Full Text of SB1673 97th General Assembly
SB1673ham008 97TH GENERAL ASSEMBLY | Rep. Tom Cross Filed: 5/31/2012
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| 1 | | AMENDMENT TO SENATE BILL 1673
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1673, AS AMENDED, | 3 | | with reference to page and line numbers of House Amendment No. | 4 | | 7, on page 25, in line 12, after "14-132,", by inserting | 5 | | "14-133,"; and | 6 | | on page 25, in line 14, before "15-163", by inserting | 7 | | "15-157,"; and | 8 | | on page 25, in line 15, after "16-136.1,", by inserting | 9 | | "16-152,"; and | 10 | | on page 25, in line 16, before "2-105.1", by inserting | 11 | | "1-162,"; and | 12 | | on page 25, in line 18, by deleting "15-155.1,"; and | 13 | | on page 26, below line 24, by inserting the following: |
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| 1 | | "(40 ILCS 5/1-162 new) | 2 | | Sec. 1-162. Optional cash balance plan. | 3 | | (a) Participation and Applicability. Beginning on July 1, | 4 | | 2013, any Tier I employee who has made the election under | 5 | | paragraph (1) of subsection (a) or (a-5) of Section 14-106.5, | 6 | | paragraph (1) of subsection (a) or (a-5) of Section 15-134.6, | 7 | | or paragraph (1) of subsection (a) or (a-5) of Section 16-131.7 | 8 | | may elect to participate in the optional cash balance plan | 9 | | created under this Section. | 10 | | This Section does not, however, apply to any person with | 11 | | respect to service for which the person participates in the | 12 | | self-managed plan established under Section 15-158.2 in lieu of | 13 | | the retirement benefits otherwise provided by the State | 14 | | Universities Retirement System. | 15 | | The Board of Trustees of the applicable retirement system | 16 | | shall promulgate rules to create an annual election wherein a | 17 | | person eligible to participate in the optional cash balance | 18 | | plan may elect to participate, and an active employee who is a | 19 | | participant in the plan may elect to cease active | 20 | | participation. The election to cease active participation | 21 | | shall not disqualify the employee from eligibility to receive | 22 | | an interest credit under subsection (f), a distribution upon | 23 | | termination under subsection (f-10), a refund under subsection | 24 | | (f-15), a retirement annuity under subsection (f-15), a | 25 | | retirement annuity under subsection (g), or a survivor annuity |
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| 1 | | under subsection (k), or from eligibility to resume active | 2 | | participation in the optional cash balance plan in a subsequent | 3 | | year. | 4 | | (b) Title. The package of benefits provided under this | 5 | | Section may be referred to as the "optional cash balance plan". | 6 | | Persons subject to the provisions of this Section may be | 7 | | referred to as "participants in the optional cash balance | 8 | | plan". | 9 | | (b-5) Definitions. As used in this Section: | 10 | | "Account" means the notional cash balance account | 11 | | established under this Section for a participant in the | 12 | | optional cash balance plan. | 13 | | "Consumer Price Index-U" means
the Consumer Price Index | 14 | | published by the Bureau of Labor Statistics of the United | 15 | | States
Department of Labor that measures the average change in | 16 | | prices of goods and
services purchased by all urban consumers, | 17 | | United States city average, all
items, 1982-84 = 100. | 18 | | "Salary" means "compensation" as defined in Article 14, | 19 | | "earnings" as defined in Article 15, or "salary" as defined in | 20 | | Article 16, whichever is applicable, without regard to the | 21 | | limitation in subsection (b-5) of Section 1-160. | 22 | | "Tier I employee" means a person who is a Tier I employee | 23 | | under the applicable Article of this Code. | 24 | | (c) Cash Balance Account. A notional cash balance account | 25 | | shall be established by the applicable retirement system for | 26 | | each participant in the optional cash balance plan. The account |
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| 1 | | is notional and does not contain any actual money segregated | 2 | | from the commingled assets of the retirement system. The cash | 3 | | balance in the account is to be used in calculating benefits as | 4 | | provided in this Section, but is not to be used in the | 5 | | calculation of any refund, transfer, or other benefit under the | 6 | | applicable Article of this Code. | 7 | | The amounts to be credited to the cash balance account | 8 | | shall consist of (i) amounts contributed by or on behalf of the | 9 | | participant as employee contributions and (ii) interest credit | 10 | | that is attributable to the account, both as provided in this | 11 | | Section. | 12 | | Whenever necessary for the prompt calculation or | 13 | | administration, or when the System lacks information necessary | 14 | | to the calculation or administration otherwise required of or | 15 | | for a benefit under this Section, the applicable retirement | 16 | | system may estimate an amount to be credited to or debited from | 17 | | a participant's cash balance account and then adjust the amount | 18 | | so credited or debited when more accurate information becomes | 19 | | available. | 20 | | The applicable retirement system shall give to each | 21 | | participant in the optional cash balance plan who has not yet | 22 | | retired annual notice of (1) the balance in the participant's | 23 | | cash balance account and (2) an estimate of the retirement | 24 | | annuity that will be payable to the participant if he or she | 25 | | retires at age 59 1/2. | 26 | | (d) Employee Contributions. In addition to the other |
