Illinois General Assembly - Full Text of HB0429
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Full Text of HB0429  99th General Assembly

HB0429 99TH GENERAL ASSEMBLY

  
  

 


 
99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB0429

 

Introduced , by Rep. Thomas Morrison

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-125.5 new
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-119 new
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
30 ILCS 805/8.39 new

    Amends the State Universities and Downstate Teacher Articles of the Illinois Pension Code. Provides that, for academic years beginning on or after July 1, 2015, if the amount of a participant's earnings for any academic year used to determine the final rate of earnings, determined on a full-time equivalent basis, exceeds the amount of his or her earnings with the same employer for the previous academic year, determined on a full-time equivalent basis, by more than the unadjusted percentage increase in the consumer price index-u for that year (rather than 6%), then the participant's employer shall pay to the applicable System, in addition to all other payments required and in accordance with guidelines established by that System, the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of the unadjusted percentage increase in the consumer price index-u for that year (rather than the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of 6%). Defines "consumer price index-u". Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB099 03585 RPS 23593 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0429LRB099 03585 RPS 23593 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 15-155 and 16-158 and by adding Sections 15-125.5 and
616-119 as follows:
 
7    (40 ILCS 5/15-125.5 new)
8    Sec. 15-125.5. Consumer price index-u. "Consumer price
9index-u": The index published by the Bureau of Labor Statistics
10of the United States Department of Labor that measures the
11average change in prices of goods and services purchased by all
12urban consumers, United States city average, all items, 1982-84
13= 100.
 
14    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
15    Sec. 15-155. Employer contributions.
16    (a) The State of Illinois shall make contributions by
17appropriations of amounts which, together with the other
18employer contributions from trust, federal, and other funds,
19employee contributions, income from investments, and other
20income of this System, will be sufficient to meet the cost of
21maintaining and administering the System on a 100% funded basis
22in accordance with actuarial recommendations by the end of

 

 

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1State fiscal year 2044.
2    The Board shall determine the amount of State contributions
3required for each fiscal year on the basis of the actuarial
4tables and other assumptions adopted by the Board and the
5recommendations of the actuary, using the formula in subsection
6(a-1).
7    (a-1) For State fiscal years 2015 through 2044, the minimum
8contribution to the System to be made by the State for each
9fiscal year shall be an amount determined by the System to be
10equal to the sum of (1) the State's portion of the projected
11normal cost for that fiscal year, plus (2) an amount sufficient
12to bring the total assets of the System up to 100% of the total
13actuarial liabilities of the System by the end of the State
14fiscal year 2044. In making these determinations, the required
15State contribution shall be calculated each year as a level
16percentage of payroll over the years remaining to and including
17fiscal year 2044 and shall be determined under the projected
18unit cost method for fiscal year 2015 and under the entry age
19normal actuarial cost method for fiscal years 2016 through
202044.
21    For State fiscal years 2012 through 2014, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total assets of the System up to 90% of
25the total actuarial liabilities of the System by the end of
26State fiscal year 2045. In making these determinations, the

 

 

HB0429- 3 -LRB099 03585 RPS 23593 b

1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$166,641,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$252,064,100.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$702,514,000 and shall be made from the State Pensions Fund and
25proceeds of bonds sold in fiscal year 2010 pursuant to Section
267.2 of the General Obligation Bond Act, less (i) the pro rata

 

 

HB0429- 4 -LRB099 03585 RPS 23593 b

1share of bond sale expenses determined by the System's share of
2total bond proceeds, (ii) any amounts received from the General
3Revenue Fund in fiscal year 2010, (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 15-165 and shall be made from the State
10Pensions Fund and proceeds of bonds sold in fiscal year 2011
11pursuant to Section 7.2 of the General Obligation Bond Act,
12less (i) the pro rata share of bond sale expenses determined by
13the System's share of total bond proceeds, (ii) any amounts
14received from the General Revenue Fund in fiscal year 2011, and
15(iii) any reduction in bond proceeds due to the issuance of
16discounted bonds, if applicable.
17    Beginning in State fiscal year 2045, the minimum
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 100% of the total
20liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

HB0429- 5 -LRB099 03585 RPS 23593 b

1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 100%. A reference in this Article to
4the "required State contribution" or any substantially similar
5term does not include or apply to any amounts payable to the
6System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter through State
10fiscal year 2014, as calculated under this Section and
11certified under Section 15-165, shall not exceed an amount
12equal to (i) the amount of the required State contribution that
13would have been calculated under this Section for that fiscal
14year if the System had not received any payments under
15subsection (d) of Section 7.2 of the General Obligation Bond
16Act, minus (ii) the portion of the State's total debt service
17payments for that fiscal year on the bonds issued in fiscal
18year 2003 for the purposes of that Section 7.2, as determined
19and certified by the Comptroller, that is the same as the
20System's portion of the total moneys distributed under
21subsection (d) of Section 7.2 of the General Obligation Bond
22Act. In determining this maximum for State fiscal years 2008
23through 2010, however, the amount referred to in item (i) shall
24be increased, as a percentage of the applicable employee
25payroll, in equal increments calculated from the sum of the
26required State contribution for State fiscal year 2007 plus the

