Rep. Kelly M. Burke

Filed: 5/25/2016

 

 


 

 


 
09900SB2156ham003LRB099 13062 RPS 49165 a

1
AMENDMENT TO SENATE BILL 2156

2    AMENDMENT NO. ______. Amend Senate Bill 2156, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Pension Code is amended by
6changing Sections 15-106, 15-107, 15-110, 15-111, 15-113.11,
715-155, 15-158.2, 15-168, and 15-168.2 and by adding Sections
815-111.5 and 15-113.12 as follows:
 
9    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 15-106. Employer. "Employer": The University of
13Illinois, Southern Illinois University, Chicago State
14University, Eastern Illinois University, Governors State
15University, Illinois State University, Northeastern Illinois
16University, Northern Illinois University, Western Illinois

 

 

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1University, the State Board of Higher Education, the Illinois
2Mathematics and Science Academy, the University Civil Service
3Merit Board, the Board of Trustees of the State Universities
4Retirement System, the Illinois Community College Board,
5community college boards, any association of community college
6boards organized under Section 3-55 of the Public Community
7College Act, the Board of Examiners established under the
8Illinois Public Accounting Act, and, only during the period for
9which employer contributions required under Section 15-155 are
10paid, the following organizations: the alumni associations,
11the foundations and the athletic associations which are
12affiliated with the universities and colleges included in this
13Section as employers. An individual who begins employment on or
14after the effective date of this amendatory Act of the 99th
15General Assembly with any association of community college
16boards organized under Section 3-55 of the Public Community
17College Act, the Association of Illinois Middle-Grade Schools,
18the Illinois Association of School Administrators, the
19Illinois Association for Supervision and Curriculum
20Development, the Illinois Principals Association, the Illinois
21Association of School Business Officials, the Illinois Special
22Olympics, or an entity not defined as an employer in this
23Section shall not be deemed an employee for the purposes of
24this Article with respect to that employment and shall not be
25eligible to participate in the System with respect to that
26employment; provided, however, that those individuals who are

 

 

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1both employed by such an entity and are participating in the
2System with respect to that employment on the effective date of
3this amendatory Act of the 99th General Assembly shall be
4allowed to continue as participants in the System for the
5duration of that employment.
6    A department as defined in Section 14-103.04 is an employer
7for any person appointed by the Governor under the Civil
8Administrative Code of Illinois who is a participating employee
9as defined in Section 15-109. The Department of Central
10Management Services is an employer with respect to persons
11employed by the State Board of Higher Education in positions
12with the Illinois Century Network as of June 30, 2004 who
13remain continuously employed after that date by the Department
14of Central Management Services in positions with the Illinois
15Century Network, the Bureau of Communication and Computer
16Services, or, if applicable, any successor bureau.
17    The cities of Champaign and Urbana shall be considered
18employers, but only during the period for which contributions
19are required to be made under subsection (b-1) of Section
2015-155 and only with respect to individuals described in
21subsection (h) of Section 15-107.
22(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
23Sec. 999.)
 
24    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
25    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

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1which has been held unconstitutional)
2    Sec. 15-107. Employee.
3    (a) "Employee" means any member of the educational,
4administrative, secretarial, clerical, mechanical, labor or
5other staff of an employer whose employment is permanent and
6continuous or who is employed in a position in which services
7are expected to be rendered on a continuous basis for at least
84 months or one academic term, whichever is less, who (A)
9receives payment for personal services on a warrant issued
10pursuant to a payroll voucher certified by an employer and
11drawn by the State Comptroller upon the State Treasurer or by
12an employer upon trust, federal or other funds, or (B) is on a
13leave of absence without pay. Employment which is irregular,
14intermittent or temporary shall not be considered continuous
15for purposes of this paragraph.
16    However, a person is not an "employee" if he or she:
17        (1) is a student enrolled in and regularly attending
18    classes in a college or university which is an employer,
19    and is employed on a temporary basis at less than full
20    time;
21        (2) is currently receiving a retirement annuity or a
22    disability retirement annuity under Section 15-153.2 from
23    this System;
24        (3) is on a military leave of absence;
25        (4) is eligible to participate in the Federal Civil
26    Service Retirement System and is currently making

 

 

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1    contributions to that system based upon earnings paid by an
2    employer;
3        (5) is on leave of absence without pay for more than 60
4    days immediately following termination of disability
5    benefits under this Article;
6        (6) is hired after June 30, 1979 as a public service
7    employment program participant under the Federal
8    Comprehensive Employment and Training Act and receives
9    earnings in whole or in part from funds provided under that
10    Act; or
11        (7) is employed on or after July 1, 1991 to perform
12    services that are excluded by subdivision (a)(7)(f) or
13    (a)(19) of Section 210 of the federal Social Security Act
14    from the definition of employment given in that Section (42
15    U.S.C. 410).
16    (b) Any employer may, by filing a written notice with the
17board, exclude from the definition of "employee" all persons
18employed pursuant to a federally funded contract entered into
19after July 1, 1982 with a federal military department in a
20program providing training in military courses to federal
21military personnel on a military site owned by the United
22States Government, if this exclusion is not prohibited by the
23federally funded contract or federal laws or rules governing
24the administration of the contract.
25    (c) Any person appointed by the Governor under the Civil
26Administrative Code of the State is an employee, if he or she

