Illinois General Assembly - Full Text of HB1165
Illinois General Assembly

Previous General Assemblies

Full Text of HB1165  98th General Assembly

HB1165eng 98TH GENERAL ASSEMBLY



 


 
HB1165 EngrossedLRB098 08854 EFG 38984 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 1. Short title. This Act may be cited as the
5Pension Fund Solvency Act of 2013.
 
6    Section 4. The Illinois Pension Code is amended by changing
7Sections 2-119.1, 14-114, 15-136, and 16-133.1 and by adding
8Sections 2-105.1, 2-105.2, 14-103.40, 14-103.41, 15-107.1,
915-107.2, 16-106.4, and 16-106.5 as follows:
 
10    (40 ILCS 5/2-105.1 new)
11    Sec. 2-105.1. Tier I participant. "Tier I participant": A
12participant who first became a participant before January 1,
132011.
 
14    (40 ILCS 5/2-105.2 new)
15    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
16former Tier I participant who is receiving a retirement
17annuity.
 
18    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
19    Sec. 2-119.1. Automatic increase in retirement annuity.
20    (a) Except as provided in subsections (a-1) and (a-2), a A

 

 

HB1165 Engrossed- 2 -LRB098 08854 EFG 38984 b

1participant who retires after June 30, 1967, and who has not
2received an initial increase under this Section before the
3effective date of this amendatory Act of 1991, shall, in
4January or July next following the first anniversary of
5retirement, whichever occurs first, and in the same month of
6each year thereafter, but in no event prior to age 60, have the
7amount of the originally granted retirement annuity increased
8as follows: for each year through 1971, 1 1/2%; for each year
9from 1972 through 1979, 2%; and for 1980 and each year
10thereafter, 3%. Annuitants who have received an initial
11increase under this subsection prior to the effective date of
12this amendatory Act of 1991 shall continue to receive their
13annual increases in the same month as the initial increase.
14    (a-1) Notwithstanding any other provision of this Article,
15for a Tier I retiree, the amount of each automatic annual
16increase in retirement annuity occurring on or after the
17effective date of this amendatory Act of the 98th General
18Assembly shall be the lesser of $750 or 3% of the total annuity
19payable at the time of the increase, including previous
20increases granted.
21    (a-2) Notwithstanding any other provision of this Article,
22for a Tier I retiree, the monthly retirement annuity shall
23first be subject to annual increases on the January 1 occurring
24on or next after the attainment of age 67 or the January 1
25occurring on or next after the fifth anniversary of the annuity
26start date, whichever occurs earlier. If on the effective date

 

 

HB1165 Engrossed- 3 -LRB098 08854 EFG 38984 b

1of this amendatory Act of the 98th General Assembly a Tier I
2retiree has already received an annual increase under this
3Section but does not yet meet the new eligibility requirements
4of this subsection, the annual increases already received shall
5continue in force, but no additional annual increase shall be
6granted until the Tier I retiree meets the new eligibility
7requirements.
8    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
9and (a-2) apply without regard to whether or not the Tier I
10retiree is in active service under this Article on or after the
11effective date of this amendatory Act of the 98th General
12Assembly.
13    (b) Beginning January 1, 1990, for eligible participants
14who remain in service after attaining 20 years of creditable
15service, the 3% increases provided under subsection (a) shall
16begin to accrue on the January 1 next following the date upon
17which the participant (1) attains age 55, or (2) attains 20
18years of creditable service, whichever occurs later, and shall
19continue to accrue while the participant remains in service;
20such increases shall become payable on January 1 or July 1,
21whichever occurs first, next following the first anniversary of
22retirement. For any person who has service credit in the System
23for the entire period from January 15, 1969 through December
2431, 1992, regardless of the date of termination of service, the
25reference to age 55 in clause (1) of this subsection (b) shall
26be deemed to mean age 50.