 

 

HB0429- 6 -LRB099 03585 RPS 23593 b

1applicable portion of the State's total debt service payments
2for fiscal year 2007 on the bonds issued in fiscal year 2003
3for the purposes of Section 7.2 of the General Obligation Bond
4Act, so that, by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    (b) If an employee is paid from trust or federal funds, the
7employer shall pay to the Board contributions from those funds
8which are sufficient to cover the accruing normal costs on
9behalf of the employee. However, universities having employees
10who are compensated out of local auxiliary funds, income funds,
11or service enterprise funds are not required to pay such
12contributions on behalf of those employees. The local auxiliary
13funds, income funds, and service enterprise funds of
14universities shall not be considered trust funds for the
15purpose of this Article, but funds of alumni associations,
16foundations, and athletic associations which are affiliated
17with the universities included as employers under this Article
18and other employers which do not receive State appropriations
19are considered to be trust funds for the purpose of this
20Article.
21    (b-1) The City of Urbana and the City of Champaign shall
22each make employer contributions to this System for their
23respective firefighter employees who participate in this
24System pursuant to subsection (h) of Section 15-107. The rate
25of contributions to be made by those municipalities shall be
26determined annually by the Board on the basis of the actuarial

 

 

HB0429- 7 -LRB099 03585 RPS 23593 b

1assumptions adopted by the Board and the recommendations of the
2actuary, and shall be expressed as a percentage of salary for
3each such employee. The Board shall certify the rate to the
4affected municipalities as soon as may be practical. The
5employer contributions required under this subsection shall be
6remitted by the municipality to the System at the same time and
7in the same manner as employee contributions.
8    (c) Through State fiscal year 1995: The total employer
9contribution shall be apportioned among the various funds of
10the State and other employers, whether trust, federal, or other
11funds, in accordance with actuarial procedures approved by the
12Board. State of Illinois contributions for employers receiving
13State appropriations for personal services shall be payable
14from appropriations made to the employers or to the System. The
15contributions for Class I community colleges covering earnings
16other than those paid from trust and federal funds, shall be
17payable solely from appropriations to the Illinois Community
18College Board or the System for employer contributions.
19    (d) Beginning in State fiscal year 1996, the required State
20contributions to the System shall be appropriated directly to
21the System and shall be payable through vouchers issued in
22accordance with subsection (c) of Section 15-165, except as
23provided in subsection (g).
24    (e) The State Comptroller shall draw warrants payable to
25the System upon proper certification by the System or by the
26employer in accordance with the appropriation laws and this

 

 

HB0429- 8 -LRB099 03585 RPS 23593 b

1Code.
2    (f) Normal costs under this Section means liability for
3pensions and other benefits which accrues to the System because
4of the credits earned for service rendered by the participants
5during the fiscal year and expenses of administering the
6System, but shall not include the principal of or any
7redemption premium or interest on any bonds issued by the Board
8or any expenses incurred or deposits required in connection
9therewith.
10    (g) For academic years beginning on or after June 1, 2005
11and before July 1, 2015, if If the amount of a participant's
12earnings for any academic year used to determine the final rate
13of earnings, determined on a full-time equivalent basis,
14exceeds the amount of his or her earnings with the same
15employer for the previous academic year, determined on a
16full-time equivalent basis, by more than 6%, the participant's
17employer shall pay to the System, in addition to all other
18payments required under this Section and in accordance with
19guidelines established by the System, the present value of the
20increase in benefits resulting from the portion of the increase
21in earnings that is in excess of 6%. This present value shall
22be computed by the System on the basis of the actuarial
23assumptions and tables used in the most recent actuarial
24valuation of the System that is available at the time of the
25computation. The System may require the employer to provide any
26pertinent information or documentation.

 

 

HB0429- 9 -LRB099 03585 RPS 23593 b

1    Whenever it determines that a payment is or may be required
2under this subsection (g), the System shall calculate the
3amount of the payment and bill the employer for that amount.
4The bill shall specify the calculations used to determine the
5amount due. If the employer disputes the amount of the bill, it
6may, within 30 days after receipt of the bill, apply to the
7System in writing for a recalculation. The application must
8specify in detail the grounds of the dispute and, if the
9employer asserts that the calculation is subject to subsection
10(h) or (i) of this Section, must include an affidavit setting
11forth and attesting to all facts within the employer's
12knowledge that are pertinent to the applicability of subsection
13(h) or (i). Upon receiving a timely application for
14recalculation, the System shall review the application and, if
15appropriate, recalculate the amount due.
16    The employer contributions required under this subsection
17(g) may be paid in the form of a lump sum within 90 days after
18receipt of the bill. If the employer contributions are not paid
19within 90 days after receipt of the bill, then interest will be
20charged at a rate equal to the System's annual actuarially
21assumed rate of return on investment compounded annually from
22the 91st day after receipt of the bill. Payments must be
23concluded within 3 years after the employer's receipt of the
24bill.
25    (g-1) For academic years beginning on or after July 1,
262015, if the amount of a participant's earnings for any