 

 

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1is a participant in this system on the effective date of the
2appointment.
3    (d) A participant on lay-off status under civil service
4rules is considered an employee for not more than 120 days from
5the date of the lay-off.
6    (e) A participant is considered an employee during (1) the
7first 60 days of disability leave, (2) the period, not to
8exceed one year, in which his or her eligibility for disability
9benefits is being considered by the board or reviewed by the
10courts, and (3) the period he or she receives disability
11benefits under the provisions of Section 15-152, workers'
12compensation or occupational disease benefits, or disability
13income under an insurance contract financed wholly or partially
14by the employer.
15    (f) Absences without pay, other than formal leaves of
16absence, of less than 30 calendar days, are not considered as
17an interruption of a person's status as an employee. If such
18absences during any period of 12 months exceed 30 work days,
19the employee status of the person is considered as interrupted
20as of the 31st work day.
21    (g) A staff member whose employment contract requires
22services during an academic term is to be considered an
23employee during the summer and other vacation periods, unless
24he or she declines an employment contract for the succeeding
25academic term or his or her employment status is otherwise
26terminated, and he or she receives no earnings during these

 

 

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1periods.
2    (h) An individual 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 and who immediately after the
6elimination of that fire department became employed by the fire
7department of the City of Urbana or the City of Champaign shall
8continue to be considered as an employee for purposes of this
9Article for so long as the individual remains employed as a
10firefighter by the City of Urbana or the City of Champaign. The
11individual shall cease to be considered an employee under this
12subsection (h) upon the first termination of the individual's
13employment as a firefighter by the City of Urbana or the City
14of Champaign.
15    (i) An individual who is employed on a full-time basis as
16an officer or employee of a statewide teacher organization that
17serves System participants or an officer of a national teacher
18organization that serves System participants may participate
19in the System and shall be deemed an employee, provided that
20(1) the individual has previously earned creditable service
21under this Article, (2) the individual files with the System an
22irrevocable election to become a participant before the
23effective date of this amendatory Act of the 97th General
24Assembly, (3) the individual does not receive credit for that
25employment under any other Article of this Code, and (4) the
26individual first became a full-time employee of the teacher

 

 

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1organization and becomes a participant before the effective
2date of this amendatory Act of the 97th General Assembly. An
3employee under this subsection (i) is responsible for paying to
4the System both (A) employee contributions based on the actual
5compensation received for service with the teacher
6organization and (B) employer contributions equal to the normal
7costs (as defined in Section 15-155) resulting from that
8service; all or any part of these contributions may be paid on
9the employee's behalf or picked up for tax purposes (if
10authorized under federal law) by the teacher organization.
11    A person who is an employee as defined in this subsection
12(i) may establish service credit for similar employment prior
13to becoming an employee under this subsection by paying to the
14System for that employment the contributions specified in this
15subsection, plus interest at the effective rate from the date
16of service to the date of payment. However, credit shall not be
17granted under this subsection for any such prior employment for
18which the applicant received credit under any other provision
19of this Code, or during which the applicant was on a leave of
20absence under Section 15-113.2.
21    (j) A person employed by the State Board of Higher
22Education in a position with the Illinois Century Network as of
23June 30, 2004 shall be considered to be an employee for so long
24as he or she remains continuously employed after that date by
25the Department of Central Management Services in a position
26with the Illinois Century Network, the Bureau of Communication

 

 

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1and Computer Services, or, if applicable, any successor bureau
2and meets the requirements of subsection (a).
3    (k) The Board shall promulgate rules with respect to
4determining whether any person is an employee within the
5meaning of this Section. In the case of doubt as to whether any
6person is an employee within the meaning of this Section or any
7rule adopted by the Board, the decision of the Board shall be
8final.
9(Source: P.A. 97-651, eff. 1-5-12.)
 
10    (40 ILCS 5/15-110)  (from Ch. 108 1/2, par. 15-110)
11    Sec. 15-110. Basic compensation. "Basic compensation":
12Subject to Section 15-111.5, the The gross basic rate of salary
13or wages payable by an employer, including:
14        (1) the value of maintenance, board, living quarters,
15    personal laundry, or other allowances furnished in lieu of
16    salary which are considered gross income under the federal
17    Federal Internal Revenue Code of 1986, as amended; ,
18        (2) the employee contributions required under Section
19    15-157; , and
20        (3) the amount paid by any employer to a custodial
21    account for investment in regulated investment company
22    stocks for the benefit of the employee pursuant to the
23    University Employees Custodial Accounts Act; "An Act in
24    relation to payments to custodial accounts for the benefit
25    of employees of public institutions of higher education",

 

 

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1    approved September 9, 1983, and
2        (4) the amount of the premium payable by any employer
3    to an insurance company or companies on an annuity
4    contract, pursuant to the employee's election to accept a
5    reduction in earnings or forego an increase in earnings
6    under Section 30c of the State Finance Act "An Act in
7    relation to State Finance," approved June 10, 1919, as
8    amended, or a tax-sheltered annuity plan approved by any
9    employer; and
10        (5) the amount of any elective deferral to a deferred
11    compensation plan established under Article 24 of this Code
12    pursuant to Section 457(b) of the federal Internal Revenue
13    Code of 1986, as amended.
14    Basic compensation does not include (1) salary or wages for
15overtime or other extra service; (2) prospective salary or
16wages under a summer teaching contract not yet entered upon;
17and (3) overseas differential allowances, quarters allowances,
18post allowances, educational allowances and transportation
19allowances paid by an employer under a contract with the
20federal government or its agencies for services rendered in
21other countries. If an employee elects to receive in lieu of
22cash salary or wages, fringe benefits which are not taxable
23under the federal Federal Internal Revenue Code of 1986, as
24amended, the amount of the cash salary or wages which is waived
25shall be included in determining basic compensation.
26(Source: P.A. 84-1308.)
 

