Illinois General Assembly - Full Text of SB1265
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Full Text of SB1265  101st General Assembly




SB1265 EnrolledLRB101 07893 RPS 52948 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
5Sections 15-107, 15-110, and 15-145 as follows:
6    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
7    Sec. 15-107. Employee.
8    (a) "Employee" means any member of the educational,
9administrative, secretarial, clerical, mechanical, labor or
10other staff of an employer whose employment is permanent and
11continuous or who is employed in a position in which services
12are expected to be rendered on a continuous basis for at least
134 months or one academic term, whichever is less, who (A)
14receives payment for personal services on a warrant issued
15pursuant to a payroll voucher certified by an employer and
16drawn by the State Comptroller upon the State Treasurer or by
17an employer upon trust, federal or other funds, or (B) is on a
18leave of absence without pay. Employment which is irregular,
19intermittent or temporary shall not be considered continuous
20for purposes of this paragraph.
21    However, a person is not an "employee" if he or she:
22        (1) is a student enrolled in and regularly attending
23    classes in a college or university which is an employer,



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



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1after July 1, 1982 with a federal military department in a
2program providing training in military courses to federal
3military personnel on a military site owned by the United
4States Government, if this exclusion is not prohibited by the
5federally funded contract or federal laws or rules governing
6the administration of the contract.
7    (c) Any person appointed by the Governor under the Civil
8Administrative Code of Illinois the State is an employee, if he
9or she is a participant in this system on the effective date of
10the appointment.
11    (d) A participant on lay-off status under civil service
12rules is considered an employee for not more than 120 days from
13the date of the lay-off.
14    (e) A participant is considered an employee during (1) the
15first 60 days of disability leave, (2) the period, not to
16exceed one year, in which his or her eligibility for disability
17benefits is being considered by the board or reviewed by the
18courts, and (3) the period he or she receives disability
19benefits under the provisions of Section 15-152, workers'
20compensation or occupational disease benefits, or disability
21income under an insurance contract financed wholly or partially
22by the employer.
23    (f) Absences without pay, other than formal leaves of
24absence, of less than 30 calendar days, are not considered as
25an interruption of a person's status as an employee. If such
26absences during any period of 12 months exceed 30 work days,



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1the employee status of the person is considered as interrupted
2as of the 31st work day.
3    (g) A staff member whose employment contract requires
4services during an academic term is to be considered an
5employee during the summer and other vacation periods, unless
6he or she declines an employment contract for the succeeding
7academic term or his or her employment status is otherwise
8terminated, and he or she receives no earnings during these
10    (h) An individual who was a participating employee employed
11in the fire department of the University of Illinois's
12Champaign-Urbana campus immediately prior to the elimination
13of that fire department and who immediately after the
14elimination of that fire department became employed by the fire
15department of the City of Urbana or the City of Champaign shall
16continue to be considered as an employee for purposes of this
17Article for so long as the individual remains employed as a
18firefighter by the City of Urbana or the City of Champaign. The
19individual shall cease to be considered an employee under this
20subsection (h) upon the first termination of the individual's
21employment as a firefighter by the City of Urbana or the City
22of Champaign.
23    (i) An individual who is employed on a full-time basis as
24an officer or employee of a statewide teacher organization that
25serves System participants or an officer of a national teacher
26organization that serves System participants may participate



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1in the System and shall be deemed an employee, provided that
2(1) the individual has previously earned creditable service
3under this Article, (2) the individual files with the System an
4irrevocable election to become a participant before January 5,
52012 (the effective date of Public Act 97-651) this amendatory
6Act of the 97th General Assembly, (3) the individual does not
7receive credit for that employment under any other Article of
8this Code, and (4) the individual first became a full-time
9employee of the teacher organization and becomes a participant
10before January 5, 2012 (the effective date of Public Act
1197-651) this amendatory Act of the 97th General Assembly. An
12employee under this subsection (i) is responsible for paying to
13the System both (A) employee contributions based on the actual
14compensation received for service with the teacher
15organization and (B) employer contributions equal to the normal
16costs (as defined in Section 15-155) resulting from that
17service; all or any part of these contributions may be paid on
18the employee's behalf or picked up for tax purposes (if
19authorized under federal law) by the teacher organization.
20    A person who is an employee as defined in this subsection
21(i) may establish service credit for similar employment prior
22to becoming an employee under this subsection by paying to the
23System for that employment the contributions specified in this
24subsection, plus interest at the effective rate from the date
25of service to the date of payment. However, credit shall not be
26granted under this subsection for any such prior employment for