 

 

HB1165 Engrossed- 4 -LRB098 08854 EFG 38984 b

1    This subsection (b) does not apply to any person who first
2becomes a member of the System after August 8, 2003 (the
3effective date of Public Act 93-494) this amendatory Act of the
493rd General Assembly.
5    (b-5) Notwithstanding any other provision of this Article,
6a participant who first becomes a participant on or after
7January 1, 2011 (the effective date of Public Act 96-889)
8shall, in January or July next following the first anniversary
9of retirement, whichever occurs first, and in the same month of
10each year thereafter, but in no event prior to age 67, have the
11amount of the retirement annuity then being paid increased by
123% or the annual unadjusted percentage increase in the Consumer
13Price Index for All Urban Consumers as determined by the Public
14Pension Division of the Department of Insurance under
15subsection (a) of Section 2-108.1, whichever is less.
16    (c) The foregoing provisions relating to automatic
17increases are not applicable to a participant who retires
18before having made contributions (at the rate prescribed in
19Section 2-126) for automatic increases for less than the
20equivalent of one full year. However, in order to be eligible
21for the automatic increases, such a participant may make
22arrangements to pay to the system the amount required to bring
23the total contributions for the automatic increase to the
24equivalent of one year's contributions based upon his or her
25last salary.
26    (d) A participant who terminated service prior to July 1,

 

 

HB1165 Engrossed- 5 -LRB098 08854 EFG 38984 b

11967, with at least 14 years of service is entitled to an
2increase in retirement annuity beginning January, 1976, and to
3additional increases in January of each year thereafter.
4    The initial increase shall be 1 1/2% of the originally
5granted retirement annuity multiplied by the number of full
6years that the annuitant was in receipt of such annuity prior
7to January 1, 1972, plus 2% of the originally granted
8retirement annuity for each year after that date. The
9subsequent annual increases shall be at the rate of 2% of the
10originally granted retirement annuity for each year through
111979 and at the rate of 3% for 1980 and thereafter.
12    (e) Beginning January 1, 1990, all automatic annual
13increases payable under this Section shall be calculated as a
14percentage of the total annuity payable at the time of the
15increase, including previous increases granted under this
16Article.
17(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
18    (40 ILCS 5/14-103.40 new)
19    Sec. 14-103.40. Tier I member. "Tier I member": A member of
20this System who first became a member or participant before
21January 1, 2011 under any reciprocal retirement system or
22pension fund established under this Code other than a
23retirement system or pension fund established under Article 2,
243, 4, 5, 6, or 18 of this Code.
 

 

 

HB1165 Engrossed- 6 -LRB098 08854 EFG 38984 b

1    (40 ILCS 5/14-103.41 new)
2    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
3Tier I member who is receiving a retirement annuity.
 
4    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
5    Sec. 14-114. Automatic increase in retirement annuity.
6    (a) Except as provided in subsections (a-1) and (a-2), any
7Any person receiving a retirement annuity under this Article
8who retires having attained age 60, or who retires before age
960 having at least 35 years of creditable service, or who
10retires on or after January 1, 2001 at an age which, when added
11to the number of years of his or her creditable service, equals
12at least 85, shall, on January 1 next following the first full
13year of retirement, have the amount of the then fixed and
14payable monthly retirement annuity increased 3%. Any person
15receiving a retirement annuity under this Article who retires
16before attainment of age 60 and with less than (i) 35 years of
17creditable service if retirement is before January 1, 2001, or
18(ii) the number of years of creditable service which, when
19added to the member's age, would equal 85, if retirement is on
20or after January 1, 2001, shall have the amount of the fixed
21and payable retirement annuity increased by 3% on the January 1
22occurring on or next following (1) attainment of age 60, or (2)
23the first anniversary of retirement, whichever occurs later.
24However, for persons who receive the alternative retirement
25annuity under Section 14-110, references in this subsection (a)

 

 

HB1165 Engrossed- 7 -LRB098 08854 EFG 38984 b

1to attainment of age 60 shall be deemed to refer to attainment
2of age 55. For a person receiving early retirement incentives
3under Section 14-108.3 whose retirement annuity began after
4January 1, 1992 pursuant to an extension granted under
5subsection (e) of that Section, the first anniversary of
6retirement shall be deemed to be January 1, 1993. For a person
7who retires on or after June 28, 2001 and on or before October
81, 2001, and whose retirement annuity is calculated, in whole
9or in part, under Section 14-110 or subsection (g) or (h) of
10Section 14-108, the first anniversary of retirement shall be
11deemed to be January 1, 2002.
12    On each January 1 following the date of the initial
13increase under this subsection, the employee's monthly
14retirement annuity shall be increased by an additional 3%.
15    Beginning January 1, 1990 and except as provided in
16subsections (a-1) and (a-2), all automatic annual increases
17payable under this Section shall be calculated as a percentage
18of the total annuity payable at the time of the increase,
19including previous increases granted under this Article.
20    (a-1) Notwithstanding any other provision of this Article,
21for a Tier I retiree, the amount of each automatic annual
22increase in retirement annuity occurring on or after the
23effective date of this amendatory Act of the 98th General
24Assembly shall be the lesser of $600 ($750 if the annuity is
25based primarily upon service as a noncovered employee) or 3% of
26the total annuity payable at the time of the increase,

