007 on the bonds issued in fiscal year 2003 for the
19purposes of Section 7.2 of the General Obligation Bond Act, so
20that, by State fiscal year 2011, the State is contributing at
21the rate otherwise required under this Section.
22    (d) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

SB0035- 53 -LRB098 05472 JDS 35506 b

1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (e) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
137-13-12.)
 
14    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
15    Sec. 2-125. Obligations of State; funding guarantee.
16    (a) The payment of (1) the required State contributions,
17(2) all benefits granted under this system and (3) all expenses
18of administration and operation are obligations of the State to
19the extent specified in this Article.
20    (b) All income, interest and dividends derived from
21deposits and investments shall be credited to the account of
22the system in the State Treasury and used to pay benefits under
23this Article.
24    (c) Beginning July 1, 2013, the State shall be
25contractually obligated to contribute to the System under

 

 

SB0035- 54 -LRB098 05472 JDS 35506 b

1Section 2-124 in each State fiscal year an amount not less than
2the sum of (i) the State's normal cost for that year and (ii)
3the portion of the unfunded accrued liability assigned to that
4year by law in accordance with a schedule that distributes
5payments equitably over a reasonable period of time and in
6accordance with accepted actuarial practices. The obligations
7created under this subsection (c) are contractual obligations
8protected and enforceable under Article I, Section 16 and
9Article XIII, Section 5 of the Illinois Constitution.
10    Notwithstanding any other provision of law, if the State
11fails to pay in a State fiscal year the amount guaranteed under
12this subsection, the System may bring a mandamus action in the
13Circuit Court of Sangamon County to compel the State to make
14that payment, irrespective of other remedies that may be
15available to the System. In ordering the State to make the
16required payment, the court may order a reasonable payment
17schedule to enable the State to make the required payment
18without significantly imperiling the public health, safety, or
19welfare.
20    Any payments required to be made by the State pursuant to
21this subsection (c) are expressly subordinated to the payment
22of the principal, interest, and premium, if any, on any bonded
23debt obligation of the State or any other State-created entity,
24either currently outstanding or to be issued, for which the
25source of repayment or security thereon is derived directly or
26indirectly from tax revenues collected by the State or any

 

 

SB0035- 55 -LRB098 05472 JDS 35506 b

1other State-created entity. Payments on such bonded
2obligations include any statutory fund transfers or other
3prefunding mechanisms or formulas set forth, now or hereafter,
4in State law or bond indentures, into debt service funds or
5accounts of the State related to such bonded obligations,
6consistent with the payment schedules associated with such
7obligations.
8(Source: P.A. 83-1440.)
 
9    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
10    Sec. 2-126. Contributions by participants.
11    (a) Each participant shall contribute toward the cost of
12his or her retirement annuity a percentage of each payment of
13salary received by him or her for service as a member as
14follows: for service between October 31, 1947 and January 1,
151959, 5%; for service between January 1, 1959 and June 30,
161969, 6%; for service between July 1, 1969 and January 10,
171973, 6 1/2%; for service after January 10, 1973, 7%; for
18service after December 31, 1981, 8 1/2%.
19    (a-5) In addition to the contributions otherwise required
20under this Article, each Tier I participant shall also make the
21following contributions toward the cost of his or her
22retirement annuity from each payment of salary received by him
23or her for service as a member:
24        (1) beginning July 1, 2013 and through June 30, 2014,
25    1% of salary; and

 

 

SB0035- 56 -LRB098 05472 JDS 35506 b

1        (2) beginning on July 1, 2014, 2% of salary.
2    (b) Beginning August 2, 1949, each male participant, and
3from July 1, 1971, each female participant shall contribute
4towards the cost of the survivor's annuity 2% of salary.
5    A participant who has no eligible survivor's annuity
6beneficiary may elect to cease making contributions for
7survivor's annuity under this subsection. A survivor's annuity
8shall not be payable upon the death of a person who has made
9this election, unless prior to that death the election has been
10revoked and the amount of the contributions that would have
11been paid under this subsection in the absence of the election
12is paid to the System, together with interest at the rate of 4%
13per year from the date the contributions would have been made
14to the date of payment.
15    (c) Beginning July 1, 1967, each participant shall
16contribute 1% of salary towards the cost of automatic increase
17in annuity provided in Section 2-119.1. These contributions
18shall be made concurrently with contributions for retirement
19annuity purposes.
20    (d) In addition, each participant serving as an officer of
21the General Assembly shall contribute, for the same purposes
22and at the same rates as are required of a regular participant,
23on each additional payment received as an officer. If the
24participant serves as an officer for at least 2 but less than 4
25years, he or she shall contribute an amount equal to the amount
26that would have been contributed had the participant served as

 

 

SB0035- 57 -LRB098 05472 JDS 35506 b

1an officer for 4 years. Persons who serve as officers in the
287th General Assembly but cannot receive the additional payment
3to officers because of the ban on increases in salary during
4their terms may nonetheless make contributions based on those
5additional payments for the purpose of having the additional
6payments included in their highest salary for annuity purposes;
7however, persons electing to make these additional
8contributions must also pay an amount representing the
9corresponding employer contributions, as calculated by the
10System.
11    (e) Notwithstanding any other provision of this Article,
12the required contribution of a participant who first becomes a
13participant on or after January 1, 2011 shall not exceed the
14contribution that would be due under this Article if that
15participant's highest salary for annuity purposes were
16$106,800, plus any increases in that amount under Section
172-108.1.
18(Source: P.A. 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
20    Sec. 2-134. To certify required State contributions and
21submit vouchers.
22    (a) The Board shall certify to the Governor on or before
23December 15 of each year through until December 15, 2011 the
24amount of the required State contribution to the System for the
25next fiscal year and shall specifically identify the System's

 

 

SB0035- 58 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 59 -LRB098 05472 JDS 35506 b

1the State Actuary's recommended changes, and the fiscal impact
2of not following the State Actuary's recommended changes on the
3required State contribution.
4    (a-7) On or before May 1, 2004, the Board shall recalculate
5and recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2005, taking
7into account the amounts appropriated to and received by the
8System under subsection (d) of Section 7.2 of the General
9Obligation Bond Act.
10    On or before July 1, 2005, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2006, taking
13into account the changes in required State contributions made
14by this amendatory Act of the 94th General Assembly.
15    On or before April 1, 2011, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2011, applying
18the changes made by Public Act 96-889 to the System's assets
19and liabilities as of June 30, 2009 as though Public Act 96-889
20was approved on that date.
21    On or before July 1, 2013, the Board shall, if necessary,
22recalculate and recertify to the Governor the amount of the
23required State contribution to the System for State fiscal year
242014, taking into account the changes in required State
25contributions made by this amendatory Act of the 98th General
26Assembly.

 

 

SB0035- 60 -LRB098 05472 JDS 35506 b

1    (b) Beginning in State fiscal year 1996, on or as soon as
2possible after the 15th day of each month the Board shall
3submit vouchers for payment of State contributions to the
4System, in a total monthly amount of one-twelfth of the
5required annual State contribution certified under subsection
6(a). From the effective date of this amendatory Act of the 93rd
7General Assembly through June 30, 2004, the Board shall not
8submit vouchers for the remainder of fiscal year 2004 in excess
9of the fiscal year 2004 certified contribution amount
10determined under this Section after taking into consideration
11the transfer to the System under subsection (d) of Section
126z-61 of the State Finance Act. These vouchers shall be paid by
13the State Comptroller and Treasurer by warrants drawn on the
14funds appropriated to the System for that fiscal year. If in
15any month the amount remaining unexpended from all other
16appropriations to the System for the applicable fiscal year
17(including the appropriations to the System under Section 8.12
18of the State Finance Act and Section 1 of the State Pension
19Funds Continuing Appropriation Act) is less than the amount
20lawfully vouchered under this Section, the difference shall be
21paid from the General Revenue Fund under the continuing
22appropriation authority provided in Section 1.1 of the State
23Pension Funds Continuing Appropriation Act.
24    (c) The full amount of any annual appropriation for the
25System for State fiscal year 1995 shall be transferred and made
26available to the System at the beginning of that fiscal year at

 

 

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1the request of the Board. Any excess funds remaining at the end
2of any fiscal year from appropriations shall be retained by the
3System as a general reserve to meet the System's accrued
4liabilities.
5(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
697-694, eff. 6-18-12.)
 
7    (40 ILCS 5/2-162)
8    Sec. 2-162. Application and expiration of new benefit
9increases.
10    (a) As used in this Section, "new benefit increase" means
11an increase in the amount of any benefit provided under this
12Article, or an expansion of the conditions of eligibility for
13any benefit under this Article, that results from an amendment
14to this Code that takes effect after the effective date of this
15amendatory Act of the 94th General Assembly. "New benefit
16increase", however, does not include any benefit increase
17resulting from the changes made to this Article by this
18amendatory Act of the 98th General Assembly.
19    (b) Notwithstanding any other provision of this Code or any
20subsequent amendment to this Code, every new benefit increase
21is subject to this Section and shall be deemed to be granted
22only in conformance with and contingent upon compliance with
23the provisions of this Section.
24    (c) The Public Act enacting a new benefit increase must
25identify and provide for payment to the System of additional

 

 

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

 

 

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1under this Section continues to apply to persons who applied
2and qualified for the affected benefit while the new benefit
3increase was in effect and to the affected beneficiaries and
4alternate payees of such persons, but does not apply to any
5other person, including without limitation a person who
6continues in service after the expiration date and did not
7apply and qualify for the affected benefit while the new
8benefit increase was in effect.
9(Source: P.A. 94-4, eff. 6-1-05.)
 
10    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
11    Sec. 14-103.10. Compensation.
12    (a) For periods of service prior to January 1, 1978, the
13full rate of salary or wages payable to an employee for
14personal services performed if he worked the full normal
15working period for his position, subject to the following
16maximum amounts: (1) prior to July 1, 1951, $400 per month or
17$4,800 per year; (2) between July 1, 1951 and June 30, 1957
18inclusive, $625 per month or $7,500 per year; (3) beginning
19July 1, 1957, no limitation.
20    In the case of service of an employee in a position
21involving part-time employment, compensation shall be
22determined according to the employees' earnings record.
23    (b) For periods of service on and after January 1, 1978,
24all remuneration for personal services performed defined as
25"wages" under the Social Security Enabling Act, including that

 

 

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

 

 

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1pay plan in effect before January 1, 1981. Compensation shall
2exclude lump sum salary payments:
3        (1) for vacation;
4        (2) for accumulated unused sick leave;
5        (3) upon discharge or dismissal; and
6        (4) for approved holidays.
7    (f) Notwithstanding any other provision of this Code, the
8compensation of a Tier I member for the purposes of this Code
9shall not exceed, for periods of service on or after the
10effective date of this amendatory Act of the 98th General
11Assembly, the annual contribution and benefit base established
12for the applicable year by the Commissioner of Social Security
13under the federal Social Security Act; except that this
14limitation does not apply to a member's compensation that is
15determined under an employment contract or collective
16bargaining agreement that is in effect on the effective date of
17this amendatory Act of the 98th General Assembly and has not
18been amended or renewed after that date.
19(Source: P.A. 96-1490, eff. 1-1-11.)
 
20    (40 ILCS 5/14-103.40 new)
21    Sec. 14-103.40. Tier I member. "Tier I member": A member of
22this System who first became a member or participant before
23January 1, 2011 under any reciprocal retirement system or
24pension fund established under this Code other than a
25retirement system or pension fund established under Article 2,

 

 

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13, 4, 5, 6, or 18 of this Code.
 
2    (40 ILCS 5/14-103.41 new)
3    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
4Tier I member who is receiving a retirement annuity.
 
5    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)
6    Sec. 14-107. Retirement annuity - service and age -
7conditions.
8    (a) A member is entitled to a retirement annuity after
9having at least 8 years of creditable service.
10    (b) A member who has at least 35 years of creditable
11service may claim his or her retirement annuity at any age. A
12member having at least 8 years of creditable service but less
13than 35 may claim his or her retirement annuity upon or after
14attainment of age 60 or, beginning January 1, 2001, any lesser
15age which, when added to the number of years of his or her
16creditable service, equals at least 85. A member upon or after
17attainment of age 55 having at least 25 years of creditable
18service (30 years if retirement is before January 1, 2001) may
19elect to receive the lower retirement annuity provided in
20paragraph (c) of Section 14-108 of this Code. For purposes of
21the rule of 85, portions of years shall be counted in whole
22months.
23    (c) Notwithstanding subsection (b) of this Section, for a
24Tier I member who begins receiving a retirement annuity under

 

 

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1this Article after July 1, 2013:
2        (1) If the Tier I member is at least 45 years old on
3    the effective date of this amendatory Act of the 98th
4    General Assembly, then the references to age 55 and 60 in
5    subsection (b) of this Section remain unchanged and the
6    references to 85 in subsection (b) of this Section remain
7    unchanged.
8        (2) If the Tier I member is at least 40 but less than
9    45 years old on the effective date of this amendatory Act
10    of the 98th General Assembly, then the references to age 55
11    and 60 in subsection (b) of this Section are increased by
12    one year and the references to 85 in subsection (b) are
13    increased to 87.
14        (3) If the Tier I member is at least 35 but less than
15    40 years old on the effective date of this amendatory Act
16    of the 98th General Assembly, then the references to age 55
17    and 60 in subsection (b) of this Section are increased by 3
18    years and the references to 85 in subsection (b) are
19    increased to 91.
20        (4) If the Tier I member is less than 35 years old on
21    the effective date of this amendatory Act of the 98th
22    General Assembly, then the references to age 55 and 60 in
23    subsection (b) of this Section are increased by 5 years and
24    the references to 85 in subsection (b) are increased to 95.
25    Notwithstanding Section 1-103.1, this subsection (c)
26applies without regard to whether or not the Tier I member is

 

 

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1in active service under this Article on or after the effective
2date of this amendatory Act of the 98th General Assembly.
3    (d) The allowance shall begin with the first full calendar
4month specified in the member's application therefor, the first
5day of which shall not be before the date of withdrawal as
6approved by the board. Regardless of the date of withdrawal,
7the allowance need not begin within one year of application
8therefor.
9(Source: P.A. 91-927, eff. 12-14-00.)
 
10    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)
11    Sec. 14-108. Amount of retirement annuity. A member who has
12contributed to the System for at least 12 months shall be
13entitled to a prior service annuity for each year of certified
14prior service credited to him, except that a member shall
15receive 1/3 of the prior service annuity for each year of
16service for which contributions have been made and all of such
17annuity shall be payable after the member has made
18contributions for a period of 3 years. Proportionate amounts
19shall be payable for service of less than a full year after
20completion of at least 12 months.
21    The total period of service to be considered in
22establishing the measure of prior service annuity shall include
23service credited in the Teachers' Retirement System of the
24State of Illinois and the State Universities Retirement System
25for which contributions have been made by the member to such

 

 

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1systems; provided that at least 1 year of the total period of 3
2years prescribed for the allowance of a full measure of prior
3service annuity shall consist of membership service in this
4system for which credit has been granted.
5    (a) In the case of a member who retires on or after January
61, 1998 and is a noncovered employee, the retirement annuity
7for membership service and prior service shall be 2.2% of final
8average compensation for each year of service. Any service
9credit established as a covered employee shall be computed as
10stated in paragraph (b).
11    (b) In the case of a member who retires on or after January
121, 1998 and is a covered employee, the retirement annuity for
13membership service and prior service shall be computed as
14stated in paragraph (a) for all service credit established as a
15noncovered employee; for service credit established as a
16covered employee it shall be 1.67% of final average
17compensation for each year of service.
18    (c) For a member retiring after attaining age 55 but before
19age 60 with at least 30 but less than 35 years of creditable
20service if retirement is before January 1, 2001, or with at
21least 25 but less than 30 years of creditable service if
22retirement is on or after January 1, 2001, the retirement
23annuity shall be reduced by 1/2 of 1% for each month that the
24member's age is under age 60 at the time of retirement. For
25members to whom subsection (c) of Section 14-107 applies, the
26references to age 55 and 60 in this subsection (c) are

 

 

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1increased as provided in subsection (c) of Section 14-107.
2    (d) A retirement annuity shall not exceed 75% of final
3average compensation, subject to such extension as may result
4from the application of Section 14-114 or Section 14-115.
5    (e) The retirement annuity payable to any covered employee
6who is a member of the System and in service on January 1,
71969, or in service thereafter in 1969 as a result of
8legislation enacted by the Illinois General Assembly
9transferring the member to State employment from county
10employment in a county Department of Public Aid in counties of
113,000,000 or more population, under a plan of coordination with
12the Old Age, Survivors and Disability provisions thereof, if
13not fully insured for Old Age Insurance payments under the
14Federal Old Age, Survivors and Disability Insurance provisions
15at the date of acceptance of a retirement annuity, shall not be
16less than the amount for which the member would have been
17eligible if coordination were not applicable.
18    (f) The retirement annuity payable to any covered employee
19who is a member of the System and in service on January 1,
201969, or in service thereafter in 1969 as a result of the
21legislation designated in the immediately preceding paragraph,
22if fully insured for Old Age Insurance payments under the
23Federal Social Security Act at the date of acceptance of a
24retirement annuity, shall not be less than an amount which when
25added to the Primary Insurance Benefit payable to the member
26upon attainment of age 65 under such Federal Act, will equal

 

 

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1the annuity which would otherwise be payable if the coordinated
2plan of coverage were not applicable.
3    (g) In the case of a member who is a noncovered employee,
4the retirement annuity for membership service as a security
5employee of the Department of Corrections or security employee
6of the Department of Human Services shall be: if retirement
7occurs on or after January 1, 2001, 3% of final average
8compensation for each year of creditable service; or if
9retirement occurs before January 1, 2001, 1.9% of final average
10compensation for each of the first 10 years of service, 2.1%
11for each of the next 10 years of service, 2.25% for each year
12of service in excess of 20 but not exceeding 30, and 2.5% for
13each year in excess of 30; except that the annuity may be
14calculated under subsection (a) rather than this subsection (g)
15if the resulting annuity is greater.
16    (h) In the case of a member who is a covered employee, the
17retirement annuity for membership service as a security
18employee of the Department of Corrections or security employee
19of the Department of Human Services shall be: if retirement
20occurs on or after January 1, 2001, 2.5% of final average
21compensation for each year of creditable service; if retirement
22occurs before January 1, 2001, 1.67% of final average
23compensation for each of the first 10 years of service, 1.90%
24for each of the next 10 years of service, 2.10% for each year
25of service in excess of 20 but not exceeding 30, and 2.30% for
26each year in excess of 30.

 

 

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1    (i) For the purposes of this Section and Section 14-133 of
2this Act, the term "security employee of the Department of
3Corrections" and the term "security employee of the Department
4of Human Services" shall have the meanings ascribed to them in
5subsection (c) of Section 14-110.
6    (j) The retirement annuity computed pursuant to paragraphs
7(g) or (h) shall be applicable only to those security employees
8of the Department of Corrections and security employees of the
9Department of Human Services who have at least 20 years of
10membership service and who are not eligible for the alternative
11retirement annuity provided under Section 14-110. However,
12persons transferring to this System under Section 14-108.2 or
1314-108.2c who have service credit under Article 16 of this Code
14may count such service toward establishing their eligibility
15under the 20-year service requirement of this subsection; but
16such service may be used only for establishing such
17eligibility, and not for the purpose of increasing or
18calculating any benefit.
19    (k) (Blank).
20    (l) The changes to this Section made by this amendatory Act
21of 1997 (changing certain retirement annuity formulas from a
22stepped rate to a flat rate) apply to members who retire on or
23after January 1, 1998, without regard to whether employment
24terminated before the effective date of this amendatory Act of
251997. An annuity shall not be calculated in steps by using the
26new flat rate for some steps and the superseded stepped rate

 

 

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1for other steps of the same type of service.
2(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
 
3    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
4    Sec. 14-110. Alternative retirement annuity.
5    (a) Any member who has withdrawn from service with not less
6than 20 years of eligible creditable service and has attained
7age 55, and any member who has withdrawn from service with not
8less than 25 years of eligible creditable service and has
9attained age 50, regardless of whether the attainment of either
10of the specified ages occurs while the member is still in
11service, shall be entitled to receive at the option of the
12member, in lieu of the regular or minimum retirement annuity, a
13retirement annuity computed as follows:
14        (i) for periods of service as a noncovered employee: if
15    retirement occurs on or after January 1, 2001, 3% of final
16    average compensation for each year of creditable service;
17    if retirement occurs before January 1, 2001, 2 1/4% of
18    final average compensation for each of the first 10 years
19    of creditable service, 2 1/2% for each year above 10 years
20    to and including 20 years of creditable service, and 2 3/4%
21    for each year of creditable service above 20 years; and
22        (ii) for periods of eligible creditable service as a
23    covered employee: if retirement occurs on or after January
24    1, 2001, 2.5% of final average compensation for each year
25    of creditable service; if retirement occurs before January

 

 

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1    1, 2001, 1.67% of final average compensation for each of
2    the first 10 years of such service, 1.90% for each of the
3    next 10 years of such service, 2.10% for each year of such
4    service in excess of 20 but not exceeding 30, and 2.30% for
5    each year in excess of 30.
6    Such annuity shall be subject to a maximum of 75% of final
7average compensation if retirement occurs before January 1,
82001 or to a maximum of 80% of final average compensation if
9retirement occurs on or after January 1, 2001.
10    These rates shall not be applicable to any service
11performed by a member as a covered employee which is not
12eligible creditable service. Service as a covered employee
13which is not eligible creditable service shall be subject to
14the rates and provisions of Section 14-108.
15    (a-5) Notwithstanding subsection (a) of this Section, for a
16Tier I member who begins receiving a retirement annuity under
17this Section after July 1, 2013:
18        (1) If the Tier I member is at least 45 years old on
19    the effective date of this amendatory Act of the 98th
20    General Assembly, then the references to age 50 and 55 in
21    subsection (a) of this Section remain unchanged.
22        (2) If the Tier I member is at least 40 but less than
23    45 years old on the effective date of this amendatory Act
24    of the 98th General Assembly, then the references to age 50
25    and 55 in subsection (a) of this Section are increased by
26    one year.