 

 

HB0429- 10 -LRB099 03585 RPS 23593 b

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

 

 

HB0429- 11 -LRB099 03585 RPS 23593 b

1(i-1) of this Section, must include an affidavit setting forth
2and attesting to all facts within the employer's knowledge that
3are pertinent to the applicability of subsection (i-1). Upon
4receiving a timely application for recalculation, the System
5shall review the application and, if appropriate, recalculate
6the amount due.
7    The employer contributions required under this subsection
8(g-1) may be paid in the form of a lump sum within 90 days after
9receipt of the bill. If the employer contributions are not paid
10within 90 days after receipt of the bill, then interest shall
11be charged at a rate equal to the System's annual actuarially
12assumed rate of return on investment compounded annually from
13the 91st day after receipt of the bill. Payments must be
14concluded within 3 years after the employer's receipt of the
15bill.
16    (h) This subsection (h) applies only to payments made or
17salary increases given on or after June 1, 2005 but before July
181, 2011. The changes made by Public Act 94-1057 shall not
19require the System to refund any payments received before July
2031, 2006 (the effective date of Public Act 94-1057).
21    When assessing payment for any amount due under subsection
22(g), the System shall exclude earnings increases paid to
23participants under contracts or collective bargaining
24agreements entered into, amended, or renewed before June 1,
252005.
26    When assessing payment for any amount due under subsection

 

 

HB0429- 12 -LRB099 03585 RPS 23593 b

1(g), the System shall exclude earnings increases paid to a
2participant at a time when the participant is 10 or more years
3from retirement eligibility under Section 15-135.
4    When assessing payment for any amount due under subsection
5(g), the System shall exclude earnings increases resulting from
6overload work, including a contract for summer teaching, or
7overtime when the employer has certified to the System, and the
8System has approved the certification, that: (i) in the case of
9overloads (A) the overload work is for the sole purpose of
10academic instruction in excess of the standard number of
11instruction hours for a full-time employee occurring during the
12academic year that the overload is paid and (B) the earnings
13increases are equal to or less than the rate of pay for
14academic instruction computed using the participant's current
15salary rate and work schedule; and (ii) in the case of
16overtime, the overtime was necessary for the educational
17mission.
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude any earnings increase resulting
20from (i) a promotion for which the employee moves from one
21classification to a higher classification under the State
22Universities Civil Service System, (ii) a promotion in academic
23rank for a tenured or tenure-track faculty position, or (iii) a
24promotion that the Illinois Community College Board has
25recommended in accordance with subsection (k) of this Section.
26These earnings increases shall be excluded only if the

 

 

HB0429- 13 -LRB099 03585 RPS 23593 b

1promotion is to a position that has existed and been filled by
2a member for no less than one complete academic year and the
3earnings increase as a result of the promotion is an increase
4that results in an amount no greater than the average salary
5paid for other similar positions.
6    (i) When assessing payment for any amount due under
7subsection (g), the System shall exclude any salary increase
8described in subsection (h) of this Section given on or after
9July 1, 2011 but before July 1, 2014 under a contract or
10collective bargaining agreement entered into, amended, or
11renewed on or after June 1, 2005 but before July 1, 2011.
12Notwithstanding any other provision of this Section, any
13payments made or salary increases given after June 30, 2014
14shall be used in assessing payment for any amount due under
15subsection (g) of this Section.
16    (i-1) When assessing payment for any amount due under
17subsection (g-1), the System shall exclude earnings increases
18paid to participants under contracts or collective bargaining
19agreements entered into, amended, or renewed before the
20effective date of this amendatory Act of the 99th General
21Assembly.
22    (j) The System shall prepare a report and file copies of
23the report with the Governor and the General Assembly by
24January 1, 2007 that contains all of the following information:
25        (1) The number of recalculations required by the
26    changes made to this Section by Public Act 94-1057 for each

 

 

HB0429- 14 -LRB099 03585 RPS 23593 b

1    employer.
2        (2) The dollar amount by which each employer's
3    contribution to the System was changed due to
4    recalculations required by Public Act 94-1057.
5        (3) The total amount the System received from each
6    employer as a result of the changes made to this Section by
7    Public Act 94-4.
8        (4) The increase in the required State contribution
9    resulting from the changes made to this Section by Public
10    Act 94-1057.
11    (k) The Illinois Community College Board shall adopt rules
12for recommending lists of promotional positions submitted to
13the Board by community colleges and for reviewing the
14promotional lists on an annual basis. When recommending
15promotional lists, the Board shall consider the similarity of
16the positions submitted to those positions recognized for State
17universities by the State Universities Civil Service System.
18The Illinois Community College Board shall file a copy of its
19findings with the System. The System shall consider the
20findings of the Illinois Community College Board when making
21determinations under this Section. The System shall not exclude
22any earnings increases resulting from a promotion when the
23promotion was not submitted by a community college. Nothing in
24this subsection (k) shall require any community college to
25submit any information to the Community College Board.
26    (l) For purposes of determining the required State

 

 

HB0429- 15 -LRB099 03585 RPS 23593 b

1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (m) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13;
1698-463, eff. 8-16-13; 98-599, eff. 6-1-14.)
 