 

 

09900SB2156ham003- 11 -LRB099 13062 RPS 49165 a

1    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 15-111. Earnings.
5    (a) "Earnings": Subject to Section 15-111.5, an An amount
6paid for personal services equal to the sum of the basic
7compensation plus extra compensation for summer teaching,
8overtime or other extra service. For periods for which an
9employee receives service credit under subsection (c) of
10Section 15-113.1 or Section 15-113.2, earnings are equal to the
11basic compensation on which contributions are paid by the
12employee during such periods. Compensation for employment
13which is irregular, intermittent and temporary shall not be
14considered earnings, unless the participant is also receiving
15earnings from the employer as an employee under Section 15-107.
16    With respect to transition pay paid by the University of
17Illinois to a person who was a participating employee employed
18in the fire department of the University of Illinois's
19Champaign-Urbana campus immediately prior to the elimination
20of that fire department:
21        (1) "Earnings" includes transition pay paid to the
22    employee on or after the effective date of this amendatory
23    Act of the 91st General Assembly.
24        (2) "Earnings" includes transition pay paid to the
25    employee before the effective date of this amendatory Act

 

 

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1    of the 91st General Assembly only if (i) employee
2    contributions under Section 15-157 have been withheld from
3    that transition pay or (ii) the employee pays to the System
4    before January 1, 2001 an amount representing employee
5    contributions under Section 15-157 on that transition pay.
6    Employee contributions under item (ii) may be paid in a
7    lump sum, by withholding from additional transition pay
8    accruing before January 1, 2001, or in any other manner
9    approved by the System. Upon payment of the employee
10    contributions on transition pay, the corresponding
11    employer contributions become an obligation of the State.
12    (b) For a Tier 2 member, the annual earnings shall not
13exceed $106,800; however, that amount shall annually
14thereafter be increased by the lesser of (i) 3% of that amount,
15including all previous adjustments, or (ii) one half the annual
16unadjusted percentage increase (but not less than zero) in the
17consumer price index-u for the 12 months ending with the
18September preceding each November 1, including all previous
19adjustments.
20    For the purposes of this Section, "consumer price index u"
21means the index published by the Bureau of Labor Statistics of
22the United States Department of Labor that measures the average
23change in prices of goods and services purchased by all urban
24consumers, United States city average, all items, 1982-84 =
25100. The new amount resulting from each annual adjustment shall
26be determined by the Public Pension Division of the Department

 

 

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1of Insurance and made available to the boards of the retirement
2systems and pension funds by November 1 of each year.
3    (c) With each submission of payroll information in the
4manner prescribed by the System, the employer shall certify
5that the payroll information is correct and complies with all
6applicable State and federal laws.
7(Source: P.A. 98-92, eff. 7-16-13.)
 
8    (40 ILCS 5/15-111.5 new)
9    Sec. 15-111.5. Basic compensation and earnings
10restrictions. For an employee who first becomes a participant
11on or after the effective date of this amendatory Act of the
1299th General Assembly, basic compensation under Section 15-110
13and earnings under Section 15-111 shall not include bonuses,
14housing allowances, vehicle allowances, social club dues, or
15athletic club dues.
 
16    (40 ILCS 5/15-113.11)
17    Sec. 15-113.11. Service for periods of voluntary or
18involuntary furlough.
19    (a) A participant may establish creditable service and
20earnings credit for periods of furlough beginning on or after
21July 1, 2009 and ending on or before June 30, 2011. To receive
22this credit, the participant must (i) apply in writing to the
23System before December 31, 2011; (ii) not receive compensation
24from an employer for any furlough period; and (iii) make, on an

 

 

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1after-tax basis, employee contributions required under Section
215-157 based on the rate of basic compensation during the
3periods of furlough, plus an amount determined by the Board to
4be equal to the employer's normal cost of the benefit, plus
5compounded interest at the actuarially assumed rate from the
6date of voluntary or involuntary furlough to the date of
7payment. The participant shall provide, at the time of
8application, written certification from the employer providing
9the total number of furlough days a participant has been
10required to take.
11    (b) A participant may establish creditable service and
12earnings credit for periods of furlough beginning on or after
13July 1, 2015 and ending on or before June 30, 2017. To receive
14this credit, the participant must (i) apply in writing to the
15System before December 31, 2018; (ii) not receive compensation
16from an employer for any furlough period; and (iii) make, on an
17after-tax basis, employee contributions required under Section
1815-157 based on the rate of basic compensation during the
19periods of furlough, plus an amount determined by the Board to
20be equal to the employer's normal cost of the benefit, plus
21compounded interest at the actuarially assumed rate from the
22date of voluntary or involuntary furlough to the date of
23payment. The participant shall provide, at the time of
24application, written certification from the employer providing
25the total number of furlough days a participant has been
26required to take.