 

 

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1        (3) If the Tier I member is at least 35 but less than
2    40 years old on the effective date of this amendatory Act
3    of the 98th General Assembly, then the references to age 50
4    and 55 in subsection (a) of this Section are increased by 3
5    years.
6        (4) If the Tier I member is less than 35 years old on
7    the effective date of this amendatory Act of the 98th
8    General Assembly, then the references to age 50 and 55 in
9    subsection (a) of this Section are increased by 5 years.
10    Notwithstanding Section 1-103.1, this subsection (a-5)
11applies without regard to whether or not the Tier I member is
12in active service under this Article on or after the effective
13date of this amendatory Act of the 98th General Assembly.
14    (b) For the purpose of this Section, "eligible creditable
15service" means creditable service resulting from service in one
16or more of the following positions:
17        (1) State policeman;
18        (2) fire fighter in the fire protection service of a
19    department;
20        (3) air pilot;
21        (4) special agent;
22        (5) investigator for the Secretary of State;
23        (6) conservation police officer;
24        (7) investigator for the Department of Revenue or the
25    Illinois Gaming Board;
26        (8) security employee of the Department of Human

 

 

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1    Services;
2        (9) Central Management Services security police
3    officer;
4        (10) security employee of the Department of
5    Corrections or the Department of Juvenile Justice;
6        (11) dangerous drugs investigator;
7        (12) investigator for the Department of State Police;
8        (13) investigator for the Office of the Attorney
9    General;
10        (14) controlled substance inspector;
11        (15) investigator for the Office of the State's
12    Attorneys Appellate Prosecutor;
13        (16) Commerce Commission police officer;
14        (17) arson investigator;
15        (18) State highway maintenance worker.
16    A person employed in one of the positions specified in this
17subsection is entitled to eligible creditable service for
18service credit earned under this Article while undergoing the
19basic police training course approved by the Illinois Law
20Enforcement Training Standards Board, if completion of that
21training is required of persons serving in that position. For
22the purposes of this Code, service during the required basic
23police training course shall be deemed performance of the
24duties of the specified position, even though the person is not
25a sworn peace officer at the time of the training.
26    (c) For the purposes of this Section:

 

 

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1        (1) The term "state policeman" includes any title or
2    position in the Department of State Police that is held by
3    an individual employed under the State Police Act.
4        (2) The term "fire fighter in the fire protection
5    service of a department" includes all officers in such fire
6    protection service including fire chiefs and assistant
7    fire chiefs.
8        (3) The term "air pilot" includes any employee whose
9    official job description on file in the Department of
10    Central Management Services, or in the department by which
11    he is employed if that department is not covered by the
12    Personnel Code, states that his principal duty is the
13    operation of aircraft, and who possesses a pilot's license;
14    however, the change in this definition made by this
15    amendatory Act of 1983 shall not operate to exclude any
16    noncovered employee who was an "air pilot" for the purposes
17    of this Section on January 1, 1984.
18        (4) The term "special agent" means any person who by
19    reason of employment by the Division of Narcotic Control,
20    the Bureau of Investigation or, after July 1, 1977, the
21    Division of Criminal Investigation, the Division of
22    Internal Investigation, the Division of Operations, or any
23    other Division or organizational entity in the Department
24    of State Police is vested by law with duties to maintain
25    public order, investigate violations of the criminal law of
26    this State, enforce the laws of this State, make arrests

 

 

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1    and recover property. The term "special agent" includes any
2    title or position in the Department of State Police that is
3    held by an individual employed under the State Police Act.
4        (5) The term "investigator for the Secretary of State"
5    means any person employed by the Office of the Secretary of
6    State and vested with such investigative duties as render
7    him ineligible for coverage under the Social Security Act
8    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
9    218(l)(1) of that Act.
10        A person who became employed as an investigator for the
11    Secretary of State between January 1, 1967 and December 31,
12    1975, and who has served as such until attainment of age
13    60, either continuously or with a single break in service
14    of not more than 3 years duration, which break terminated
15    before January 1, 1976, shall be entitled to have his
16    retirement annuity calculated in accordance with
17    subsection (a), notwithstanding that he has less than 20
18    years of credit for such service.
19        (6) The term "Conservation Police Officer" means any
20    person employed by the Division of Law Enforcement of the
21    Department of Natural Resources and vested with such law
22    enforcement duties as render him ineligible for coverage
23    under the Social Security Act by reason of Sections
24    218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
25    term "Conservation Police Officer" includes the positions
26    of Chief Conservation Police Administrator and Assistant

 

 

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1    Conservation Police Administrator.
2        (7) The term "investigator for the Department of
3    Revenue" means any person employed by the Department of
4    Revenue and vested with such investigative duties as render
5    him ineligible for coverage under the Social Security Act
6    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
7    218(l)(1) of that Act.
8        The term "investigator for the Illinois Gaming Board"
9    means any person employed as such by the Illinois Gaming
10    Board and vested with such peace officer duties as render
11    the person ineligible for coverage under the Social
12    Security Act by reason of Sections 218(d)(5)(A),
13    218(d)(8)(D), and 218(l)(1) of that Act.
14        (8) The term "security employee of the Department of
15    Human Services" means any person employed by the Department
16    of Human Services who (i) is employed at the Chester Mental
17    Health Center and has daily contact with the residents
18    thereof, (ii) is employed within a security unit at a
19    facility operated by the Department and has daily contact
20    with the residents of the security unit, (iii) is employed
21    at a facility operated by the Department that includes a
22    security unit and is regularly scheduled to work at least
23    50% of his or her working hours within that security unit,
24    or (iv) is a mental health police officer. "Mental health
25    police officer" means any person employed by the Department
26    of Human Services in a position pertaining to the

 

 

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1    Department's mental health and developmental disabilities
2    functions who is vested with such law enforcement duties as
3    render the person ineligible for coverage under the Social
4    Security Act by reason of Sections 218(d)(5)(A),
5    218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
6    means that portion of a facility that is devoted to the
7    care, containment, and treatment of persons committed to
8    the Department of Human Services as sexually violent
9    persons, persons unfit to stand trial, or persons not
10    guilty by reason of insanity. With respect to past
11    employment, references to the Department of Human Services
12    include its predecessor, the Department of Mental Health
13    and Developmental Disabilities.
14        The changes made to this subdivision (c)(8) by Public
15    Act 92-14 apply to persons who retire on or after January
16    1, 2001, notwithstanding Section 1-103.1.
17        (9) "Central Management Services security police
18    officer" means any person employed by the Department of
19    Central Management Services who is vested with such law
20    enforcement duties as render him ineligible for coverage
21    under the Social Security Act by reason of Sections
22    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
23        (10) For a member who first became an employee under
24    this Article before July 1, 2005, the term "security
25    employee of the Department of Corrections or the Department
26    of Juvenile Justice" means any employee of the Department

 

 

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1    of Corrections or the Department of Juvenile Justice or the
2    former Department of Personnel, and any member or employee
3    of the Prisoner Review Board, who has daily contact with
4    inmates or youth by working within a correctional facility
5    or Juvenile facility operated by the Department of Juvenile
6    Justice or who is a parole officer or an employee who has
7    direct contact with committed persons in the performance of
8    his or her job duties. For a member who first becomes an
9    employee under this Article on or after July 1, 2005, the
10    term means an employee of the Department of Corrections or
11    the Department of Juvenile Justice who is any of the
12    following: (i) officially headquartered at a correctional
13    facility or Juvenile facility operated by the Department of
14    Juvenile Justice, (ii) a parole officer, (iii) a member of
15    the apprehension unit, (iv) a member of the intelligence
16    unit, (v) a member of the sort team, or (vi) an
17    investigator.
18        (11) The term "dangerous drugs investigator" means any
19    person who is employed as such by the Department of Human
20    Services.
21        (12) The term "investigator for the Department of State
22    Police" means a person employed by the Department of State
23    Police who is vested under Section 4 of the Narcotic
24    Control Division Abolition Act with such law enforcement
25    powers as render him ineligible for coverage under the
26    Social Security Act by reason of Sections 218(d)(5)(A),

 

 

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1    218(d)(8)(D) and 218(l)(1) of that Act.
2        (13) "Investigator for the Office of the Attorney
3    General" means any person who is employed as such by the
4    Office of the Attorney General and is vested with such
5    investigative duties as render him ineligible for coverage
6    under the Social Security Act by reason of Sections
7    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
8    the period before January 1, 1989, the term includes all
9    persons who were employed as investigators by the Office of
10    the Attorney General, without regard to social security
11    status.
12        (14) "Controlled substance inspector" means any person
13    who is employed as such by the Department of Professional
14    Regulation and is vested with such law enforcement duties
15    as render him ineligible for coverage under the Social
16    Security Act by reason of Sections 218(d)(5)(A),
17    218(d)(8)(D) and 218(l)(1) of that Act. The term
18    "controlled substance inspector" includes the Program
19    Executive of Enforcement and the Assistant Program
20    Executive of Enforcement.
21        (15) The term "investigator for the Office of the
22    State's Attorneys Appellate Prosecutor" means a person
23    employed in that capacity on a full time basis under the
24    authority of Section 7.06 of the State's Attorneys
25    Appellate Prosecutor's Act.
26        (16) "Commerce Commission police officer" means any

 

 

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1    person employed by the Illinois Commerce Commission who is
2    vested with such law enforcement duties as render him
3    ineligible for coverage under the Social Security Act by
4    reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
5    218(l)(1) of that Act.
6        (17) "Arson investigator" means any person who is
7    employed as such by the Office of the State Fire Marshal
8    and is vested with such law enforcement duties as render
9    the person ineligible for coverage under the Social
10    Security Act by reason of Sections 218(d)(5)(A),
11    218(d)(8)(D), and 218(l)(1) of that Act. A person who was
12    employed as an arson investigator on January 1, 1995 and is
13    no longer in service but not yet receiving a retirement
14    annuity may convert his or her creditable service for
15    employment as an arson investigator into eligible
16    creditable service by paying to the System the difference
17    between the employee contributions actually paid for that
18    service and the amounts that would have been contributed if
19    the applicant were contributing at the rate applicable to
20    persons with the same social security status earning
21    eligible creditable service on the date of application.
22        (18) The term "State highway maintenance worker" means
23    a person who is either of the following:
24            (i) A person employed on a full-time basis by the
25        Illinois Department of Transportation in the position
26        of highway maintainer, highway maintenance lead

 

 

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1        worker, highway maintenance lead/lead worker, heavy
2        construction equipment operator, power shovel
3        operator, or bridge mechanic; and whose principal
4        responsibility is to perform, on the roadway, the
5        actual maintenance necessary to keep the highways that
6        form a part of the State highway system in serviceable
7        condition for vehicular traffic.
8            (ii) A person employed on a full-time basis by the
9        Illinois State Toll Highway Authority in the position
10        of equipment operator/laborer H-4, equipment
11        operator/laborer H-6, welder H-4, welder H-6,
12        mechanical/electrical H-4, mechanical/electrical H-6,
13        water/sewer H-4, water/sewer H-6, sign maker/hanger
14        H-4, sign maker/hanger H-6, roadway lighting H-4,
15        roadway lighting H-6, structural H-4, structural H-6,
16        painter H-4, or painter H-6; and whose principal
17        responsibility is to perform, on the roadway, the
18        actual maintenance necessary to keep the Authority's
19        tollways in serviceable condition for vehicular
20        traffic.
21    (d) A security employee of the Department of Corrections or
22the Department of Juvenile Justice, and a security employee of
23the Department of Human Services who is not a mental health
24police officer, shall not be eligible for the alternative
25retirement annuity provided by this Section unless he or she
26meets the following minimum age and service requirements at the

 

 

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1time of retirement:
2        (i) 25 years of eligible creditable service and age 55;
3    or
4        (ii) beginning January 1, 1987, 25 years of eligible
5    creditable service and age 54, or 24 years of eligible
6    creditable service and age 55; or
7        (iii) beginning January 1, 1988, 25 years of eligible
8    creditable service and age 53, or 23 years of eligible
9    creditable service and age 55; or
10        (iv) beginning January 1, 1989, 25 years of eligible
11    creditable service and age 52, or 22 years of eligible
12    creditable service and age 55; or
13        (v) beginning January 1, 1990, 25 years of eligible
14    creditable service and age 51, or 21 years of eligible
15    creditable service and age 55; or
16        (vi) beginning January 1, 1991, 25 years of eligible
17    creditable service and age 50, or 20 years of eligible
18    creditable service and age 55.
19    For members to whom subsection (a-5) of this Section
20applies, the references to age 50 and 55 in item (vi) of this
21subsection are increased as provided in subsection (a-5).
22    Persons who have service credit under Article 16 of this
23Code for service as a security employee of the Department of
24Corrections or the Department of Juvenile Justice, or the
25Department of Human Services in a position requiring
26certification as a teacher may count such service toward

 

 

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1establishing their eligibility under the service requirements
2of this Section; but such service may be used only for
3establishing such eligibility, and not for the purpose of
4increasing or calculating any benefit.
5    (e) If a member enters military service while working in a
6position in which eligible creditable service may be earned,
7and returns to State service in the same or another such
8position, and fulfills in all other respects the conditions
9prescribed in this Article for credit for military service,
10such military service shall be credited as eligible creditable
11service for the purposes of the retirement annuity prescribed
12in this Section.
13    (f) For purposes of calculating retirement annuities under
14this Section, periods of service rendered after December 31,
151968 and before October 1, 1975 as a covered employee in the
16position of special agent, conservation police officer, mental
17health police officer, or investigator for the Secretary of
18State, shall be deemed to have been service as a noncovered
19employee, provided that the employee pays to the System prior
20to retirement an amount equal to (1) the difference between the
21employee contributions that would have been required for such
22service as a noncovered employee, and the amount of employee
23contributions actually paid, plus (2) if payment is made after
24July 31, 1987, regular interest on the amount specified in item
25(1) from the date of service to the date of payment.
26    For purposes of calculating retirement annuities under

 

 

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1this Section, periods of service rendered after December 31,
21968 and before January 1, 1982 as a covered employee in the
3position of investigator for the Department of Revenue shall be
4deemed to have been service as a noncovered employee, provided
5that the employee pays to the System prior to retirement an
6amount equal to (1) the difference between the employee
7contributions that would have been required for such service as
8a noncovered employee, and the amount of employee contributions
9actually paid, plus (2) if payment is made after January 1,
101990, regular interest on the amount specified in item (1) from
11the date of service to the date of payment.
12    (g) A State policeman may elect, not later than January 1,
131990, to establish eligible creditable service for up to 10
14years of his service as a policeman under Article 3, by filing
15a written election with the Board, accompanied by payment of an
16amount to be determined by the Board, equal to (i) the
17difference between the amount of employee and employer
18contributions transferred to the System under Section 3-110.5,
19and the amounts that would have been contributed had such
20contributions been made at the rates applicable to State
21policemen, plus (ii) interest thereon at the effective rate for
22each year, compounded annually, from the date of service to the
23date of payment.
24    Subject to the limitation in subsection (i), a State
25policeman may elect, not later than July 1, 1993, to establish
26eligible creditable service for up to 10 years of his service

 

 

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1as a member of the County Police Department under Article 9, by
2filing a written election with the Board, accompanied by
3payment of an amount to be determined by the Board, equal to
4(i) the difference between the amount of employee and employer
5contributions transferred to the System under Section 9-121.10
6and the amounts that would have been contributed had those
7contributions been made at the rates applicable to State
8policemen, plus (ii) interest thereon at the effective rate for
9each year, compounded annually, from the date of service to the
10date of payment.
11    (h) Subject to the limitation in subsection (i), a State
12policeman or investigator for the Secretary of State may elect
13to establish eligible creditable service for up to 12 years of
14his service as a policeman under Article 5, by filing a written
15election with the Board on or before January 31, 1992, and
16paying to the System by January 31, 1994 an amount to be
17determined by the Board, equal to (i) the difference between
18the amount of employee and employer contributions transferred
19to the System under Section 5-236, and the amounts that would
20have been contributed had such contributions been made at the
21rates applicable to State policemen, plus (ii) interest thereon
22at the effective rate for each year, compounded annually, from
23the date of service to the date of payment.
24    Subject to the limitation in subsection (i), a State
25policeman, conservation police officer, or investigator for
26the Secretary of State may elect to establish eligible

 

 

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1creditable service for up to 10 years of service as a sheriff's
2law enforcement employee under Article 7, by filing a written
3election with the Board on or before January 31, 1993, and
4paying to the System by January 31, 1994 an amount to be
5determined by the Board, equal to (i) the difference between
6the amount of employee and employer contributions transferred
7to the System under Section 7-139.7, and the amounts that would
8have been contributed had such contributions been made at the
9rates applicable to State policemen, plus (ii) interest thereon
10at the effective rate for each year, compounded annually, from
11the date of service to the date of payment.
12    Subject to the limitation in subsection (i), a State
13policeman, conservation police officer, or investigator for
14the Secretary of State may elect to establish eligible
15creditable service for up to 5 years of service as a police
16officer under Article 3, a policeman under Article 5, a
17sheriff's law enforcement employee under Article 7, a member of
18the county police department under Article 9, or a police
19officer under Article 15 by filing a written election with the
20Board and paying to the System an amount to be determined by
21the Board, equal to (i) the difference between the amount of
22employee and employer contributions transferred to the System
23under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
24and the amounts that would have been contributed had such
25contributions been made at the rates applicable to State
26policemen, plus (ii) interest thereon at the effective rate for

 

 

SB0035- 90 -LRB098 05472 JDS 35506 b

1each year, compounded annually, from the date of service to the
2date of payment.
3    Subject to the limitation in subsection (i), an
4investigator for the Office of the Attorney General, or an
5investigator for the Department of Revenue, may elect to
6establish eligible creditable service for up to 5 years of
7service as a police officer under Article 3, a policeman under
8Article 5, a sheriff's law enforcement employee under Article
97, or a member of the county police department under Article 9
10by filing a written election with the Board within 6 months
11after August 25, 2009 (the effective date of Public Act 96-745)
12and paying to the System an amount to be determined by the
13Board, equal to (i) the difference between the amount of
14employee and employer contributions transferred to the System
15under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
16amounts that would have been contributed had such contributions
17been made at the rates applicable to State policemen, plus (ii)
18interest thereon at the actuarially assumed rate for each year,
19compounded annually, from the date of service to the date of
20payment.
21    Subject to the limitation in subsection (i), a State
22policeman, conservation police officer, investigator for the
23Office of the Attorney General, an investigator for the
24Department of Revenue, or investigator for the Secretary of
25State may elect to establish eligible creditable service for up
26to 5 years of service as a person employed by a participating

 

 

SB0035- 91 -LRB098 05472 JDS 35506 b

1municipality to perform police duties, or law enforcement
2officer employed on a full-time basis by a forest preserve
3district under Article 7, a county corrections officer, or a
4court services officer under Article 9, by filing a written
5election with the Board within 6 months after August 25, 2009
6(the effective date of Public Act 96-745) and paying to the
7System an amount to be determined by the Board, equal to (i)
8the difference between the amount of employee and employer
9contributions transferred to the System under Sections 7-139.8
10and 9-121.10 and the amounts that would have been contributed
11had such contributions been made at the rates applicable to
12State policemen, plus (ii) interest thereon at the actuarially
13assumed rate for each year, compounded annually, from the date
14of service to the date of payment.
15    (i) The total amount of eligible creditable service
16established by any person under subsections (g), (h), (j), (k),
17and (l) of this Section shall not exceed 12 years.
18    (j) Subject to the limitation in subsection (i), an
19investigator for the Office of the State's Attorneys Appellate
20Prosecutor or a controlled substance inspector may elect to
21establish eligible creditable service for up to 10 years of his
22service as a policeman under Article 3 or a sheriff's law
23enforcement employee under Article 7, by filing a written
24election with the Board, accompanied by payment of an amount to
25be determined by the Board, equal to (1) the difference between
26the amount of employee and employer contributions transferred