17    (40 ILCS 5/16-119 new)
18    Sec. 16-119. Consumer price index-u. "Consumer price
19index-u": The index published by the Bureau of Labor Statistics
20of the United States Department of Labor that measures the
21average change in prices of goods and services purchased by all
22urban consumers, United States city average, all items, 1982-84
23= 100.
 
24    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)

 

 

HB0429- 16 -LRB099 03585 RPS 23593 b

1    Sec. 16-158. Contributions by State and other employing
2units.
3    (a) The State shall make contributions to the System by
4means of appropriations from the Common School Fund and other
5State funds of amounts which, together with other employer
6contributions, employee contributions, investment income, and
7other income, will be sufficient to meet the cost of
8maintaining and administering the System on a 100% funded basis
9in accordance with actuarial recommendations by the end of
10State fiscal year 2044.
11    The Board shall determine the amount of State contributions
12required for each fiscal year on the basis of the actuarial
13tables and other assumptions adopted by the Board and the
14recommendations of the actuary, using the formula in subsection
15(b-3).
16    (a-1) Annually, on or before November 15 through November
1715, 2011, the Board shall certify to the Governor the amount of
18the required State contribution for the coming fiscal year. The
19certification under this subsection (a-1) shall include a copy
20of the actuarial recommendations upon which it is based.
21    On or before May 1, 2004, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2005, taking
24into account the amounts appropriated to and received by the
25System under subsection (d) of Section 7.2 of the General
26Obligation Bond Act.

 

 

HB0429- 17 -LRB099 03585 RPS 23593 b

1    On or before July 1, 2005, the Board shall recalculate and
2recertify to the Governor the amount of the required State
3contribution to the System for State fiscal year 2006, taking
4into account the changes in required State contributions made
5by this amendatory Act of the 94th General Assembly.
6    On or before April 1, 2011, the Board shall recalculate and
7recertify to the Governor the amount of the required State
8contribution to the System for State fiscal year 2011, applying
9the changes made by Public Act 96-889 to the System's assets
10and liabilities as of June 30, 2009 as though Public Act 96-889
11was approved on that date.
12    (a-5) On or before November 1 of each year, beginning
13November 1, 2012, the Board shall submit to the State Actuary,
14the Governor, and the General Assembly a proposed certification
15of the amount of the required State contribution to the System
16for the next fiscal year, along with all of the actuarial
17assumptions, calculations, and data upon which that proposed
18certification is based. On or before January 1 of each year,
19beginning January 1, 2013, the State Actuary shall issue a
20preliminary report concerning the proposed certification and
21identifying, if necessary, recommended changes in actuarial
22assumptions that the Board must consider before finalizing its
23certification of the required State contributions.
24    On or before January 15, 2013 and each January 15
25thereafter, the Board shall certify to the Governor and the
26General Assembly the amount of the required State contribution

 

 

HB0429- 18 -LRB099 03585 RPS 23593 b

1for the next fiscal year. The certification shall include a
2copy of the actuarial recommendations upon which it is based
3and shall specifically identify the System's projected State
4normal cost for that fiscal year. The Board's certification
5must note any deviations from the State Actuary's recommended
6changes, the reason or reasons for not following the State
7Actuary's recommended changes, and the fiscal impact of not
8following the State Actuary's recommended changes on the
9required State contribution.
10    (a-10) For purposes of Section (c-5) of Section 20 of the
11Budget Stabilization Act, on or before November 1 of each year
12beginning November 1, 2014, the Board shall determine the
13amount of the State contribution to the System that would have
14been required for the next fiscal year if this amendatory Act
15of the 98th General Assembly had not taken effect, using the
16best and most recent available data but based on the law in
17effect on May 31, 2014. The Board shall submit to the State
18Actuary, the Governor, and the General Assembly a proposed
19certification, along with the relevant law, actuarial
20assumptions, calculations, and data upon which that
21certification is based. On or before January 1, 2015 and every
22January 1 thereafter, the State Actuary shall issue a
23preliminary report concerning the proposed certification and
24identifying, if necessary, recommended changes in actuarial
25assumptions that the Board must consider before finalizing its
26certification. On or before January 15, 2015 and every January

 

 