 

 

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1(Source: P.A. 96-961, eff. 7-2-10.)
 
2    (40 ILCS 5/15-113.12 new)
3    Sec. 15-113.12. Earnings for periods of voluntary pay
4reduction taken in lieu of furlough. A participant may
5establish earnings credit for periods of voluntary pay
6reduction, taken in lieu of furlough, beginning on or after
7July 1, 2015 and ending on or before June 30, 2017. To receive
8this credit, the participant must: (1) apply in writing to the
9System before December 31, 2018; and (2) make, on an after-tax
10basis, employee contributions required under Section 15-157
11based on the voluntary reduction in pay, plus an amount
12determined by the Board to be equal to the employer's normal
13cost of the benefit, plus compounded interest at the
14actuarially assumed rate from the date of voluntary reduction
15in pay to the date of payment. The participant shall provide,
16at the time of application, (i) written certification from the
17employer providing the total voluntary reduction in pay per pay
18period for each pay period with a voluntary reduction in pay
19and (ii) written certification from the employer stating that
20the voluntary reduction in pay was taken in lieu of furlough.
 
21    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 15-155. Employer contributions.

 

 

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1    (a) The State of Illinois shall make contributions by
2appropriations of amounts which, together with the other
3employer contributions from trust, federal, and other funds,
4employee contributions, income from investments, and other
5income of this System, will be sufficient to meet the cost of
6maintaining and administering the System on a 90% funded basis
7in accordance with actuarial recommendations.
8    The Board shall determine the amount of State contributions
9required for each fiscal year on the basis of the actuarial
10tables and other assumptions adopted by the Board and the
11recommendations of the actuary, using the formula in subsection
12(a-1).
13    (a-1) For State fiscal years 2012 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.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2006 is
4$166,641,900.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2007 is
7$252,064,100.
8    For each of State fiscal years 2008 through 2009, the State
9contribution to the System, as a percentage of the applicable
10employee payroll, shall be increased in equal annual increments
11from the required State contribution for State fiscal year
122007, so that by State fiscal year 2011, the State is
13contributing at the rate otherwise required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2010 is
16$702,514,000 and shall be made from the State Pensions Fund and
17proceeds of bonds sold in fiscal year 2010 pursuant to Section
187.2 of the General Obligation Bond Act, less (i) the pro rata
19share of bond sale expenses determined by the System's share of
20total bond proceeds, (ii) any amounts received from the General
21Revenue Fund in fiscal year 2010, (iii) any reduction in bond
22proceeds due to the issuance of discounted bonds, if
23applicable.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2011 is
26the amount recertified by the System on or before April 1, 2011

 

 

09900SB2156ham003- 18 -LRB099 13062 RPS 49165 a

1pursuant to Section 15-165 and shall be made from the State
2Pensions Fund and proceeds of bonds sold in fiscal year 2011
3pursuant to Section 7.2 of the General Obligation Bond Act,
4less (i) the pro rata share of bond sale expenses determined by
5the System's share of total bond proceeds, (ii) any amounts
6received from the General Revenue Fund in fiscal year 2011, and
7(iii) any reduction in bond proceeds due to the issuance of
8discounted bonds, if applicable.
9    Beginning in State fiscal year 2046, the minimum State
10contribution for each fiscal year shall be the amount needed to
11maintain the total assets of the System at 90% of the total
12actuarial liabilities of the System.
13    Amounts received by the System pursuant to Section 25 of
14the Budget Stabilization Act or Section 8.12 of the State
15Finance Act in any fiscal year do not reduce and do not
16constitute payment of any portion of the minimum State
17contribution required under this Article in that fiscal year.
18Such amounts shall not reduce, and shall not be included in the
19calculation of, the required State contributions under this
20Article in any future year until the System has reached a
21funding ratio of at least 90%. A reference in this Article to
22the "required State contribution" or any substantially similar
23term does not include or apply to any amounts payable to the
24System under Section 25 of the Budget Stabilization Act.
25    Notwithstanding any other provision of this Section, the
26required State contribution for State fiscal year 2005 and for

 

 

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1fiscal year 2008 and each fiscal year thereafter, as calculated
2under this Section and certified under Section 15-165, shall
3not exceed an amount equal to (i) the amount of the required
4State contribution that would have been calculated under this
5Section for that fiscal year if the System had not received any
6payments under subsection (d) of Section 7.2 of the General
7Obligation Bond Act, minus (ii) the portion of the State's
8total debt service payments for that fiscal year on the bonds
9issued in fiscal year 2003 for the purposes of that Section
107.2, as determined and certified by the Comptroller, that is
11the same as the System's portion of the total moneys
12distributed under subsection (d) of Section 7.2 of the General
13Obligation Bond Act. In determining this maximum for State
14fiscal years 2008 through 2010, however, the amount referred to
15in item (i) shall be increased, as a percentage of the
16applicable employee payroll, in equal increments calculated
17from the sum of the required State contribution for State
18fiscal year 2007 plus the applicable portion of the State's
19total debt service payments for fiscal year 2007 on the bonds
20issued in fiscal year 2003 for the purposes of Section 7.2 of
21the General Obligation Bond Act, so that, by State fiscal year
222011, the State is contributing at the rate otherwise required
23under this Section.
24    (b) If an employee is paid from trust or federal funds, the
25employer shall pay to the Board contributions from those funds
26which are sufficient to cover the accruing normal costs on

