98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB1687

 

Introduced 2/15/2013, by Sen. Daniel Biss

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-139.5
40 ILCS 5/15-168.2

    Amends the State Universities Article of the Illinois Pension Code. Delays by one year the implementation of the return to service provisions added by Public Act 97-968. Authorizes an employer to notify the System that an annuitant is returning to service by providing the annuitant's rate of compensation and anticipated length of employment (now, an employer may give notice in that manner only if there is not a written employment contract). Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 15-139.5 and 15-168.2 as follows:
 
6    (40 ILCS 5/15-139.5)
7    Sec. 15-139.5. Return to work by affected annuitant; notice
8and contribution by employer.
9    (a) An employer who employs or re-employs a person
10receiving a retirement annuity from the System in an academic
11year beginning on or after August 1, 2014 2013 must notify the
12System of that employment within 60 days after employing the
13annuitant. The notice must include a copy of the contract of
14employment, or it ; if no written contract of employment
15exists, then the notice must specify the rate of compensation
16and the anticipated length of employment of that annuitant. The
17notice must specify whether the annuitant will be compensated
18from federal, corporate, foundation, or trust funds or grants
19of State funds that identify the principal investigator by
20name. The notice must include the employer's determination of
21whether or not the annuitant is an "affected annuitant" as
22defined in subsection (b).
23    The employer must also record, document, and certify to the

 

 

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1System (i) the number of paid days and paid weeks worked by the
2annuitant in the academic year, (ii) the amount of compensation
3paid to the annuitant for employment during the academic year,
4and (iii) the amount of that compensation, if any, that comes
5from either federal, corporate, foundation, or trust funds or
6grants of State funds that identify the principal investigator
7by name.
8    As used in this Section, "academic year" has the meaning
9ascribed to that term in Section 15-126.1; "paid day" means a
10day on which a person performs personal services for an
11employer and for which the person is compensated by the
12employer; and "paid week" means a calendar week in which a
13person has at least one paid day.
14    For the purposes of this Section, an annuitant whose
15employment by an employer extends over more than one academic
16year shall be deemed to be re-employed by that employer in each
17of those academic years.
18    The System may specify the time, form, and manner of
19providing the determinations, notifications, certifications,
20and documentation required under this Section.
21    (b) A person receiving a retirement annuity from the System
22becomes an "affected annuitant" on the first day of the
23academic year following the academic year in which the
24annuitant first meets both of the following conditions:
25        (1) While receiving a retirement annuity under this
26    Article, the annuitant has been employed on or after August

 

 

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1    1, 2014 2013 by one or more employers under this Article
2    for a total of more than 18 paid weeks (which need not have
3    been with the same employer or in the same academic year);
4    except that any periods of employment for which the
5    annuitant was compensated solely from federal, corporate,
6    foundation, or trust funds or grants of State funds that
7    identify the principal investigator by name are excluded.
8        (2) While receiving a retirement annuity under this
9    Article, the annuitant was employed on or after August 1,
10    2014 2013 by one or more employers under this Article and
11    received or became entitled to receive during an academic
12    year compensation for that employment in excess of 40% of
13    his or her highest annual earnings prior to retirement;
14    except that compensation paid from federal, corporate,
15    foundation, or trust funds or grants of State funds that
16    identify the principal investigator by name is excluded.
17    A person who becomes an affected annuitant remains an
18affected annuitant, except for any period during which the
19person returns to active service and does not receive a
20retirement annuity from the System.
21    (c) It is the obligation of the employer to determine
22whether an annuitant is an affected annuitant before employing
23the annuitant. For that purpose the employer may require the
24annuitant to disclose and document his or her relevant prior
25employment and earnings history. Failure of the employer to
26make this determination correctly and in a timely manner or to

 

 

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1include this determination with the notification required
2under subsection (a) does not excuse the employer from making
3the contribution required under subsection (e).
4    The System may assist the employer in determining whether a
5person is an affected annuitant. The System shall inform the
6employer if it discovers that the employer's determination is
7inconsistent with the employment and earnings information in
8the System's records.
9    (d) Upon the request of an annuitant, the System shall
10certify to the annuitant the following information as reported
11by the employers, as that information is indicated in the
12records of the System: (i) the annuitant's highest annual
13earnings prior to retirement, (ii) the number of paid weeks
14worked by the annuitant for an employer on or after August 1,
152014 2013, (iii) the compensation paid for that employment in
16each academic year, and (iv) whether any of that employment or
17compensation has been certified to the System as being paid
18from federal, corporate, foundation, or trust funds or grants
19of State funds that identify the principal investigator by
20name. The System shall only be required to certify information
21that is received from the employers.
22    (e) In addition to the requirements of subsection (a), an
23employer who employs an affected annuitant must pay to the
24System an employer contribution in the amount and manner
25provided in this Section, unless the annuitant is compensated
26by that employer solely from federal, corporate, foundation, or