HB0429- 19 -LRB099 03585 RPS 23593 b

11 thereafter, the Board shall certify to the Governor and the
2General Assembly the amount of the State contribution to the
3System that would have been required for the next fiscal year
4if this amendatory Act of the 98th General Assembly had not
5taken effect, using the best and most recent available data but
6based on the law in effect on May 31, 2014. The Board's
7certification must note any deviations from the State Actuary's
8recommended changes, the reason or reasons for not following
9the State Actuary's recommended changes, and the impact of not
10following the State Actuary's recommended changes.
11    (b) Through State fiscal year 1995, the State contributions
12shall be paid to the System in accordance with Section 18-7 of
13the School Code.
14    (b-1) Beginning in State fiscal year 1996, on the 15th day
15of each month, or as soon thereafter as may be practicable, the
16Board shall submit vouchers for payment of State contributions
17to the System, in a total monthly amount of one-twelfth of the
18required annual State contribution certified under subsection
19(a-1). From the effective date of this amendatory Act of the
2093rd General Assembly through June 30, 2004, the Board shall
21not submit vouchers for the remainder of fiscal year 2004 in
22excess of the fiscal year 2004 certified contribution amount
23determined under this Section after taking into consideration
24the transfer to the System under subsection (a) of Section
256z-61 of the State Finance Act. These vouchers shall be paid by
26the State Comptroller and Treasurer by warrants drawn on the

 

 

HB0429- 20 -LRB099 03585 RPS 23593 b

1funds appropriated to the System for that fiscal year.
2    If in any month the amount remaining unexpended from all
3other appropriations to the System for the applicable fiscal
4year (including the appropriations to the System under Section
58.12 of the State Finance Act and Section 1 of the State
6Pension Funds Continuing Appropriation Act) is less than the
7amount lawfully vouchered under this subsection, the
8difference shall be paid from the Common School Fund under the
9continuing appropriation authority provided in Section 1.1 of
10the State Pension Funds Continuing Appropriation Act.
11    (b-2) Allocations from the Common School Fund apportioned
12to school districts not coming under this System shall not be
13diminished or affected by the provisions of this Article.
14    (b-3) For State fiscal years 2015 through 2044, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17equal to the sum of (1) the State's portion of the projected
18normal cost for that fiscal year, plus (2) an amount sufficient
19to bring the total assets of the System up to 100% of the total
20actuarial liabilities of the System by the end of State fiscal
21year 2044. In making these determinations, the required State
22contribution shall be calculated each year as a level
23percentage of payroll over the years remaining to and including
24fiscal year 2044 and shall be determined under the projected
25unit cost method for fiscal year 2015 and under the entry age
26normal actuarial cost method for fiscal years 2016 through

 

 

HB0429- 21 -LRB099 03585 RPS 23593 b

12044.
2    For State fiscal years 2012 through 2014, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5sufficient to bring the total assets of the System up to 90% of
6the total actuarial liabilities of the System by the end of
7State fiscal year 2045. In making these determinations, the
8required State contribution shall be calculated each year as a
9level percentage of payroll over the years remaining to and
10including fiscal year 2045 and shall be determined under the
11projected unit credit actuarial cost method.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section; except that in the
17following specified State fiscal years, the State contribution
18to the System shall not be less than the following indicated
19percentages of the applicable employee payroll, even if the
20indicated percentage will produce a State contribution in
21excess of the amount otherwise required under this subsection
22and subsection (a), and notwithstanding any contrary
23certification made under subsection (a-1) before the effective
24date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
25in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
262003; and 13.56% in FY 2004.

 

 

HB0429- 22 -LRB099 03585 RPS 23593 b

1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2006 is
3$534,627,700.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2007 is
6$738,014,500.
7    For each of State fiscal years 2008 through 2009, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10from the required State contribution for State fiscal year
112007, so that by State fiscal year 2011, the State is
12contributing at the rate otherwise required under this Section.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2010 is
15$2,089,268,000 and shall be made from the proceeds of bonds
16sold in fiscal year 2010 pursuant to Section 7.2 of the General
17Obligation Bond Act, less (i) the pro rata share of bond sale
18expenses determined by the System's share of total bond
19proceeds, (ii) any amounts received from the Common School Fund
20in fiscal year 2010, and (iii) any reduction in bond proceeds
21due to the issuance of discounted bonds, if applicable.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2011 is
24the amount recertified by the System on or before April 1, 2011
25pursuant to subsection (a-1) of this Section and shall be made
26from the proceeds of bonds sold in fiscal year 2011 pursuant to

 

 

HB0429- 23 -LRB099 03585 RPS 23593 b

1Section 7.2 of the General Obligation Bond Act, less (i) the
2pro rata share of bond sale expenses determined by the System's
3share of total bond proceeds, (ii) any amounts received from
4the Common School Fund in fiscal year 2011, and (iii) any
5reduction in bond proceeds due to the issuance of discounted
6bonds, if applicable. This amount shall include, in addition to
7the amount certified by the System, an amount necessary to meet
8employer contributions required by the State as an employer
9under paragraph (e) of this Section, which may also be used by
10the System for contributions required by paragraph (a) of
11Section 16-127.
12    Beginning in State fiscal year 2045, the minimum State
13contribution for each fiscal year shall be the amount needed to
14maintain the total assets of the System at 100% of the total
15actuarial liabilities of the System.
16    Amounts received by the System pursuant to Section 25 of
17the Budget Stabilization Act or Section 8.12 of the State
18Finance Act in any fiscal year do not reduce and do not
19constitute payment of any portion of the minimum State
20contribution required under this Article in that fiscal year.
21Such amounts shall not reduce, and shall not be included in the
22calculation of, the required State contributions under this
23Article in any future year until the System has reached a
24funding ratio of at least 100%. A reference in this Article to
25the "required State contribution" or any substantially similar
26term does not include or apply to any amounts payable to the