 

 

09900SB2156ham003- 20 -LRB099 13062 RPS 49165 a

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

 

 

09900SB2156ham003- 21 -LRB099 13062 RPS 49165 a

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

 

 

09900SB2156ham003- 22 -LRB099 13062 RPS 49165 a

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

 

 

09900SB2156ham003- 23 -LRB099 13062 RPS 49165 a

1(h) or (i) of this Section, must include an affidavit setting
2forth and attesting to all facts within the employer's
3knowledge that are pertinent to the applicability of subsection
4(h) or (i). Upon receiving a timely application for
5recalculation, the System shall review the application and, if
6appropriate, recalculate the amount due.
7    The employer contributions required under this subsection
8(g) may be paid in the form of a lump sum within 90 days after
9receipt of the bill. If the employer contributions are not paid
10within 90 days after receipt of the bill, then interest will be
11charged at a rate equal to the System's annual actuarially
12assumed rate of return on investment compounded annually from
13the 91st day after receipt of the bill. Payments must be
14concluded within 3 years after the employer's receipt of the
15bill.
16    When assessing payment for any amount due under this
17subsection (g), the System shall include earnings, to the
18extent not established by a participant under Section 15-113.11
19or 15-113.12, that would have been paid to the participant had
20the participant not taken (i) periods of voluntary or
21involuntary furlough occurring on or after July 1, 2015 and on
22or before June 30, 2017 or (ii) periods of voluntary pay
23reduction in lieu of furlough occurring on or after July 1,
242015 and on or before June 30, 2017. Determining earnings that
25would have been paid to a participant had the participant not
26taken periods of voluntary or involuntary furlough or periods

 

 

09900SB2156ham003- 24 -LRB099 13062 RPS 49165 a

1of voluntary pay reduction shall be the responsibility of the
2employer, and shall be reported in a manner prescribed by the
3System.
4    (h) This subsection (h) applies only to payments made or
5salary increases given on or after June 1, 2005 but before July
61, 2011. The changes made by Public Act 94-1057 shall not
7require the System to refund any payments received before July
831, 2006 (the effective date of Public Act 94-1057).
9    When assessing payment for any amount due under subsection
10(g), the System shall exclude earnings increases paid to
11participants under contracts or collective bargaining
12agreements entered into, amended, or renewed before June 1,
132005.
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude earnings increases paid to a
16participant at a time when the participant is 10 or more years
17from retirement eligibility under Section 15-135.
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases resulting from
20overload work, including a contract for summer teaching, or
21overtime when the employer has certified to the System, and the
22System has approved the certification, that: (i) in the case of
23overloads (A) the overload work is for the sole purpose of
24academic instruction in excess of the standard number of
25instruction hours for a full-time employee occurring during the
26academic year that the overload is paid and (B) the earnings

 

 

09900SB2156ham003- 25 -LRB099 13062 RPS 49165 a

1increases are equal to or less than the rate of pay for
2academic instruction computed using the participant's current
3salary rate and work schedule; and (ii) in the case of
4overtime, the overtime was necessary for the educational
5mission.
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude any earnings increase resulting
8from (i) a promotion for which the employee moves from one
9classification to a higher classification under the State
10Universities Civil Service System, (ii) a promotion in academic
11rank for a tenured or tenure-track faculty position, or (iii) a
12promotion that the Illinois Community College Board has
13recommended in accordance with subsection (k) of this Section.
14These earnings increases shall be excluded only if the
15promotion is to a position that has existed and been filled by
16a member for no less than one complete academic year and the
17earnings increase as a result of the promotion is an increase
18that results in an amount no greater than the average salary
19paid for other similar positions.
20    (i) When assessing payment for any amount due under
21subsection (g), the System shall exclude any salary increase
22described in subsection (h) of this Section given on or after
23July 1, 2011 but before July 1, 2014 under a contract or
24collective bargaining agreement entered into, amended, or
25renewed on or after June 1, 2005 but before July 1, 2011.
26Notwithstanding any other provision of this Section, any

 

 

09900SB2156ham003- 26 -LRB099 13062 RPS 49165 a

1payments made or salary increases given after June 30, 2014
2shall be used in assessing payment for any amount due under
3subsection (g) of this Section.
4    (j) The System shall prepare a report and file copies of
5the report with the Governor and the General Assembly by
6January 1, 2007 that contains all of the following information:
7        (1) The number of recalculations required by the
8    changes made to this Section by Public Act 94-1057 for each
9    employer.
10        (2) The dollar amount by which each employer's
11    contribution to the System was changed due to
12    recalculations required by Public Act 94-1057.
13        (3) The total amount the System received from each
14    employer as a result of the changes made to this Section by
15    Public Act 94-4.
16        (4) The increase in the required State contribution
17    resulting from the changes made to this Section by Public
18    Act 94-1057.
19    (k) The Illinois Community College Board shall adopt rules
20for recommending lists of promotional positions submitted to
21the Board by community colleges and for reviewing the
22promotional lists on an annual basis. When recommending
23promotional lists, the Board shall consider the similarity of
24the positions submitted to those positions recognized for State
25universities by the State Universities Civil Service System.
26The Illinois Community College Board shall file a copy of its

