093_HB0356

 
                                     LRB093 06744 EFG 07116 b

 1        AN ACT in relation to public employee benefits.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The  Illinois  Pension  Code  is  amended  by
 5    changing Sections 14-108.3 and 16-133.3 as follows:

 6        (40 ILCS 5/14-108.3)
 7        Sec. 14-108.3.  Early retirement incentives.
 8        (a)  To  be  eligible  for  the benefits provided in this
 9    Section, a person must:
10             (1)  be a member of this  System  who,  on  any  day
11        during  June,  2002, is (i) in active payroll status in a
12        position of employment with a department  and  an  active
13        contributor   to   this   System  with  respect  to  that
14        employment, and terminates  that  employment  before  the
15        retirement  annuity under this Article begins, or (ii) on
16        layoff status from  such  a  position  with  a  right  of
17        re-employment  or  recall  to service, or (iii) receiving
18        benefits under Section 14-123, 14-123.1  or  14-124,  but
19        only  if the member has not been receiving those benefits
20        for a continuous period of more than 2 years  as  of  the
21        date of application;
22             (2)  not  have received any retirement annuity under
23        this Article beginning earlier than August 1, 2002;
24             (3)  file with the Board on or before June 30,  2003
25        December  31,  2002  a written application requesting the
26        benefits provided in this Section;
27             (4)  terminate  employment  under  this  Article  no
28        later than June 30, 2003 December 31, 2002 (or  the  date
29        established under subsection (d), if applicable);
30             (5)  by  the date of termination of service, have at
31        least 8 years of creditable service under  this  Article,
 
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 1        without  the  use  of  any creditable service established
 2        under this Section;
 3             (6)  by the date of termination of service, have  at
 4        least  5  years  of  membership  service  earned while an
 5        employee under this Article, which may  include  military
 6        service  for  which  credit  is established under Section
 7        14-105(b), service during the qualifying period for which
 8        credit  is  established  under  Section  14-104(a),   and
 9        service for which credit has been established by repaying
10        a  refund  under  Section  14-130,  but shall not include
11        service for which any other optional service  credit  has
12        been established; and
13             (7)  not  receive any early retirement benefit under
14        Section 16-133.3 of this Code.
15        (b)   An eligible person may establish up to 5  years  of
16    creditable  service  under this Article, in increments of one
17    month, by making the contributions  specified  in  subsection
18    (c).   In  addition,  for  each  month  of creditable service
19    established under this Section, a person's age at  retirement
20    shall be deemed to be one month older than it actually is.
21        The creditable service established under this Section may
22    be   used  for  all  purposes  under  this  Article  and  the
23    Retirement Systems Reciprocal Act, except for the computation
24    of final average compensation under Section 14-103.12 or  the
25    determination of compensation under this or any other Article
26    of this Code.
27        The  age  enhancement  established under this Section may
28    not be used  to  enable  any  person  to  begin  receiving  a
29    retirement  annuity  calculated  under  Section 14-110 before
30    actually attaining age 50 (without any age enhancement  under
31    this  Section).   The  age enhancement established under this
32    Section may be used for all other purposes under this Article
33    (including calculation of a proportionate annuity payable  by
34    this  System  under  the  Retirement Systems Reciprocal Act),
 
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 1    except for purposes of the level  income  option  in  Section
 2    14-112,  the  reversionary  annuity under Section 14-113, and
 3    the required distributions under Section 14-121.1.
 4        The age enhancement established under this Section may be
 5    used in determining benefits payable under Article 16 of this
 6    Code under the Retirement  Systems  Reciprocal  Act,  if  the
 7    person  has at least 5 years of service credit in the Article
 8    16 system that was earned while participating in that  system
 9    as  a  teacher  (as  defined in Section 16-106) employed by a
10    department  (as  defined  in   Section   14-103.04).      Age
11    enhancement   established   under   this  Section  shall  not
12    otherwise be used in determining benefits payable under other
13    Articles of this Code under the Retirement Systems Reciprocal
14    Act.
15        (c)  For all creditable service  established  under  this
16    Section,  a  person  must  pay  to  the  System  an  employee
17    contribution  to  be  determined  by the System, based on the
18    member's rate of compensation on June 1, 2002  (or  the  last
19    date  before June 1, 2002 for which a rate can be determined)
20    and the retirement contribution rate in  effect  on  June  1,
21    2002  for  the  member  (or  for members with the same social
22    security and alternative formula status as the member).
23        If the member receives a lump sum payment for accumulated
24    vacation, sick leave and personal leave upon withdrawal  from
25    service,  and  the  net amount of that lump sum payment is at
26    least as great as the amount  of  the  contribution  required
27    under  this  Section, the entire contribution must be paid by
28    the employee by payroll deduction.  If there is no such  lump
29    sum  payment, or if it is less than the contribution required
30    under this Section, the member shall make an initial  payment
31    by payroll deduction, equal to the net amount of the lump sum
32    payment  for  accumulated  vacation, sick leave, and personal
33    leave, and  have  the  remaining  amount  due  treated  as  a
34    reduction  from  the  retirement  annuity in 24 equal monthly
 