 

 

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1trust funds or grants of State funds that identify the
2principal investigator by name.
3    The employer contribution required under this Section for
4employment of an affected annuitant in an academic year shall
5be equal to 12 times the amount of the gross monthly retirement
6annuity payable to the annuitant for the month in which the
7first paid day of that employment in that academic year occurs,
8after any reduction in that annuity that may be imposed under
9subsection (b) of Section 15-139.
10    If an affected annuitant is employed by more than one
11employer in an academic year, the employer contribution
12required under this Section shall be divided among those
13employers in proportion to their respective portions of the
14total compensation paid to the affected annuitant for that
15employment during that academic year.
16    If the System determines that an employer, without
17reasonable justification, has failed to make the determination
18of affected annuitant status correctly and in a timely manner,
19or has failed to notify the System or to correctly document or
20certify to the System any of the information required by this
21Section, and that failure results in a delayed determination by
22the System that a contribution is payable under this Section,
23then the amount of that employer's contribution otherwise
24determined under this Section shall be doubled.
25    The System shall deem a failure to correctly determine the
26annuitant's status to be justified if the employer establishes

 

 

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1to the System's satisfaction that the employer, after due
2diligence, made an erroneous determination that the annuitant
3was not an affected annuitant due to reasonable reliance on
4false or misleading information provided by the annuitant or
5another employer, or an error in the annuitant's official
6employment or earnings records.
7    (f) Whenever the System determines that an employer is
8liable for a contribution under this Section, it shall so
9notify the employer and certify the amount of the contribution.
10The employer may pay the required contribution without interest
11at any time within one year after receipt of the certification.
12If the employer fails to pay within that year, then interest
13shall be charged at a rate equal to the System's prescribed
14rate of interest, compounded annually from the 366th day after
15receipt of the certification from the System. Payment must be
16concluded within 2 years after receipt of the certification by
17the employer. If the employer fails to make complete payment,
18including applicable interest, within 2 years, then the System
19may, after giving notice to the employer, certify the
20delinquent amount to the State Comptroller, and the Comptroller
21shall thereupon deduct the certified delinquent amount from
22State funds payable to the employer and pay them instead to the
23System.
24    (g) If an employer is required to make a contribution to
25the System as a result of employing an affected annuitant and
26the annuitant later elects to forgo his or her annuity in that

 

 

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1same academic year pursuant to subsection (c) of Section
215-139, then the required contribution by the employer shall be
3waived, and if the contribution has already been paid, it shall
4be refunded to the employer without interest.
5    (h) Notwithstanding any other provision of this Article,
6the employer contribution required under this Section shall not
7be included in the determination of any benefit under this
8Article or any other Article of this Code, regardless of
9whether the annuitant returns to active service, and is in
10addition to any other State or employer contribution required
11under this Article.
12    (i) Notwithstanding any other provision of this Section to
13the contrary, if an employer employs an affected annuitant in
14order to continue critical operations in the event of either an
15employee's unforeseen illness, accident, or death or a
16catastrophic incident or disaster, then, for one and only one
17academic year, the employer is not required to pay the
18contribution set forth in this Section for that annuitant. The
19employer shall, however, immediately notify the System upon
20employing a person subject to this subsection (i). For the
21purposes of this subsection (i), "critical operations" means
22teaching services, medical services, student welfare services,
23and any other services that are critical to the mission of the
24employer.
25(Source: P.A. 97-968, eff. 8-16-12.)
 

 

 

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1    (40 ILCS 5/15-168.2)
2    Sec. 15-168.2. Audit of employers. Beginning August 1, 2014
32013, the System may audit the employment records and payroll
4records of all employers. When the System audits an employer,
5it shall specify the exact information it requires, which may
6include but need not be limited to the names, titles, and
7earnings history of every individual receiving compensation
8from the employer. If an employer is audited by the System,
9then the employer must provide to the System all necessary
10documents and records within 60 calendar days after receiving
11notification from the System. When the System audits an
12employer, it shall send related correspondence by certified
13mail.
14(Source: P.A. 97-968, eff. 8-16-12.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.