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1which the applicant received credit under any other provision
2of this Code, or during which the applicant was on a leave of
3absence under Section 15-113.2.
4    (j) A person employed by the State Board of Higher
5Education in a position with the Illinois Century Network as of
6June 30, 2004 shall be considered to be an employee for so long
7as he or she remains continuously employed after that date by
8the Department of Central Management Services in a position
9with the Illinois Century Network, the Bureau of Communication
10and Computer Services, or, if applicable, any successor bureau
11or the Department of Innovation and Technology and meets the
12requirements of subsection (a).
13    (k) The Board shall promulgate rules with respect to
14determining whether any person is an employee within the
15meaning of this Section. In the case of doubt as to whether any
16person is an employee within the meaning of this Section or any
17rule adopted by the Board, the decision of the Board shall be
19(Source: P.A. 99-830, eff. 1-1-17; 99-897, eff. 1-1-17; revised
21    (40 ILCS 5/15-110)  (from Ch. 108 1/2, par. 15-110)
22    Sec. 15-110. Basic compensation. "Basic compensation":
23Subject to Section 15-111.5, the gross basic rate of salary or
24wages payable by an employer, including:
25        (1) the value of maintenance, board, living quarters,



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1    personal laundry, or other allowances furnished in lieu of
2    salary which are considered gross income under the federal
3    Internal Revenue Code of 1986, as amended;
4        (2) the employee contributions required under Section
5    15-157;
6        (3) the amount paid by any employer to a custodial
7    account for investment in regulated investment company
8    stocks for the benefit of the employee pursuant to the
9    University Employees Custodial Accounts Act;
10        (4) the amount of the premium payable by any employer
11    to an insurance company or companies on an annuity
12    contract, pursuant to the employee's election to accept a
13    reduction in earnings or forego an increase in earnings
14    under Section 30c of the State Finance Act, or a
15    tax-sheltered annuity plan approved by any employer; and
16        (5) the amount of any elective deferral to a deferred
17    compensation plan established under this Article or
18    Article 24 of this Code pursuant to Section 457(b) of the
19    federal Internal Revenue Code of 1986, as amended.
20    Basic compensation does not include (1) salary or wages for
21overtime or other extra service; (2) prospective salary or
22wages under a summer teaching contract not yet entered upon;
23and (3) overseas differential allowances, quarters allowances,
24post allowances, educational allowances and transportation
25allowances paid by an employer under a contract with the
26federal government or its agencies for services rendered in



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1other countries. If an employee elects to receive in lieu of
2cash salary or wages, fringe benefits which are not taxable
3under the federal Internal Revenue Code of 1986, as amended,
4the amount of the cash salary or wages which is waived shall be
5included in determining basic compensation.
6(Source: P.A. 99-897, eff. 1-1-17.)
7    (40 ILCS 5/15-145)  (from Ch. 108 1/2, par. 15-145)
8    Sec. 15-145. Survivors insurance benefits; conditions and
10    (a) The survivors insurance benefits provided under this
11Section shall be payable to the eligible survivors of a Tier 1
12member covered under the traditional benefit package upon the
13death of (1) a participating employee with at least 1 1/2 years
14of service, (2) a participant who terminated employment with at
15least 10 years of service, and (3) an annuitant in receipt of a
16retirement annuity or disability retirement annuity under this
18    Service under the State Employees' Retirement System of
19Illinois, the Teachers' Retirement System of the State of
20Illinois and the Public School Teachers' Pension and Retirement
21Fund of Chicago shall be considered in determining eligibility
22for survivors benefits under this Section.
23    If by law, a function of a governmental unit, as defined by
24Section 20-107, is transferred in whole or in part to an
25employer, and an employee transfers employment from this