 

 

HB0429- 24 -LRB099 03585 RPS 23593 b

1System under Section 25 of the Budget Stabilization Act.
2    Notwithstanding any other provision of this Section, the
3required State contribution for State fiscal year 2005 and for
4fiscal year 2008 and each fiscal year thereafter through State
5fiscal year 2014, as calculated under this Section and
6certified under subsection (a-1), shall not exceed an amount
7equal to (i) the amount of the required State contribution that
8would have been calculated under this Section for that fiscal
9year if the System had not received any payments under
10subsection (d) of Section 7.2 of the General Obligation Bond
11Act, minus (ii) the portion of the State's total debt service
12payments for that fiscal year on the bonds issued in fiscal
13year 2003 for the purposes of that Section 7.2, as determined
14and certified by the Comptroller, that is the same as the
15System's portion of the total moneys distributed under
16subsection (d) of Section 7.2 of the General Obligation Bond
17Act. In determining this maximum for State fiscal years 2008
18through 2010, however, the amount referred to in item (i) shall
19be increased, as a percentage of the applicable employee
20payroll, in equal increments calculated from the sum of the
21required State contribution for State fiscal year 2007 plus the
22applicable portion of the State's total debt service payments
23for fiscal year 2007 on the bonds issued in fiscal year 2003
24for the purposes of Section 7.2 of the General Obligation Bond
25Act, so that, by State fiscal year 2011, the State is
26contributing at the rate otherwise required under this Section.

 

 

HB0429- 25 -LRB099 03585 RPS 23593 b

1    (c) Payment of the required State contributions and of all
2pensions, retirement annuities, death benefits, refunds, and
3other benefits granted under or assumed by this System, and all
4expenses in connection with the administration and operation
5thereof, are obligations of the State.
6    If members are paid from special trust or federal funds
7which are administered by the employing unit, whether school
8district or other unit, the employing unit shall pay to the
9System from such funds the full accruing retirement costs based
10upon that service, which, beginning July 1, 2014, shall be at a
11rate, expressed as a percentage of salary, equal to the total
12minimum contribution to the System to be made by the State for
13that fiscal year, including both normal cost and unfunded
14liability components, expressed as a percentage of payroll, as
15determined by the System under subsection (b-3) of this
16Section. Employer contributions, based on salary paid to
17members from federal funds, may be forwarded by the
18distributing agency of the State of Illinois to the System
19prior to allocation, in an amount determined in accordance with
20guidelines established by such agency and the System. Any
21contribution for fiscal year 2015 collected as a result of the
22change made by this amendatory Act of the 98th General Assembly
23shall be considered a State contribution under subsection (b-3)
24of this Section.
25    (d) Effective July 1, 1986, any employer of a teacher as
26defined in paragraph (8) of Section 16-106 shall pay the

 

 

HB0429- 26 -LRB099 03585 RPS 23593 b

1employer's normal cost of benefits based upon the teacher's
2service, in addition to employee contributions, as determined
3by the System. Such employer contributions shall be forwarded
4monthly in accordance with guidelines established by the
5System.
6    However, with respect to benefits granted under Section
716-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
8of Section 16-106, the employer's contribution shall be 12%
9(rather than 20%) of the member's highest annual salary rate
10for each year of creditable service granted, and the employer
11shall also pay the required employee contribution on behalf of
12the teacher. For the purposes of Sections 16-133.4 and
1316-133.5, a teacher as defined in paragraph (8) of Section
1416-106 who is serving in that capacity while on leave of
15absence from another employer under this Article shall not be
16considered an employee of the employer from which the teacher
17is on leave.
18    (e) Beginning July 1, 1998, every employer of a teacher
19shall pay to the System an employer contribution computed as
20follows:
21        (1) Beginning July 1, 1998 through June 30, 1999, the
22    employer contribution shall be equal to 0.3% of each
23    teacher's salary.
24        (2) Beginning July 1, 1999 and thereafter, the employer
25    contribution shall be equal to 0.58% of each teacher's
26    salary.