 

 

HB1165 Engrossed- 8 -LRB098 08854 EFG 38984 b

1including previous increases granted.
2    (a-2) Notwithstanding any other provision of this Article,
3for a Tier I retiree, the monthly retirement annuity shall
4first be subject to annual increases on the January 1 occurring
5on or next after the attainment of age 67 or the January 1
6occurring on or next after the fifth anniversary of the annuity
7start date, whichever occurs earlier. If on the effective date
8of this amendatory Act of the 98th General Assembly a Tier I
9retiree has already received an annual increase under this
10Section but does not yet meet the new eligibility requirements
11of this subsection, the annual increases already received shall
12continue in force, but no additional annual increase shall be
13granted until the Tier I retiree meets the new eligibility
14requirements.
15    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
16and (a-2) apply without regard to whether or not the Tier I
17retiree is in active service under this Article on or after the
18effective date of this amendatory Act of the 98th General
19Assembly.
20    (b) The provisions of subsection (a) of this Section shall
21be applicable to an employee only if the employee makes the
22additional contributions required after December 31, 1969 for
23the purpose of the automatic increases for not less than the
24equivalent of one full year. If an employee becomes an
25annuitant before his additional contributions equal one full
26year's contributions based on his salary at the date of

 

 

HB1165 Engrossed- 9 -LRB098 08854 EFG 38984 b

1retirement, the employee may pay the necessary balance of the
2contributions to the system, without interest, and be eligible
3for the increasing annuity authorized by this Section.
4    (c) The provisions of subsection (a) of this Section shall
5not be applicable to any annuitant who is on retirement on
6December 31, 1969, and thereafter returns to State service,
7unless the member has established at least one year of
8additional creditable service following reentry into service.
9    (d) In addition to other increases which may be provided by
10this Section, on January 1, 1981 any annuitant who was
11receiving a retirement annuity on or before January 1, 1971
12shall have his retirement annuity then being paid increased $1
13per month for each year of creditable service. On January 1,
141982, any annuitant who began receiving a retirement annuity on
15or before January 1, 1977, shall have his retirement annuity
16then being paid increased $1 per month for each year of
17creditable service.
18    On January 1, 1987, any annuitant who began receiving a
19retirement annuity on or before January 1, 1977, shall have the
20monthly retirement annuity increased by an amount equal to 8˘
21per year of creditable service times the number of years that
22have elapsed since the annuity began.
23    (e) Every person who receives the alternative retirement
24annuity under Section 14-110 and who is eligible to receive the
253% increase under subsection (a) on January 1, 1986, shall also
26receive on that date a one-time increase in retirement annuity

 

 

HB1165 Engrossed- 10 -LRB098 08854 EFG 38984 b

1equal to the difference between (1) his actual retirement
2annuity on that date, including any increases received under
3subsection (a), and (2) the amount of retirement annuity he
4would have received on that date if the amendments to
5subsection (a) made by Public Act 84-162 had been in effect
6since the date of his retirement.
7(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
892-651, eff. 7-11-02.)
 
9    (40 ILCS 5/15-107.1 new)
10    Sec. 15-107.1. Tier I participant. "Tier I participant": A
11participant under this Article, other than a participant in the
12self-managed plan under Section 15-158.2, who first became a
13member or participant before January 1, 2011 under any
14reciprocal retirement system or pension fund established under
15this Code other than a retirement system or pension fund
16established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
17    (40 ILCS 5/15-107.2 new)
18    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
19Tier I participant who is receiving a retirement annuity.
20    A person does not become a Tier I retiree by virtue of
21receiving a reversionary, survivors, beneficiary, or
22disability annuity.
 