 

 

SB0035- 92 -LRB098 05472 JDS 35506 b

1to the System under Section 3-110.6 or 7-139.8, and the amounts
2that would have been contributed had such contributions been
3made at the rates applicable to State policemen, plus (2)
4interest thereon at the effective rate for each year,
5compounded annually, from the date of service to the date of
6payment.
7    (k) Subject to the limitation in subsection (i) of this
8Section, an alternative formula employee may elect to establish
9eligible creditable service for periods spent as a full-time
10law enforcement officer or full-time corrections officer
11employed by the federal government or by a state or local
12government located outside of Illinois, for which credit is not
13held in any other public employee pension fund or retirement
14system. To obtain this credit, the applicant must file a
15written application with the Board by March 31, 1998,
16accompanied by evidence of eligibility acceptable to the Board
17and payment of an amount to be determined by the Board, equal
18to (1) employee contributions for the credit being established,
19based upon the applicant's salary on the first day as an
20alternative formula employee after the employment for which
21credit is being established and the rates then applicable to
22alternative formula employees, plus (2) an amount determined by
23the Board to be the employer's normal cost of the benefits
24accrued for the credit being established, plus (3) regular
25interest on the amounts in items (1) and (2) from the first day
26as an alternative formula employee after the employment for

 

 

SB0035- 93 -LRB098 05472 JDS 35506 b

1which credit is being established to the date of payment.
2    (l) Subject to the limitation in subsection (i), a security
3employee of the Department of Corrections may elect, not later
4than July 1, 1998, to establish eligible creditable service for
5up to 10 years of his or her service as a policeman under
6Article 3, by filing a written election with the Board,
7accompanied by payment of an amount to be determined by the
8Board, equal to (i) the difference between the amount of
9employee and employer contributions transferred to the System
10under Section 3-110.5, and the amounts that would have been
11contributed had such contributions been made at the rates
12applicable to security employees of the Department of
13Corrections, plus (ii) interest thereon at the effective rate
14for each year, compounded annually, from the date of service to
15the date of payment.
16    (m) The amendatory changes to this Section made by this
17amendatory Act of the 94th General Assembly apply only to: (1)
18security employees of the Department of Juvenile Justice
19employed by the Department of Corrections before the effective
20date of this amendatory Act of the 94th General Assembly and
21transferred to the Department of Juvenile Justice by this
22amendatory Act of the 94th General Assembly; and (2) persons
23employed by the Department of Juvenile Justice on or after the
24effective date of this amendatory Act of the 94th General
25Assembly who are required by subsection (b) of Section 3-2.5-15
26of the Unified Code of Corrections to have a bachelor's or

 

 

SB0035- 94 -LRB098 05472 JDS 35506 b

1advanced degree from an accredited college or university with a
2specialization in criminal justice, education, psychology,
3social work, or a closely related social science or, in the
4case of persons who provide vocational training, who are
5required to have adequate knowledge in the skill for which they
6are providing the vocational training.
7    (n) A person employed in a position under subsection (b) of
8this Section who has purchased service credit under subsection
9(j) of Section 14-104 or subsection (b) of Section 14-105 in
10any other capacity under this Article may convert up to 5 years
11of that service credit into service credit covered under this
12Section by paying to the Fund an amount equal to (1) the
13additional employee contribution required under Section
1414-133, plus (2) the additional employer contribution required
15under Section 14-131, plus (3) interest on items (1) and (2) at
16the actuarially assumed rate from the date of the service to
17the date of payment.
18(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
1996-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
207-2-10.)
 
21    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
22    Sec. 14-114. Automatic increase in retirement annuity.
23    (a) Except as provided in subsections (a-1) and (a-2), any
24Any person receiving a retirement annuity under this Article
25who retires having attained age 60, or who retires before age

 

 

SB0035- 95 -LRB098 05472 JDS 35506 b

160 having at least 35 years of creditable service, or who
2retires on or after January 1, 2001 at an age which, when added
3to the number of years of his or her creditable service, equals
4at least 85, shall, on January 1 next following the first full
5year of retirement, have the amount of the then fixed and
6payable monthly retirement annuity increased 3%. Any person
7receiving a retirement annuity under this Article who retires
8before attainment of age 60 and with less than (i) 35 years of
9creditable service if retirement is before January 1, 2001, or
10(ii) the number of years of creditable service which, when
11added to the member's age, would equal 85, if retirement is on
12or after January 1, 2001, shall have the amount of the fixed
13and payable retirement annuity increased by 3% on the January 1
14occurring on or next following (1) attainment of age 60, or (2)
15the first anniversary of retirement, whichever occurs later.
16However, for persons who receive the alternative retirement
17annuity under Section 14-110, references in this subsection (a)
18to attainment of age 60 shall be deemed to refer to attainment
19of age 55. For a person receiving early retirement incentives
20under Section 14-108.3 whose retirement annuity began after
21January 1, 1992 pursuant to an extension granted under
22subsection (e) of that Section, the first anniversary of
23retirement shall be deemed to be January 1, 1993. For a person
24who retires on or after June 28, 2001 and on or before October
251, 2001, and whose retirement annuity is calculated, in whole
26or in part, under Section 14-110 or subsection (g) or (h) of

 

 

SB0035- 96 -LRB098 05472 JDS 35506 b

1Section 14-108, the first anniversary of retirement shall be
2deemed to be January 1, 2002.
3    On each January 1 following the date of the initial
4increase under this subsection, the employee's monthly
5retirement annuity shall be increased by an additional 3%.
6    Beginning January 1, 1990 and except as provided in
7subsections (a-1) and (a-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 previous increases granted under this Article.
11    (a-1) Notwithstanding any other provision of this Article,
12for a Tier I retiree, the amount of each automatic annual
13increase in retirement annuity occurring on or after the
14effective date of this amendatory Act of the 98th General
15Assembly shall be the lesser of $600 ($750 if the annuity is
16based primarily upon service as a noncovered employee) or 3% of
17the total annuity payable at the time of the increase,
18including previous increases granted.
19    (a-2) Notwithstanding any other provision of this Article,
20for a Tier I retiree, the monthly retirement annuity shall
21first be subject to annual increases on the January 1 occurring
22on or next after the attainment of age 67 or the January 1
23occurring on or next after the fifth anniversary of the annuity
24start date, whichever occurs earlier. If on the effective date
25of this amendatory Act of the 98th General Assembly a Tier I
26retiree has already received an annual increase under this

 

 

SB0035- 97 -LRB098 05472 JDS 35506 b

1Section but does not yet meet the new eligibility requirements
2of this subsection, the annual increases already received shall
3continue in force, but no additional annual increase shall be
4granted until the Tier I retiree meets the new eligibility
5requirements.
6    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
7and (a-2) apply without regard to whether or not the Tier I
8retiree is in active service under this Article on or after the
9effective date of this amendatory Act of the 98th General
10Assembly.
11    (b) The provisions of subsection (a) of this Section shall
12be applicable to an employee only if the employee makes the
13additional contributions required after December 31, 1969 for
14the purpose of the automatic increases for not less than the
15equivalent of one full year. If an employee becomes an
16annuitant before his additional contributions equal one full
17year's contributions based on his salary at the date of
18retirement, the employee may pay the necessary balance of the
19contributions to the system, without interest, and be eligible
20for the increasing annuity authorized by this Section.
21    (c) The provisions of subsection (a) of this Section shall
22not be applicable to any annuitant who is on retirement on
23December 31, 1969, and thereafter returns to State service,
24unless the member has established at least one year of
25additional creditable service following reentry into service.
26    (d) In addition to other increases which may be provided by

 

 

SB0035- 98 -LRB098 05472 JDS 35506 b

1this Section, on January 1, 1981 any annuitant who was
2receiving a retirement annuity on or before January 1, 1971
3shall have his retirement annuity then being paid increased $1
4per month for each year of creditable service. On January 1,
51982, any annuitant who began receiving a retirement annuity on
6or before January 1, 1977, shall have his retirement annuity
7then being paid increased $1 per month for each year of
8creditable service.
9    On January 1, 1987, any annuitant who began receiving a
10retirement annuity on or before January 1, 1977, shall have the
11monthly retirement annuity increased by an amount equal to 8
12per year of creditable service times the number of years that
13have elapsed since the annuity began.
14    (e) Every person who receives the alternative retirement
15annuity under Section 14-110 and who is eligible to receive the
163% increase under subsection (a) on January 1, 1986, shall also
17receive on that date a one-time increase in retirement annuity
18equal to the difference between (1) his actual retirement
19annuity on that date, including any increases received under
20subsection (a), and (2) the amount of retirement annuity he
21would have received on that date if the amendments to
22subsection (a) made by Public Act 84-162 had been in effect
23since the date of his retirement.
24(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
2592-651, eff. 7-11-02.)
 

 

 

SB0035- 99 -LRB098 05472 JDS 35506 b

1    (40 ILCS 5/14-131)
2    Sec. 14-131. Contributions by State.
3    (a) The State shall make contributions to the System by
4appropriations of amounts which, together with other employer
5contributions from trust, federal, and other funds, employee
6contributions, investment income, and other income, will be
7sufficient to meet the cost of maintaining and administering
8the System on a 100% 90% funded basis in accordance with
9actuarial recommendations by the end of State fiscal year 2043.
10    For the purposes of this Section and Section 14-135.08,
11references to State contributions refer only to employer
12contributions and do not include employee contributions that
13are picked up or otherwise paid by the State or a department on
14behalf of the employee.
15    (b) The Board shall determine the total amount of State
16contributions required for each fiscal year on the basis of the
17actuarial tables and other assumptions adopted by the Board,
18using the formula in subsection (e).
19    The Board shall also determine a State contribution rate
20for each fiscal year, expressed as a percentage of payroll,
21based on the total required State contribution for that fiscal
22year (less the amount received by the System from
23appropriations under Section 8.12 of the State Finance Act and
24Section 1 of the State Pension Funds Continuing Appropriation
25Act, if any, for the fiscal year ending on the June 30
26immediately preceding the applicable November 15 certification

 

 

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

 

 

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

 

 

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1    (e) For State fiscal years 2014 through 2043, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4equal to the sum of (1) the State's portion of the projected
5normal cost for that fiscal year, plus (2) an amount sufficient
6to bring the total assets of the System up to 100% of the total
7actuarial liabilities of the System by the end of State fiscal
8year 2043. In making these determinations, the required State
9contribution shall be calculated each year as a level
10percentage of payroll over the years remaining to and including
11fiscal year 2043 and shall be determined under the projected
12unit credit actuarial cost method.
13For State fiscal years 2012 and 2013 through 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 90% of
17the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of payroll over the years remaining to and
21including fiscal year 2045 and shall be determined under the
22projected unit credit actuarial cost method.
23    For State fiscal years 1996 through 2005, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26so that by State fiscal year 2011, the State is contributing at

 

 

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1the rate required under this Section; except that (i) for State
2fiscal year 1998, for all purposes of this Code and any other
3law of this State, the certified percentage of the applicable
4employee payroll shall be 5.052% for employees earning eligible
5creditable service under Section 14-110 and 6.500% for all
6other employees, notwithstanding any contrary certification
7made under Section 14-135.08 before the effective date of this
8amendatory Act of 1997, and (ii) in the following specified
9State fiscal years, the State contribution to the System shall
10not be less than the following indicated percentages of the
11applicable employee payroll, even if the indicated percentage
12will produce a State contribution in excess of the amount
13otherwise required under this subsection and subsection (a):
149.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
152002; 10.6% in FY 2003; and 10.8% in FY 2004.
16    Notwithstanding any other provision of this Article, the
17total required State contribution to the System for State
18fiscal year 2006 is $203,783,900.
19    Notwithstanding any other provision of this Article, the
20total required State contribution to the System for State
21fiscal year 2007 is $344,164,400.
22    For each of State fiscal years 2008 through 2009, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25from the required State contribution for State fiscal year
262007, so that by State fiscal year 2011, the State is

 

 

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1contributing at the rate otherwise required under this Section.
2    Notwithstanding any other provision of this Article, the
3total required State General Revenue Fund contribution for
4State fiscal year 2010 is $723,703,100 and shall be made from
5the proceeds of bonds sold in fiscal year 2010 pursuant to
6Section 7.2 of the General Obligation Bond Act, less (i) the
7pro rata share of bond sale expenses determined by the System's
8share of total bond proceeds, (ii) any amounts received from
9the General Revenue Fund in fiscal year 2010, and (iii) any
10reduction in bond proceeds due to the issuance of discounted
11bonds, if applicable.
12    Notwithstanding any other provision of this Article, the
13total required State General Revenue Fund contribution for
14State fiscal year 2011 is the amount recertified by the System
15on or before April 1, 2011 pursuant to Section 14-135.08 and
16shall be made from the proceeds of bonds sold in fiscal year
172011 pursuant to Section 7.2 of the General Obligation Bond
18Act, less (i) the pro rata share of bond sale expenses
19determined by the System's share of total bond proceeds, (ii)
20any amounts received from the General Revenue Fund in fiscal
21year 2011, and (iii) any reduction in bond proceeds due to the
22issuance of discounted bonds, if applicable.
23    Beginning in State fiscal year 2044, the minimum State
24contribution for each fiscal year shall be the amount needed to
25maintain the total assets of the System at 100% of the total
26actuarial liabilities of the System.

 

 

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1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 100% 90%. A reference in this Article
14to the "required State contribution" or any substantially
15similar term does not include or apply to any amounts payable
16to the System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 and each fiscal year thereafter through State
20fiscal year 2013, as calculated under this Section and
21certified under Section 14-135.08, shall not exceed an amount
22equal to (i) the amount of the required State contribution that
23would have been calculated under this Section for that fiscal
24year if the System had not received any payments under
25subsection (d) of Section 7.2 of the General Obligation Bond
26Act, minus (ii) the portion of the State's total debt service

 

 

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1payments for that fiscal year on the bonds issued in fiscal
2year 2003 for the purposes of that Section 7.2, as determined
3and certified by the Comptroller, that is the same as the
4System's portion of the total moneys distributed under
5subsection (d) of Section 7.2 of the General Obligation Bond
6Act. In determining this maximum for State fiscal years 2008
7through 2010, however, the amount referred to in item (i) shall
8be increased, as a percentage of the applicable employee
9payroll, in equal increments calculated from the sum of the
10required State contribution for State fiscal year 2007 plus the
11applicable portion of the State's total debt service payments
12for fiscal year 2007 on the bonds issued in fiscal year 2003
13for the purposes of Section 7.2 of the General Obligation Bond
14Act, so that, by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    (f) After the submission of all payments for eligible
17employees from personal services line items in fiscal year 2004
18have been made, the Comptroller shall provide to the System a
19certification of the sum of all fiscal year 2004 expenditures
20for personal services that would have been covered by payments
21to the System under this Section if the provisions of this
22amendatory Act of the 93rd General Assembly had not been
23enacted. Upon receipt of the certification, the System shall
24determine the amount due to the System based on the full rate
25certified by the Board under Section 14-135.08 for fiscal year
262004 in order to meet the State's obligation under this

 

 

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1Section. The System shall compare this amount due to the amount
2received by the System in fiscal year 2004 through payments
3under this Section and under Section 6z-61 of the State Finance
4Act. If the amount due is more than the amount received, the
5difference shall be termed the "Fiscal Year 2004 Shortfall" for
6purposes of this Section, and the Fiscal Year 2004 Shortfall
7shall be satisfied under Section 1.2 of the State Pension Funds
8Continuing Appropriation Act. If the amount due is less than
9the amount received, the difference shall be termed the "Fiscal
10Year 2004 Overpayment" for purposes of this Section, and the
11Fiscal Year 2004 Overpayment shall be repaid by the System to
12the Pension Contribution Fund as soon as practicable after the
13certification.
14    (g) For purposes of determining the required State
15contribution to the System, the value of the System's assets
16shall be equal to the actuarial value of the System's assets,
17which shall be calculated as follows:
18    As of June 30, 2008, the actuarial value of the System's
19assets shall be equal to the market value of the assets as of
20that date. In determining the actuarial value of the System's
21assets for fiscal years after June 30, 2008, any actuarial
22gains or losses from investment return incurred in a fiscal
23year shall be recognized in equal annual amounts over the
245-year period following that fiscal year.
25    (h) For purposes of determining the required State
26contribution to the System for a particular year, the actuarial

 

 

SB0035- 108 -LRB098 05472 JDS 35506 b

1value of assets shall be assumed to earn a rate of return equal
2to the System's actuarially assumed rate of return.
3    (i) After the submission of all payments for eligible
4employees from personal services line items paid from the
5General Revenue Fund in fiscal year 2010 have been made, the
6Comptroller shall provide to the System a certification of the
7sum of all fiscal year 2010 expenditures for personal services
8that would have been covered by payments to the System under
9this Section if the provisions of this amendatory Act of the
1096th General Assembly had not been enacted. Upon receipt of the
11certification, the System shall determine the amount due to the
12System based on the full rate certified by the Board under
13Section 14-135.08 for fiscal year 2010 in order to meet the
14State's obligation under this Section. The System shall compare
15this amount due to the amount received by the System in fiscal
16year 2010 through payments under this Section. If the amount
17due is more than the amount received, the difference shall be
18termed the "Fiscal Year 2010 Shortfall" for purposes of this
19Section, and the Fiscal Year 2010 Shortfall shall be satisfied
20under Section 1.2 of the State Pension Funds Continuing
21Appropriation Act. If the amount due is less than the amount
22received, the difference shall be termed the "Fiscal Year 2010
23Overpayment" for purposes of this Section, and the Fiscal Year
242010 Overpayment shall be repaid by the System to the General
25Revenue Fund as soon as practicable after the certification.
26    (j) After the submission of all payments for eligible

 

 

SB0035- 109 -LRB098 05472 JDS 35506 b

1employees from personal services line items paid from the
2General Revenue Fund in fiscal year 2011 have been made, the
3Comptroller shall provide to the System a certification of the
4sum of all fiscal year 2011 expenditures for personal services
5that would have been covered by payments to the System under
6this Section if the provisions of this amendatory Act of the
796th General Assembly had not been enacted. Upon receipt of the
8certification, the System shall determine the amount due to the
9System based on the full rate certified by the Board under
10Section 14-135.08 for fiscal year 2011 in order to meet the
11State's obligation under this Section. The System shall compare
12this amount due to the amount received by the System in fiscal
13year 2011 through payments under this Section. If the amount
14due is more than the amount received, the difference shall be
15termed the "Fiscal Year 2011 Shortfall" for purposes of this
16Section, and the Fiscal Year 2011 Shortfall shall be satisfied
17under Section 1.2 of the State Pension Funds Continuing
18Appropriation Act. If the amount due is less than the amount
19received, the difference shall be termed the "Fiscal Year 2011
20Overpayment" for purposes of this Section, and the Fiscal Year
212011 Overpayment shall be repaid by the System to the General
22Revenue Fund as soon as practicable after the certification.
23    (k) For fiscal years 2012 and 2013 only, after the
24submission of all payments for eligible employees from personal
25services line items paid from the General Revenue Fund in the
26fiscal year have been made, the Comptroller shall provide to

 

 

SB0035- 110 -LRB098 05472 JDS 35506 b

1the System a certification of the sum of all expenditures in
2the fiscal year for personal services. Upon receipt of the
3certification, the System shall determine the amount due to the
4System based on the full rate certified by the Board under
5Section 14-135.08 for the fiscal year in order to meet the
6State's obligation under this Section. The System shall compare
7this amount due to the amount received by the System for the
8fiscal year. If the amount due is more than the amount
9received, the difference shall be termed the "Prior Fiscal Year
10Shortfall" for purposes of this Section, and the Prior Fiscal
11Year Shortfall shall be satisfied under Section 1.2 of the
12State Pension Funds Continuing Appropriation Act. If the amount
13due is less than the amount received, the difference shall be
14termed the "Prior Fiscal Year Overpayment" for purposes of this
15Section, and the Prior Fiscal Year Overpayment shall be repaid
16by the System to the General Revenue Fund as soon as
17practicable after the certification.
18(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1996-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
201-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
21eff. 6-30-12.)
 
22    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
23    Sec. 14-132. Obligations of State; funding guarantee.
24    (a) The payment of the required department contributions,
25all allowances, annuities, benefits granted under this

 

 

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

 

 

SB0035- 112 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 113 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 114 -LRB098 05472 JDS 35506 b

1    11.5% in 2004 and thereafter.
2    (a-5) In addition to the contributions otherwise required
3under this Article, each Tier I member shall also make the
4following contributions for retirement annuity from each
5payment of compensation:
6        (1) beginning July 1, 2013 and through June 30, 2014,
7    1% of compensation; and
8        (2) beginning on July 1, 2014, 2% of compensation.
9    (b) Contributions shall be in the form of a deduction from
10compensation and shall be made notwithstanding that the
11compensation paid in cash to the employee shall be reduced
12thereby below the minimum prescribed by law or regulation. Each
13member is deemed to consent and agree to the deductions from
14compensation provided for in this Article, and shall receipt in
15full for salary or compensation.
16(Source: P.A. 92-14, eff. 6-28-01.)
 