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| 1 | | contributions required under the applicable Article, each | 2 | | participant shall make contributions to the applicable | 3 | | retirement system at the rate of 2% of each payment of salary. | 4 | | The amount of each contribution shall be credited to the | 5 | | participant's cash balance account upon receipt and after the | 6 | | retirement system's reconciliation of the contribution. | 7 | | (e) Employer Contributions. There shall be no employer | 8 | | contributions under the optional cash balance plan. | 9 | | (f) Interest Credit. An amount representing earnings on | 10 | | investments shall be determined by the retirement system in | 11 | | accordance with this Section and credited to the participant's | 12 | | cash balance account for each fiscal year in which there is a | 13 | | positive balance in that account; except that no additional | 14 | | interest credit shall be credited while an annuity based on the | 15 | | account is being paid. The interest credit amount shall be a | 16 | | percentage of the average quarterly balance in the cash balance | 17 | | account during that fiscal year, and shall be calculated on | 18 | | June 30. | 19 | | The percentage shall be the assumed treasury rate for the | 20 | | previous fiscal year, unless neither the retirement system's | 21 | | actual rate of investment earnings for the previous fiscal year | 22 | | nor the retirement system's actual rate of investment earnings | 23 | | for the five-year period ending at the end of the previous | 24 | | fiscal year is less than the assumed treasury rate. | 25 | | If both the retirement system's actual rate of investment | 26 | | earnings for the previous fiscal year and the actual rate of |
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| 1 | | investment earnings for the five-year period ending at the end | 2 | | of the previous fiscal year are at least the assumed treasury | 3 | | rate, then the percentage shall be: | 4 | | (i) the assumed treasury rate, plus | 5 | | (ii) two-thirds of the amount of the actual rate of | 6 | | investment earnings for the previous fiscal year that | 7 | | exceeds the assumed treasury rate. | 8 | | However, in no event shall the percentage applied under this | 9 | | subsection exceed 10%. | 10 | | For the purposes of this subsection only, "previous fiscal | 11 | | year" means fiscal year ending one year before the interest | 12 | | rate is calculated. | 13 | | For the purposes of this subsection only, "assumed treasury | 14 | | rate" means the average annual yield of the 30-year U.S. | 15 | | Treasury Bond over the previous fiscal year, but not less than | 16 | | 4%. | 17 | | When a person applies for a benefit under this Section, the | 18 | | retirement system shall apply an interest credit based on a | 19 | | proration of an estimate of what the interest credit will be | 20 | | for the relevant year. When the retirement system certifies the | 21 | | credit on June 30, it shall adjust the benefit accordingly. | 22 | | (f-10) Distribution upon Termination of Employment. Upon | 23 | | termination of active employment with at least 5 years of | 24 | | service credit under the applicable retirement system and prior | 25 | | to making application for an annuity under this Section, a | 26 | | participant in the optional cash balance plan may make an |
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| 1 | | irrevocable election to distribute an amount not to exceed 40% | 2 | | of the balance in the participant's account in the form of a | 3 | | direct rollover to another qualified plan, to the extent | 4 | | allowed by federal law. If the participant makes such an | 5 | | election, then the amount distributed shall be debited from the | 6 | | participant's cash balance account. A participant in the | 7 | | optional cash balance plan shall be allowed only one | 8 | | distribution under this subsection. The remaining balance in | 9 | | the participant's account shall be used for the determination | 10 | | of other benefits provided under this Section. | 11 | | (f-15) Refund. In lieu of receiving a distribution under | 12 | | subsection (f-10), at any time after terminating active | 13 | | employment under the applicable retirement system, but before | 14 | | receiving a retirement annuity under this Section, a | 15 | | participant in the optional cash balance plan may elect to | 16 | | receive a refund under this subsection. The refund shall | 17 | | consist of an amount equal to the amount of all employee | 18 | | contributions credited to the participant's account, but shall | 19 | | not include any interest credit. If the participant so | 20 | | requests, the refund may be paid in the form of a direct | 21 | | rollover to another qualified plan, to the extent allowed by | 22 | | federal law and in accordance with the rules of the applicable | 23 | | retirement system. Upon payment of the refund, the | 24 | | participant's notional cash balance account shall be closed. | 25 | | (g) Retirement Annuity. A participant in the optional cash | 26 | | balance plan may begin collecting a retirement annuity at age |