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 1    installments beginning in the month in which  the  retirement
 2    annuity  takes effect.  The required contribution may be paid
 3    as a  pre-tax  deduction  from  earnings.   For  federal  and
 4    Illinois  tax  purposes,  the  monthly  amount  by  which the
 5    annuitant's benefit is reduced shall  not  be  treated  as  a
 6    contribution  by  the annuitant, but rather as a reduction of
 7    the annuitant's monthly benefit.
 8        (c-5)  The reduction in retirement  annuity  provided  in
 9    subsection  (c)  of  Section  14-108  does  not  apply to the
10    annuity of a person who retires under this Section.  A person
11    who has received any age enhancement  or  creditable  service
12    under   this  Section  may  begin  to  receive  an  unreduced
13    retirement annuity upon attainment of age 55 with at least 25
14    years of creditable service (including  any  age  enhancement
15    and creditable service established under this Section).
16        (d)  In  order  to ensure that the efficient operation of
17    State government  is  not  jeopardized  by  the  simultaneous
18    retirement of large numbers of key personnel, the director or
19    other  head  of  a  department may, for key employees of that
20    department,  extend  the  December  31,  2002  deadline   for
21    terminating  employment  under  this  Article  established in
22    subdivision (a)(4) of this Section to a date not  later  than
23    April  30,  2003  by  so  notifying  the System in writing by
24    December 31, 2002.
25        (e)  Notwithstanding Section 14-111,  a  person  who  has
26    received any age enhancement or creditable service under this
27    Section and who reenters service under this Article (or as an
28    employee  of  a  department under Article 16) other than as a
29    temporary employee thereby forfeits that age enhancement  and
30    creditable  service  and  is  entitled  to  a  refund  of the
31    contributions made pursuant to this Section.
32        (f)  The  System  shall  determine  the  amount  of   the
33    increase  in  unfunded  accrued  liability resulting from the
34    granting of early retirement incentives  under  this  Section
 
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 1    and  shall report that amount to the Governor and the Pension
 2    Laws Commission on or before November 15, 2003.  The increase
 3    in liability reported under this subsection (f) shall not  be
 4    included   in   the   calculation   of   the  required  State
 5    contribution under Section 14-131.
 6        (g)  The System shall determine the amount of the  annual
 7    State   contribution   necessary   to  amortize  on  a  level
 8    dollar-payment basis, over a  period  of  10  years  at  8.5%
 9    interest,   compounded  annually,  an  amount  equal  to  the
10    increase  in  unfunded  accrued  liability  determined  under
11    subsection (f) minus $70,000,000.  The System  shall  certify
12    the amount of this annual State contribution to the Governor,
13    the  State  Comptroller,  the  Bureau  of the Budget, and the
14    Pension Laws Commission on or before November 15, 2003.
15        In addition to the contributions otherwise required under
16    this Article, the State shall  appropriate  and  pay  to  the
17    System  (1)  an  amount  equal to $70,000,000 in State fiscal
18    year 2004 and (2) in each of State fiscal years 2005  through
19    2013,  an  amount  equal  to  the  annual  State contribution
20    certified by the System under this subsection (g).
21        (h)  The Pension  Laws  Commission  shall  determine  and
22    report  to the General Assembly, on or before January 1, 2004
23    and annually thereafter through the year 2013,  its  estimate
24    of  (1)  the  annual  amount  of payroll savings likely to be
25    realized by the State as a result of the early retirement  of
26    persons  receiving  early  retirement  incentives  under this
27    Section and (2) the net annual savings or cost to  the  State
28    from the program of early retirement incentives created under
29    this Section.
30        The   System,   the   Department  of  Central  Management
31    Services, the Bureau of the Budget, and all other departments
32    shall provide to  the  Commission  any  assistance  that  the
33    Commission may request with respect to its reports under this
34    Section.   The  Commission may require departments to provide
 
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 1    it with any information that it  deems  necessary  or  useful
 2    with  respect  to  its  reports under this Section, including
 3    without limitation information about (1) the  final  earnings
 4    of   former  department  employees  who  elected  to  receive
 5    benefits under this Section,  (2)  the  earnings  of  current
 6    department employees holding the positions vacated by persons
 7    who  elected  to receive benefits under this Section, and (3)
 8    positions vacated by persons who elected to receive  benefits
 9    under this Section that have not yet been refilled.
10        (i)  The  changes made to this Section by this amendatory
11    Act of the 92nd General Assembly do not apply to persons  who
12    retired under this Section on or before May 1, 1992.
13        (j)  The  changes made to this Section by this amendatory
14    Act of the 93rd General Assembly apply only to (1) persons in
15    service under this Article on  the  effective  date  of  this
16    amendatory  Act  and  (2) persons whose employment under this
17    Article was terminated without cause on or after December 15,
18    2002 but before the effective date of this amendatory Act.
19    (Source: P.A. 92-566, eff. 6-25-02.)