23    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)

 

 

HB1165 Engrossed- 11 -LRB098 08854 EFG 38984 b

1    Sec. 15-136. Retirement annuities - Amount. The provisions
2of this Section 15-136 apply only to those participants who are
3participating in the traditional benefit package or the
4portable benefit package and do not apply to participants who
5are participating in the self-managed plan.
6    (a) The amount of a participant's retirement annuity,
7expressed in the form of a single-life annuity, shall be
8determined by whichever of the following rules is applicable
9and provides the largest annuity:
10    Rule 1: The retirement annuity shall be 1.67% of final rate
11of earnings for each of the first 10 years of service, 1.90%
12for each of the next 10 years of service, 2.10% for each year
13of service in excess of 20 but not exceeding 30, and 2.30% for
14each year in excess of 30; or for persons who retire on or
15after January 1, 1998, 2.2% of the final rate of earnings for
16each year of service.
17    Rule 2: The retirement annuity shall be the sum of the
18following, determined from amounts credited to the participant
19in accordance with the actuarial tables and the effective rate
20of interest in effect at the time the retirement annuity
21begins:
22        (i) the normal annuity which can be provided on an
23    actuarially equivalent basis, by the accumulated normal
24    contributions as of the date the annuity begins;
25        (ii) an annuity from employer contributions of an
26    amount equal to that which can be provided on an

 

 

HB1165 Engrossed- 12 -LRB098 08854 EFG 38984 b

1    actuarially equivalent basis from the accumulated normal
2    contributions made by the participant under Section
3    15-113.6 and Section 15-113.7 plus 1.4 times all other
4    accumulated normal contributions made by the participant;
5    and
6        (iii) the annuity that can be provided on an
7    actuarially equivalent basis from the entire contribution
8    made by the participant under Section 15-113.3.
9    With respect to a police officer or firefighter who retires
10on or after August 14, 1998, the accumulated normal
11contributions taken into account under clauses (i) and (ii) of
12this Rule 2 shall include the additional normal contributions
13made by the police officer or firefighter under Section
1415-157(a).
15    The amount of a retirement annuity calculated under this
16Rule 2 shall be computed solely on the basis of the
17participant's accumulated normal contributions, as specified
18in this Rule and defined in Section 15-116. Neither an employee
19or employer contribution for early retirement under Section
2015-136.2 nor any other employer contribution shall be used in
21the calculation of the amount of a retirement annuity under
22this Rule 2.
23    This amendatory Act of the 91st General Assembly is a
24clarification of existing law and applies to every participant
25and annuitant without regard to whether status as an employee
26terminates before the effective date of this amendatory Act.

 

 

HB1165 Engrossed- 13 -LRB098 08854 EFG 38984 b

1    This Rule 2 does not apply to a person who first becomes an
2employee under this Article on or after July 1, 2005.
3    Rule 3: The retirement annuity of a participant who is
4employed at least one-half time during the period on which his
5or her final rate of earnings is based, shall be equal to the
6participant's years of service not to exceed 30, multiplied by
7(1) $96 if the participant's final rate of earnings is less
8than $3,500, (2) $108 if the final rate of earnings is at least
9$3,500 but less than $4,500, (3) $120 if the final rate of
10earnings is at least $4,500 but less than $5,500, (4) $132 if
11the final rate of earnings is at least $5,500 but less than
12$6,500, (5) $144 if the final rate of earnings is at least
13$6,500 but less than $7,500, (6) $156 if the final rate of
14earnings is at least $7,500 but less than $8,500, (7) $168 if
15the final rate of earnings is at least $8,500 but less than
16$9,500, and (8) $180 if the final rate of earnings is $9,500 or
17more, except that the annuity for those persons having made an
18election under Section 15-154(a-1) shall be calculated and
19payable under the portable retirement benefit program pursuant
20to the provisions of Section 15-136.4.
21    Rule 4: A participant who is at least age 50 and has 25 or
22more years of service as a police officer or firefighter, and a
23participant who is age 55 or over and has at least 20 but less
24than 25 years of service as a police officer or firefighter,
25shall be entitled to a retirement annuity of 2 1/4% of the
26final rate of earnings for each of the first 10 years of

 

 