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| 1 | | 59 1/2, but no earlier than the date of termination of active | 2 | | employment under the applicable retirement system. | 3 | | The amount of the retirement annuity shall be calculated by | 4 | | the retirement system, based on the balance in the cash balance | 5 | | account, the assumption of future investment returns as | 6 | | specified in this subsection, the participant's election to | 7 | | have a lifetime survivor's annuity as specified in this | 8 | | subsection, the annual increase in retirement annuity as | 9 | | specified in subsection (h), the annual increase in survivor's | 10 | | annuity as specified in subsection (l), and any actuarial | 11 | | assumptions and tables adopted by the board of the retirement | 12 | | system for this purpose. The calculation shall determine the | 13 | | amount of retirement annuity, on an actuarially equivalent | 14 | | basis, that shall be designed to result in the balance in the | 15 | | participant's account arriving at zero on the date when the | 16 | | last payment of the retirement annuity (or survivor's annuity, | 17 | | if the participant elects to provide for a survivor's annuity | 18 | | pursuant to this subsection) is anticipated to be paid under | 19 | | the relevant actuarial assumptions. A retirement annuity or a | 20 | | survivor's annuity provided under this Section shall be a life | 21 | | annuity and shall not expire if the account balance equals | 22 | | zero. | 23 | | The annuity payment shall begin on the date specified by | 24 | | the participant submitting a written application, which date | 25 | | shall not be prior to termination of employment or more than | 26 | | one year before the application is received by the board; |
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| 1 | | however, if the participant is not an employee of an employer | 2 | | participating in this System or in a participating system as | 3 | | defined in Article 20 of this Code on April 1 of the calendar | 4 | | year next following the calendar year in which the participant | 5 | | attains age 70 1/2, the annuity payment period shall begin on | 6 | | that date regardless of whether an application has been filed. | 7 | | The participant may elect, under the participant's written | 8 | | application for retirement, to receive a reduced annuity | 9 | | payable for his or her life and to have a lifetime survivor's | 10 | | annuity in a monthly amount equal to 50%, 75%, or 100% of that | 11 | | reduced monthly amount, to be paid after the participant's | 12 | | death to his or her eligible survivor. Eligibility for a | 13 | | survivor's annuity shall be determined under the applicable | 14 | | Article of this Code. | 15 | | For the purpose of calculating retirement annuities, | 16 | | future investment returns shall be assumed to be a percentage | 17 | | equal to the average yield of the 30-year U.S. Treasury Bond | 18 | | over the 5 fiscal years prior to the calculation of the initial | 19 | | retirement annuity, plus 250 basis points; but not less than 4% | 20 | | nor more than 8%. | 21 | | (h) Annual Increase in Retirement Annuity. The retirement | 22 | | annuity shall be subject to an automatic annual increase in an | 23 | | amount equal to 3% of the originally granted annuity on each | 24 | | January 1 occurring on or after the first anniversary of the | 25 | | annuity start date. | 26 | | (i) Disability Benefits. There are no disability benefits |
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| 1 | | provided under the optional cash balance plan, and no amounts | 2 | | for disability shall be deducted from the account of a | 3 | | participant in the optional cash balance plan. The disability | 4 | | benefits provided under the applicable retirement system apply | 5 | | to participants in the optional cash balance plan. | 6 | | (j) Return to Service. Upon a return to service under the | 7 | | same retirement system after beginning to receive a retirement | 8 | | annuity under the optional cash balance plan, the retirement | 9 | | annuity shall be suspended and active participation in the | 10 | | optional cash balance plan shall resume. Upon termination of | 11 | | the employment, the retirement annuity shall resume in an | 12 | | amount to be recalculated in accordance with subsection (g), | 13 | | taking into effect the changes in the cash balance account. If | 14 | | a retired annuitant returns to service, his or her