 

 

09900SB2156ham003- 27 -LRB099 13062 RPS 49165 a

1findings with the System. The System shall consider the
2findings of the Illinois Community College Board when making
3determinations under this Section. The System shall not exclude
4any earnings increases resulting from a promotion when the
5promotion was not submitted by a community college. Nothing in
6this subsection (k) shall require any community college to
7submit any information to the Community College Board.
8    (l) For purposes of determining the required State
9contribution to the System, the value of the System's assets
10shall be equal to the actuarial value of the System's assets,
11which shall be calculated as follows:
12    As of June 30, 2008, the actuarial value of the System's
13assets shall be equal to the market value of the assets as of
14that date. In determining the actuarial value of the System's
15assets for fiscal years after June 30, 2008, any actuarial
16gains or losses from investment return incurred in a fiscal
17year shall be recognized in equal annual amounts over the
185-year period following that fiscal year.
19    (m) For purposes of determining the required State
20contribution to the system for a particular year, the actuarial
21value of assets shall be assumed to earn a rate of return equal
22to the system's actuarially assumed rate of return.
23(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13;
2498-463, eff. 8-16-13.)
 
25    (40 ILCS 5/15-158.2)

 

 

09900SB2156ham003- 28 -LRB099 13062 RPS 49165 a

1    Sec. 15-158.2. Self-managed plan.
2    (a) Purpose. The General Assembly finds that it is
3important for colleges and universities to be able to attract
4and retain the most qualified employees and that in order to
5attract and retain these employees, colleges and universities
6should have the flexibility to provide a defined contribution
7plan as an alternative for eligible employees who elect not to
8participate in a defined benefit retirement program provided
9under this Article. Accordingly, the State Universities
10Retirement System is hereby authorized to establish and
11administer a self-managed plan, which shall offer
12participating employees the opportunity to accumulate assets
13for retirement through a combination of employee and employer
14contributions that may be invested in mutual funds, collective
15investment funds, or other investment products and used to
16purchase annuity contracts, either fixed or variable or a
17combination thereof. The plan must be qualified under the
18Internal Revenue Code of 1986.
19    (b) Adoption by employers. Each employer subject to this
20Article may elect to adopt the self-managed plan established
21under this Section; this election is irrevocable. An employer's
22election to adopt the self-managed plan makes available to the
23eligible employees of that employer the elections described in
24Section 15-134.5.
25    The State Universities Retirement System shall be the plan
26sponsor for the self-managed plan and shall prepare a plan

 

 

09900SB2156ham003- 29 -LRB099 13062 RPS 49165 a

1document and prescribe such rules and procedures as are
2considered necessary or desirable for the administration of the
3self-managed plan. Consistent with its fiduciary duty to the
4participants and beneficiaries of the self-managed plan, the
5Board of Trustees of the System may delegate aspects of plan
6administration as it sees fit to companies authorized to do
7business in this State, to the employers, or to a combination
8of both.
9    (c) Selection of service providers and funding vehicles.
10The System, in consultation with the employers, shall solicit
11proposals to provide administrative services and funding
12vehicles for the self-managed plan from insurance and annuity
13companies and mutual fund companies, banks, trust companies, or
14other financial institutions authorized to do business in this
15State. In reviewing the proposals received and approving and
16contracting with no fewer than 2 and no more than 7 companies,
17the Board of Trustees of the System shall consider, among other
18things, the following criteria:
19        (1) the nature and extent of the benefits that would be
20    provided to the participants;
21        (2) the reasonableness of the benefits in relation to
22    the premium charged;
23        (3) the suitability of the benefits to the needs and
24    interests of the participating employees and the employer;
25        (4) the ability of the company to provide benefits
26    under the contract and the financial stability of the

 

 

09900SB2156ham003- 30 -LRB099 13062 RPS 49165 a

1    company; and
2        (5) the efficacy of the contract in the recruitment and
3    retention of employees.
4    The System, in consultation with the employers, shall
5periodically review each approved company. A company may
6continue to provide administrative services and funding
7vehicles for the self-managed plan only so long as it continues
8to be an approved company under contract with the Board.
9    (d) Employee Direction. Employees who are participating in
10the program must be allowed to direct the transfer of their
11account balances among the various investment options offered,
12subject to applicable contractual provisions. The participant
13shall not be deemed a fiduciary by reason of providing such
14investment direction. A person who is a fiduciary shall not be
15liable for any loss resulting from such investment direction
16and shall not be deemed to have breached any fiduciary duty by
17acting in accordance with that direction. The System shall
18provide advance notice to the participant of the participant's
19obligation to direct the investment of employee and employer
20contributions into one or more investment funds selected by the
21System at the time he or she makes his or her initial
22retirement plan selection. If a participant fails to direct the
23investment of employee and employer contributions into the
24various investment options offered to the participant when
25making his or her initial retirement election choice, that
26failure shall require the System to invest the employee and

 

 