HB1165 Engrossed- 14 -LRB098 08854 EFG 38984 b

1service as a police officer or firefighter, 2 1/2% for each of
2the next 10 years of service as a police officer or
3firefighter, and 2 3/4% for each year of service as a police
4officer or firefighter in excess of 20. The retirement annuity
5for all other service shall be computed under Rule 1.
6    For purposes of this Rule 4, a participant's service as a
7firefighter shall also include the following:
8        (i) service that is performed while the person is an
9    employee under subsection (h) of Section 15-107; and
10        (ii) in the case of an individual who was a
11    participating employee employed in the fire department of
12    the University of Illinois's Champaign-Urbana campus
13    immediately prior to the elimination of that fire
14    department and who immediately after the elimination of
15    that fire department transferred to another job with the
16    University of Illinois, service performed as an employee of
17    the University of Illinois in a position other than police
18    officer or firefighter, from the date of that transfer
19    until the employee's next termination of service with the
20    University of Illinois.
21    Rule 5: The retirement annuity of a participant who elected
22early retirement under the provisions of Section 15-136.2 and
23who, on or before February 16, 1995, brought administrative
24proceedings pursuant to the administrative rules adopted by the
25System to challenge the calculation of his or her retirement
26annuity shall be the sum of the following, determined from

 

 

HB1165 Engrossed- 15 -LRB098 08854 EFG 38984 b

1amounts credited to the participant in accordance with the
2actuarial tables and the prescribed rate of interest in effect
3at the time the retirement annuity begins:
4        (i) the normal annuity which can be provided on an
5    actuarially equivalent basis, by the accumulated normal
6    contributions as of the date the annuity begins; and
7        (ii) an annuity from employer contributions of an
8    amount equal to that which can be provided on an
9    actuarially equivalent basis from the accumulated normal
10    contributions made by the participant under Section
11    15-113.6 and Section 15-113.7 plus 1.4 times all other
12    accumulated normal contributions made by the participant;
13    and
14        (iii) an annuity which can be provided on an
15    actuarially equivalent basis from the employee
16    contribution for early retirement under Section 15-136.2,
17    and an annuity from employer contributions of an amount
18    equal to that which can be provided on an actuarially
19    equivalent basis from the employee contribution for early
20    retirement under Section 15-136.2.
21    In no event shall a retirement annuity under this Rule 5 be
22lower than the amount obtained by adding (1) the monthly amount
23obtained by dividing the combined employee and employer
24contributions made under Section 15-136.2 by the System's
25annuity factor for the age of the participant at the beginning
26of the annuity payment period and (2) the amount equal to the

 

 

HB1165 Engrossed- 16 -LRB098 08854 EFG 38984 b

1participant's annuity if calculated under Rule 1, reduced under
2Section 15-136(b) as if no contributions had been made under
3Section 15-136.2.
4    With respect to a participant who is qualified for a
5retirement annuity under this Rule 5 whose retirement annuity
6began before the effective date of this amendatory Act of the
791st General Assembly, and for whom an employee contribution
8was made under Section 15-136.2, the System shall recalculate
9the retirement annuity under this Rule 5 and shall pay any
10additional amounts due in the manner provided in Section
1115-186.1 for benefits mistakenly set too low.
12    The amount of a retirement annuity calculated under this
13Rule 5 shall be computed solely on the basis of those
14contributions specifically set forth in this Rule 5. Except as
15provided in clause (iii) of this Rule 5, neither an employee
16nor employer contribution for early retirement under Section
1715-136.2, nor any other employer contribution, shall be used in
18the calculation of the amount of a retirement annuity under
19this Rule 5.
20    The General Assembly has adopted the changes set forth in
21Section 25 of this amendatory Act of the 91st General Assembly
22in recognition that the decision of the Appellate Court for the
23Fourth District in Mattis v. State Universities Retirement
24System et al. might be deemed to give some right to the
25plaintiff in that case. The changes made by Section 25 of this
26amendatory Act of the 91st General Assembly are a legislative

 

 