notional | 15 | | cash balance account shall be decreased by each payment of | 16 | | retirement annuity prior to the return to service. | 17 | | (k) Survivor's Annuity - Death before Retirement. In the | 18 | | case of a participant in the optional cash balance plan who had | 19 | | less than 5 years of service under the applicable Article and | 20 | | had not begun receiving a retirement annuity, the eligible | 21 | | survivor shall be entitled only to a refund of employee | 22 | | contributions under subsection (f-15). | 23 | | In the case of a participant in the optional cash balance | 24 | | plan who had at least 5 years of service under the applicable | 25 | | Article and had not begun receiving a retirement annuity, the | 26 | | eligible survivor shall be entitled to receive a survivor's |
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| 1 | | annuity beginning at age 59 1/2 upon written application. The | 2 | | survivor's annuity shall be calculated in the same manner as a | 3 | | retirement annuity under subsection (g). At any time before | 4 | | receiving a survivor's annuity, the eligible survivor may claim | 5 | | a distribution under subsection (f-10) or a refund under | 6 | | subsection (f-15). The deceased participant's account shall | 7 | | continue to receive interest credit until the eligible survivor | 8 | | begins to receive a survivor's annuity or receives a refund of | 9 | | employee contributions under subsection (f-15). | 10 | | Eligibility for a survivor's annuity shall be determined | 11 | | under the applicable Article of this Code. A child's or | 12 | | parent's annuity for an otherwise eligible child or dependent | 13 | | parent shall be in the same amount, if any, prescribed under | 14 | | the applicable Article. | 15 | | (l) Annual Increase in Survivor's Annuity. A survivor's | 16 | | annuity granted under subsection (g) or (k) shall be subject to | 17 | | an automatic annual increase in an amount equal to 3% of the | 18 | | originally granted annuity on each January 1 occurring on or | 19 | | after the first anniversary of the annuity start date. | 20 | | (m) Applicability of Provisions. The following provisions, | 21 | | if and as they exist in this Code, do not apply to participants | 22 | | in the optional cash balance plan with respect to participation | 23 | | in the optional cash balance plan, except as they are | 24 | | specifically provided for in this Section: | 25 | | (1) minimum service or vesting requirements (other | 26 | | than as provided in this Section); |
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| 1 | | (2) provisions limiting a retirement annuity to a | 2 | | specified percentage of salary; | 3 | | (3) provisions authorizing a minimum retirement or | 4 | | survivor's annuity or a supplemental annuity; | 5 | | (4) provisions authorizing any form of retirement | 6 | | annuity or survivor's annuity not authorized under this | 7 | | Section; | 8 | | (5) provisions authorizing a reversionary annuity | 9 | | (other than the survivor's annuity under subsection (g)); | 10 | | (6) provisions authorizing a refund of employee | 11 | | contributions upon termination of service (other than upon | 12 | | the death of the participant without an eligible survivor) | 13 | | or any lump-sum payout in lieu of a retirement or | 14 | | survivor's annuity (other than the distribution under | 15 | | subsection (f-10) or the refund under subsection (f-15) of | 16 | | this Section; | 17 | | (7) provisions authorizing optional service credits or | 18 | | the payment of optional additional contributions; or | 19 | | (8) a level income option. | 20 | | The Retirement Systems Reciprocal Act (Article 20 of this | 21 | | Code) does not apply to participation in the optional cash | 22 | | balance plan and does not affect the calculation of benefits | 23 | | payable under this Section. | 24 | | The other provisions of this Code continue to apply to | 25 | | participants in the optional cash balance plan, to the extent | 26 | | that they do not conflict with this Section. In the case of a |
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| 1 | | conflict between the provisions of this Section and any other | 2 | | provision of this Code, the provisions of this Section control. | 3 | | (n) Rules. The Board of Trustees of the applicable | 4 | | retirement system may adopt rules and procedures for the | 5 | | implementation of this Section, including but not limited to | 6 | | determinations of how to integrate the administration of this | 7 | | Section with the requirements of the applicable Article and any | 8 | | other applicable provisions of this Code. | 9 | | (o) Public Pension Division. The Public Pension Division of | 10 | | the Department of Insurance shall determine in October of each | 11 | | year the annual unadjusted percentage increase (but not less | 12 | | than zero) in the Consumer Price Index-U
for the 12 months | 13 | | ending with the preceding September. The Division shall certify | 14 | | its determination to the Board of Trustees of the State | 15 | | Universities Retirement System by November 1 of each year.
