SB2933 EnrolledLRB098 19649 RPM 54852 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Section 22-101B as follows:
 
6    (40 ILCS 5/22-101B)
7    Sec. 22-101B. Health Care Benefits.
8    (a) The Chicago Transit Authority (hereinafter referred to
9in this Section as the "Authority") shall take all actions
10lawfully available to it to separate the funding of health care
11benefits for retirees and their dependents and survivors from
12the funding for its retirement system. The Authority shall
13endeavor to achieve this separation as soon as possible, and in
14any event no later than July 1, 2009.
15    (b) Effective 90 days after the effective date of this
16amendatory Act of the 95th General Assembly, a Retiree Health
17Care Trust is established for the purpose of providing health
18care benefits to eligible retirees and their dependents and
19survivors in accordance with the terms and conditions set forth
20in this Section 22-101B. The Retiree Health Care Trust shall be
21solely responsible for providing health care benefits to
22eligible retirees and their dependents and survivors upon the
23exhaustion of the account established by the Retirement Plan

 

 

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1for Chicago Transit Authority Employees pursuant to Section
2401(h) of the Internal Revenue Code of 1986, but no earlier
3than January 1, 2009 and no later than July 1, 2009.
4        (1) The Board of Trustees shall consist of 7 members
5    appointed as follows: (i) 3 trustees shall be appointed by
6    the Chicago Transit Board; (ii) one trustee shall be
7    appointed by an organization representing the highest
8    number of Chicago Transit Authority participants; (iii)
9    one trustee shall be appointed by an organization
10    representing the second-highest number of Chicago Transit
11    Authority participants; (iv) one trustee shall be
12    appointed by the recognized coalition representatives of
13    participants who are not represented by an organization
14    with the highest or second-highest number of Chicago
15    Transit Authority participants; and (v) one trustee shall
16    be selected by the Regional Transportation Authority Board
17    of Directors, and the trustee shall be a professional
18    fiduciary who has experience in the area of collectively
19    bargained retiree health plans. Trustees shall serve until
20    a successor has been appointed and qualified, or until
21    resignation, death, incapacity, or disqualification.
22        Any person appointed as a trustee of the board shall
23    qualify by taking an oath of office that he or she will
24    diligently and honestly administer the affairs of the
25    system, and will not knowingly violate or willfully permit
26    the violation of any of the provisions of law applicable to

 

 

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1    the Plan, including Sections 1-109, 1-109.1, 1-109.2,
2    1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois
3    Pension Code.
4        Each trustee shall cast individual votes, and a
5    majority vote shall be final and binding upon all
6    interested parties, provided that the Board of Trustees may
7    require a supermajority vote with respect to the investment
8    of the assets of the Retiree Health Care Trust, and may set
9    forth that requirement in the trust agreement or by-laws of
10    the Board of Trustees. Each trustee shall have the rights,
11    privileges, authority and obligations as are usual and
12    customary for such fiduciaries.
13        (2) The Board of Trustees shall establish and
14    administer a health care benefit program for eligible
15    retirees and their dependents and survivors. Any health
16    care benefit program established by the Board of Trustees
17    for eligible retirees and their dependents and survivors
18    effective on or after July 1, 2009 shall not contain any
19    plan which provides for more than 90% coverage for
20    in-network services or 70% coverage for out-of-network
21    services after any deductible has been paid, except that
22    coverage through a health maintenance organization ("HMO")
23    may be provided at 100%.
24        (2.5) The Board of Trustees may also establish and
25    administer a health reimbursement arrangement for retirees
26    and for former employees of the Authority or the Retirement

 

 

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1    Plan, and their survivors, who have contributed to the
2    Retiree Health Care Trust but do not satisfy the years of
3    service requirement of subdivision (b)(4) and the terms of
4    the retiree health care plan; or for those who do satisfy
5    the requirements of subdivision (b)(4) and the terms of the
6    retiree health care plan but who decline coverage under the
7    plan prior to retirement. Any such health reimbursement
8    arrangement may provide that: the retirees or former
9    employees of the Authority or the Retirement Plan, and
10    their survivors, must have reached age 65 to be eligible to
11    participate in the health reimbursement arrangement;
12    contributions by the retirees or former employees of the
13    Authority or the Retirement Plan to the Retiree Health Care
14    Trust shall be considered assets of the Retiree Health Care
15    Trust only; contributions shall not accrue interest for the
16    benefit of the retiree or former employee of the Authority
17    or the Retirement Plan or survivor; benefits shall be
18    payable in accordance with the Internal Revenue Code of
19    1986; the amounts paid to or on account of the retiree or
20    former employee of the Authority or the Retirement Plan or
21    survivor shall not exceed the total amount which the
22    retiree or former employee of the Authority or the
23    Retirement Plan contributed to the Retiree Health Care
24    Trust; the Retiree Health Care Trust may charge a
25    reasonable administrative fee for processing the benefits.
26    The Board of Trustees of the Retiree Health Care Trust may