17    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
18    Sec. 14-135.08. To certify required State contributions.
19    (a) To certify to the Governor and to each department, on
20or before November 15 of each year through until November 15,
212011, the required rate for State contributions to the System
22for the next State fiscal year, as determined under subsection
23(b) of Section 14-131. The certification to the Governor under
24this subsection (a) shall include a copy of the actuarial
25recommendations upon which the rate is based and shall

 

 

SB0035- 115 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 116 -LRB098 05472 JDS 35506 b

1    (b) The certifications under subsections (a) and (a-5)
2shall include an additional amount necessary to pay all
3principal of and interest on those general obligation bonds due
4the next fiscal year authorized by Section 7.2(a) of the
5General Obligation Bond Act and issued to provide the proceeds
6deposited by the State with the System in July 2003,
7representing deposits other than amounts reserved under
8Section 7.2(c) of the General Obligation Bond Act. For State
9fiscal year 2005, the Board shall make a supplemental
10certification of the additional amount necessary to pay all
11principal of and interest on those general obligation bonds due
12in State fiscal years 2004 and 2005 authorized by Section
137.2(a) of the General Obligation Bond Act and issued to provide
14the proceeds deposited by the State with the System in July
152003, representing deposits other than amounts reserved under
16Section 7.2(c) of the General Obligation Bond Act, as soon as
17practical after the effective date of this amendatory Act of
18the 93rd General Assembly.
19    On or before May 1, 2004, the Board shall recalculate and
20recertify to the Governor and to each department the amount of
21the required State contribution to the System and the required
22rates for State contributions to the System for State fiscal
23year 2005, taking into account the amounts appropriated to and
24received by the System under subsection (d) of Section 7.2 of
25the General Obligation Bond Act.
26    On or before July 1, 2005, the Board shall recalculate and

 

 

SB0035- 117 -LRB098 05472 JDS 35506 b

1recertify to the Governor and to each department the amount of
2the required State contribution to the System and the required
3rates for State contributions to the System for State fiscal
4year 2006, taking into account the changes in required State
5contributions made by this amendatory Act of the 94th General
6Assembly.
7    On or before April 1, 2011, the Board shall recalculate and
8recertify to the Governor and to each department the amount of
9the required State contribution to the System for State fiscal
10year 2011, applying the changes made by Public Act 96-889 to
11the System's assets and liabilities as of June 30, 2009 as
12though Public Act 96-889 was approved on that date.
13    On or before July 1, 2013, the Board shall, if necessary,
14recalculate and recertify to the Governor the amount of the
15required State contribution to the System for State fiscal year
162014, taking into account the changes in required State
17contributions made by this amendatory Act of the 98th General
18Assembly.
19(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2097-694, eff. 6-18-12.)
 
21    (40 ILCS 5/14-152.1)
22    Sec. 14-152.1. Application and expiration of new benefit
23increases.
24    (a) As used in this Section, "new benefit increase" means
25an increase in the amount of any benefit provided under this

 

 

SB0035- 118 -LRB098 05472 JDS 35506 b

1Article, or an expansion of the conditions of eligibility for
2any benefit under this Article, that results from an amendment
3to this Code that takes effect after June 1, 2005 (the
4effective date of Public Act 94-4). "New benefit increase",
5however, does not include any benefit increase resulting from
6the changes made to this Article by Public Act 96-37 or by this
7amendatory Act of the 98th 96th General Assembly.
8    (b) Notwithstanding any other provision of this Code or any
9subsequent amendment to this Code, every new benefit increase
10is subject to this Section and shall be deemed to be granted
11only in conformance with and contingent upon compliance with
12the provisions of this Section.
13    (c) The Public Act enacting a new benefit increase must
14identify and provide for payment to the System of additional
15funding at least sufficient to fund the resulting annual
16increase in cost to the System as it accrues.
17    Every new benefit increase is contingent upon the General
18Assembly providing the additional funding required under this
19subsection. The Commission on Government Forecasting and
20Accountability shall analyze whether adequate additional
21funding has been provided for the new benefit increase and
22shall report its analysis to the Public Pension Division of the
23Department of Financial and Professional Regulation. A new
24benefit increase created by a Public Act that does not include
25the additional funding required under this subsection is null
26and void. If the Public Pension Division determines that the

 

 

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1additional funding provided for a new benefit increase under
2this subsection is or has become inadequate, it may so certify
3to the Governor and the State Comptroller and, in the absence
4of corrective action by the General Assembly, the new benefit
5increase shall expire at the end of the fiscal year in which
6the certification is made.
7    (d) Every new benefit increase shall expire 5 years after
8its effective date or on such earlier date as may be specified
9in the language enacting the new benefit increase or provided
10under subsection (c). This does not prevent the General
11Assembly from extending or re-creating a new benefit increase
12by law.
13    (e) Except as otherwise provided in the language creating
14the new benefit increase, a new benefit increase that expires
15under this Section continues to apply to persons who applied
16and qualified for the affected benefit while the new benefit
17increase was in effect and to the affected beneficiaries and
18alternate payees of such persons, but does not apply to any
19other person, including without limitation a person who
20continues in service after the expiration date and did not
21apply and qualify for the affected benefit while the new
22benefit increase was in effect.
23(Source: P.A. 96-37, eff. 7-13-09.)
 
24    (40 ILCS 5/15-107.1 new)
25    Sec. 15-107.1. Tier I participant. "Tier I participant": A

 

 

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1participant under this Article, other than a participant in the
2self-managed plan under Section 15-158.2, who first became a
3member or participant before January 1, 2011 under any
4reciprocal retirement system or pension fund established under
5this Code other than a retirement system or pension fund
6established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
7    (40 ILCS 5/15-107.2 new)
8    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
9Tier I participant who is receiving a retirement annuity.
10    A person does not become a Tier I retiree by virtue of
11receiving a reversionary, survivors, beneficiary, or
12disability annuity.
 
13    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
14    Sec. 15-111. Earnings. "Earnings": An amount paid for
15personal services equal to the sum of the basic compensation
16plus extra compensation for summer teaching, overtime or other
17extra service. For periods for which an employee receives
18service credit under subsection (c) of Section 15-113.1 or
19Section 15-113.2, earnings are equal to the basic compensation
20on which contributions are paid by the employee during such
21periods. Compensation for employment which is irregular,
22intermittent and temporary shall not be considered earnings,
23unless the participant is also receiving earnings from the
24employer as an employee under Section 15-107.

 

 

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1    With respect to transition pay paid by the University of
2Illinois to a person who was a participating employee employed
3in the fire department of the University of Illinois's
4Champaign-Urbana campus immediately prior to the elimination
5of that fire department:
6        (1) "Earnings" includes transition pay paid to the
7    employee on or after the effective date of this amendatory
8    Act of the 91st General Assembly.
9        (2) "Earnings" includes transition pay paid to the
10    employee before the effective date of this amendatory Act
11    of the 91st General Assembly only if (i) employee
12    contributions under Section 15-157 have been withheld from
13    that transition pay or (ii) the employee pays to the System
14    before January 1, 2001 an amount representing employee
15    contributions under Section 15-157 on that transition pay.
16    Employee contributions under item (ii) may be paid in a
17    lump sum, by withholding from additional transition pay
18    accruing before January 1, 2001, or in any other manner
19    approved by the System. Upon payment of the employee
20    contributions on transition pay, the corresponding
21    employer contributions become an obligation of the State.
22    Notwithstanding any other provision of this Code, the
23earnings of a Tier I participant for the purposes of this Code
24shall not exceed, for periods of service on or after the
25effective date of this amendatory Act of the 98th General
26Assembly, the annual contribution and benefit base established

 

 

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1for the applicable year by the Commissioner of Social Security
2under the federal Social Security Act; except that this
3limitation does not apply to a participant's earnings that are
4determined under an employment contract or collective
5bargaining agreement that is in effect on the effective date of
6this amendatory Act of the 98th General Assembly and has not
7been amended or renewed after that date.
8(Source: P.A. 91-887, eff. 7-6-00.)
 
9    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
10    Sec. 15-113.6. Service for employment in public schools.
11"Service for employment in public schools": Includes those
12periods not exceeding the lesser of 10 years or 2/3 of the
13service granted under other Sections of this Article dealing
14with service credit, during which a person who entered the
15system after September 1, 1974 was employed full time by a
16public common school, public college and public university, or
17by an agency or instrumentality of any of the foregoing, of any
18state, territory, dependency or possession of the United States
19of America, including the Philippine Islands, or a school
20operated by or under the auspices of any agency or department
21of any other state, if the person (1) cannot qualify for a
22retirement pension or other benefit based upon employer
23contributions from another retirement system, exclusive of
24federal social security, based in whole or in part upon this
25employment, and (2) pays the lesser of (A) an amount equal to

 

 

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18% of his or her annual basic compensation on the date of
2becoming a participating employee subsequent to this service
3multiplied by the number of years of such service, together
4with compound interest from the date participation begins to
5the date payment is received by the board at the rate of 6% per
6annum through August 31, 1982, and at the effective rates after
7that date, and (B) 50% of the actuarial value of the increase
8in the retirement annuity provided by this service, and (3)
9contributes for at least 5 years subsequent to this employment
10to one or more of the following systems: the State Universities
11Retirement System, the Teachers' Retirement System of the State
12of Illinois, and the Public School Teachers' Pension and
13Retirement Fund of Chicago.
14    The service granted under this Section shall not be
15considered in determining whether the person has the minimum
16number of 8 years of service required to qualify for a
17retirement annuity at age 55 or the 5 years of service required
18to qualify for a retirement annuity at age 62, as provided in
19Section 15-135, or the 10 years required by subsection (c) of
20Section 1-160 for a person who first becomes a participant on
21or after January 1, 2011. The maximum allowable service of 10
22years for this governmental employment shall be reduced by the
23service credit which is validated under paragraph (2) of
24subsection (b) of Section 16-127 and paragraph 1 of Section
2517-133.
26(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/15-113.7)  (from Ch. 108 1/2, par. 15-113.7)
2    Sec. 15-113.7. Service for other public employment.
3"Service for other public employment": Includes those periods
4not exceeding the lesser of 10 years or 2/3 of the service
5granted under other Sections of this Article dealing with
6service credit, during which a person was employed full time by
7the United States government, or by the government of a state,
8or by a political subdivision of a state, or by an agency or
9instrumentality of any of the foregoing, if the person (1)
10cannot qualify for a retirement pension or other benefit based
11upon employer contributions from another retirement system,
12exclusive of federal social security, based in whole or in part
13upon this employment, and (2) pays the lesser of (A) an amount
14equal to 8% of his or her annual basic compensation on the date
15of becoming a participating employee subsequent to this service
16multiplied by the number of years of such service, together
17with compound interest from the date participation begins to
18the date payment is received by the board at the rate of 6% per
19annum through August 31, 1982, and at the effective rates after
20that date, and (B) 50% of the actuarial value of the increase
21in the retirement annuity provided by this service, and (3)
22contributes for at least 5 years subsequent to this employment
23to one or more of the following systems: the State Universities
24Retirement System, the Teachers' Retirement System of the State
25of Illinois, and the Public School Teachers' Pension and

 

 

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1Retirement Fund of Chicago. If a function of a governmental
2unit as defined by Section 20-107 is transferred by law, in
3whole or in part to an employer, and an employee transfers
4employment from this governmental unit to such employer within
56 months of the transfer of the function, the payment for
6service authorized under this Section shall not exceed the
7amount which would have been payable for this service to the
8retirement system covering the governmental unit from which the
9function was transferred.
10    The service granted under this Section shall not be
11considered in determining whether the person has the minimum
12number of 8 years of service required to qualify for a
13retirement annuity at age 55 or the 5 years of service required
14to qualify for a retirement annuity at age 62, as provided in
15Section 15-135. The maximum allowable service of 10 years for
16this governmental employment shall be reduced by the service
17credit which is validated under paragraph (2) of subsection (b)
18of Section 16-127 and paragraph one of Section 17-133.
19    Except as hereinafter provided, this Section shall not
20apply to persons who become participants in the system after
21September 1, 1974.
22(Source: P.A. 95-83, eff. 8-13-07.)
 
23    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
24    Sec. 15-135. Retirement annuities - Conditions.
25    (a) A participant who retires in one of the following

 

 

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1specified years with the specified amount of service is
2entitled to a retirement annuity at any age under the
3retirement program applicable to the participant:
4        35 years if retirement is in 1997 or before;
5        34 years if retirement is in 1998;
6        33 years if retirement is in 1999;
7        32 years if retirement is in 2000;
8        31 years if retirement is in 2001;
9        30 years if retirement is in 2002 or later.
10    A participant with 8 or more years of service after
11September 1, 1941, is entitled to a retirement annuity on or
12after attainment of age 55.
13    A participant with at least 5 but less than 8 years of
14service after September 1, 1941, is entitled to a retirement
15annuity on or after attainment of age 62.
16    A participant who has at least 25 years of service in this
17system as a police officer or firefighter is entitled to a
18retirement annuity on or after the attainment of age 50, if
19Rule 4 of Section 15-136 is applicable to the participant.
20    (a-5) Notwithstanding subsection (a) of this Section, for a
21Tier I participant who begins receiving a retirement annuity
22under this Article after July 1, 2013:
23        (1) If the Tier I participant is at least 45 years old
24    on the effective date of this amendatory Act of the 98th
25    General Assembly, then the references to age 50, 55, and 62
26    in subsection (a) of this Section remain unchanged.

 

 

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1        (2) If the Tier I participant is at least 40 but less
2    than 45 years old on the effective date of this amendatory
3    Act of the 98th General Assembly, then the references to
4    age 50, 55, and 62 in subsection (a) of this Section are
5    increased by one year.
6        (3) If the Tier I participant is at least 35 but less
7    than 40 years old on the effective date of this amendatory
8    Act of the 98th General Assembly, then the references to
9    age 50, 55, and 62 in subsection (a) of this Section are
10    increased by 3 years.
11        (4) If the Tier I participant is less than 35 years old
12    on the effective date of this amendatory Act of the 98th
13    General Assembly, then the references to age 50, 55, and 62
14    in subsection (a) of this Section are increased by 5 years.
15    Notwithstanding Section 1-103.1, this subsection (a-5)
16applies without regard to whether or not the Tier I participant
17is in active service under this Article on or after the
18effective date of this amendatory Act of the 98th General
19Assembly.
20    (b) The annuity payment period shall begin on the date
21specified by the participant or the recipient of a disability
22retirement annuity submitting a written application, which
23date shall not be prior to termination of employment or more
24than one year before the application is received by the board;
25however, if the participant is not an employee of an employer
26participating in this System or in a participating system as

 

 

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1defined in Article 20 of this Code on April 1 of the calendar
2year next following the calendar year in which the participant
3attains age 70 1/2, the annuity payment period shall begin on
4that date regardless of whether an application has been filed.
5    (c) An annuity is not payable if the amount provided under
6Section 15-136 is less than $10 per month.
7(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
8    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
9    Sec. 15-136. Retirement annuities - Amount. The provisions
10of this Section 15-136 apply only to those participants who are
11participating in the traditional benefit package or the
12portable benefit package and do not apply to participants who
13are participating in the self-managed plan.
14    (a) The amount of a participant's retirement annuity,
15expressed in the form of a single-life annuity, shall be
16determined by whichever of the following rules is applicable
17and provides the largest annuity:
18    Rule 1: The retirement annuity shall be 1.67% of final rate
19of earnings for each of the first 10 years of service, 1.90%
20for each of the next 10 years of service, 2.10% for each year
21of service in excess of 20 but not exceeding 30, and 2.30% for
22each year in excess of 30; or for persons who retire on or
23after January 1, 1998, 2.2% of the final rate of earnings for
24each year of service.
25    Rule 2: The retirement annuity shall be the sum of the

 

 

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1following, determined from amounts credited to the participant
2in accordance with the actuarial tables and the effective rate
3of interest in effect at the time the retirement annuity
4begins:
5        (i) the normal annuity which can be provided on an
6    actuarially equivalent basis, by the accumulated normal
7    contributions as of the date the annuity begins;
8        (ii) an annuity from employer contributions of an
9    amount equal to that which can be provided on an
10    actuarially equivalent basis from the accumulated normal
11    contributions made by the participant under Section
12    15-113.6 and Section 15-113.7 plus 1.4 times all other
13    accumulated normal contributions made by the participant;
14    and
15        (iii) the annuity that can be provided on an
16    actuarially equivalent basis from the entire contribution
17    made by the participant under Section 15-113.3.
18    For the purpose of calculating an annuity under this Rule
192, the contribution required under subsection (c-5) of Section
2015-157 shall not be considered when determining the
21participant's accumulated normal contributions under clause
22(i) or the employer contribution under clause (ii).
23    With respect to a police officer or firefighter who retires
24on or after August 14, 1998, the accumulated normal
25contributions taken into account under clauses (i) and (ii) of
26this Rule 2 shall include the additional normal contributions

 

 

SB0035- 130 -LRB098 05472 JDS 35506 b

1made by the police officer or firefighter under Section
215-157(a).
3    The amount of a retirement annuity calculated under this
4Rule 2 shall be computed solely on the basis of the
5participant's accumulated normal contributions, as specified
6in this Rule and defined in Section 15-116. Neither an employee
7or employer contribution for early retirement under Section
815-136.2 nor any other employer contribution shall be used in
9the calculation of the amount of a retirement annuity under
10this Rule 2.
11    This amendatory Act of the 91st General Assembly is a
12clarification of existing law and applies to every participant
13and annuitant without regard to whether status as an employee
14terminates before the effective date of this amendatory Act.
15    This Rule 2 does not apply to a person who first becomes an
16employee under this Article on or after July 1, 2005.
17    Rule 3: The retirement annuity of a participant who is
18employed at least one-half time during the period on which his
19or her final rate of earnings is based, shall be equal to the
20participant's years of service not to exceed 30, multiplied by
21(1) $96 if the participant's final rate of earnings is less
22than $3,500, (2) $108 if the final rate of earnings is at least
23$3,500 but less than $4,500, (3) $120 if the final rate of
24earnings is at least $4,500 but less than $5,500, (4) $132 if
25the final rate of earnings is at least $5,500 but less than
26$6,500, (5) $144 if the final rate of earnings is at least

 

 

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1$6,500 but less than $7,500, (6) $156 if the final rate of
2earnings is at least $7,500 but less than $8,500, (7) $168 if
3the final rate of earnings is at least $8,500 but less than
4$9,500, and (8) $180 if the final rate of earnings is $9,500 or
5more, except that the annuity for those persons having made an
6election under Section 15-154(a-1) shall be calculated and
7payable under the portable retirement benefit program pursuant
8to the provisions of Section 15-136.4.
9    Rule 4: A participant who is at least age 50 and has 25 or
10more years of service as a police officer or firefighter, and a
11participant who is age 55 or over and has at least 20 but less
12than 25 years of service as a police officer or firefighter,
13shall be entitled to a retirement annuity of 2 1/4% of the
14final rate of earnings for each of the first 10 years of
15service as a police officer or firefighter, 2 1/2% for each of
16the next 10 years of service as a police officer or
17firefighter, and 2 3/4% for each year of service as a police
18officer or firefighter in excess of 20. The retirement annuity
19for all other service shall be computed under Rule 1.
20    For purposes of this Rule 4, a participant's service as a
21firefighter shall also include the following:
22        (i) service that is performed while the person is an
23    employee under subsection (h) of Section 15-107; and
24        (ii) in the case of an individual who was a
25    participating employee employed in the fire department of
26    the University of Illinois's Champaign-Urbana campus

 

 

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1    immediately prior to the elimination of that fire
2    department and who immediately after the elimination of
3    that fire department transferred to another job with the
4    University of Illinois, service performed as an employee of
5    the University of Illinois in a position other than police
6    officer or firefighter, from the date of that transfer
7    until the employee's next termination of service with the
8    University of Illinois.
9    Rule 5: The retirement annuity of a participant who elected
10early retirement under the provisions of Section 15-136.2 and
11who, on or before February 16, 1995, brought administrative
12proceedings pursuant to the administrative rules adopted by the
13System to challenge the calculation of his or her retirement
14annuity shall be the sum of the following, determined from
15amounts credited to the participant in accordance with the
16actuarial tables and the prescribed rate of interest in effect
17at the time the retirement annuity begins:
18        (i) the normal annuity which can be provided on an
19    actuarially equivalent basis, by the accumulated normal
20    contributions as of the date the annuity begins; and
21        (ii) an annuity from employer contributions of an
22    amount equal to that which can be provided on an
23    actuarially equivalent basis from the accumulated normal
24    contributions made by the participant under Section
25    15-113.6 and Section 15-113.7 plus 1.4 times all other
26    accumulated normal contributions made by the participant;

 

 