| 16 | | (p) Prospective Modification. The provisions set forth in | 17 | | this Section are subject to prospective changes made by law | 18 | | provided that any such changes shall not apply to any benefits | 19 | | accrued under this Section prior to the effective date of any | 20 | | amendatory Act of the General Assembly. | 21 | | (q) Qualified Plan Status. No provision of this Section | 22 | | shall be interpreted in a way that would cause the applicable | 23 | | retirement system to cease to be a qualified plan under section | 24 | | 461 (a) of the Internal Revenue Code of 1986. "; and | 25 | | on page 44, in line 15, by changing " 14-106.5 " to " 2-110.3 "; |
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| 1 | | and
| 2 | | on page 52, in line 20, by changing " the Township School | 3 | | District Trustees " to " an association or not-for-profit | 4 | | corporation, membership in which is authorized under Section | 5 | | 85-15 of the Township Code "; and | 6 | | on page 61, in line 25, after " 14-103.10. ", by inserting " In | 7 | | addition, a Tier I employee who has made the election under | 8 | | paragraph (1) of subsection (a) of this Section shall receive | 9 | | the right to also participate in the optional cash balance plan | 10 | | established under Section 1-162. "; and | 11 | | on page 62, in line 8, after " 14-103.10. ", by inserting " In | 12 | | addition, a Tier I retiree who returns to active service and | 13 | | has made the election under paragraph (1) of subsection (a-5) | 14 | | of this Section shall receive the right to also participate in | 15 | | the optional cash balance plan established under Section | 16 | | 1-162. "; and | 17 | | on page 62, in line 19, after " requirement. ", by inserting " In | 18 | | addition, a Tier I employee who has made the election under | 19 | | paragraph (2) of subsection (a) of this Section shall not | 20 | | receive the right to participate in the optional cash balance | 21 | | plan established under Section 1-162. "; and |
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| 1 | | on page 63, in line 4, after " requirement. ", by inserting " In | 2 | | addition, a Tier I retiree who returns to active service and | 3 | | has made the election under paragraph (2) of subsection (a-5) | 4 | | of this Section shall not receive the right to participate in | 5 | | the optional cash balance plan established under Section | 6 | | 1-162. "; and | 7 | | on page 83, below line 11, by inserting the following:
| 8 | | "(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
| 9 | | Sec. 14-133. Contributions on behalf of members.
| 10 | | (a) Each participating employee shall make contributions | 11 | | to the System,
based on the employee's compensation, as | 12 | | follows:
| 13 | | (1) Covered employees, except as indicated below, 3.5% | 14 | | for
retirement annuity, and 0.5% for a widow or survivors
| 15 | | annuity;
| 16 | | (2) Noncovered employees, except as indicated below, | 17 | | 7% for retirement
annuity and 1% for a widow or survivors | 18 | | annuity;
| 19 | | (3) Noncovered employees serving in a position in which | 20 | | "eligible
creditable service" as defined in Section 14-110 | 21 | | may be earned, 1% for a widow
or survivors annuity
plus the | 22 | | following amount for retirement annuity: 8.5% through | 23 | | December 31,
2001; 9.5% in 2002; 10.5% in 2003; and 11.5% | 24 | | in 2004 and thereafter;
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| 1 | | (4) Covered employees serving in a position in which | 2 | | "eligible creditable
service" as defined in Section 14-110 | 3 | | may be earned, 0.5% for a widow or survivors annuity
plus | 4 | | the following amount for retirement annuity: 5% through | 5 | | December 31,
2001; 6% in 2002; 7% in 2003; and 8% in 2004 | 6 | | and thereafter;
| 7 | | (5) Each security employee of the Department of | 8 | | Corrections
or of the Department of Human Services who is a | 9 | | covered employee, 0.5% for a widow or survivors annuity
| 10 | | plus the following amount for retirement annuity: 5% | 11 | | through December 31,
2001; 6% in 2002; 7% in 2003; and 8% | 12 | | in 2004 and thereafter;
| 13 | | (6) Each security employee of the Department of | 14 | | Corrections
or of the Department of Human Services who is | 15 | | not a covered employee, 1% for a widow or survivors annuity
| 16 | | plus the following amount for retirement annuity: 8.5% | 17 | | through December 31,
2001; 9.5% in 2002; 10.5% in 2003; and | 18 | | 11.5% in 2004 and thereafter.