 

 

HB0429- 27 -LRB099 03585 RPS 23593 b

1The school district or other employing unit may pay these
2employer contributions out of any source of funding available
3for that purpose and shall forward the contributions to the
4System on the schedule established for the payment of member
5contributions.
6    These employer contributions are intended to offset a
7portion of the cost to the System of the increases in
8retirement benefits resulting from this amendatory Act of 1998.
9    Each employer of teachers is entitled to a credit against
10the contributions required under this subsection (e) with
11respect to salaries paid to teachers for the period January 1,
122002 through June 30, 2003, equal to the amount paid by that
13employer under subsection (a-5) of Section 6.6 of the State
14Employees Group Insurance Act of 1971 with respect to salaries
15paid to teachers for that period.
16    The additional 1% employee contribution required under
17Section 16-152 by this amendatory Act of 1998 is the
18responsibility of the teacher and not the teacher's employer,
19unless the employer agrees, through collective bargaining or
20otherwise, to make the contribution on behalf of the teacher.
21    If an employer is required by a contract in effect on May
221, 1998 between the employer and an employee organization to
23pay, on behalf of all its full-time employees covered by this
24Article, all mandatory employee contributions required under
25this Article, then the employer shall be excused from paying
26the employer contribution required under this subsection (e)

 

 

HB0429- 28 -LRB099 03585 RPS 23593 b

1for the balance of the term of that contract. The employer and
2the employee organization shall jointly certify to the System
3the existence of the contractual requirement, in such form as
4the System may prescribe. This exclusion shall cease upon the
5termination, extension, or renewal of the contract at any time
6after May 1, 1998.
7    (f) For school years beginning on or after June 1, 2005 and
8before July 1, 2015, if If the amount of a teacher's salary for
9any school year used to determine final average salary exceeds
10the member's annual full-time salary rate with the same
11employer for the previous school year by more than 6%, the
12teacher's employer shall pay to the System, in addition to all
13other payments required under this Section and in accordance
14with guidelines established by the System, the present value of
15the increase in benefits resulting from the portion of the
16increase in salary that is in excess of 6%. This present value
17shall be computed by the System on the basis of the actuarial
18assumptions and tables used in the most recent actuarial
19valuation of the System that is available at the time of the
20computation. If a teacher's salary for the 2005-2006 school
21year is used to determine final average salary under this
22subsection (f), then the changes made to this subsection (f) by
23Public Act 94-1057 shall apply in calculating whether the
24increase in his or her salary is in excess of 6%. For the
25purposes of this Section, change in employment under Section
2610-21.12 of the School Code on or after June 1, 2005 shall

 

 

HB0429- 29 -LRB099 03585 RPS 23593 b

1constitute a change in employer. The System may require the
2employer to provide any pertinent information or
3documentation. The changes made to this subsection (f) by this
4amendatory Act of the 94th General Assembly apply without
5regard to whether the teacher was in service on or after its
6effective date.
7    Whenever it determines that a payment is or may be required
8under this subsection, the System shall calculate the amount of
9the payment and bill the employer for that amount. The bill
10shall specify the calculations used to determine the amount
11due. If the employer disputes the amount of the bill, it may,
12within 30 days after receipt of the bill, apply to the System
13in writing for a recalculation. The application must specify in
14detail the grounds of the dispute and, if the employer asserts
15that the calculation is subject to subsection (g) or (h) of
16this Section, must include an affidavit setting forth and
17attesting to all facts within the employer's knowledge that are
18pertinent to the applicability of that subsection. Upon
19receiving a timely application for recalculation, the System
20shall review the application and, if appropriate, recalculate
21the amount due.
22    The employer contributions required under this subsection
23(f) may be paid in the form of a lump sum within 90 days after
24receipt of the bill. If the employer contributions are not paid
25within 90 days after receipt of the bill, then interest will be
26charged at a rate equal to the System's annual actuarially

 

 

HB0429- 30 -LRB099 03585 RPS 23593 b

1assumed rate of return on investment compounded annually from
2the 91st day after receipt of the bill. Payments must be
3concluded within 3 years after the employer's receipt of the
4bill.
5    (f-1) For school years beginning on or after July 1, 2015,
6if the amount of a teacher's salary for any school year used to
7determine final average salary exceeds the member's annual
8full-time salary rate with the same employer for the previous
9school year by more than the unadjusted percentage increase in
10the consumer price index-u for that year, then the teacher's
11employer shall pay to the System, in addition to all other
12payments required under this Section and in accordance with
13guidelines established by the System, the present value of the
14increase in benefits resulting from the portion of the increase
15in salary that is in excess of the unadjusted percentage
16increase in the consumer price index-u for that year. This
17present value shall be computed by the System on the basis of
18the actuarial assumptions and tables used in the most recent
19actuarial valuation of the System that is available at the time
20of the computation. The System may require the employer to
21provide any pertinent information or documentation.
22    Whenever it determines that a payment is or may be required
23under this subsection (f-1), the System shall calculate the
24amount of the payment and bill the employer for that amount.
25The bill shall specify the calculations used to determine the
26amount due. If the employer disputes the amount of the bill, it

 

 