 

 

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1    establish such rules, limitations and requirements as the
2    Board of Trustees deems appropriate.
3        (3) The Retiree Health Care Trust shall be administered
4    by the Board of Trustees according to the following
5    requirements:
6            (i) The Board of Trustees may cause amounts on
7        deposit in the Retiree Health Care Trust to be invested
8        in those investments that are permitted investments
9        for the investment of moneys held under any one or more
10        of the pension or retirement systems of the State, any
11        unit of local government or school district, or any
12        agency or instrumentality thereof. The Board, by a vote
13        of at least two-thirds of the trustees, may transfer
14        investment management to the Illinois State Board of
15        Investment, which is hereby authorized to manage these
16        investments when so requested by the Board of Trustees.
17            (ii) The Board of Trustees shall establish and
18        maintain an appropriate funding reserve level which
19        shall not be less than the amount of incurred and
20        unreported claims plus 12 months of expected claims and
21        administrative expenses.
22            (iii) The Board of Trustees shall make an annual
23        assessment of the funding levels of the Retiree Health
24        Care Trust and shall submit a report to the Auditor
25        General at least 90 days prior to the end of the fiscal
26        year. The report shall provide the following:

 

 

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1                (A) the actuarial present value of projected
2            benefits expected to be paid to current and future
3            retirees and their dependents and survivors;
4                (B) the actuarial present value of projected
5            contributions and trust income plus assets;
6                (C) the reserve required by subsection
7            (b)(3)(ii); and
8                (D) an assessment of whether the actuarial
9            present value of projected benefits expected to be
10            paid to current and future retirees and their
11            dependents and survivors exceeds or is less than
12            the actuarial present value of projected
13            contributions and trust income plus assets in
14            excess of the reserve required by subsection
15            (b)(3)(ii).
16            If the actuarial present value of projected
17        benefits expected to be paid to current and future
18        retirees and their dependents and survivors exceeds
19        the actuarial present value of projected contributions
20        and trust income plus assets in excess of the reserve
21        required by subsection (b)(3)(ii), then the report
22        shall provide a plan, to be implemented over a period
23        of not more than 10 years from each valuation date,
24        which would make the actuarial present value of
25        projected contributions and trust income plus assets
26        equal to or exceed the actuarial present value of

 

 

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1        projected benefits expected to be paid to current and
2        future retirees and their dependents and survivors.
3        The plan may consist of increases in employee, retiree,
4        dependent, or survivor contribution levels, decreases
5        in benefit levels, or other plan changes or any
6        combination thereof. If the actuarial present value of
7        projected benefits expected to be paid to current and
8        future retirees and their dependents and survivors is
9        less than the actuarial present value of projected
10        contributions and trust income plus assets in excess of
11        the reserve required by subsection (b)(3)(ii), then
12        the report may provide a plan of decreases in employee,
13        retiree, dependent, or survivor contribution levels,
14        increases in benefit levels, or other plan changes, or
15        any combination thereof, to the extent of the surplus.
16            (iv) The Auditor General shall review the report
17        and plan provided in subsection (b)(3)(iii) and issue a
18        determination within 90 days after receiving the
19        report and plan, with a copy of such determination
20        provided to the General Assembly and the Regional
21        Transportation Authority, as follows:
22                (A) In the event of a projected shortfall, if
23            the Auditor General determines that the
24            assumptions stated in the report are not
25            unreasonable in the aggregate and that the plan of
26            increases in employee, retiree, dependent, or

 

 

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1            survivor contribution levels, decreases in benefit
2            levels, or other plan changes, or any combination
3            thereof, to be implemented over a period of not
4            more than 10 years from each valuation date, is
5            reasonably projected to make the actuarial present
6            value of projected contributions and trust income
7            plus assets equal to or in excess of the actuarial
8            present value of projected benefits expected to be
9            paid to current and future retirees and their
10            dependents and survivors, then the Board of
11            Trustees shall implement the plan. If the Auditor
12            General determines that the assumptions stated in
13            the report are unreasonable in the aggregate, or
14            that the plan of increases in employee, retiree,
15            dependent, or survivor contribution levels,
16            decreases in benefit levels, or other plan changes
17            to be implemented over a period of not more than 10
18            years from each valuation date, is not reasonably
19            projected to make the actuarial present value of
20            projected contributions and trust income plus
21            assets equal to or in excess of the actuarial
22            present value of projected benefits expected to be
23            paid to current and future retirees and their
24            dependents and survivors, then the Board of
25            Trustees shall not implement the plan, the Auditor
26            General shall explain the basis for such