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1    and
2        (iii) an annuity which can be provided on an
3    actuarially equivalent basis from the employee
4    contribution for early retirement under Section 15-136.2,
5    and an annuity from employer contributions of an amount
6    equal to that which can be provided on an actuarially
7    equivalent basis from the employee contribution for early
8    retirement under Section 15-136.2.
9    In no event shall a retirement annuity under this Rule 5 be
10lower than the amount obtained by adding (1) the monthly amount
11obtained by dividing the combined employee and employer
12contributions made under Section 15-136.2 by the System's
13annuity factor for the age of the participant at the beginning
14of the annuity payment period and (2) the amount equal to the
15participant's annuity if calculated under Rule 1, reduced under
16Section 15-136(b) as if no contributions had been made under
17Section 15-136.2.
18    With respect to a participant who is qualified for a
19retirement annuity under this Rule 5 whose retirement annuity
20began before the effective date of this amendatory Act of the
2191st General Assembly, and for whom an employee contribution
22was made under Section 15-136.2, the System shall recalculate
23the retirement annuity under this Rule 5 and shall pay any
24additional amounts due in the manner provided in Section
2515-186.1 for benefits mistakenly set too low.
26    The amount of a retirement annuity calculated under this

 

 

SB0035- 134 -LRB098 05472 JDS 35506 b

1Rule 5 shall be computed solely on the basis of those
2contributions specifically set forth in this Rule 5. Except as
3provided in clause (iii) of this Rule 5, neither an employee
4nor employer contribution for early retirement under Section
515-136.2, nor any other employer contribution, shall be used in
6the calculation of the amount of a retirement annuity under
7this Rule 5.
8    The General Assembly has adopted the changes set forth in
9Section 25 of this amendatory Act of the 91st General Assembly
10in recognition that the decision of the Appellate Court for the
11Fourth District in Mattis v. State Universities Retirement
12System et al. might be deemed to give some right to the
13plaintiff in that case. The changes made by Section 25 of this
14amendatory Act of the 91st General Assembly are a legislative
15implementation of the decision of the Appellate Court for the
16Fourth District in Mattis v. State Universities Retirement
17System et al. with respect to that plaintiff.
18    The changes made by Section 25 of this amendatory Act of
19the 91st General Assembly apply without regard to whether the
20person is in service as an employee on or after its effective
21date.
22    (b) The retirement annuity provided under Rules 1 and 3
23above shall be reduced by 1/2 of 1% for each month the
24participant is under age 60 at the time of retirement. However,
25this reduction shall not apply in the following cases:
26        (1) For a disabled participant whose disability

 

 

SB0035- 135 -LRB098 05472 JDS 35506 b

1    benefits have been discontinued because he or she has
2    exhausted eligibility for disability benefits under clause
3    (6) of Section 15-152;
4        (2) For a participant who has at least the number of
5    years of service required to retire at any age under
6    subsection (a) of Section 15-135; or
7        (3) For that portion of a retirement annuity which has
8    been provided on account of service of the participant
9    during periods when he or she performed the duties of a
10    police officer or firefighter, if these duties were
11    performed for at least 5 years immediately preceding the
12    date the retirement annuity is to begin.
13    (c) The maximum retirement annuity provided under Rules 1,
142, 4, and 5 shall be the lesser of (1) the annual limit of
15benefits as specified in Section 415 of the Internal Revenue
16Code of 1986, as such Section may be amended from time to time
17and as such benefit limits shall be adjusted by the
18Commissioner of Internal Revenue, and (2) 80% of final rate of
19earnings.
20    (d) Subject to the provisions of subsections (d-1) and
21(d-2), an An annuitant whose status as an employee terminates
22after August 14, 1969 shall receive automatic increases in his
23or her retirement annuity as follows:
24    Effective January 1 immediately following the date the
25retirement annuity begins, the annuitant shall receive an
26increase in his or her monthly retirement annuity of 0.125% of

 

 

SB0035- 136 -LRB098 05472 JDS 35506 b

1the monthly retirement annuity provided under Rule 1, Rule 2,
2Rule 3, Rule 4, or Rule 5, contained in this Section,
3multiplied by the number of full months which elapsed from the
4date the retirement annuity payments began to January 1, 1972,
5plus 0.1667% of such annuity, multiplied by the number of full
6months which elapsed from January 1, 1972, or the date the
7retirement annuity payments began, whichever is later, to
8January 1, 1978, plus 0.25% of such annuity multiplied by the
9number of full months which elapsed from January 1, 1978, or
10the date the retirement annuity payments began, whichever is
11later, to the effective date of the increase.
12    The annuitant shall receive an increase in his or her
13monthly retirement annuity on each January 1 thereafter during
14the annuitant's life of 3% of the monthly annuity provided
15under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
16this Section. The change made under this subsection by P.A.
1781-970 is effective January 1, 1980 and applies to each
18annuitant whose status as an employee terminates before or
19after that date.
20    Beginning January 1, 1990 and except as provided in
21subsections (d-1) and (d-2), all automatic annual increases
22payable under this Section shall be calculated as a percentage
23of the total annuity payable at the time of the increase,
24including all increases previously granted under this Article.
25    The change made in this subsection by P.A. 85-1008 is
26effective January 26, 1988, and is applicable without regard to

 

 

SB0035- 137 -LRB098 05472 JDS 35506 b

1whether status as an employee terminated before that date.
2    (d-1) Notwithstanding any other provision of this Article,
3for a Tier I retiree, the amount of each automatic annual
4increase in retirement annuity occurring on or after the
5effective date of this amendatory Act of the 98th General
6Assembly shall be the lesser of $750 or 3% of the total annuity
7payable at the time of the increase, including previous
8increases granted.
9    (d-2) Notwithstanding any other provision of this Article,
10for a Tier I retiree, the monthly retirement annuity shall
11first be subject to annual increases on the January 1 occurring
12on or next after the attainment of age 67 or the January 1
13occurring on or next after the fifth anniversary of the annuity
14start date, whichever occurs earlier. If on the effective date
15of this amendatory Act of the 98th General Assembly a Tier I
16retiree has already received an annual increase under this
17Section but does not yet meet the new eligibility requirements
18of this subsection, the annual increases already received shall
19continue in force, but no additional annual increase shall be
20granted until the Tier I retiree meets the new eligibility
21requirements.
22    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
23and (d-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.

 

 

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1    (e) If, on January 1, 1987, or the date the retirement
2annuity payment period begins, whichever is later, the sum of
3the retirement annuity provided under Rule 1 or Rule 2 of this
4Section and the automatic annual increases provided under the
5preceding subsection or Section 15-136.1, amounts to less than
6the retirement annuity which would be provided by Rule 3, the
7retirement annuity shall be increased as of January 1, 1987, or
8the date the retirement annuity payment period begins,
9whichever is later, to the amount which would be provided by
10Rule 3 of this Section. Such increased amount shall be
11considered as the retirement annuity in determining benefits
12provided under other Sections of this Article. This paragraph
13applies without regard to whether status as an employee
14terminated before the effective date of this amendatory Act of
151987, provided that the annuitant was employed at least
16one-half time during the period on which the final rate of
17earnings was based.
18    (f) A participant is entitled to such additional annuity as
19may be provided on an actuarially equivalent basis, by any
20accumulated additional contributions to his or her credit.
21However, the additional contributions made by the participant
22toward the automatic increases in annuity provided under this
23Section and the contributions made under subsection (c-5) of
24Section 15-157 by this amendatory Act of the 98th General
25Assembly shall not be taken into account in determining the
26amount of such additional annuity.

 

 

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1    (g) If, (1) by law, a function of a governmental unit, as
2defined by Section 20-107 of this Code, is transferred in whole
3or in part to an employer, and (2) a participant transfers
4employment from such governmental unit to such employer within
56 months after the transfer of the function, and (3) the sum of
6(A) the annuity payable to the participant under Rule 1, 2, or
73 of this Section (B) all proportional annuities payable to the
8participant by all other retirement systems covered by Article
920, and (C) the initial primary insurance amount to which the
10participant is entitled under the Social Security Act, is less
11than the retirement annuity which would have been payable if
12all of the participant's pension credits validated under
13Section 20-109 had been validated under this system, a
14supplemental annuity equal to the difference in such amounts
15shall be payable to the participant.
16    (h) On January 1, 1981, an annuitant who was receiving a
17retirement annuity on or before January 1, 1971 shall have his
18or her retirement annuity then being paid increased $1 per
19month for each year of creditable service. On January 1, 1982,
20an annuitant whose retirement annuity began on or before
21January 1, 1977, shall have his or her retirement annuity then
22being paid increased $1 per month for each year of creditable
23service.
24    (i) On January 1, 1987, any annuitant whose retirement
25annuity began on or before January 1, 1977, shall have the
26monthly retirement annuity increased by an amount equal to 8

 

 

SB0035- 140 -LRB098 05472 JDS 35506 b

1per year of creditable service times the number of years that
2have elapsed since the annuity began.
3    (j) For participants to whom subsection (a-5) of Section
415-135 applies, the references to age 50, 55, and 62 in this
5Section are increased as provided in subsection (a-5) of
6Section 15-135.
7(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
8    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
9    Sec. 15-155. Employer contributions.
10    (a) The State of Illinois shall make contributions by
11appropriations of amounts which, together with the other
12employer contributions from trust, federal, and other funds,
13employee contributions, income from investments, and other
14income of this System, will be sufficient to meet the cost of
15maintaining and administering the System on a 100% 90% funded
16basis in accordance with actuarial recommendations by the end
17of State fiscal year 2043.
18    Beginning with State fiscal year 2014, the State's required
19contributions to the System under subsection (a-1) shall be
20limited to the amounts required to amortize the total cost of
21the benefits of the System arising before July 1, 2013. The
22State shall also pay any employer contributions required from
23the State as the actual employer of participants under this
24Article and any contribution required under subsection (a-20).
25    The Board shall determine the amount of State and employer

 

 

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1contributions required for each fiscal year on the basis of the
2actuarial tables and other assumptions adopted by the Board and
3the recommendations of the actuary, using the formulas provided
4in this Section formula in subsection (a-1).
5    (a-1) For State fiscal years 2014 through 2043, the minimum
6contribution to the System to be made by the State under this
7subsection (a-1) for each fiscal year shall be an amount
8determined by the Board to be sufficient to amortize the
9unfunded accrued liability that is attributable to benefits
10that accrued before July 1, 2013 as a level percentage of
11payroll over the years remaining to and including fiscal year
122043, determined under the projected unit credit actuarial cost
13method.
14    For State fiscal year 2044 and thereafter, the minimum
15contribution to the System to be made by the State under this
16subsection (a-1) for each fiscal year shall be an amount
17determined by the Board to be sufficient to amortize, over a
1830-year rolling amortization period, any unfunded liability
19arising on or after July 1, 2043 that is attributable to
20benefits that accrued before July 1, 2013.
21    For State fiscal years 2012 and 2013 through 2045, the
22minimum contribution to the System to be made by the State for
23each fiscal year shall be an amount determined by the System to
24be sufficient to bring the total assets of the System up to 90%
25of the total actuarial liabilities of the System by the end of
26State fiscal year 2045. In making these determinations, the

 

 

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1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$166,641,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$252,064,100.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$702,514,000 and shall be made from the State Pensions Fund and
25proceeds of bonds sold in fiscal year 2010 pursuant to Section
267.2 of the General Obligation Bond Act, less (i) the pro rata

 

 

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1share of bond sale expenses determined by the System's share of
2total bond proceeds, (ii) any amounts received from the General
3Revenue Fund in fiscal year 2010, (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 15-165 and shall be made from the State
10Pensions Fund and proceeds of bonds sold in fiscal year 2011
11pursuant to Section 7.2 of the General Obligation Bond Act,
12less (i) the pro rata share of bond sale expenses determined by
13the System's share of total bond proceeds, (ii) any amounts
14received from the General Revenue Fund in fiscal year 2011, and
15(iii) any reduction in bond proceeds due to the issuance of
16discounted bonds, if applicable.
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

 

 

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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 Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter through State
10fiscal year 2013, as calculated under this Section and
11certified under Section 15-165, shall not exceed an amount
12equal to (i) the amount of the required State contribution that
13would have been calculated under this Section for that fiscal
14year if the System had not received any payments under
15subsection (d) of Section 7.2 of the General Obligation Bond
16Act, minus (ii) the portion of the State's total debt service
17payments for that fiscal year on the bonds issued in fiscal
18year 2003 for the purposes of that Section 7.2, as determined
19and certified by the Comptroller, that is the same as the
20System's portion of the total moneys distributed under
21subsection (d) of Section 7.2 of the General Obligation Bond
22Act. In determining this maximum for State fiscal years 2008
23through 2010, however, the amount referred to in item (i) shall
24be increased, as a percentage of the applicable employee
25payroll, in equal increments calculated from the sum of the
26required State contribution for State fiscal year 2007 plus the

 

 

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1applicable portion of the State's total debt service payments
2for fiscal year 2007 on the bonds issued in fiscal year 2003
3for the purposes of Section 7.2 of the General Obligation Bond
4Act, so that, by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    (a-10) Subject to the limitations provided in subsection
7(a-15), beginning with State fiscal year 2014, the minimum
8required contribution of each employer under this Article shall
9be sufficient to produce an annual amount equal to:
10        (i) the employer's normal cost for that fiscal year,
11    exclusive of the employer's normal cost that arises from
12    optional employer contributions agreed to by that employer
13    for that fiscal year under Section 1-161; plus
14        (ii) the employer's normal cost for that fiscal year
15    that arises from optional employer contributions agreed to
16    by that employer for that fiscal year under Section 1-161;
17    plus
18        (iii) the amount required for that fiscal year to
19    amortize that employer's portion of the unfunded accrued
20    liability associated with the cost of benefits accrued on
21    or after July 1, 2013 as a level percentage of payroll over
22    a 30-year rolling amortization period, as determined for
23    each employer by the Board.
24    Each employer under this Article shall make these
25contributions in the amounts determined and the manner
26prescribed from time to time by the Board.

 

 

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1    (a-15) The System shall determine the employer's normal
2cost under item (i) of subsection (a-10) as a percentage of
3projected payroll applicable to all employers, based on
4actuarial assumptions applicable to the System as a whole. The
5required employer contribution under item (i) in a fiscal year
6shall not exceed a percentage of payroll determined by
7subtracting 2013 from the applicable fiscal year and
8multiplying the result by 0.5%.
9    The System shall determine the employer's normal cost under
10item (ii) of subsection (a-10) as an additional percentage of
11projected payroll payable by a specific employer, based on the
12optional employer contributions agreed to by that employer for
13that fiscal year under Section 1-161 and the actuarial
14assumptions applicable to the System as a whole.
15    The System shall determine the employer's portion of the
16unfunded accrued liability under item (iii) of subsection
17(a-10) separately for each employer, as a percentage of that
18employer's projected payroll, based on the liabilities
19attributable to that employer arising on or after July 1, 2013
20and the actuarial assumptions applicable to the System as a
21whole.
22    For use in determining the employer's contribution for
23unfunded accrued liability under item (iii), the System shall
24maintain a separate account for each employer. The separate
25account shall be maintained in such form and detail as the
26System determines to be appropriate. The separate account shall

 

 

SB0035- 147 -LRB098 05472 JDS 35506 b

1reflect the following items to the extent that they are
2attributable to that employer and arise on or after July 1,
32013: employer contributions, State contributions under
4subsection (a-20), employee contributions, investment returns,
5payments of benefits, and that employer's proportionate share
6of the System's administrative expenses.
7    In the event that the Board determines that there is a
8deficiency or surplus in the account of an employer with
9respect to the , the Board shall determine the employer's
10contribution rate under item (iii) of subsection (a-10) so as
11to address that deficiency or surplus over a reasonable period
12of time as determined by the Board.
13    (a-20) Beginning in State fiscal year 2014, for any fiscal
14year in which (1) the System's normal cost for all employers
15for that fiscal year, exclusive of the normal cost that arises
16from optional employer contributions agreed to by employers for
17that fiscal year under Section 1-161, exceeds (2) the total
18contribution calculated under item (i) of subsection (a-10) for
19all employers for that fiscal year, the State shall make an
20additional contribution to the System for that fiscal year
21equal to the difference.
22    The State contribution under this subsection (a-20) is in
23addition to the State contributions required under subsection
24(a-1) and any contributions required to be paid by the State as
25an employer under subsection (a-10) of this Section.
26    (b) If an employee is paid from trust or federal funds, the

 

 

SB0035- 148 -LRB098 05472 JDS 35506 b

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

 

 

SB0035- 149 -LRB098 05472 JDS 35506 b

1in the same manner as employee contributions.
2    (c) Through State fiscal year 1995: The total employer
3contribution shall be apportioned among the various funds of
4the State and other employers, whether trust, federal, or other
5funds, in accordance with actuarial procedures approved by the
6Board. State of Illinois contributions for employers receiving
7State appropriations for personal services shall be payable
8from appropriations made to the employers or to the System. The
9contributions for Class I community colleges covering earnings
10other than those paid from trust and federal funds, shall be
11payable solely from appropriations to the Illinois Community
12College Board or the System for employer contributions.
13    (d) Beginning in State fiscal year 1996, the required State
14contributions to the System shall be appropriated directly to
15the System and shall be payable through vouchers issued in
16accordance with subsection (c) of Section 15-165, except as
17provided in subsection (g).
18    (e) The State Comptroller shall draw warrants payable to
19the System upon proper certification by the System or by the
20employer in accordance with the appropriation laws and this
21Code.
22    (f) Normal costs under this Section means liability for
23pensions and other benefits which accrues to the System because
24of the credits earned for service rendered by the participants
25during the fiscal year and expenses of administering the
26System, but shall not include the principal of or any

 

 

SB0035- 150 -LRB098 05472 JDS 35506 b

1redemption premium or interest on any bonds issued by the Board
2or any expenses incurred or deposits required in connection
3therewith.
4    (g) The employer contributions under this subsection (g)
5are no longer required after June 30, 2013.
6    If the amount of a participant's earnings for any academic
7year used to determine the final rate of earnings, determined
8on a full-time equivalent basis, exceeds the amount of his or
9her earnings with the same employer for the previous academic
10year, determined on a full-time equivalent basis, by more than
116%, the participant's employer shall pay to the System, in
12addition to all other payments required under this Section and
13in accordance with guidelines established by the System, the
14present value of the increase in benefits resulting from the
15portion of the increase in earnings that is in excess of 6%.
16This present value shall be computed by the System on the basis
17of the actuarial assumptions and tables used in the most recent
18actuarial valuation of the System that is available at the time
19of the computation. The System may require the employer to
20provide any pertinent information or documentation.
21    Whenever it determines that a payment is or may be required
22under this subsection (g), the System shall calculate the
23amount of the payment and bill the employer for that amount.
24The bill shall specify the calculations used to determine the
25amount due. If the employer disputes the amount of the bill, it
26may, within 30 days after receipt of the bill, apply to the

 

 

SB0035- 151 -LRB098 05472 JDS 35506 b

1System in writing for a recalculation. The application must
2specify in detail the grounds of the dispute and, if the
3employer asserts that the calculation is subject to subsection
4(h) or (i) of this Section, must include an affidavit setting
5forth and attesting to all facts within the employer's
6knowledge that are pertinent to the applicability of subsection
7(h) or (i). Upon receiving a timely application for
8recalculation, the System shall review the application and, if
9appropriate, recalculate the amount due.
10    The employer contributions required under this subsection
11(g) (f) may be paid in the form of a lump sum within 90 days
12after receipt of the bill. If the employer contributions are
13not paid within 90 days after receipt of the bill, then
14interest will be charged at a rate equal to the System's annual
15actuarially assumed rate of return on investment compounded
16annually from the 91st day after receipt of the bill. Payments
17must be concluded within 3 years after the employer's receipt
18of the bill.
19    (h) This subsection (h) applies only to payments made or
20salary increases given on or after June 1, 2005 but before July
211, 2011. The changes made by Public Act 94-1057 shall not
22require the System to refund any payments received before July
2331, 2006 (the effective date of Public Act 94-1057).
24    When assessing payment for any amount due under subsection
25(g), the System shall exclude earnings increases paid to
26participants under contracts or collective bargaining

 

 

SB0035- 152 -LRB098 05472 JDS 35506 b

1agreements entered into, amended, or renewed before June 1,
22005.
3    When assessing payment for any amount due under subsection
4(g), the System shall exclude earnings increases paid to a
5participant at a time when the participant is 10 or more years
6from retirement eligibility under Section 15-135.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude earnings increases resulting from
9overload work, including a contract for summer teaching, or
10overtime when the employer has certified to the System, and the
11System has approved the certification, that: (i) in the case of
12overloads (A) the overload work is for the sole purpose of
13academic instruction in excess of the standard number of
14instruction hours for a full-time employee occurring during the
15academic year that the overload is paid and (B) the earnings
16increases are equal to or less than the rate of pay for
17academic instruction computed using the participant's current
18salary rate and work schedule; and (ii) in the case of
19overtime, the overtime was necessary for the educational
20mission.
21    When assessing payment for any amount due under subsection
22(g), the System shall exclude any earnings increase resulting
23from (i) a promotion for which the employee moves from one
24classification to a higher classification under the State
25Universities Civil Service System, (ii) a promotion in academic
26rank for a tenured or tenure-track faculty position, or (iii) a

 

 

SB0035- 153 -LRB098 05472 JDS 35506 b

1promotion that the Illinois Community College Board has
2recommended in accordance with subsection (k) of this Section.
3These earnings increases shall be excluded only if the
4promotion is to a position that has existed and been filled by
5a member for no less than one complete academic year and the
6earnings increase as a result of the promotion is an increase
7that results in an amount no greater than the average salary
8paid for other similar positions.
9    (i) When assessing payment for any amount due under
10subsection (g), the System shall exclude any salary increase
11described in subsection (h) 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 (g) of this Section.
19    (j) 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

 

 

SB0035- 154 -LRB098 05472 JDS 35506 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    (k) The Illinois Community College Board shall adopt rules
9for recommending lists of promotional positions submitted to
10the Board by community colleges and for reviewing the
11promotional lists on an annual basis. When recommending
12promotional lists, the Board shall consider the similarity of
13the positions submitted to those positions recognized for State
14universities by the State Universities Civil Service System.
15The Illinois Community College Board shall file a copy of its
16findings with the System. The System shall consider the
17findings of the Illinois Community College Board when making
18determinations under this Section. The System shall not exclude
19any earnings increases resulting from a promotion when the
20promotion was not submitted by a community college. Nothing in
21this subsection (k) shall require any community college to
22submit any information to the Community College Board.
23    (l) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

 

 

SB0035- 155 -LRB098 05472 JDS 35506 b

1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (m) For purposes of determining the required State
9contribution to the system for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the system's actuarially assumed rate of return.
12(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
147-13-12; revised 10-17-12.)
 
