Illinois General Assembly - Full Text of HB0308
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Full Text of HB0308  102nd General Assembly

HB0308 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB0308

 

Introduced 1/29/2021, by Rep. Maurice A. West, II

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/3-125  from Ch. 108 1/2, par. 3-125
40 ILCS 5/4-118  from Ch. 108 1/2, par. 4-118
30 ILCS 805/8.45 new

    Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Provides that the annual employer contribution shall include an amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 (instead of 2040). Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB102 02722 RPS 12725 b

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

 

 

A BILL FOR

 

HB0308LRB102 02722 RPS 12725 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
5changing Sections 3-125 and 4-118 as follows:
 
6    (40 ILCS 5/3-125)  (from Ch. 108 1/2, par. 3-125)
7    Sec. 3-125. Financing.
8    (a) The city council or the board of trustees of the
9municipality shall annually levy a tax upon all the taxable
10property of the municipality at the rate on the dollar which
11will produce an amount which, when added to the deductions
12from the salaries or wages of police officers, and revenues
13available from other sources, will equal a sum sufficient to
14meet the annual requirements of the police pension fund. The
15annual requirements to be provided by such tax levy are equal
16to (1) the normal cost of the pension fund for the year
17involved, plus (2) an amount sufficient to bring the total
18assets of the pension fund up to 90% of the total actuarial
19liabilities of the pension fund by the end of municipal fiscal
20year 2050 2040, as annually updated and determined by an
21enrolled actuary employed by the Illinois Department of
22Insurance or by an enrolled actuary retained by the pension
23fund or the municipality. In making these determinations, the

 

 

HB0308- 2 -LRB102 02722 RPS 12725 b

1required minimum employer contribution shall be calculated
2each year as a level percentage of payroll over the years
3remaining up to and including fiscal year 2050 2040 and shall
4be determined under the projected unit credit actuarial cost
5method. The tax shall be levied and collected in the same
6manner as the general taxes of the municipality, and in
7addition to all other taxes now or hereafter authorized to be
8levied upon all property within the municipality, and shall be
9in addition to the amount authorized to be levied for general
10purposes as provided by Section 8-3-1 of the Illinois
11Municipal Code, approved May 29, 1961, as amended. The tax
12shall be forwarded directly to the treasurer of the board
13within 30 business days after receipt by the county.
14    (b) For purposes of determining the required employer
15contribution to a pension fund, the value of the pension
16fund's assets shall be equal to the actuarial value of the
17pension fund's assets, which shall be calculated as follows:
18        (1) On March 30, 2011, the actuarial value of a
19    pension fund's assets shall be equal to the market value
20    of the assets as of that date.
21        (2) In determining the actuarial value of the System's
22    assets for fiscal years after March 30, 2011, any
23    actuarial gains or losses from investment return incurred
24    in a fiscal year shall be recognized in equal annual
25    amounts over the 5-year period following that fiscal year.
26    (c) If a participating municipality fails to transmit to

 

 

HB0308- 3 -LRB102 02722 RPS 12725 b

1the fund contributions required of it under this Article for
2more than 90 days after the payment of those contributions is
3due, the fund may, after giving notice to the municipality,
4certify to the State Comptroller the amounts of the delinquent
5payments in accordance with any applicable rules of the
6Comptroller, and the Comptroller must, beginning in fiscal
7year 2016, deduct and remit to the fund the certified amounts
8or a portion of those amounts from the following proportions
9of payments of State funds to the municipality:
10        (1) in fiscal year 2016, one-third of the total amount
11    of any payments of State funds to the municipality;
12        (2) in fiscal year 2017, two-thirds of the total
13    amount of any payments of State funds to the municipality;
14    and
15        (3) in fiscal year 2018 and each fiscal year
16    thereafter, the total amount of any payments of State
17    funds to the municipality.
18    The State Comptroller may not deduct from any payments of
19State funds to the municipality more than the amount of
20delinquent payments certified to the State Comptroller by the
21fund.
22    (d) The police pension fund shall consist of the following
23moneys which shall be set apart by the treasurer of the
24municipality:
25        (1) All moneys derived from the taxes levied
26    hereunder;

 

 