09900SB2156ham003- 31 -LRB099 13062 RPS 49165 a

1employer contributions in a default investment fund on behalf
2of the participant, and the investment shall be deemed to have
3been made at the participant's investment direction. The
4participant has the right to transfer account balances out of
5the default investment fund during time periods designated by
6the System. Neither the System nor the employer guarantees any
7of the investments in the employee's account balances.
8    (e) Participation. An employee eligible to participate in
9the self-managed plan must make a written election in
10accordance with the provisions of Section 15-134.5 and the
11procedures established by the System. Participation in the
12self-managed plan by an electing employee shall begin on the
13first day of the first pay period following the later of the
14date the employee's election is filed with the System or the
15effective date as of which the employee's employer begins to
16offer participation in the self-managed plan. Employers may not
17make the self-managed plan available earlier than January 1,
181998. An employee's participation in any other retirement
19program administered by the System under this Article shall
20terminate on the date that participation in the self-managed
21plan begins.
22    An employee who has elected to participate in the
23self-managed plan under this Section must continue
24participation while employed in an eligible position, and may
25not participate in any other retirement program administered by
26the System under this Article while employed by that employer

 

 

09900SB2156ham003- 32 -LRB099 13062 RPS 49165 a

1or any other employer that has adopted the self-managed plan,
2unless the self-managed plan is terminated in accordance with
3subsection (i).
4    Notwithstanding any other provision of this Article, a Tier
52 member shall have the option to enroll in the self-managed
6plan.
7    Participation in the self-managed plan under this Section
8shall constitute membership in the State Universities
9Retirement System.
10    A participant under this Section shall be entitled to the
11benefits of Article 20 of this Code.
12    (f) Establishment of Initial Account Balance. If at the
13time an employee elects to participate in the self-managed plan
14he or she has rights and credits in the System due to previous
15participation in the traditional benefit package, the System
16shall establish for the employee an opening account balance in
17the self-managed plan, equal to the amount of contribution
18refund that the employee would be eligible to receive under
19Section 15-154 if the employee terminated employment on that
20date and elected a refund of contributions, except that this
21hypothetical refund shall include interest at the effective
22rate for the respective years. The System shall transfer assets
23from the defined benefit retirement program to the self-managed
24plan, as a tax free transfer in accordance with Internal
25Revenue Service guidelines, for purposes of funding the
26employee's opening account balance.

 

 

09900SB2156ham003- 33 -LRB099 13062 RPS 49165 a

1    (g) No Duplication of Service Credit. Notwithstanding any
2other provision of this Article, an employee may not purchase
3or receive service or service credit applicable to any other
4retirement program administered by the System under this
5Article for any period during which the employee was a
6participant in the self-managed plan established under this
7Section.
8    (h) Contributions. The self-managed plan shall be funded by
9contributions from employees participating in the self-managed
10plan and employer contributions as provided in this Section.
11    The contribution rate for employees participating in the
12self-managed plan under this Section shall be equal to the
13employee contribution rate for other participants in the
14System, as provided in Section 15-157. This required
15contribution shall be made as an "employer pick-up" under
16Section 414(h) of the Internal Revenue Code of 1986 or any
17successor Section thereof. Any employee participating in the
18System's traditional benefit package prior to his or her
19election to participate in the self-managed plan shall continue
20to have the employer pick up the contributions required under
21Section 15-157. However, the amounts picked up after the
22election of the self-managed plan shall be remitted to and
23treated as assets of the self-managed plan. In no event shall
24an employee have an option of receiving these amounts in cash.
25Employees may make additional contributions to the
26self-managed plan in accordance with procedures prescribed by

 

 

09900SB2156ham003- 34 -LRB099 13062 RPS 49165 a

1the System, to the extent permitted under rules prescribed by
2the System.
3    The program shall provide for employer contributions to be
4credited to each self-managed plan participant at a rate of
57.6% of the participating employee's salary, less the amount
6used by the System to provide disability benefits for the
7employee. The amounts so credited shall be paid into the
8participant's self-managed plan accounts in a manner to be
9prescribed by the System.
10    An amount of employer contribution, not exceeding 1% of the
11participating employee's salary, shall be used for the purpose
12of providing the disability benefits of the System to the
13employee. Prior to the beginning of each plan year under the
14self-managed plan, the Board of Trustees shall determine, as a
15percentage of salary, the amount of employer contributions to
16be allocated during that plan year for providing disability
17benefits for employees in the self-managed plan.
18    The State of Illinois shall make contributions by
19appropriations to the System of the employer contributions
20required for employees who participate in the self-managed plan
21under this Section. The amount required shall be certified by
22the Board of Trustees of the System and paid by the State in
23accordance with Section 15-165. The System shall not be
24obligated to remit the required employer contributions to any
25of the insurance and annuity companies, mutual fund companies,
26banks, trust companies, financial institutions, or other

 

 