HB0429- 31 -LRB099 03585 RPS 23593 b

1may, within 30 days after receipt of the bill, apply to the
2System in writing for a recalculation. The application must
3specify in detail the grounds of the dispute and, if the
4employer asserts that the calculation is subject to subsection
5(h-1) of this Section, must include an affidavit setting forth
6and attesting to all facts within the employer's knowledge that
7are pertinent to the applicability of subsection (h-1). Upon
8receiving a timely application for recalculation, the System
9shall review the application and, if appropriate, recalculate
10the amount due.
11    The employer contributions required under this subsection
12(f-1) may be paid in the form of a lump sum within 90 days after
13receipt of the bill. If the employer contributions are not paid
14within 90 days after receipt of the bill, then interest shall
15be charged at a rate equal to the System's annual actuarially
16assumed rate of return on investment compounded annually from
17the 91st day after receipt of the bill. Payments must be
18concluded within 3 years after the employer's receipt of the
19bill.
20    (g) This subsection (g) applies only to payments made or
21salary increases given on or after June 1, 2005 but before July
221, 2011. The changes made by Public Act 94-1057 shall not
23require the System to refund any payments received before July
2431, 2006 (the effective date of Public Act 94-1057).
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude salary increases paid to teachers

 

 

HB0429- 32 -LRB099 03585 RPS 23593 b

1under contracts or collective bargaining agreements entered
2into, amended, or renewed before June 1, 2005.
3    When assessing payment for any amount due under subsection
4(f), the System shall exclude salary increases paid to a
5teacher at a time when the teacher is 10 or more years from
6retirement eligibility under Section 16-132 or 16-133.2.
7    When assessing payment for any amount due under subsection
8(f), the System shall exclude salary increases resulting from
9overload work, including summer school, when the school
10district has certified to the System, and the System has
11approved the certification, that (i) the overload work is for
12the sole purpose of classroom instruction in excess of the
13standard number of classes for a full-time teacher in a school
14district during a school year and (ii) the salary increases are
15equal to or less than the rate of pay for classroom instruction
16computed on the teacher's current salary and work schedule.
17    When assessing payment for any amount due under subsection
18(f), the System shall exclude a salary increase resulting from
19a promotion (i) for which the employee is required to hold a
20certificate or supervisory endorsement issued by the State
21Teacher Certification Board that is a different certification
22or supervisory endorsement than is required for the teacher's
23previous position and (ii) to a position that has existed and
24been filled by a member for no less than one complete academic
25year and the salary increase from the promotion is an increase
26that results in an amount no greater than the lesser of the

 

 

HB0429- 33 -LRB099 03585 RPS 23593 b

1average salary paid for other similar positions in the district
2requiring the same certification or the amount stipulated in
3the collective bargaining agreement for a similar position
4requiring the same certification.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude any payment to the teacher from
7the State of Illinois or the State Board of Education over
8which the employer does not have discretion, notwithstanding
9that the payment is included in the computation of final
10average salary.
11    (h) When assessing payment for any amount due under
12subsection (f), the System shall exclude any salary increase
13described in subsection (g) of this Section given on or after
14July 1, 2011 but before July 1, 2014 under a contract or
15collective bargaining agreement entered into, amended, or
16renewed on or after June 1, 2005 but before July 1, 2011.
17Notwithstanding any other provision of this Section, any
18payments made or salary increases given after June 30, 2014
19shall be used in assessing payment for any amount due under
20subsection (f) of this Section.
21    (h-1) When assessing payment for any amount due under
22subsection (f-1), the System shall exclude earnings increases
23paid to participants under contracts or collective bargaining
24agreements entered into, amended, or renewed before the
25effective date of this amendatory Act of the 99th General
26Assembly.

 

 

HB0429- 34 -LRB099 03585 RPS 23593 b

1    (i) The System shall prepare a report and file copies of
2the report with the Governor and the General Assembly by
3January 1, 2007 that contains all of the following information:
4        (1) The number of recalculations required by the
5    changes made to this Section by Public Act 94-1057 for each
6    employer.
7        (2) The dollar amount by which each employer's
8    contribution to the System was changed due to
9    recalculations required by Public Act 94-1057.
10        (3) The total amount the System received from each
11    employer as a result of the changes made to this Section by
12    Public Act 94-4.
13        (4) The increase in the required State contribution
14    resulting from the changes made to this Section by Public
15    Act 94-1057.
16    (j) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

HB0429- 35 -LRB099 03585 RPS 23593 b

1    (k) For purposes of determining the required State
2contribution to the system for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the system's actuarially assumed rate of return.
5(Source: P.A. 97-694, eff. 6-18-12; 97-813, eff. 7-13-12;
698-599, eff. 6-1-14; 98-674, eff. 6-30-14.)
 
7    Section 90. The State Mandates Act is amended by adding
8Section 8.39 as follows:
 
9    (30 ILCS 805/8.39 new)
10    Sec. 8.39. Exempt mandate. Notwithstanding Sections 6 and 8
11of this Act, no reimbursement by the State is required for the
12implementation of any mandate created by this amendatory Act of
13the 99th General Assembly.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.