HB1165 Engrossed- 17 -LRB098 08854 EFG 38984 b

1implementation of the decision of the Appellate Court for the
2Fourth District in Mattis v. State Universities Retirement
3System et al. with respect to that plaintiff.
4    The changes made by Section 25 of this amendatory Act of
5the 91st General Assembly apply without regard to whether the
6person is in service as an employee on or after its effective
7date.
8    (b) The retirement annuity provided under Rules 1 and 3
9above shall be reduced by 1/2 of 1% for each month the
10participant is under age 60 at the time of retirement. However,
11this reduction shall not apply in the following cases:
12        (1) For a disabled participant whose disability
13    benefits have been discontinued because he or she has
14    exhausted eligibility for disability benefits under clause
15    (6) of Section 15-152;
16        (2) For a participant who has at least the number of
17    years of service required to retire at any age under
18    subsection (a) of Section 15-135; or
19        (3) For that portion of a retirement annuity which has
20    been provided on account of service of the participant
21    during periods when he or she performed the duties of a
22    police officer or firefighter, if these duties were
23    performed for at least 5 years immediately preceding the
24    date the retirement annuity is to begin.
25    (c) The maximum retirement annuity provided under Rules 1,
262, 4, and 5 shall be the lesser of (1) the annual limit of

 

 

HB1165 Engrossed- 18 -LRB098 08854 EFG 38984 b

1benefits as specified in Section 415 of the Internal Revenue
2Code of 1986, as such Section may be amended from time to time
3and as such benefit limits shall be adjusted by the
4Commissioner of Internal Revenue, and (2) 80% of final rate of
5earnings.
6    (d) Subject to the provisions of subsection (d-1), an An
7annuitant whose status as an employee terminates after August
814, 1969 shall receive automatic increases in his or her
9retirement annuity as follows:
10    Effective January 1 immediately following the date the
11retirement annuity begins, the annuitant shall receive an
12increase in his or her monthly retirement annuity of 0.125% of
13the monthly retirement annuity provided under Rule 1, Rule 2,
14Rule 3, Rule 4, or Rule 5, contained in this Section,
15multiplied by the number of full months which elapsed from the
16date the retirement annuity payments began to January 1, 1972,
17plus 0.1667% of such annuity, multiplied by the number of full
18months which elapsed from January 1, 1972, or the date the
19retirement annuity payments began, whichever is later, to
20January 1, 1978, plus 0.25% of such annuity multiplied by the
21number of full months which elapsed from January 1, 1978, or
22the date the retirement annuity payments began, whichever is
23later, to the effective date of the increase.
24    The annuitant shall receive an increase in his or her
25monthly retirement annuity on each January 1 thereafter during
26the annuitant's life of 3% of the monthly annuity provided

 

 

HB1165 Engrossed- 19 -LRB098 08854 EFG 38984 b

1under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
2this Section. The change made under this subsection by P.A.
381-970 is effective January 1, 1980 and applies to each
4annuitant whose status as an employee terminates before or
5after that date.
6    Beginning January 1, 1990 and except as provided in
7subsections (d-1) and (d-2), all automatic annual increases
8payable under this Section shall be calculated as a percentage
9of the total annuity payable at the time of the increase,
10including all increases previously granted under this Article.
11    The change made in this subsection by P.A. 85-1008 is
12effective January 26, 1988, and is applicable without regard to
13whether status as an employee terminated before that date.
14    (d-1) Notwithstanding any other provision of this Article,
15for a Tier I retiree, the amount of each automatic annual
16increase in retirement annuity occurring on or after the
17effective date of this amendatory Act of the 98th General
18Assembly shall be the lesser of $750 or 3% of the total annuity
19payable at the time of the increase, including previous
20increases granted.
21    (d-2) Notwithstanding any other provision of this Article,
22for a Tier I retiree, the monthly retirement annuity shall
23first be subject to annual increases on the January 1 occurring
24on or next after the attainment of age 67 or the January 1
25occurring on or next after the fifth anniversary of the annuity
26start date, whichever occurs earlier. If on the effective date

 

 

HB1165 Engrossed- 20 -LRB098 08854 EFG 38984 b

1of this amendatory Act of the 98th General Assembly a Tier I
2retiree has already received an annual increase under this
3Section but does not yet meet the new eligibility requirements
4of this subsection, the annual increases already received shall
5continue in force, but no additional annual increase shall be
6granted until the Tier I retiree meets the new eligibility
7requirements.
8    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
9and (d-2) apply without regard to whether or not the Tier I
10retiree is in active service under this Article on or after the
11effective date of this amendatory Act of the 98th General
12Assembly.
13    (e) If, on January 1, 1987, or the date the retirement
14annuity payment period begins, whichever is later, the sum of
15the retirement annuity provided under Rule 1 or Rule 2 of this
16Section and the automatic annual increases provided under the
17preceding subsection or Section 15-136.1, amounts to less than
18the retirement annuity which would be provided by Rule 3, the
19retirement annuity shall be increased as of January 1, 1987, or
20the date the retirement annuity payment period begins,
21whichever is later, to the amount which would be provided by
22Rule 3 of this Section. Such increased amount shall be
23considered as the retirement annuity in determining benefits
24provided under other Sections of this Article. This paragraph
25applies without regard to whether status as an employee
26terminated before the effective date of this amendatory Act of