20        (40 ILCS 5/16-133.3) (from Ch. 108 1/2, par. 16-133.3)
21        Sec. 16-133.3.  Early  retirement  incentives  for  State
22    employees.
23        (a)  To  be  eligible  for  the benefits provided in this
24    Section, a person must:
25             (1)  be a member of this  System  who,  on  any  day
26        during  June,  2002, is (i) in active payroll status as a
27        full-time teacher employed by a department and an  active
28        contributor   to   this   System  with  respect  to  that
29        employment, or (ii) on layoff status from such a position
30        with a right of re-employment or recall  to  service,  or
31        (iii) receiving a disability benefit under Section 16-149
32        or  16-149.1,  but  only  if  the  member  has  not  been
33        receiving  that  benefit  for a continuous period of more
 
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 1        than 2 years as of the date of application;
 2             (2)  not have received any retirement annuity  under
 3        this Article beginning earlier than August 1, 2002;
 4             (3)  file  with the Board on or before June 30, 2003
 5        December 31, 2002 a written  application  requesting  the
 6        benefits provided in this Section;
 7             (4)  terminate  employment  under  this  Article  no
 8        later  than  June 30, 2003 December 31, 2002 (or the date
 9        established under subsection (d), if applicable);
10             (5)  by the date of termination of service, have  at
11        least  8  years of creditable service under this Article,
12        without the use of  any  creditable  service  established
13        under this Section;
14             (6)  by  the date of termination of service, have at
15        least  5   years   of   service   credit   earned   while
16        participating  in  the  System as a teacher employed by a
17        department; and
18             (7)  not receive any early retirement benefit  under
19        Section 14-108.3 of this Code.
20        For  the  purposes  of this Section, "department" means a
21    department as defined in Section  14-103.04  that  employs  a
22    teacher as defined in this Article.
23        (b)  An  eligible  person  may establish up to 5 years of
24    creditable  service  under  this  Article   by   making   the
25    contributions  specified in subsection (c).  In addition, for
26    each period of  creditable  service  established  under  this
27    Section,  a  person's age at retirement shall be deemed to be
28    enhanced by an equivalent period.
29        The creditable service established under this Section may
30    be  used  for  all  purposes  under  this  Article  and   the
31    Retirement Systems Reciprocal Act, except for the computation
32    of  final  average  salary,  the  determination  of salary or
33    compensation under this Article or any other Article of  this
34    Code,   or  the  determination  of  eligibility  for  or  the
 
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 1    computation of benefits under Section 16-133.2.
 2        The age enhancement established under this Section may be
 3    used  for  all  purposes  under   this   Article   (including
 4    calculation of a proportionate annuity payable by this System
 5    under  the  Retirement  Systems  Reciprocal  Act), except for
 6    purposes of a retirement annuity under Section  16-133(a)(A),
 7    a  reversionary  annuity  under  Section 16-136, the required
 8    distributions under Section 16-142.3, and  the  determination
 9    of  eligibility  for  or  the  computation  of benefits under
10    Section 16-133.2.  Age  enhancement  established  under  this
11    Section  may  be  used  in determining benefits payable under
12    Article  14  of  this  Code  under  the  Retirement   Systems
13    Reciprocal  Act (subject to the limitations on the use of age
14    enhancement provided in Section  14-108.3);  age  enhancement
15    established   under   this  Section  shall  not  be  used  in
16    determining benefits payable under  other  Articles  of  this
17    Code under the Retirement Systems Reciprocal Act.
18        (c)  For  all  creditable  service established under this
19    Section,  a  person  must  pay  to  the  System  an  employee
20    contribution to be determined by the System, equal to 9.0% of
21    the member's highest annual salary rate that would be used in
22    the  determination  of  the  average  salary  for  retirement
23    annuity purposes if  the  member  retired  immediately  after
24    withdrawal,  for  each year of creditable service established
25    under this Section.
26        If the member receives a lump sum payment for accumulated
27    vacation, sick leave, and personal leave upon withdrawal from
28    service, and the net amount of that lump sum  payment  is  at
29    least  as  great  as  the amount of the contribution required
30    under this Section, the entire contribution must be  paid  by
31    the  employee by payroll deduction.  If there is no such lump
32    sum payment, or if it is less than the contribution  required
33    under  this Section, the member shall make an initial payment
34    by payroll deduction, equal to the net amount of the lump sum
 