HB0308- 4 -LRB102 02722 RPS 12725 b

1        (2) Contributions by police officers under Section
2    3-125.1;
3        (2.5) All moneys received from the Police Officers'
4    Pension Investment Fund as provided in Article 22B of this
5    Code;
6        (3) All moneys accumulated by the municipality under
7    any previous legislation establishing a fund for the
8    benefit of disabled or retired police officers;
9        (4) Donations, gifts or other transfers authorized by
10    this Article.
11    (e) The Commission on Government Forecasting and
12Accountability shall conduct a study of all funds established
13under this Article and shall report its findings to the
14General Assembly on or before January 1, 2013. To the fullest
15extent possible, the study shall include, but not be limited
16to, the following:
17        (1) fund balances;
18        (2) historical employer contribution rates for each
19    fund;
20        (3) the actuarial formulas used as a basis for
21    employer contributions, including the actual assumed rate
22    of return for each year, for each fund;
23        (4) available contribution funding sources;
24        (5) the impact of any revenue limitations caused by
25    PTELL and employer home rule or non-home rule status; and
26        (6) existing statutory funding compliance procedures

 

 

HB0308- 5 -LRB102 02722 RPS 12725 b

1    and funding enforcement mechanisms for all municipal
2    pension funds.
3(Source: P.A. 101-610, eff. 1-1-20.)
 
4    (40 ILCS 5/4-118)  (from Ch. 108 1/2, par. 4-118)
5    Sec. 4-118. Financing.
6    (a) The city council or the board of trustees of the
7municipality shall annually levy a tax upon all the taxable
8property of the municipality at the rate on the dollar which
9will produce an amount which, when added to the deductions
10from the salaries or wages of firefighters and revenues
11available from other sources, will equal a sum sufficient to
12meet the annual actuarial requirements of the pension fund, as
13determined by an enrolled actuary employed by the Illinois
14Department of Insurance or by an enrolled actuary retained by
15the pension fund or municipality. For the purposes of this
16Section, the annual actuarial requirements of the pension fund
17are equal to (1) the normal cost of the pension fund, or 17.5%
18of the salaries and wages to be paid to firefighters for the
19year involved, whichever is greater, plus (2) an annual amount
20sufficient to bring the total assets of the pension fund up to
2190% of the total actuarial liabilities of the pension fund by
22the end of municipal fiscal year 2050 2040, as annually
23updated and determined by an enrolled actuary employed by the
24Illinois Department of Insurance or by an enrolled actuary
25retained by the pension fund or the municipality. In making

 

 

HB0308- 6 -LRB102 02722 RPS 12725 b

1these determinations, the required minimum employer
2contribution shall be calculated each year as a level
3percentage of payroll over the years remaining up to and
4including fiscal year 2050 2040 and shall be determined under
5the projected unit credit actuarial cost method. The amount to
6be applied towards the amortization of the unfunded accrued
7liability in any year shall not be less than the annual amount
8required to amortize the unfunded accrued liability, including
9interest, as a level percentage of payroll over the number of
10years remaining in the 40-year 40 year amortization period.
11    (a-2) A municipality that has established a pension fund
12under this Article and that who employs a full-time
13firefighter, as defined in Section 4-106, shall be deemed a
14primary employer with respect to that full-time firefighter.
15Any municipality of 5,000 or more inhabitants that employs or
16enrolls a firefighter while that firefighter continues to earn
17service credit as a participant in a primary employer's
18pension fund under this Article shall be deemed a secondary
19employer and such employees shall be deemed to be secondary
20employee firefighters. To ensure that the primary employer's
21pension fund under this Article is aware of additional
22liabilities and risks to which firefighters are exposed when
23performing work as firefighters for secondary employers, a
24secondary employer shall annually prepare a report accounting
25for all hours worked by and wages and salaries paid to the
26secondary employee firefighters it receives services from or

 

 

HB0308- 7 -LRB102 02722 RPS 12725 b

1employs for each fiscal year in which such firefighters are
2employed and transmit a certified copy of that report to the
3primary employer's pension fund and the secondary employee
4firefighter no later than 30 days after the end of any fiscal
5year in which wages were paid to the secondary employee
6firefighters.
7    Nothing in this Section shall be construed to allow a
8secondary employee to qualify for benefits or creditable
9service for employment as a firefighter for a secondary
10employer.
11    (a-5) For purposes of determining the required employer
12contribution to a pension fund, the value of the pension
13fund's assets shall be equal to the actuarial value of the
14pension fund's assets, which shall be calculated as follows:
15        (1) On March 30, 2011, the actuarial value of a
16    pension fund's assets shall be equal to the market value
17    of the assets as of that date.
18        (2) In determining the actuarial value of the pension
19    fund's assets for fiscal years after March 30, 2011, any
20    actuarial gains or losses from investment return incurred
21    in a fiscal year shall be recognized in equal annual
22    amounts over the 5-year period following that fiscal year.
23    (b) The tax shall be levied and collected in the same
24manner as the general taxes of the municipality, and shall be
25in addition to all other taxes now or hereafter authorized to
26be levied upon all property within the municipality, and in