 

 

HB1165 Engrossed- 21 -LRB098 08854 EFG 38984 b

11987, provided that the annuitant was employed at least
2one-half time during the period on which the final rate of
3earnings was based.
4    (f) A participant is entitled to such additional annuity as
5may be provided on an actuarially equivalent basis, by any
6accumulated additional contributions to his or her credit.
7However, the additional contributions made by the participant
8toward the automatic increases in annuity provided under this
9Section shall not be taken into account in determining the
10amount of such additional annuity.
11    (g) If, (1) by law, a function of a governmental unit, as
12defined by Section 20-107 of this Code, is transferred in whole
13or in part to an employer, and (2) a participant transfers
14employment from such governmental unit to such employer within
156 months after the transfer of the function, and (3) the sum of
16(A) the annuity payable to the participant under Rule 1, 2, or
173 of this Section (B) all proportional annuities payable to the
18participant by all other retirement systems covered by Article
1920, and (C) the initial primary insurance amount to which the
20participant is entitled under the Social Security Act, is less
21than the retirement annuity which would have been payable if
22all of the participant's pension credits validated under
23Section 20-109 had been validated under this system, a
24supplemental annuity equal to the difference in such amounts
25shall be payable to the participant.
26    (h) On January 1, 1981, an annuitant who was receiving a

 

 

HB1165 Engrossed- 22 -LRB098 08854 EFG 38984 b

1retirement annuity on or before January 1, 1971 shall have his
2or her retirement annuity then being paid increased $1 per
3month for each year of creditable service. On January 1, 1982,
4an annuitant whose retirement annuity began on or before
5January 1, 1977, shall have his or her retirement annuity then
6being paid increased $1 per month for each year of creditable
7service.
8    (i) On January 1, 1987, any annuitant whose retirement
9annuity began on or before January 1, 1977, shall have the
10monthly retirement annuity increased by an amount equal to 8˘
11per year of creditable service times the number of years that
12have elapsed since the annuity began.
13(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
14    (40 ILCS 5/16-106.4 new)
15    Sec. 16-106.4. Tier I member. "Tier I member": A member
16under this Article who first became a member or participant
17before January 1, 2011 under any reciprocal retirement system
18or pension fund established under this Code other than a
19retirement system or pension fund established under Article 2,
203, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/16-106.5 new)
22    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
23Tier I member who is receiving a retirement annuity.
 

 

 

HB1165 Engrossed- 23 -LRB098 08854 EFG 38984 b

1    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
2    Sec. 16-133.1. Automatic annual increase in annuity.
3    (a) Each member with creditable service and retiring on or
4after August 26, 1969 is entitled to the automatic annual
5increases in annuity provided under this Section while
6receiving a retirement annuity or disability retirement
7annuity from the system.
8    An annuitant shall first be entitled to an initial increase
9under this Section on the January 1 next following the first
10anniversary of retirement, or January 1 of the year next
11following attainment of age 61, whichever is later. At such
12time, the system shall pay an initial increase determined as
13follows or as provided in subsections (a-1) and (a-2):
14        (1) 1.5% of the originally granted retirement annuity
15    or disability retirement annuity multiplied by the number
16    of years elapsed, if any, from the date of retirement until
17    January 1, 1972, plus
18        (2) 2% of the originally granted annuity multiplied by
19    the number of years elapsed, if any, from the date of
20    retirement or January 1, 1972, whichever is later, until
21    January 1, 1978, plus
22        (3) 3% of the originally granted annuity multiplied by
23    the number of years elapsed from the date of retirement or
24    January 1, 1978, whichever is later, until the effective
25    date of the initial increase.
26However, the initial annual increase calculated under this

 

 