09900SB2156ham003- 35 -LRB099 13062 RPS 49165 a

1sponsors of any of the funding vehicles offered under the
2self-managed plan until it has received the required employer
3contributions from the State. In the event of a deficiency in
4the amount of State contributions, the System shall implement
5those procedures described in subsection (c) of Section 15-165
6to obtain the required funding from the General Revenue Fund.
7    (i) Termination. The self-managed plan authorized under
8this Section may be terminated by the System, subject to the
9terms of any relevant contracts, and the System shall have no
10obligation to reestablish the self-managed plan under this
11Section. This Section does not create a right to continued
12participation in any self-managed plan set up by the System
13under this Section. If the self-managed plan is terminated, the
14participants shall have the right to participate in one of the
15other retirement programs offered by the System and receive
16service credit in such other retirement program for any years
17of employment following the termination.
18    (j) Vesting; Withdrawal; Return to Service. A participant
19in the self-managed plan becomes vested in the employer
20contributions credited to his or her accounts in the
21self-managed plan on the earliest to occur of the following:
22(1) completion of 5 years of service with an employer described
23in Section 15-106; (2) the death of the participating employee
24while employed by an employer described in Section 15-106, if
25the participant has completed at least 1 1/2 years of service;
26or (3) the participant's election to retire and apply the

 

 

09900SB2156ham003- 36 -LRB099 13062 RPS 49165 a

1reciprocal provisions of Article 20 of this Code.
2    A participant in the self-managed plan who receives a
3distribution of his or her vested amounts from the self-managed
4plan while not yet eligible for retirement under this Article
5(and Article 20, if applicable) shall forfeit all service
6credit and accrued rights in the System; if subsequently
7re-employed, the participant shall be considered a new
8employee. If a former participant again becomes a participating
9employee (or becomes employed by a participating system under
10Article 20 of this Code) and continues as such for at least 2
11years, all such rights, service credits, and previous status as
12a participant shall be restored upon repayment of the amount of
13the distribution, without interest.
14    (k) Benefit amounts. If an employee who is vested in
15employer contributions terminates employment, the employee
16shall be entitled to a benefit which is based on the account
17values attributable to both employer and employee
18contributions and any investment return thereon.
19    If an employee who is not vested in employer contributions
20terminates employment, the employee shall be entitled to a
21benefit based solely on the account values attributable to the
22employee's contributions and any investment return thereon,
23and the employer contributions and any investment return
24thereon shall be forfeited. Any employer contributions which
25are forfeited shall be held in escrow by the company investing
26those contributions and shall be used as directed by the System

 

 

09900SB2156ham003- 37 -LRB099 13062 RPS 49165 a

1for future allocations of employer contributions or for the
2restoration of amounts previously forfeited by former
3participants who again become participating employees.
4(Source: P.A. 98-92, eff. 7-16-13.)
 
5    (40 ILCS 5/15-168)  (from Ch. 108 1/2, par. 15-168)
6    Sec. 15-168. To require information.
7    (a) To require such information as shall be necessary for
8the proper operation of the system from any participant or
9beneficiary or annuitant benefit recipient or from any current
10or former employer of a participant or annuitant. Such
11information may include, but is not limited to, employment
12contracts current or former participant.
13    (b) When the System submits a request for information under
14subsection (a) of this Section, the employer shall respond
15within 90 calendar days of the System's request. Beginning on
16the 91st calendar day after the System's request, the System
17may assess a penalty of $250 per calendar day until receipt of
18the information by the System, with a maximum penalty of
19$25,000. All payments must be received within one calendar year
20after receipt of the information by the System or one calendar
21year of reaching the maximum penalty of $25,000, whichever
22occurs earlier. If the employer fails to make complete payment
23within the applicable timeframe, then the System may, after
24giving notice to the employer, certify the delinquent amount to
25the State Comptroller, and the Comptroller shall thereupon

 

 

09900SB2156ham003- 38 -LRB099 13062 RPS 49165 a

1deduct the certified delinquent amount from State funds payable
2to the employer and pay them instead to the System.
3    (c) If a participant, beneficiary, or annuitant fails to
4provide any information that is necessary for the calculation,
5payment, or finalization of any benefit under this Article
6within 90 calendar days of the date of the System's request
7under subsection (a) of this Section, then the System may
8immediately cease processing the benefit and may not pay any
9additional benefit payment to the participant, beneficiary, or
10annuitant until the requested information is provided.
11(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
12    (40 ILCS 5/15-168.2)
13    Sec. 15-168.2. Audit of employers.
14    (a) Beginning August 1, 2013, the System may audit the
15employment records and payroll records of all employers. When
16the System audits an employer, it shall specify the exact
17information it requires, which may include but need not be
18limited to the names, titles, and earnings history of every
19individual receiving compensation from the employer. If an
20employer is audited by the System, then the employer must
21provide to the System all necessary documents and records
22within 60 calendar days after receiving notification from the
23System. When the System audits an employer, it shall send
24related correspondence by certified mail.
25    (b) When the System submits a request for information under

 

 

09900SB2156ham003- 39 -LRB099 13062 RPS 49165 a

1subsection (a) of this Section, the employer shall respond
2within 60 calendar days of the System's request. Beginning on
3the 61st calendar day after the System's request, the System
4may assess a penalty of $250 per calendar day until receipt of
5the information by the System, with a maximum penalty of
6$25,000. All payments must be received by the System within one
7calendar year after receipt of the information by the System or
8one calendar year after reaching the maximum penalty of
9$25,000, whichever occurs earlier. If the employer fails to
10make complete payment within the applicable timeframe, then the
11System may, after giving notice to the employer, certify the
12delinquent amount to the State Comptroller, and the Comptroller
13shall thereupon deduct the certified delinquent amount from
14State funds payable to the employer and pay them instead to the
15System.
16(Source: P.A. 97-968, eff. 8-16-12.)".