 

 

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1            determination to the Board of Trustees, and the
2            Auditor General may make recommendations as to an
3            alternative report and plan.
4                (B) In the event of a projected surplus, if the
5            Auditor General determines that the assumptions
6            stated in the report are not unreasonable in the
7            aggregate and that the plan of decreases in
8            employee, retiree, dependent, or survivor
9            contribution levels, increases in benefit levels,
10            or both, is not unreasonable in the aggregate, then
11            the Board of Trustees shall implement the plan. If
12            the Auditor General determines that the
13            assumptions stated in the report are unreasonable
14            in the aggregate, or that the plan of decreases in
15            employee, retiree, dependent, or survivor
16            contribution levels, increases in benefit levels,
17            or both, is unreasonable in the aggregate, then the
18            Board of Trustees shall not implement the plan, the
19            Auditor General shall explain the basis for such
20            determination to the Board of Trustees, and the
21            Auditor General may make recommendations as to an
22            alternative report and plan.
23                (C) The Board of Trustees shall submit an
24            alternative report and plan within 45 days after
25            receiving a rejection determination by the Auditor
26            General. A determination by the Auditor General on

 

 

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1            any alternative report and plan submitted by the
2            Board of Trustees shall be made within 90 days
3            after receiving the alternative report and plan,
4            and shall be accepted or rejected according to the
5            requirements of this subsection (b)(3)(iv). The
6            Board of Trustees shall continue to submit
7            alternative reports and plans to the Auditor
8            General, as necessary, until a favorable
9            determination is made by the Auditor General.
10        (4) For any retiree who first retires effective on or
11    after January 18, 2008, to be eligible for retiree health
12    care benefits upon retirement, the retiree must be at least
13    55 years of age, retire with 10 or more years of continuous
14    service and satisfy the preconditions established by
15    Public Act 95-708 in addition to any rules or regulations
16    promulgated by the Board of Trustees. Notwithstanding the
17    foregoing, any retiree hired on or before September 5, 2001
18    who retires with 25 years or more of continuous service
19    shall be eligible for retiree health care benefits upon
20    retirement in accordance with any rules or regulations
21    adopted by the Board of Trustees; provided he or she
22    retires prior to the full execution of the successor
23    collective bargaining agreement to the collective
24    bargaining agreement that became effective January 1, 2007
25    between the Authority and the organizations representing
26    the highest and second-highest number of Chicago Transit

 

 

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1    Authority participants. This paragraph (4) shall not apply
2    to a disability allowance.
3        (5) Effective January 1, 2009, the aggregate amount of
4    retiree, dependent and survivor contributions to the cost
5    of their health care benefits shall not exceed more than
6    45% of the total cost of such benefits. The Board of
7    Trustees shall have the discretion to provide different
8    contribution levels for retirees, dependents and survivors
9    based on their years of service, level of coverage or
10    Medicare eligibility, provided that the total contribution
11    from all retirees, dependents, and survivors shall be not
12    more than 45% of the total cost of such benefits. The term
13    "total cost of such benefits" for purposes of this
14    subsection shall be the total amount expended by the
15    retiree health benefit program in the prior plan year, as
16    calculated and certified in writing by the Retiree Health
17    Care Trust's enrolled actuary to be appointed and paid for
18    by the Board of Trustees.
19        (6) Effective January 18, 2008, all employees of the
20    Authority shall contribute to the Retiree Health Care Trust
21    in an amount not less than 3% of compensation.
22        (7) No earlier than January 1, 2009 and no later than
23    July 1, 2009 as the Retiree Health Care Trust becomes
24    solely responsible for providing health care benefits to
25    eligible retirees and their dependents and survivors in
26    accordance with subsection (b) of this Section 22-101B, the

 

 

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1    Authority shall not have any obligation to provide health
2    care to current or future retirees and their dependents or
3    survivors. Employees, retirees, dependents, and survivors
4    who are required to make contributions to the Retiree
5    Health Care Trust shall make contributions at the level set
6    by the Board of Trustees pursuant to the requirements of
7    this Section 22-101B.
8(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08;
996-1254, eff. 7-23-10.)