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 1    payment for accumulated vacation, sick  leave,  and  personal
 2    leave,  and  have  the  remaining  amount  due  treated  as a
 3    reduction from the retirement annuity  in  24  equal  monthly
 4    installments  beginning  in the month in which the retirement
 5    annuity takes effect.  The required contribution may be  paid
 6    as a pre-tax deduction from earnings.
 7        (d)  In  order  to ensure that the efficient operation of
 8    State government  is  not  jeopardized  by  the  simultaneous
 9    retirement of large numbers of key personnel, the director or
10    other  head  of  a  department may, for key employees of that
11    department,  extend  the  December  31,  2002  deadline   for
12    terminating  employment  under  this  Article  established in
13    subdivision (a)(4) of this Section to a date not  later  than
14    April  30,  2003  by  so  notifying  the System in writing by
15    December 31, 2002.
16        (e)  A person who has received  any  age  enhancement  or
17    creditable  service  under  this  Section  and  who  reenters
18    contributing  service  under this Article or Article 14 shall
19    thereby forfeit that age enhancement and creditable  service,
20    and  become  entitled  to  a refund of the contributions made
21    pursuant to this Section.
22        (f)  The  System  shall  determine  the  amount  of   the
23    increase  in  unfunded  accrued  liability resulting from the
24    granting of early retirement incentives  under  this  Section
25    and  shall report that amount to the Governor and the Pension
26    Laws Commission on or before November 15, 2003.  The increase
27    in liability reported under this subsection (f) shall not  be
28    included   in   the   calculation   of   the  required  State
29    contribution under Section 16-158.
30        (g)  The System shall determine the amount of the  annual
31    State   contribution   necessary   to  amortize  on  a  level
32    dollar-payment basis, over a  period  of  10  years  at  8.5%
33    interest,   compounded  annually,  an  amount  equal  to  the
34    increase  in  unfunded  accrued  liability  determined  under
 
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 1    subsection (f) minus $1,000,000.  The  System  shall  certify
 2    the amount of this annual State contribution to the Governor,
 3    the  State  Comptroller,  the  Bureau  of the Budget, and the
 4    Pension Laws Commission on or before November 15, 2003.
 5        In addition to the contributions otherwise required under
 6    this Article, the State shall  appropriate  and  pay  to  the
 7    System (1) an amount equal to $1,000,000 in State fiscal year
 8    2004 and (2) in each of State fiscal years 2005 through 2013,
 9    an amount equal to the annual State contribution certified by
10    the System under this subsection (g).
11        (h)  The  Pension  Laws  Commission  shall  determine and
12    report to the General Assembly, on or before January 1,  2004
13    and  annually  thereafter through the year 2013, its estimate
14    of (1) the annual amount of  payroll  savings  likely  to  be
15    realized  by the State as a result of the early retirement of
16    persons receiving  early  retirement  incentives  under  this
17    Section  and  (2) the net annual savings or cost to the State
18    from the program of early retirement incentives created under
19    this Section.
20        The  System,  the  Department   of   Central   Management
21    Services, the Bureau of the Budget, and all other departments
22    shall  provide  to  the  Commission  any  assistance that the
23    Commission may request with respect to its reports under this
24    Section.  The Commission may require departments  to  provide
25    it  with  any  information  that it deems necessary or useful
26    with respect to its reports  under  this  Section,  including
27    without  limitation  information about (1) the final earnings
28    of  former  department  employees  who  elected  to   receive
29    benefits  under  this  Section,  (2)  the earnings of current
30    department employees holding the positions vacated by persons
31    who elected to receive benefits under this Section,  and  (3)
32    positions  vacated by persons who elected to receive benefits
33    under this Section that have not yet been refilled.
34        (i)  The changes made to this Section by this  amendatory
 
                            -11-     LRB093 06744 EFG 07116 b
 1    Act  of the 92nd General Assembly do not apply to persons who
 2    retired under this Section on or before May 1, 1992.
 3        (j)  The changes made to this Section by this  amendatory
 4    Act of the 93rd General Assembly apply only to (1) persons in
 5    service with a department under this Article on the effective
 6    date  of this amendatory Act and (2) persons whose employment
 7    with a department under this Article was  terminated  without
 8    cause  on or after December 15, 2002 but before the effective
 9    date of this amendatory Act.
10    (Source: P.A. 92-566, eff. 6-25-02.)

11        Section 99. Effective date.  This Act takes  effect  upon
12    becoming law.