15    (40 ILCS 5/15-155.1 new)
16    Sec. 15-155.1. Actions to enforce payments by employers
17other than the State. Any employer, other than the State, that
18fails to transmit to the System contributions required of it
19under this Article or contributions required of employees, for
20more than 90 days after such contributions are due, is subject
21to the following: after giving notice to the employer, the
22System may certify to the State Comptroller or the Illinois
23Community College Board, whichever is applicable, the amounts
24of such delinquent payments and the State Comptroller or the
25Illinois Community College Board, whichever is applicable,

 

 

SB0035- 156 -LRB098 05472 JDS 35506 b

1shall deduct the amounts so certified or any part thereof from
2any State funds to be remitted to the employer and shall pay
3the amount so deducted to the System. If State funds from which
4such deductions may be made are not available, the System may
5proceed against the employer to recover the amounts of such
6delinquent payments in the appropriate circuit court.
7    The System may provide for an audit of the records of an
8employer, other than the State, as may be required to establish
9the amounts of required contributions. The employer shall make
10its records available to the System for the purpose of such
11audit. The cost of such audit shall be added to the amount of
12the delinquent payments and may be recovered by the System from
13the employer at the same time and in the same manner as the
14delinquent payments are recovered.
 
15    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
16    Sec. 15-156. Obligations of State; funding guarantees.
17    (a) The payment of (1) the required State contributions,
18(2) all benefits granted under this system and (3) all expenses
19in connection with the administration and operation thereof are
20obligations of the State of Illinois to the extent specified in
21this Article. The accumulated employee normal, additional and
22survivors insurance contributions credited to the accounts of
23active and inactive participants shall not be used to pay the
24State's share of the obligations.
25    (b) Beginning July 1, 2013, the State shall be

 

 

SB0035- 157 -LRB098 05472 JDS 35506 b

1contractually obligated to contribute to the System under
2Section 15-155 in each State fiscal year an amount not less
3than the sum of (i) the State's required contribution under
4subsections (a-10) and (a-20) of Section 15-155 and (ii) the
5portion of the total cost of the benefits of the System arising
6before July 1, 2013 assigned to that State fiscal year by law
7in accordance with a schedule that distributes payments
8equitably over a reasonable period of time and in accordance
9with accepted actuarial practices. The obligations created
10under this subsection (b) are contractual obligations
11protected and enforceable under Article I, Section 16 and
12Article XIII, Section 5 of the Illinois Constitution.
13    Notwithstanding any other provision of law, if the State
14fails to pay in a State fiscal year the amount guaranteed under
15this subsection, the System may bring a mandamus action in the
16circuit court of Champaign or Sangamon County to compel the
17State to make that payment, irrespective of other remedies that
18may be available to the System. In ordering the State to make
19the required payment, the court may order a reasonable payment
20schedule to enable the State to make the required payment
21without significantly imperiling the public health, safety, or
22welfare.
23    Any payments required to be made by the State pursuant to
24this subsection (b) are expressly subordinated to the payment
25of the principal, interest, and premium, if any, on any bonded
26debt obligation of the State or any other State-created entity,

 

 

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1either currently outstanding or to be issued, for which the
2source of repayment or security thereon is derived directly or
3indirectly from tax revenues collected by the State or any
4other State-created entity. Payments on such bonded
5obligations include any statutory fund transfers or other
6prefunding mechanisms or formulas set forth, now or hereafter,
7in State law or bond indentures, into debt service funds or
8accounts of the State related to such bonded obligations,
9consistent with the payment schedules associated with such
10obligations.
11(Source: P.A. 83-1440.)
 
12    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
13    Sec. 15-157. Employee Contributions.
14    (a) Each participating employee shall make contributions
15towards the retirement benefits payable under the retirement
16program applicable to the employee from each payment of
17earnings applicable to employment under this system on and
18after the date of becoming a participant as follows: Prior to
19September 1, 1949, 3 1/2% of earnings; from September 1, 1949
20to August 31, 1955, 5%; from September 1, 1955 to August 31,
211969, 6%; from September 1, 1969, 6 1/2%. These contributions
22are to be considered as normal contributions for purposes of
23this Article.
24    Each participant who is a police officer or firefighter
25shall make normal contributions of 8% of each payment of

 

 

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1earnings applicable to employment as a police officer or
2firefighter under this system on or after September 1, 1981,
3unless he or she files with the board within 60 days after the
4effective date of this amendatory Act of 1991 or 60 days after
5the board receives notice that he or she is employed as a
6police officer or firefighter, whichever is later, a written
7notice waiving the retirement formula provided by Rule 4 of
8Section 15-136. This waiver shall be irrevocable. If a
9participant had met the conditions set forth in Section
1015-132.1 prior to the effective date of this amendatory Act of
111991 but failed to make the additional normal contributions
12required by this paragraph, he or she may elect to pay the
13additional contributions plus compound interest at the
14effective rate. If such payment is received by the board, the
15service shall be considered as police officer service in
16calculating the retirement annuity under Rule 4 of Section
1715-136. While performing service described in clause (i) or
18(ii) of Rule 4 of Section 15-136, a participating employee
19shall be deemed to be employed as a firefighter for the purpose
20of determining the rate of employee contributions under this
21Section.
22    (b) Starting September 1, 1969, each participating
23employee shall make additional contributions of 1/2 of 1% of
24earnings to finance a portion of the cost of the annual
25increases in retirement annuity provided under Section 15-136,
26except that with respect to participants in the self-managed

 

 

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1plan this additional contribution shall be used to finance the
2benefits obtained under that retirement program.
3    (c) In addition to the amounts described in subsections (a)
4and (b) of this Section, each participating employee shall make
5contributions of 1% of earnings applicable under this system on
6and after August 1, 1959. The contributions made under this
7subsection (c) shall be considered as survivor's insurance
8contributions for purposes of this Article if the employee is
9covered under the traditional benefit package, and such
10contributions shall be considered as additional contributions
11for purposes of this Article if the employee is participating
12in the self-managed plan or has elected to participate in the
13portable benefit package and has completed the applicable
14one-year waiting period. Contributions in excess of $80 during
15any fiscal year beginning before August 31, 1969 and in excess
16of $120 during any fiscal year thereafter until September 1,
171971 shall be considered as additional contributions for
18purposes of this Article.
19    (c-5) In addition to the contributions otherwise required
20under this Article, each Tier I participant shall also make the
21following contributions toward the retirement benefits payable
22under the retirement program applicable to the employee from
23each payment of earnings applicable to employment under this
24system:
25        (1) beginning July 1, 2013 and through June 30, 2014,
26    1% of earnings; and

 

 

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1        (2) beginning on July 1, 2014, 2% of earnings.
2    Except as otherwise specified, these contributions are to
3be considered as normal contributions for purposes of this
4Article.
5    (d) If the board by board rule so permits and subject to
6such conditions and limitations as may be specified in its
7rules, a participant may make other additional contributions of
8such percentage of earnings or amounts as the participant shall
9elect in a written notice thereof received by the board.
10    (e) That fraction of a participant's total accumulated
11normal contributions, the numerator of which is equal to the
12number of years of service in excess of that which is required
13to qualify for the maximum retirement annuity, and the
14denominator of which is equal to the total service of the
15participant, shall be considered as accumulated additional
16contributions. The determination of the applicable maximum
17annuity and the adjustment in contributions required by this
18provision shall be made as of the date of the participant's
19retirement.
20    (f) Notwithstanding the foregoing, a participating
21employee shall not be required to make contributions under this
22Section after the date upon which continuance of such
23contributions would otherwise cause his or her retirement
24annuity to exceed the maximum retirement annuity as specified
25in clause (1) of subsection (c) of Section 15-136.
26    (g) A participating employee may make contributions for the

 

 

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1purchase of service credit under this Article.
2(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
3eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
490-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
5    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
6    Sec. 15-165. To certify amounts and submit vouchers.
7    (a) The Board shall certify to the Governor on or before
8November 15 of each year through until November 15, 2011 the
9appropriation required from State funds for the purposes of
10this System for the following fiscal year. The certification
11under this subsection (a) shall include a copy of the actuarial
12recommendations upon which it is based and shall specifically
13identify the System's projected State normal cost for that
14fiscal year and the projected State cost for the self-managed
15plan for that fiscal year.
16    On or before May 1, 2004, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2005, taking
19into account the amounts appropriated to and received by the
20System under subsection (d) of Section 7.2 of the General
21Obligation Bond Act.
22    On or before July 1, 2005, the Board shall recalculate and
23recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2006, taking
25into account the changes in required State contributions made

 

 

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1by this amendatory Act of the 94th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2011, applying
5the changes made by Public Act 96-889 to the System's assets
6and liabilities as of June 30, 2009 as though Public Act 96-889
7was approved on that date.
8    On or before July 1, 2013, the Board shall, if necessary,
9recalculate and recertify to the Governor the amount of the
10required State contribution to the System for State fiscal year
112014, taking into account the changes in required State
12contributions made by this amendatory Act of the 98th General
13Assembly.
14    (a-5) On or before November 1 of each year, beginning
15November 1, 2012, the Board shall submit to the State Actuary,
16the Governor, and the General Assembly a proposed certification
17of the amount of the required State contribution to the System
18for the next fiscal year, along with all of the actuarial
19assumptions, calculations, and data upon which that proposed
20certification is based. On or before January 1 of each year,
21beginning January 1, 2013, the State Actuary shall issue a
22preliminary report concerning the proposed certification and
23identifying, if necessary, recommended changes in actuarial
24assumptions that the Board must consider before finalizing its
25certification of the required State contributions.
26    On or before January 15, 2013 and each January 15

 

 

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1thereafter, the Board shall certify to the Governor and the
2General Assembly the amount of the required State contribution
3for the next fiscal year. The certification shall include a
4copy of the actuarial recommendations upon which it is based
5and shall specifically identify the System's projected State
6normal cost for that fiscal year and the projected State cost
7for the self-managed plan for that fiscal year. The Board's
8certification must note, in a written response to the State
9Actuary, any deviations from the State Actuary's recommended
10changes, the reason or reasons for not following the State
11Actuary's recommended changes, and the fiscal impact of not
12following the State Actuary's recommended changes on the
13required State contribution.
14    (b) The Board shall certify to the State Comptroller or
15employer, as the case may be, from time to time, by its
16president and secretary, with its seal attached, the amounts
17payable to the System from the various funds.
18    (c) Beginning in State fiscal year 1996, on or as soon as
19possible after the 15th day of each month the Board shall
20submit vouchers for payment of State contributions to the
21System, in a total monthly amount of one-twelfth of the
22required annual State contribution certified under subsection
23(a). From the effective date of this amendatory Act of the 93rd
24General Assembly through June 30, 2004, the Board shall not
25submit vouchers for the remainder of fiscal year 2004 in excess
26of the fiscal year 2004 certified contribution amount

 

 

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1determined under this Section after taking into consideration
2the transfer to the System under subsection (b) of Section
36z-61 of the State Finance Act. These vouchers shall be paid by
4the State Comptroller and Treasurer by warrants drawn on the
5funds appropriated to the System for that fiscal year.
6    If in any month the amount remaining unexpended from all
7other appropriations to the System for the applicable fiscal
8year (including the appropriations to the System under Section
98.12 of the State Finance Act and Section 1 of the State
10Pension Funds Continuing Appropriation Act) is less than the
11amount lawfully vouchered under this Section, the difference
12shall be paid from the General Revenue Fund under the
13continuing appropriation authority provided in Section 1.1 of
14the State Pension Funds Continuing Appropriation Act.
15    (d) So long as the payments received are the full amount
16lawfully vouchered under this Section, payments received by the
17System under this Section shall be applied first toward the
18employer contribution to the self-managed plan established
19under Section 15-158.2. Payments shall be applied second toward
20the employer's portion of the normal costs of the System, as
21defined in subsection (f) of Section 15-155. The balance shall
22be applied toward the unfunded actuarial liabilities of the
23System.
24    (e) In the event that the System does not receive, as a
25result of legislative enactment or otherwise, payments
26sufficient to fully fund the employer contribution to the

 

 

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1self-managed plan established under Section 15-158.2 and to
2fully fund that portion of the employer's portion of the normal
3costs of the System, as calculated in accordance with Section
415-155(a-1), then any payments received shall be applied
5proportionately to the optional retirement program established
6under Section 15-158.2 and to the employer's portion of the
7normal costs of the System, as calculated in accordance with
8Section 15-155(a-1).
9(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1097-694, eff. 6-18-12.)
 
11    (40 ILCS 5/15-198)
12    Sec. 15-198. Application and expiration of new benefit
13increases.
14    (a) As used in this Section, "new benefit increase" means
15an increase in the amount of any benefit provided under this
16Article, or an expansion of the conditions of eligibility for
17any benefit under this Article or Article 1, that results from
18an amendment to this Code that takes effect after the effective
19date of this amendatory Act of the 94th General Assembly. "New
20benefit increase", however, does not include any benefit
21increase resulting from the changes made to this Article or
22Article 1 by this amendatory Act of the 98th General Assembly.
23    (b) Notwithstanding any other provision of this Code or any
24subsequent amendment to this Code, every new benefit increase
25is subject to this Section and shall be deemed to be granted

 

 

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

 

 

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1Assembly from extending or re-creating a new benefit increase
2by law.
3    (e) Except as otherwise provided in the language creating
4the new benefit increase, a new benefit increase that expires
5under this Section continues to apply to persons who applied
6and qualified for the affected benefit while the new benefit
7increase was in effect and to the affected beneficiaries and
8alternate payees of such persons, but does not apply to any
9other person, including without limitation a person who
10continues in service after the expiration date and did not
11apply and qualify for the affected benefit while the new
12benefit increase was in effect.
13(Source: P.A. 94-4, eff. 6-1-05.)
 
14    (40 ILCS 5/16-106.4 new)
15    Sec. 16-106.4. Tier I member. "Tier I member": A member
16under this Article who first became a member or participant
17before January 1, 2011 under any reciprocal retirement system
18or pension fund established under this Code other than a
19retirement system or pension fund established under Article 2,
203, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/16-106.5 new)
22    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
23Tier I member who is receiving a retirement annuity.
 

 

 

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1    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
2    Sec. 16-121. Salary. "Salary": The actual compensation
3received by a teacher during any school year and recognized by
4the system in accordance with rules of the board. For purposes
5of this Section, "school year" includes the regular school term
6plus any additional period for which a teacher is compensated
7and such compensation is recognized by the rules of the board.
8    Notwithstanding any other provision of this Code, the
9salary of a Tier I member for the purposes of this Code shall
10not exceed, for periods of service on or after the effective
11date of this amendatory Act of the 98th General Assembly, the
12annual contribution and benefit base established for the
13applicable year by the Commissioner of Social Security under
14the federal Social Security Act; except that this limitation
15does not apply to a member's salary that is determined under an
16employment contract or collective bargaining agreement that is
17in effect on the effective date of this amendatory Act of the
1898th General Assembly and has not been amended or renewed after
19that date.
20(Source: P.A. 84-1028.)
 
21    (40 ILCS 5/16-132)  (from Ch. 108 1/2, par. 16-132)
22    Sec. 16-132. Retirement annuity eligibility.
23    (a) A member who has at least 20 years of creditable
24service is entitled to a retirement annuity upon or after
25attainment of age 55. A member who has at least 10 but less

 

 

SB0035- 170 -LRB098 05472 JDS 35506 b

1than 20 years of creditable service is entitled to a retirement
2annuity upon or after attainment of age 60. A member who has at
3least 5 but less than 10 years of creditable service is
4entitled to a retirement annuity upon or after attainment of
5age 62. A member who (i) has earned during the period
6immediately preceding the last day of service at least one year
7of contributing creditable service as an employee of a
8department as defined in Section 14-103.04, (ii) has earned at
9least 5 years of contributing creditable service as an employee
10of a department as defined in Section 14-103.04, and (iii)
11retires on or after January 1, 2001 is entitled to a retirement
12annuity upon or after attainment of an age which, when added to
13the number of years of his or her total creditable service,
14equals at least 85. Portions of years shall be counted as
15decimal equivalents.
16    A member who is eligible to receive a retirement annuity of
17at least 74.6% of final average salary and will attain age 55
18on or before December 31 during the year which commences on
19July 1 shall be deemed to attain age 55 on the preceding June
201.
21    (b) Notwithstanding subsection (a) of this Section, for a
22Tier I member who begins receiving a retirement annuity under
23this Article after July 1, 2013:
24        (1) If the Tier I member is at least 45 years old on
25    the effective date of this amendatory Act of the 98th
26    General Assembly, then the references to age 55, 60, and 62

 

 

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1    in subsection (a) of this Section remain unchanged and the
2    reference to 85 in subsection (a) of this Section remains
3    unchanged.
4        (2) If the Tier I member is at least 40 but less than
5    45 years old on the effective date of this amendatory Act
6    of the 98th General Assembly, then the references to age
7    55, 60, and 62 in subsection (a) of this Section are
8    increased by one year and the reference to 85 in subsection
9    (a) is increased to 87.
10        (3) If the Tier I member is at least 35 but less than
11    40 years old on the effective date of this amendatory Act
12    of the 98th General Assembly, then the references to age
13    55, 60, and 62 in subsection (a) of this Section are
14    increased by 3 years and the reference to 85 in subsection
15    (a) is increased to 91.
16        (4) If the Tier I member is less than 35 years old on
17    the effective date of this amendatory Act of the 98th
18    General Assembly, then the references to age 55, 60, and 62
19    in subsection (a) of this Section are increased by 5 years
20    and the reference to 85 in subsection (a) is increased to
21    95.
22    Notwithstanding Section 1-103.1, this subsection (b)
23applies without regard to whether or not the Tier I member is
24in active service under this Article on or after the effective
25date of this amendatory Act of the 98th General Assembly.
26    (c) A member meeting the above eligibility conditions is

 

 

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1entitled to a retirement annuity upon written application to
2the board setting forth the date the member wishes the
3retirement annuity to commence. However, the effective date of
4the retirement annuity shall be no earlier than the day
5following the last day of creditable service, regardless of the
6date of official termination of employment.
7    (d) To be eligible for a retirement annuity, a member shall
8not be employed as a teacher in the schools included under this
9System or under Article 17, except (i) as provided in Section
1016-118 or 16-150.1, (ii) if the member is disabled (in which
11event, eligibility for salary must cease), or (iii) if the
12System is required by federal law to commence payment due to
13the member's age; the changes to this sentence made by Public
14Act 93-320 this amendatory Act of the 93rd General Assembly
15apply without regard to whether the member terminated
16employment before or after its effective date.
17(Source: P.A. 93-320, eff. 7-23-03.)
 