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1governmental unit to such employer within 6 months after the
2transfer of this function, the service credits in the
3governmental unit's retirement system which have been
4validated under Section 20-109 shall be considered in
5determining eligibility for survivors benefits under this
7    (b) A surviving spouse of a deceased participant, or of a
8deceased annuitant who did not take a refund or additional
9annuity consisting of accumulated survivors insurance
10contributions or who repaid the refund or additional annuity,
11shall receive a survivors annuity of 30% of the final rate of
12earnings. Payments shall begin on the day following the
13participant's or annuitant's death or the date the surviving
14spouse attains age 50, whichever is later, and continue until
15the death of the surviving spouse. The annuity shall be payable
16to the surviving spouse prior to attainment of age 50 if the
17surviving spouse has in his or her care a deceased
18participant's or annuitant's dependent unmarried child under
19age 18 (under age 22 if a full-time student) who is eligible
20for a survivors annuity.
21    Remarriage of a surviving spouse prior to attainment of age
2255 that occurs before the effective date of this amendatory Act
23of the 91st General Assembly shall disqualify him or her for
24the receipt of a survivors annuity until July 6, 2000.
25    A surviving spouse whose survivors annuity has been
26terminated due to remarriage may apply for reinstatement of



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1that annuity. The reinstated annuity shall begin to accrue on
2July 6, 2000, except that if, on July 6, 2000, the annuity is
3payable to an eligible surviving child or parent, payment of
4the annuity to the surviving spouse shall not be reinstated
5until the annuity is no longer payable to any eligible
6surviving child or parent. The reinstated annuity shall include
7any one-time or annual increases received prior to the date of
8termination, as well as any increases that would otherwise have
9accrued from the date of termination to the date of
10reinstatement. An eligible surviving spouse whose expectation
11of receiving a survivors annuity was lost due to remarriage
12before attainment of age 50 shall also be entitled to
13reinstatement under this subsection, but the resulting
14survivors annuity shall not begin to accrue sooner than upon
15the surviving spouse's attainment of age 50.
16    The changes made to this subsection by this amendatory Act
17of the 92nd General Assembly (pertaining to remarriage prior to
18age 55 or 50) apply without regard to whether the deceased
19participant or annuitant was in service on or after the
20effective date of this amendatory Act.
21    (c) Each dependent unmarried child under age 18 (under age
2222 if a full-time student) of a deceased participant, or of a
23deceased annuitant who did not take a refund or additional
24annuity consisting of accumulated survivors insurance
25contributions or who repaid the refund or additional annuity,
26shall receive a survivors annuity equal to the sum of (1) 20%



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1of the final rate of earnings, and (2) 10% of the final rate of
2earnings divided by the number of children entitled to this
3benefit. Payments shall begin on the day following the
4participant's or annuitant's death and continue until the child
5marries, dies, or attains age 18 (age 22 if a full-time
6student). If the child is in the care of a surviving spouse who
7is eligible for survivors insurance benefits, the child's
8benefit shall be paid to the surviving spouse.
9    Each unmarried child over age 18 of a deceased participant
10or of a deceased annuitant who had a survivor's insurance
11beneficiary at the time of his or her retirement, and who was
12dependent upon the participant or annuitant by reason of a
13physical or mental disability which began prior to the date the
14child attained age 18 (age 22 if a full-time student), shall
15receive a survivor's annuity equal to the sum of (1) 20% of the
16final rate of earnings, and (2) 10% of the final rate of
17earnings divided by the number of children entitled to
18survivors benefits. Payments shall begin on the day following
19the participant's or annuitant's death and continue until the
20child marries, dies, or is no longer disabled. If the child is
21in the care of a surviving spouse who is eligible for survivors
22insurance benefits, the child's benefit may be paid to the
23surviving spouse. For the purposes of this Section, disability
24means inability to engage in any substantial gainful activity
25by reason of any medically determinable physical or mental
26impairment that can be expected to result in death or that has