 

 

HB0308- 8 -LRB102 02722 RPS 12725 b

1addition to the amount authorized to be levied for general
2purposes, under Section 8-3-1 of the Illinois Municipal Code
3or under Section 14 of the Fire Protection District Act. The
4tax shall be forwarded directly to the treasurer of the board
5within 30 business days of receipt by the county (or, in the
6case of amounts added to the tax levy under subsection (f),
7used by the municipality to pay the employer contributions
8required under subsection (b-1) of Section 15-155 of this
9Code).
10    (b-5) If a participating municipality fails to transmit to
11the fund contributions required of it under this Article for
12more than 90 days after the payment of those contributions is
13due, the fund may, after giving notice to the municipality,
14certify to the State Comptroller the amounts of the delinquent
15payments in accordance with any applicable rules of the
16Comptroller, and the Comptroller must, beginning in fiscal
17year 2016, deduct and remit to the fund the certified amounts
18or a portion of those amounts from the following proportions
19of payments of State funds to the municipality:
20        (1) in fiscal year 2016, one-third of the total amount
21    of any payments of State funds to the municipality;
22        (2) in fiscal year 2017, two-thirds of the total
23    amount of any payments of State funds to the municipality;
24    and
25        (3) in fiscal year 2018 and each fiscal year
26    thereafter, the total amount of any payments of State

 

 

HB0308- 9 -LRB102 02722 RPS 12725 b

1    funds to the municipality.
2    The State Comptroller may not deduct from any payments of
3State funds to the municipality more than the amount of
4delinquent payments certified to the State Comptroller by the
5fund.
6    (c) The board shall make available to the membership and
7the general public for inspection and copying at reasonable
8times the most recent Actuarial Valuation Balance Sheet and
9Tax Levy Requirement issued to the fund by the Department of
10Insurance.
11    (d) The firefighters' pension fund shall consist of the
12following moneys which shall be set apart by the treasurer of
13the municipality: (1) all moneys derived from the taxes levied
14hereunder; (2) contributions by firefighters as provided under
15Section 4-118.1; (2.5) all moneys received from the
16Firefighters' Pension Investment Fund as provided in Article
1722C of this Code; (3) all rewards in money, fees, gifts, and
18emoluments that may be paid or given for or on account of
19extraordinary service by the fire department or any member
20thereof, except when allowed to be retained by competitive
21awards; and (4) any money, real estate or personal property
22received by the board.
23    (e) For the purposes of this Section, "enrolled actuary"
24means an actuary: (1) who is a member of the Society of
25Actuaries or the American Academy of Actuaries; and (2) who is
26enrolled under Subtitle C of Title III of the Employee

 

 

HB0308- 10 -LRB102 02722 RPS 12725 b

1Retirement Income Security Act of 1974, or who has been
2engaged in providing actuarial services to one or more public
3retirement systems for a period of at least 3 years as of July
41, 1983.
5    (f) The corporate authorities of a municipality that
6employs a person who is described in subdivision (d) of
7Section 4-106 may add to the tax levy otherwise provided for in
8this Section an amount equal to the projected cost of the
9employer contributions required to be paid by the municipality
10to the State Universities Retirement System under subsection
11(b-1) of Section 15-155 of this Code.
12    (g) The Commission on Government Forecasting and
13Accountability shall conduct a study of all funds established
14under this Article and shall report its findings to the
15General Assembly on or before January 1, 2013. To the fullest
16extent possible, the study shall include, but not be limited
17to, the following:
18        (1) fund balances;
19        (2) historical employer contribution rates for each
20    fund;
21        (3) the actuarial formulas used as a basis for
22    employer contributions, including the actual assumed rate
23    of return for each year, for each fund;
24        (4) available contribution funding sources;
25        (5) the impact of any revenue limitations caused by
26    PTELL and employer home rule or non-home rule status; and

 

 

HB0308- 11 -LRB102 02722 RPS 12725 b

1        (6) existing statutory funding compliance procedures
2    and funding enforcement mechanisms for all municipal
3    pension funds.
4(Source: P.A. 101-522, eff. 8-23-19; 101-610, eff. 1-1-20;
5revised 8-20-20.)
 
6    Section 90. The State Mandates Act is amended by adding
7Section 8.45 as follows:
 
8    (30 ILCS 805/8.45 new)
9    Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and
108 of this Act, no reimbursement by the State is required for
11the implementation of any mandate created by this amendatory
12Act of the 102nd General Assembly.
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.