18    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
19    Sec. 16-133. Retirement annuity; amount.
20    (a) The amount of the retirement annuity shall be (i) in
21the case of a person who first became a teacher under this
22Article before July 1, 2005, the larger of the amounts
23determined under paragraphs (A) and (B) below, or (ii) in the
24case of a person who first becomes a teacher under this Article
25on or after July 1, 2005, the amount determined under the

 

 

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1applicable provisions of paragraph (B):
2        (A) An amount consisting of the sum of the following:
3            (1) An amount that can be provided on an
4        actuarially equivalent basis by the member's
5        accumulated contributions at the time of retirement;
6        and
7            (2) The sum of (i) the amount that can be provided
8        on an actuarially equivalent basis by the member's
9        accumulated contributions representing service prior
10        to July 1, 1947, and (ii) the amount that can be
11        provided on an actuarially equivalent basis by the
12        amount obtained by multiplying 1.4 times the member's
13        accumulated contributions covering service subsequent
14        to June 30, 1947; and
15            (3) If there is prior service, 2 times the amount
16        that would have been determined under subparagraph (2)
17        of paragraph (A) above on account of contributions
18        which would have been made during the period of prior
19        service creditable to the member had the System been in
20        operation and had the member made contributions at the
21        contribution rate in effect prior to July 1, 1947.
22        For the purpose of calculating the sum provided under
23    this paragraph (A), the contribution required under
24    subsection (a-5) of Section 16-152 shall not be considered
25    when determining the amount of the member's accumulated
26    contributions under subparagraph (1) or (2).

 

 

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

 

 

SB0035- 175 -LRB098 05472 JDS 35506 b

1            (2) 1.5% of final average salary for each year of
2        creditable service plus the sum $7.50 for each of the
3        first 20 years of creditable service.
4    The amount of the retirement annuity determined under this
5    paragraph (B) shall be reduced by 1/2 of 1% for each month
6    that the member is less than age 60 at the time the
7    retirement annuity begins. However, this reduction shall
8    not apply (i) if the member has at least 35 years of
9    creditable service, or (ii) if the member retires on
10    account of disability under Section 16-149.2 of this
11    Article with at least 20 years of creditable service, or
12    (iii) if the member (1) has earned during the period
13    immediately preceding the last day of service at least one
14    year of contributing creditable service as an employee of a
15    department as defined in Section 14-103.04, (2) has earned
16    at least 5 years of contributing creditable service as an
17    employee of a department as defined in Section 14-103.04,
18    (3) retires on or after January 1, 2001, and (4) retires
19    having attained an age which, when added to the number of
20    years of his or her total creditable service, equals at
21    least 85. Portions of years shall be counted as decimal
22    equivalents. For participants to whom subsection (b) of
23    Section 16-132 applies, the reference to age 60 in this
24    paragraph and the reference to 85 in this paragraph are
25    increased as provided in subsection (b) of Section 16-132.
26    (b) For purposes of this Section, final average salary

 

 

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1shall be the average salary for the highest 4 consecutive years
2within the last 10 years of creditable service as determined
3under rules of the board. The minimum final average salary
4shall be considered to be $2,400 per year.
5    In the determination of final average salary for members
6other than elected officials and their appointees when such
7appointees are allowed by statute, that part of a member's
8salary for any year beginning after June 30, 1979 which exceeds
9the member's annual full-time salary rate with the same
10employer for the preceding year by more than 20% shall be
11excluded. The exclusion shall not apply in any year in which
12the member's creditable earnings are less than 50% of the
13preceding year's mean salary for downstate teachers as
14determined by the survey of school district salaries provided
15in Section 2-3.103 of the School Code.
16    (c) In determining the amount of the retirement annuity
17under paragraph (B) of this Section, a fractional year shall be
18granted proportional credit.
19    (d) The retirement annuity determined under paragraph (B)
20of this Section shall be available only to members who render
21teaching service after July 1, 1947 for which member
22contributions are required, and to annuitants who re-enter
23under the provisions of Section 16-150.
24    (e) The maximum retirement annuity provided under
25paragraph (B) of this Section shall be 75% of final average
26salary.

 

 

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1    (f) A member retiring after the effective date of this
2amendatory Act of 1998 shall receive a pension equal to 75% of
3final average salary if the member is qualified to receive a
4retirement annuity equal to at least 74.6% of final average
5salary under this Article or as proportional annuities under
6Article 20 of this Code.
7(Source: P.A. 94-4, eff. 6-1-05.)
 
8    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
9    Sec. 16-133.1. Automatic annual increase in annuity.
10    (a) Each member with creditable service and retiring on or
11after August 26, 1969 is entitled to the automatic annual
12increases in annuity provided under this Section while
13receiving a retirement annuity or disability retirement
14annuity from the system.
15    An annuitant shall first be entitled to an initial increase
16under this Section on the January 1 next following the first
17anniversary of retirement, or January 1 of the year next
18following attainment of age 61, whichever is later. At such
19time, the system shall pay an initial increase determined as
20follows or as provided in subsections (a-1) and (a-2):
21        (1) 1.5% of the originally granted retirement annuity
22    or disability retirement annuity multiplied by the number
23    of years elapsed, if any, from the date of retirement until
24    January 1, 1972, plus
25        (2) 2% of the originally granted annuity multiplied by

 

 

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1    the number of years elapsed, if any, from the date of
2    retirement or January 1, 1972, whichever is later, until
3    January 1, 1978, plus
4        (3) 3% of the originally granted annuity multiplied by
5    the number of years elapsed from the date of retirement or
6    January 1, 1978, whichever is later, until the effective
7    date of the initial increase.
8However, the initial annual increase calculated under this
9Section for the recipient of a disability retirement annuity
10granted under Section 16-149.2 shall be reduced by an amount
11equal to the total of all increases in that annuity received
12under Section 16-149.5 (but not exceeding 100% of the amount of
13the initial increase otherwise provided under this Section).
14    Following the initial increase, automatic annual increases
15in annuity shall be payable on each January 1 thereafter during
16the lifetime of the annuitant, determined as a percentage of
17the originally granted retirement annuity or disability
18retirement annuity for increases granted prior to January 1,
191990, and calculated as a percentage of the total amount of
20annuity, including previous increases under this Section, for
21increases granted on or after January 1, 1990, as follows: 1.5%
22for periods prior to January 1, 1972, 2% for periods after
23December 31, 1971 and prior to January 1, 1978, and 3% for
24periods after December 31, 1977, or as provided in subsections
25(a-1) and (a-2).
26    (a-1) Notwithstanding any other provision of this Article,

 

 

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1for a Tier I retiree, the amount of each automatic annual
2increase in retirement annuity occurring on or after the
3effective date of this amendatory Act of the 98th General
4Assembly shall be the lesser of $750 or 3% of the total annuity
5payable at the time of the increase, including previous
6increases granted.
7    (a-2) Notwithstanding any other provision of this Article,
8for a Tier I retiree, the monthly retirement annuity shall
9first be subject to annual increases on the January 1 occurring
10on or next after the attainment of age 67 or the January 1
11occurring on or next after the fifth anniversary of the annuity
12start date, whichever occurs earlier. If on the effective date
13of this amendatory Act of the 98th General Assembly a Tier I
14retiree has already received an annual increase under this
15Section but does not yet meet the new eligibility requirements
16of this subsection, the annual increases already received shall
17continue in force, but no additional annual increase shall be
18granted until the Tier I retiree meets the new eligibility
19requirements.
20    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
21and (a-2) apply without regard to whether or not the Tier I
22retiree is in active service under this Article on or after the
23effective date of this amendatory Act of the 98th General
24Assembly.
25    (b) The automatic annual increases in annuity provided
26under this Section shall not be applicable unless a member has

 

 

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1made contributions toward such increases for a period
2equivalent to one full year of creditable service. If a member
3contributes for service performed after August 26, 1969 but the
4member becomes an annuitant before such contributions amount to
5one full year's contributions based on the salary at the date
6of retirement, he or she may pay the necessary balance of the
7contributions to the system and be eligible for the automatic
8annual increases in annuity provided under this Section.
9    (c) Each member shall make contributions toward the cost of
10the automatic annual increases in annuity as provided under
11Section 16-152.
12    (d) An annuitant receiving a retirement annuity or
13disability retirement annuity on July 1, 1969, who subsequently
14re-enters service as a teacher is eligible for the automatic
15annual increases in annuity provided under this Section if he
16or she renders at least one year of creditable service
17following the latest re-entry.
18    (e) In addition to the automatic annual increases in
19annuity provided under this Section, an annuitant who meets the
20service requirements of this Section and whose retirement
21annuity or disability retirement annuity began on or before
22January 1, 1971 shall receive, on January 1, 1981, an increase
23in the annuity then being paid of one dollar per month for each
24year of creditable service. On January 1, 1982, an annuitant
25whose retirement annuity or disability retirement annuity
26began on or before January 1, 1977 shall receive an increase in

 

 

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1the annuity then being paid of one dollar per month for each
2year of creditable service.
3    On January 1, 1987, any annuitant whose retirement annuity
4began on or before January 1, 1977, shall receive an increase
5in the monthly retirement annuity equal to 8 per year of
6creditable service times the number of years that have elapsed
7since the annuity began.
8(Source: P.A. 91-927, eff. 12-14-00.)
 
9    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
10    Sec. 16-152. Contributions by members.
11    (a) Each member shall make contributions for membership
12service to this System as follows:
13        (1) Effective July 1, 1998, contributions of 7.50% of
14    salary towards the cost of the retirement annuity. Such
15    contributions shall be deemed "normal contributions".
16        (2) Effective July 1, 1969, contributions of 1/2 of 1%
17    of salary toward the cost of the automatic annual increase
18    in retirement annuity provided under Section 16-133.1.
19        (3) Effective July 24, 1959, contributions of 1% of
20    salary towards the cost of survivor benefits. Such
21    contributions shall not be credited to the individual
22    account of the member and shall not be subject to refund
23    except as provided under Section 16-143.2.
24        (4) Effective July 1, 2005, contributions of 0.40% of
25    salary toward the cost of the early retirement without

 

 

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

 

 

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

 

 

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1    retirement without discount option provided under Section
2    16-133.2 is terminated under Section 16-176.
3(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
4    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
5    Sec. 16-158. Contributions by State and other employing
6units; funding guarantee.
7    (a) The State shall make contributions to the System by
8means of appropriations from the Common School Fund and other
9State funds of amounts which, together with other employer
10contributions, employee contributions, investment income, and
11other income, will be sufficient to meet the cost of
12maintaining and administering the System on a 100% 90% funded
13basis in accordance with actuarial recommendations by the end
14of State fiscal year 2043.
15    Beginning with State fiscal year 2014, the State's required
16contributions to the System under subsection (b-3) shall be
17limited to the amounts required to amortize the total cost of
18the benefits of the System arising before July 1, 2013. The
19State shall also pay any employer contributions required from
20the State as the actual employer of participants under this
21Article and any contribution required under subsection (b-20).
22    The Board shall determine the amount of State and employer
23contributions required for each fiscal year on the basis of the
24actuarial tables and other assumptions adopted by the Board and
25the recommendations of the actuary, using the formulas provided

 

 

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1in this Section formula in subsection (b-3).
2    (a-1) Annually, on or before November 15 through until
3November 15, 2011, the Board shall certify to the Governor the
4amount of the required State contribution for the coming fiscal
5year. The certification under this subsection (a-1) shall
6include a copy of the actuarial recommendations upon which it
7is based and shall specifically identify the System's projected
8State normal cost 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    On or before July 1, 2013, the Board shall, if necessary,

 

 

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1recalculate and recertify to the Governor the amount of the
2required State contribution to the System for State fiscal year
32014, taking into account the changes in required State
4contributions made by this amendatory Act of the 98th General
5Assembly.
6    (a-5) On or before November 1 of each year, beginning
7November 1, 2012, the Board shall submit to the State Actuary,
8the Governor, and the General Assembly a proposed certification
9of the amount of the required State contribution to the System
10for the next fiscal year, along with all of the actuarial
11assumptions, calculations, and data upon which that proposed
12certification is based. On or before January 1 of each year,
13beginning January 1, 2013, the State Actuary shall issue a
14preliminary report concerning the proposed certification and
15identifying, if necessary, recommended changes in actuarial
16assumptions that the Board must consider before finalizing its
17certification of the required State contributions.
18    On or before January 15, 2013 and each January 15
19thereafter, the Board shall certify to the Governor and the
20General Assembly the amount of the required State contribution
21for the next fiscal year. The certification shall include a
22copy of the actuarial recommendations upon which it is based
23and shall specifically identify the System's projected State
24normal cost for that fiscal year. The Board's certification
25must note any deviations from the State Actuary's recommended
26changes, the reason or reasons for not following the State

 

 

SB0035- 187 -LRB098 05472 JDS 35506 b

1Actuary's recommended changes, and the fiscal impact of not
2following the State Actuary's recommended changes on the
3required State contribution.
4    (b) Through State fiscal year 1995, the State contributions
5shall be paid to the System in accordance with Section 18-7 of
6the School Code.
7    (b-1) Beginning in State fiscal year 1996, on the 15th day
8of each month, or as soon thereafter as may be practicable, the
9Board shall submit vouchers for payment of State contributions
10to the System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a-1). From the effective date of this amendatory Act of the
1393rd General Assembly through June 30, 2004, the Board shall
14not submit vouchers for the remainder of fiscal year 2004 in
15excess of the fiscal year 2004 certified contribution amount
16determined under this Section after taking into consideration
17the transfer to the System under subsection (a) 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.
21    If in any month the amount remaining unexpended from all
22other appropriations to the System for the applicable fiscal
23year (including the appropriations to the System under Section
248.12 of the State Finance Act and Section 1 of the State
25Pension Funds Continuing Appropriation Act) is less than the
26amount lawfully vouchered under this subsection, the

 

 

SB0035- 188 -LRB098 05472 JDS 35506 b

1difference shall be paid from the Common School Fund under the
2continuing appropriation authority provided in Section 1.1 of
3the State Pension Funds Continuing Appropriation Act.
4    (b-2) Allocations from the Common School Fund apportioned
5to school districts not coming under this System shall not be
6diminished or affected by the provisions of this Article.
7    (b-3) For State fiscal years 2014 through 2043, the minimum
8contribution to the System to be made by the State under this
9subsection (b-3) for each fiscal year shall be an amount
10determined by the Board to be sufficient to amortize the
11unfunded accrued liability that is attributable to benefits
12that accrued before July 1, 2013 as a level percentage of
13payroll over the years remaining to and including fiscal year
142043, determined under the projected unit credit actuarial cost
15method.
16    For State fiscal year 2044 and thereafter, the minimum
17contribution to the System to be made by the State under this
18subsection (b-3) for each fiscal year shall be an amount
19determined by the Board to be sufficient to amortize, over a
2030-year rolling amortization period, any unfunded liability
21arising on or after July 1, 2043 that is attributable to
22benefits that accrued before July 1, 2013.
23    For State fiscal years 2012 and 2013 through 2045, the
24minimum contribution to the System to be made by the State for
25each fiscal year shall be an amount determined by the System to
26be sufficient to bring the total assets of the System up to 90%

 

 

SB0035- 189 -LRB098 05472 JDS 35506 b

1of the total actuarial liabilities of the System by the end of
2State fiscal year 2045. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of payroll over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7    For State fiscal years 1996 through 2005, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10so that by State fiscal year 2011, the State is contributing at
11the rate required under this Section; except that in the
12following specified State fiscal years, the State contribution
13to the System shall not be less than the following indicated
14percentages of the applicable employee payroll, even if the
15indicated percentage will produce a State contribution in
16excess of the amount otherwise required under this subsection
17and subsection (a), and notwithstanding any contrary
18certification made under subsection (a-1) before the effective
19date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
20in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
212003; and 13.56% in FY 2004.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2006 is
24$534,627,700.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2007 is

 

 

SB0035- 190 -LRB098 05472 JDS 35506 b

1$738,014,500.
2    For each of State fiscal years 2008 through 2009, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5from the required State contribution for State fiscal year
62007, so that by State fiscal year 2011, the State is
7contributing at the rate otherwise required under this Section.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2010 is
10$2,089,268,000 and shall be made from the proceeds of bonds
11sold in fiscal year 2010 pursuant to Section 7.2 of the General
12Obligation Bond Act, less (i) the pro rata share of bond sale
13expenses determined by the System's share of total bond
14proceeds, (ii) any amounts received from the Common School Fund
15in fiscal year 2010, and (iii) any reduction in bond proceeds
16due to the issuance of discounted bonds, if applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to subsection (a-1) of this Section and shall be made
21from the proceeds of bonds sold in fiscal year 2011 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 Common School Fund in fiscal year 2011, and (iii) any
26reduction in bond proceeds due to the issuance of discounted

 

 

SB0035- 191 -LRB098 05472 JDS 35506 b

1bonds, if applicable. This amount shall include, in addition to
2the amount certified by the System, an amount necessary to meet
3employer contributions required by the State as an employer
4under paragraph (e) of this Section, which may also be used by
5the System for contributions required by paragraph (a) of
6Section 16-127.
7    Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 100% 90%. A reference in this Article
20to the "required State contribution" or any substantially
21similar term does not include or apply to any amounts payable
22to the System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter through State
26fiscal year 2013, as calculated under this Section and

 

 

SB0035- 192 -LRB098 05472 JDS 35506 b

1certified under subsection (a-1), shall not exceed an amount
2equal to (i) the amount of the required State contribution that
3would have been calculated under this Section for that fiscal
4year if the System had not received any payments under
5subsection (d) of Section 7.2 of the General Obligation Bond
6Act, minus (ii) the portion of the State's total debt service
7payments for that fiscal year on the bonds issued in fiscal
8year 2003 for the purposes of that Section 7.2, as determined
9and certified by the Comptroller, that is the same as the
10System's portion of the total moneys distributed under
11subsection (d) of Section 7.2 of the General Obligation Bond
12Act. In determining this maximum for State fiscal years 2008
13through 2010, however, the amount referred to in item (i) shall
14be increased, as a percentage of the applicable employee
15payroll, in equal increments calculated from the sum of the
16required State contribution for State fiscal year 2007 plus the
17applicable portion of the State's total debt service payments
18for fiscal year 2007 on the bonds issued in fiscal year 2003
19for the purposes of Section 7.2 of the General Obligation Bond
20Act, so that, by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    (b-10) Subject to the limitations provided in subsection
23(b-15), beginning with State fiscal year 2014, the minimum
24required contribution of each employer under this Article shall
25be sufficient to produce an annual amount equal to:
26        (i) the employer's normal cost for that fiscal year,

 

 

SB0035- 193 -LRB098 05472 JDS 35506 b

1    exclusive of the employer's normal cost that arises from
2    optional employer contributions agreed to by that employer
3    for that fiscal year under Section 1-161; plus
4        (ii) the employer's normal cost for that fiscal year
5    that arises from optional employer contributions agreed to
6    by that employer for that fiscal year under Section 1-161;
7    plus
8        (iii) the amount required for that fiscal year to
9    amortize that employer's portion of the unfunded accrued
10    liability associated with the cost of benefits accrued on
11    or after July 1, 2013 as a level percentage of payroll over
12    a 30-year rolling amortization period, as determined for
13    each employer by the Board.
14    Each employer under this Article shall make these
15contributions in the amounts determined and the manner
16prescribed from time to time by the Board.
17    (b-15) The System shall determine the employer's normal
18cost under item (i) of subsection (b-10) as a percentage of
19projected payroll applicable to all employers, based on
20actuarial assumptions applicable to the System as a whole. The
21required employer contribution under item (i) in a fiscal year
22shall not exceed a percentage of payroll determined by
23subtracting 2013 from the applicable fiscal year and
24multiplying the result by 0.5%.
25    The System shall determine the employer's normal cost under
26item (ii) of subsection (b-10) as an additional percentage of

 

 

SB0035- 194 -LRB098 05472 JDS 35506 b

1projected payroll payable by a specific employer, based on the
2optional employer contributions agreed to by that employer for
3that fiscal year under Section 1-161 and the actuarial
4assumptions applicable to the System as a whole.
5    The System shall determine the employer's portion of the
6unfunded accrued liability under item (iii) of subsection
7(b-10) separately for each employer, as a percentage of that
8employer's projected payroll, based on the liabilities
9attributable to that employer and the actuarial assumptions
10applicable to the System as a whole.
11    For use in determining the employer's contribution for
12unfunded accrued liability under item (iii), the System shall
13maintain a separate account for each employer. The separate
14account shall be maintained in such form and detail as the
15System determines to be appropriate. The separate account shall
16reflect the following items to the extent that they are
17attributable to that employer and arise on or after July 1,
182013: employer contributions, State contributions under
19subsection (b-20), employee contributions, investment returns,
20payments of benefits, and that employer's proportionate share
21of the System's administrative expenses.
22    In the event that the Board determines that there is a
23deficiency or surplus in the account of an employer with
24respect to the projected liabilities attributable to that
25employer arising on or after July 1, 2013, the Board shall
26determine the employer's contribution rate under item (iii) of

 

 

SB0035- 195 -LRB098 05472 JDS 35506 b

1subsection (b-10) so as to address that deficiency or surplus
2over a reasonable period of time as determined by the Board.
3    (b-20) Beginning in State fiscal year 2014, for any fiscal
4year in which (1) the System's normal cost for all employers
5for that fiscal year, exclusive of the normal cost that arises
6from optional employer contributions agreed to by employers for
7that fiscal year under Section 1-161, exceeds (2) the total
8contribution calculated under item (i) of subsection (b-10) for
9all employers for that fiscal year, the State shall make an
10additional contribution to the System for that fiscal year
11equal to the difference.
12    The State contribution under this subsection (b-20) is in
13addition to the State contributions required under subsection
14(b-1) and any contributions required to be paid by the State as
15an employer under subsection (b-10) of this Section.
16    (c) Payment of the required State contributions and of all
17pensions, retirement annuities, death benefits, refunds, and
18other benefits granted under or assumed by this System, and all
19expenses in connection with the administration and operation
20thereof, are obligations of the State.
21    If members are paid from special trust or federal funds
22which are administered by the employing unit, whether school
23district or other unit, the employing unit shall pay to the
24System from such funds the full accruing retirement costs based
25upon that service, as determined by the System. Employer
26contributions, based on salary paid to members from federal

 

 

SB0035- 196 -LRB098 05472 JDS 35506 b

1funds, may be forwarded by the distributing agency of the State
2of Illinois to the System prior to allocation, in an amount
3determined in accordance with guidelines established by such
4agency and the System.
5    (d) Effective July 1, 1986, any employer of a teacher as
6defined in paragraph (8) of Section 16-106 shall pay the
7employer's normal cost of benefits based upon the teacher's
8service, in addition to employee contributions, as determined
9by the System. Such employer contributions shall be forwarded
10monthly in accordance with guidelines established by the
11System.
12    However, with respect to benefits granted under Section
1316-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
14of Section 16-106, the employer's contribution shall be 12%
15(rather than 20%) of the member's highest annual salary rate
16for each year of creditable service granted, and the employer
17shall also pay the required employee contribution on behalf of
18the teacher. For the purposes of Sections 16-133.4 and
1916-133.5, a teacher as defined in paragraph (8) of Section
2016-106 who is serving in that capacity while on leave of
21absence from another employer under this Article shall not be
22considered an employee of the employer from which the teacher
23is on leave.
24    (e) Beginning July 1, 1998, every employer of a teacher
25shall pay to the System an employer contribution computed as
26follows:

 

 

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1        (1) Beginning July 1, 1998 through June 30, 1999, the
2    employer contribution shall be equal to 0.3% of each
3    teacher's salary.
4        (2) Beginning July 1, 1999 and thereafter, the employer
5    contribution shall be equal to 0.58% of each teacher's
6    salary.
7The school district or other employing unit may pay these
8employer contributions out of any source of funding available
9for that purpose and shall forward the contributions to the
10System on the schedule established for the payment of member
11contributions.
12    These employer contributions are intended to offset a
13portion of the cost to the System of the increases in
14retirement benefits resulting from this amendatory Act of 1998.
15    Each employer of teachers is entitled to a credit against
16the contributions required under this subsection (e) with
17respect to salaries paid to teachers for the period January 1,
182002 through June 30, 2003, equal to the amount paid by that
19employer under subsection (a-5) of Section 6.6 of the State
20Employees Group Insurance Act of 1971 with respect to salaries
21paid to teachers for that period.
22    The additional 1% employee contribution required under
23Section 16-152 by this amendatory Act of 1998 is the
24responsibility of the teacher and not the teacher's employer,
25unless the employer agrees, through collective bargaining or
26otherwise, to make the contribution on behalf of the teacher.