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1lasted or can be expected to last for a continuous period of at
2least one year.
3    (d) Each dependent parent of a deceased participant, or of
4a deceased annuitant who did not take a refund or additional
5annuity consisting of accumulated survivors insurance
6contributions or who repaid the refund or additional annuity,
7shall receive a survivors annuity equal to the sum of (1) 20%
8of final rate of earnings, and (2) 10% of final rate of
9earnings divided by the number of parents who qualify for the
10benefit. Payments shall begin when the parent reaches age 55 or
11the day following the participant's or annuitant's death,
12whichever is later, and continue until the parent dies.
13Remarriage of a parent prior to attainment of age 55 shall
14disqualify the parent for the receipt of a survivors annuity.
15    (e) In addition to the survivors annuity provided above,
16each survivors insurance beneficiary shall, upon death of the
17participant or annuitant, receive a lump sum payment of $1,000
18divided by the number of such beneficiaries.
19    (f) The changes made in this Section by Public Act 81-712
20pertaining to survivors annuities in cases of remarriage prior
21to age 55 shall apply to each survivors insurance beneficiary
22who remarries after June 30, 1979, regardless of the date that
23the participant or annuitant terminated his employment or died.
24    The change made to this Section by this amendatory Act of
25the 91st General Assembly, pertaining to remarriage prior to
26age 55, applies without regard to whether the deceased



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1participant or annuitant was in service on or after the
2effective date of this amendatory Act of the 91st General
4    (g) On January 1, 1981, any person who was receiving a
5survivors annuity on or before January 1, 1971 shall have the
6survivors annuity then being paid increased by 1% for each full
7year which has elapsed from the date the annuity began. On
8January 1, 1982, any survivor whose annuity began after January
91, 1971, but before January 1, 1981, shall have the survivor's
10annuity then being paid increased by 1% for each year which has
11elapsed from the date the survivor's annuity began. On January
121, 1987, any survivor who began receiving a survivor's annuity
13on or before January 1, 1977, shall have the monthly survivor's
14annuity increased by $1 for each full year which has elapsed
15since the date the survivor's annuity began.
16    (h) If the sum of the lump sum and total monthly survivor
17benefits payable under this Section upon the death of a
18participant amounts to less than the sum of the death benefits
19payable under items (2) and (3) of Section 15-141, the
20difference shall be paid in a lump sum to the beneficiary of
21the participant who is living on the date that this additional
22amount becomes payable.
23    (i) If the sum of the lump sum and total monthly survivor
24benefits payable under this Section upon the death of an
25annuitant receiving a retirement annuity or disability
26retirement annuity amounts to less than the death benefit



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1payable under Section 15-142, the difference shall be paid to
2the beneficiary of the annuitant who is living on the date that
3this additional amount becomes payable.
4    (j) Effective on the later of (1) January 1, 1990, or (2)
5the January 1 on or next after the date on which the survivor
6annuity begins, if the deceased member died while receiving a
7retirement annuity, or in all other cases the January 1 nearest
8the first anniversary of the date the survivor annuity payments
9begin, every survivors insurance beneficiary shall receive an
10increase in his or her monthly survivors annuity of 3%. On each
11January 1 after the initial increase, the monthly survivors
12annuity shall be increased by 3% of the total survivors annuity
13provided under this Article, including previous increases
14provided by this subsection. Such increases shall apply to the
15survivors insurance beneficiaries of each participant and
16annuitant, whether or not the employment status of the
17participant or annuitant terminates before the effective date
18of this amendatory Act of 1990. This subsection (j) also
19applies to persons receiving a survivor annuity under the
20portable benefit package.
21    (k) If the Internal Revenue Code of 1986, as amended,
22requires that the survivors benefits be payable at an age
23earlier than that specified in this Section the benefits shall
24begin at the earlier age, in which event, the survivor's
25beneficiary shall be entitled only to that amount which is
26equal to the actuarial equivalent of the benefits provided by



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1this Section.
2    (l) The changes made to this Section and Section 15-131 by
3this amendatory Act of 1997, relating to benefits for certain
4unmarried children who are full-time students under age 22,
5apply without regard to whether the deceased member was in
6service on or after the effective date of this amendatory Act
7of 1997. These changes do not authorize the repayment of a
8refund or a re-election of benefits, and any benefit or
9increase in benefits resulting from these changes is not
10payable retroactively for any period before the effective date
11of this amendatory Act of 1997.
12(Source: P.A. 98-92, eff. 7-16-13; 99-682, eff. 7-29-16.)
13    Section 99. Effective date. This Act takes effect upon
14becoming law.