HB1165 Engrossed- 24 -LRB098 08854 EFG 38984 b

1Section for the recipient of a disability retirement annuity
2granted under Section 16-149.2 shall be reduced by an amount
3equal to the total of all increases in that annuity received
4under Section 16-149.5 (but not exceeding 100% of the amount of
5the initial increase otherwise provided under this Section).
6    Following the initial increase, automatic annual increases
7in annuity shall be payable on each January 1 thereafter during
8the lifetime of the annuitant, determined as a percentage of
9the originally granted retirement annuity or disability
10retirement annuity for increases granted prior to January 1,
111990, and calculated as a percentage of the total amount of
12annuity, including previous increases under this Section, for
13increases granted on or after January 1, 1990, as follows: 1.5%
14for periods prior to January 1, 1972, 2% for periods after
15December 31, 1971 and prior to January 1, 1978, and 3% for
16periods after December 31, 1977, or as provided in subsections
17(a-1) and (a-2).
18    (a-1) Notwithstanding any other provision of this Article,
19for a Tier I retiree, the amount of each automatic annual
20increase in retirement annuity occurring on or after the
21effective date of this amendatory Act of the 98th General
22Assembly shall be the lesser of $750 or 3% of the total annuity
23payable at the time of the increase, including previous
24increases granted.
25    (a-2) Notwithstanding any other provision of this Article,
26for a Tier I retiree, the monthly retirement annuity shall

 

 

HB1165 Engrossed- 25 -LRB098 08854 EFG 38984 b

1first be subject to annual increases on the January 1 occurring
2on or next after the attainment of age 67 or the January 1
3occurring on or next after the fifth anniversary of the annuity
4start date, whichever occurs earlier. If on the effective date
5of this amendatory Act of the 98th General Assembly a Tier I
6retiree has already received an annual increase under this
7Section but does not yet meet the new eligibility requirements
8of this subsection, the annual increases already received shall
9continue in force, but no additional annual increase shall be
10granted until the Tier I retiree meets the new eligibility
11requirements.
12    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
13and (a-2) apply without regard to whether or not the Tier I
14retiree is in active service under this Article on or after the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (b) The automatic annual increases in annuity provided
18under this Section shall not be applicable unless a member has
19made contributions toward such increases for a period
20equivalent to one full year of creditable service. If a member
21contributes for service performed after August 26, 1969 but the
22member becomes an annuitant before such contributions amount to
23one full year's contributions based on the salary at the date
24of retirement, he or she may pay the necessary balance of the
25contributions to the system and be eligible for the automatic
26annual increases in annuity provided under this Section.

 

 

HB1165 Engrossed- 26 -LRB098 08854 EFG 38984 b

1    (c) Each member shall make contributions toward the cost of
2the automatic annual increases in annuity as provided under
3Section 16-152.
4    (d) An annuitant receiving a retirement annuity or
5disability retirement annuity on July 1, 1969, who subsequently
6re-enters service as a teacher is eligible for the automatic
7annual increases in annuity provided under this Section if he
8or she renders at least one year of creditable service
9following the latest re-entry.
10    (e) In addition to the automatic annual increases in
11annuity provided under this Section, an annuitant who meets the
12service requirements of this Section and whose retirement
13annuity or disability retirement annuity began on or before
14January 1, 1971 shall receive, on January 1, 1981, an increase
15in the annuity then being paid of one dollar per month for each
16year of creditable service. On January 1, 1982, an annuitant
17whose retirement annuity or disability retirement annuity
18began on or before January 1, 1977 shall receive an increase in
19the annuity then being paid of one dollar per month for each
20year of creditable service.
21    On January 1, 1987, any annuitant whose retirement annuity
22began on or before January 1, 1977, shall receive an increase
23in the monthly retirement annuity equal to 8˘ per year of
24creditable service times the number of years that have elapsed
25since the annuity began.
26(Source: P.A. 91-927, eff. 12-14-00.)
 

 

 

HB1165 Engrossed- 27 -LRB098 08854 EFG 38984 b

1    Section 90. The State Mandates Act is amended by adding
2Section 8.37 as follows:
 
3    (30 ILCS 805/8.37 new)
4    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
5of this Act, no reimbursement by the State is required for the
6implementation of any mandate created by this amendatory Act of
7the 98th General Assembly.
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.