 

 

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1    If an employer is required by a contract in effect on May
21, 1998 between the employer and an employee organization to
3pay, on behalf of all its full-time employees covered by this
4Article, all mandatory employee contributions required under
5this Article, then the employer shall be excused from paying
6the employer contribution required under this subsection (e)
7for the balance of the term of that contract. The employer and
8the employee organization shall jointly certify to the System
9the existence of the contractual requirement, in such form as
10the System may prescribe. This exclusion shall cease upon the
11termination, extension, or renewal of the contract at any time
12after May 1, 1998.
13    (f) The employer contributions under this subsection (f)
14are no longer required after June 30, 2013.
15    If the amount of a teacher's salary for any school year
16used to determine final average salary exceeds the member's
17annual full-time salary rate with the same employer for the
18previous school year by more than 6%, the teacher's employer
19shall pay to the System, in addition to all other payments
20required under this Section and in accordance with guidelines
21established by the System, the present value of the increase in
22benefits resulting from the portion of the increase in salary
23that is in excess of 6%. This present value shall be computed
24by the System on the basis of the actuarial assumptions and
25tables used in the most recent actuarial valuation of the
26System that is available at the time of the computation. If a

 

 

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1teacher's salary for the 2005-2006 school year is used to
2determine final average salary under this subsection (f), then
3the changes made to this subsection (f) by Public Act 94-1057
4shall apply in calculating whether the increase in his or her
5salary is in excess of 6%. For the purposes of this Section,
6change in employment under Section 10-21.12 of the School Code
7on or after June 1, 2005 shall constitute a change in employer.
8The System may require the employer to provide any pertinent
9information or documentation. The changes made to this
10subsection (f) by this amendatory Act of the 94th General
11Assembly apply without regard to whether the teacher was in
12service on or after its effective date.
13    Whenever it determines that a payment is or may be required
14under this subsection, the System shall calculate the amount of
15the payment and bill the employer for that amount. The bill
16shall specify the calculations used to determine the amount
17due. If the employer disputes the amount of the bill, it may,
18within 30 days after receipt of the bill, apply to the System
19in writing for a recalculation. The application must specify in
20detail the grounds of the dispute and, if the employer asserts
21that the calculation is subject to subsection (g) or (h) of
22this Section, must include an affidavit setting forth and
23attesting to all facts within the employer's knowledge that are
24pertinent to the applicability of that subsection. Upon
25receiving a timely application for recalculation, the System
26shall review the application and, if appropriate, recalculate

 

 

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1the amount due.
2    The employer contributions required under this subsection
3(f) may be paid in the form of a lump sum within 90 days after
4receipt of the bill. If the employer contributions are not paid
5within 90 days after receipt of the bill, then interest will be
6charged at a rate equal to the System's annual actuarially
7assumed rate of return on investment compounded annually from
8the 91st day after receipt of the bill. Payments must be
9concluded within 3 years after the employer's receipt of the
10bill.
11    (g) This subsection (g) applies only to payments made or
12salary increases given on or after June 1, 2005 but before July
131, 2011. The changes made by Public Act 94-1057 shall not
14require the System to refund any payments received before July
1531, 2006 (the effective date of Public Act 94-1057).
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases paid to teachers
18under contracts or collective bargaining agreements entered
19into, amended, or renewed before June 1, 2005.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases paid to a
22teacher at a time when the teacher is 10 or more years from
23retirement eligibility under Section 16-132 or 16-133.2.
24    When assessing payment for any amount due under subsection
25(f), the System shall exclude salary increases resulting from
26overload work, including summer school, when the school

 

 

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1district has certified to the System, and the System has
2approved the certification, that (i) the overload work is for
3the sole purpose of classroom instruction in excess of the
4standard number of classes for a full-time teacher in a school
5district during a school year and (ii) the salary increases are
6equal to or less than the rate of pay for classroom instruction
7computed on the teacher's current salary and work schedule.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude a salary increase resulting from
10a promotion (i) for which the employee is required to hold a
11certificate or supervisory endorsement issued by the State
12Teacher Certification Board that is a different certification
13or supervisory endorsement than is required for the teacher's
14previous position and (ii) to a position that has existed and
15been filled by a member for no less than one complete academic
16year and the salary increase from the promotion is an increase
17that results in an amount no greater than the lesser of the
18average salary paid for other similar positions in the district
19requiring the same certification or the amount stipulated in
20the collective bargaining agreement for a similar position
21requiring the same certification.
22    When assessing payment for any amount due under subsection
23(f), the System shall exclude any payment to the teacher from
24the State of Illinois or the State Board of Education over
25which the employer does not have discretion, notwithstanding
26that the payment is included in the computation of final

 

 

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

 

 

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1    (j) For purposes of determining the required State
2contribution to the System, the value of the System's assets
3shall be equal to the actuarial value of the System's assets,
4which shall be calculated as follows:
5    As of June 30, 2008, the actuarial value of the System's
6assets shall be equal to the market value of the assets as of
7that date. In determining the actuarial value of the System's
8assets for fiscal years after June 30, 2008, any actuarial
9gains or losses from investment return incurred in a fiscal
10year shall be recognized in equal annual amounts over the
115-year period following that fiscal year.
12    (k) For purposes of determining the required State
13contribution to the system for a particular year, the actuarial
14value of assets shall be assumed to earn a rate of return equal
15to the system's actuarially assumed rate of return.
16(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
186-18-12; 97-813, eff. 7-13-12.)
 
19    (40 ILCS 5/16-158.1)  (from Ch. 108 1/2, par. 16-158.1)
20    Sec. 16-158.1. Actions to enforce payments by school
21districts and other employing units other than the State. Any
22school district or other employing unit, other than the State,
23that fails failing to transmit to the System contributions
24required of it under this Article or contributions required of
25teachers, for more than 90 days after such contributions are

 

 

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1due is subject to the following: after giving notice to the
2district or other unit, the System may certify to the State
3Comptroller or the Regional Superintendent of Schools the
4amounts of such delinquent payments and the State Comptroller
5or the Regional Superintendent of Schools shall deduct the
6amounts so certified or any part thereof from any State funds
7to be remitted to the school district or other employing unit
8involved and shall pay the amount so deducted to the System. If
9State funds from which such deductions may be made are not
10available, the System may proceed against the school district
11or other employing unit to recover the amounts of such
12delinquent payments in the appropriate circuit court.
13    The System may provide for an audit of the records of a
14school district or other employing unit, other than the State,
15as may be required to establish the amounts of required
16contributions. The school district or other employing unit
17shall make its records available to the System for the purpose
18of such audit. The cost of such audit shall be added to the
19amount of the delinquent payments and shall be recovered by the
20System from the school district or other employing unit at the
21same time and in the same manner as the delinquent payments are
22recovered.
23(Source: P.A. 90-448, eff. 8-16-97.)
 
24    (40 ILCS 5/16-158.2 new)
25    Sec. 16-158.2. Obligations of State; funding guarantee.

 

 

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1Beginning July 1, 2013, the State shall be contractually
2obligated to contribute to the System under Section 16-158 in
3each State fiscal year an amount not less than the sum of (i)
4the State's required contribution under subsections (b-10) and
5(b-20) of Section 16-158 and (ii) the portion of the total cost
6of the benefits of the System arising before July 1, 2013
7assigned to that State fiscal year by law in accordance with a
8schedule that distributes payments equitably over a reasonable
9period of time and in accordance with accepted actuarial
10practices. The obligations created under this subsection (b)
11are contractual obligations protected and enforceable under
12Article I, Section 16 and Article XIII, Section 5 of the
13Illinois 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

 

 

SB0035- 206 -LRB098 05472 JDS 35506 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

 

 

SB0035- 207 -LRB098 05472 JDS 35506 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

 

 

SB0035- 208 -LRB098 05472 JDS 35506 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 5/20-121)  (from Ch. 108 1/2, par. 20-121)
17    Sec. 20-121. Calculation of proportional retirement
18annuities. Upon retirement of the employee, a proportional
19retirement annuity shall be computed by each participating
20system in which pension credit has been established on the
21basis of pension credits under each system. The computation
22shall be in accordance with the formula or method prescribed by
23each participating system which is in effect at the date of the
24employee's latest withdrawal from service covered by any of the
25systems in which he has pension credits which he elects to have

 

 

SB0035- 209 -LRB098 05472 JDS 35506 b

1considered under this Article. However, (1) the amount of any
2retirement annuity payable under the self-managed plan
3established under Section 15-158.2 of this Code depends solely
4on the value of the participant's vested account balances and
5is not subject to any proportional adjustment under this
6Section, and (2) the amount of any retirement annuity payable
7under the cash balance plan established under Section 1-161 of
8this Code shall be calculated solely in accordance with that
9Section and is not subject to any proportional adjustment under
10this Section.
11    Combined pension credit under all retirement systems
12subject to this Article shall be considered in determining
13whether the minimum qualification has been met and the formula
14or method of computation which shall be applied. If a system
15has a step-rate formula for calculation of the retirement
16annuity, pension credits covering previous service which have
17been established under another system shall be considered in
18determining which range or ranges of the step-rate formula are
19to be applicable to the employee.
20    Interest on pension credit shall continue to accumulate in
21accordance with the provisions of the law governing the
22retirement system in which the same has been established during
23the time an employee is in the service of another employer, on
24the assumption such employee, for interest purposes for pension
25credit, is continuing in the service covered by such retirement
26system.

 

 

SB0035- 210 -LRB098 05472 JDS 35506 b

1(Source: P.A. 91-887, eff. 7-6-00.)
 
2    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
3    Sec. 20-123. Survivor's annuity. The provisions governing
4a retirement annuity shall be applicable to a survivor's
5annuity. Appropriate credits shall be established for
6survivor's annuity purposes in those participating systems
7which provide survivor's annuities, according to the same
8conditions and subject to the same limitations and restrictions
9herein prescribed for a retirement annuity. If a participating
10system has no survivor's annuity benefit, or if the survivor's
11annuity benefit under that system is waived, pension credit
12established in that system shall not be considered in
13determining eligibility for or the amount of the survivor's
14annuity which may be payable by any other participating system.
15    For persons who participate in the self-managed plan
16established under Section 15-158.2 or the portable benefit
17package established under Section 15-136.4, pension credit
18established under Article 15 may be considered in determining
19eligibility for or the amount of the survivor's annuity that is
20payable by any other participating system, but pension credit
21established in any other system shall not result in any right
22to a survivor's annuity under the Article 15 system.
23    For persons who participate in the cash balance plan
24established under Section 1-161, pension credit established
25under the participating system with respect to which the person

 

 

SB0035- 211 -LRB098 05472 JDS 35506 b

1participates in the cash balance plan may be considered in
2determining eligibility for or the amount of the survivor's
3annuity that is payable by any other participating system with
4respect to which the person does not participate in the cash
5balance plan, but the amount of any survivor's annuity payable
6under the cash balance plan established under Section 1-161
7shall be calculated solely in accordance with that Section.
8(Source: P.A. 91-887, eff. 7-6-00.)
 
9    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
10    Sec. 20-124. Maximum benefits.
11    (a) In no event shall the combined retirement or survivors
12annuities exceed the highest annuity which would have been
13payable by any participating system in which the employee has
14pension credits, if all of his pension credits had been
15validated in that system.
16    If the combined annuities should exceed the highest maximum
17as determined in accordance with this Section, the respective
18annuities shall be reduced proportionately according to the
19ratio which the amount of each proportional annuity bears to
20the aggregate of all such annuities; except that benefits
21payable under the cash balance plan established under Section
221-161 are not subject to proportionate reduction under this
23Section.
24    (b) In the case of a participant in the self-managed plan
25established under Section 15-158.2 of this Code to whom the

 

 

SB0035- 212 -LRB098 05472 JDS 35506 b

1provisions of this Article apply:
2        (i) For purposes of calculating the combined
3    retirement annuity and the proportionate reduction, if
4    any, in a retirement annuity other than one payable under
5    the self-managed plan, the amount of the Article 15
6    retirement annuity shall be deemed to be the highest
7    annuity to which the annuitant would have been entitled if
8    he or she had participated in the traditional benefit
9    package as defined in Section 15-103.1 rather than the
10    self-managed plan.
11        (ii) For purposes of calculating the combined
12    survivor's annuity and the proportionate reduction, if
13    any, in a survivor's annuity other than one payable under
14    the self-managed plan, the amount of the Article 15
15    survivor's annuity shall be deemed to be the highest
16    survivor's annuity to which the survivor would have been
17    entitled if the deceased employee had participated in the
18    traditional benefit package as defined in Section 15-103.1
19    rather than the self-managed plan.
20        (iii) Benefits payable under the self-managed plan are
21    not subject to proportionate reduction under this Section.
22(Source: P.A. 91-887, eff. 7-6-00.)
 
23    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
24    Sec. 20-125. Return to employment - suspension of benefits.
25If a retired employee returns to employment which is covered by

 

 

SB0035- 213 -LRB098 05472 JDS 35506 b

1a system from which he is receiving a proportional annuity
2under this Article, his proportional annuity from all
3participating systems shall be suspended during the period of
4re-employment, except that this suspension does not apply to
5any distributions payable under the self-managed plan
6established under Section 15-158.2 of this Code.
7    The provisions of the Article under which such employment
8would be covered (including Section 1-161 in the case of a
9participant in the cash balance plan) shall govern the
10determination of whether the employee has returned to
11employment, and if applicable the exemption of temporary
12employment or employment not exceeding a specified duration or
13frequency, for all participating systems from which the retired
14employee is receiving a proportional annuity under this
15Article, notwithstanding any contrary provisions in the other
16Articles governing such systems.
17(Source: P.A. 91-887, eff. 7-6-00.)
 
18    Section 90. The State Mandates Act is amended by adding
19Section 8.37 as follows:
 
20    (30 ILCS 805/8.37 new)
21    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
22of this Act, no reimbursement by the State is required for the
23implementation of any mandate created by this amendatory Act of
24the 98th General Assembly.
 

 

 

SB0035- 214 -LRB098 05472 JDS 35506 b

1    Section 97. Inseverability. The provisions of this Act are
2inseverable.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.

 

 

SB0035- 215 -LRB098 05472 JDS 35506 b

1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 3005/7from Ch. 127, par. 417
4    20 ILCS 3005/8from Ch. 127, par. 418
5    30 ILCS 105/13from Ch. 127, par. 149
6    30 ILCS 105/24.12 new
7    30 ILCS 105/24.13 new
8    30 ILCS 122/20
9    40 ILCS 5/1-103.3
10    40 ILCS 5/1-160
11    40 ILCS 5/1-161 new
12    40 ILCS 5/2-105.1 new
13    40 ILCS 5/2-105.2 new
14    40 ILCS 5/2-108from Ch. 108 1/2, par. 2-108
15    40 ILCS 5/2-119from Ch. 108 1/2, par. 2-119
16    40 ILCS 5/2-119.1from Ch. 108 1/2, par. 2-119.1
17    40 ILCS 5/2-121.1from Ch. 108 1/2, par. 2-121.1
18    40 ILCS 5/2-124from Ch. 108 1/2, par. 2-124
19    40 ILCS 5/2-125from Ch. 108 1/2, par. 2-125
20    40 ILCS 5/2-126from Ch. 108 1/2, par. 2-126
21    40 ILCS 5/2-134from Ch. 108 1/2, par. 2-134
22    40 ILCS 5/2-162
23    40 ILCS 5/14-103.10from Ch. 108 1/2, par. 14-103.10
24    40 ILCS 5/14-103.40 new
25    40 ILCS 5/14-103.41 new

 

 

SB0035- 216 -LRB098 05472 JDS 35506 b

1    40 ILCS 5/14-107from Ch. 108 1/2, par. 14-107
2    40 ILCS 5/14-108from Ch. 108 1/2, par. 14-108
3    40 ILCS 5/14-110from Ch. 108 1/2, par. 14-110
4    40 ILCS 5/14-114from Ch. 108 1/2, par. 14-114
5    40 ILCS 5/14-131
6    40 ILCS 5/14-132from Ch. 108 1/2, par. 14-132
7    40 ILCS 5/14-133from Ch. 108 1/2, par. 14-133
8    40 ILCS 5/14-135.08from Ch. 108 1/2, par. 14-135.08
9    40 ILCS 5/14-152.1
10    40 ILCS 5/15-107.1 new
11    40 ILCS 5/15-107.2 new
12    40 ILCS 5/15-111from Ch. 108 1/2, par. 15-111
13    40 ILCS 5/15-113.6from Ch. 108 1/2, par. 15-113.6
14    40 ILCS 5/15-113.7from Ch. 108 1/2, par. 15-113.7
15    40 ILCS 5/15-135from Ch. 108 1/2, par. 15-135
16    40 ILCS 5/15-136from Ch. 108 1/2, par. 15-136
17    40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
18    40 ILCS 5/15-155.1 new
19    40 ILCS 5/15-156from Ch. 108 1/2, par. 15-156
20    40 ILCS 5/15-157from Ch. 108 1/2, par. 15-157
21    40 ILCS 5/15-165from Ch. 108 1/2, par. 15-165
22    40 ILCS 5/15-198
23    40 ILCS 5/16-106.4 new
24    40 ILCS 5/16-106.5 new
25    40 ILCS 5/16-121from Ch. 108 1/2, par. 16-121
26    40 ILCS 5/16-132from Ch. 108 1/2, par. 16-132

 

 

SB0035- 217 -LRB098 05472 JDS 35506 b

1    40 ILCS 5/16-133from Ch. 108 1/2, par. 16-133
2    40 ILCS 5/16-133.1from Ch. 108 1/2, par. 16-133.1
3    40 ILCS 5/16-152from Ch. 108 1/2, par. 16-152
4    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
5    40 ILCS 5/16-158.1from Ch. 108 1/2, par. 16-158.1
6    40 ILCS 5/16-158.2 new
7    40 ILCS 5/16-203
8    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
9    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
10    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
11    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125
12    30 ILCS 805/8.37 new