| 19 | | (a-1) In addition to the contributions required under | 20 | | subsection (a), an employee who elects to participate in the | 21 | | optional cash balance plan under Section 1-162 shall pay to the | 22 | | System for the purpose of participating in the optional cash | 23 | | balance plan an additional contribution of 2% of each payment | 24 | | of compensation received while he or she is a participant in | 25 | | the optional cash balance plan. These contributions shall not | 26 | | be used for the purpose of determining any benefit under this |
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| 1 | | Article except as provided in the optional cash balance plan. | 2 | | (b) Contributions shall be in the form of a deduction from
| 3 | | compensation and shall be made notwithstanding that the | 4 | | compensation
paid in cash to the employee shall be reduced | 5 | | thereby below the minimum
prescribed by law or regulation. Each | 6 | | member is deemed to consent and
agree to the deductions from | 7 | | compensation provided for in this Article,
and shall receipt in | 8 | | full for salary or compensation.
| 9 | | (Source: P.A. 92-14, eff. 6-28-01.)"; and
| 10 | | on page 103, in line 19, after " 15-111. ", by inserting " In | 11 | | addition, a Tier I employee who has made the election under | 12 | | paragraph (1) of subsection (a) of this Section shall receive | 13 | | the right to also participate in the optional cash balance plan | 14 | | established under Section 1-162. "; and | 15 | | on page 104, in line 1, after " 15-111. ", by inserting " In | 16 | | addition, a Tier I retiree who returns to active service and | 17 | | has made the election under paragraph (1) of subsection (a-5) | 18 | | of this Section shall receive the right to also participate in | 19 | | the optional cash balance plan established under Section | 20 | | 1-162. "; and | 21 | | on page 104, in line 11, after " requirement. ", by inserting " In | 22 | | addition, a Tier I employee who has made the election under | 23 | | paragraph (2) of subsection (a) of this Section shall not |
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| 1 | | receive the right to participate in the optional cash balance | 2 | | plan established under Section 1-162. "; and | 3 | | on page 104, in line 22, after " requirement. ", by inserting " | 4 | | In addition, a Tier I retiree who returns to active service and | 5 | | has made the election under paragraph (2) of subsection (a-5) | 6 | | of this Section shall not receive the right to participate in | 7 | | the optional cash balance plan established under Section | 8 | | 1-162. "; and | 9 | | on page 126, in lines 17 and 18, by changing " by more than 6%, " | 10 | | to "by more than 6%,"; and | 11 | | on page 126, in line 22, by changing " portion of the " to | 12 | | "portion of the"; and | 13 | | on page 126, in lines 22 and 23, by changing " that is in excess | 14 | | of 6% " to "that is in excess of 6%"; and | 15 | | on page 127, by replacing lines 2 through 9 with | 16 | | "documentation."; and | 17 | | by deleting line 21 on page 132 through line 6 on page 133 and | 18 | | inserting in lieu thereof the following:
| 19 | | "(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
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| 1 | | Sec. 15-157. Employee Contributions.
| 2 | | (a) Each participating employee
shall make contributions | 3 | | towards the retirement
benefits payable under the retirement | 4 | | program applicable to the
employee from each payment
of | 5 | | earnings applicable to employment under this system on and | 6 | | after the
date of becoming a participant as follows: Prior to | 7 | | September 1, 1949,
3 1/2% of earnings; from September 1, 1949 | 8 | | to August 31, 1955, 5%; from
September 1, 1955 to August 31, | 9 | | 1969, 6%; from September 1, 1969, 6 1/2%.
These contributions | 10 | | are to be considered as normal contributions for purposes
of | 11 | | this Article.
| 12 | | Each participant who is a police officer or firefighter | 13 | | shall make normal
contributions of 8% of each payment of | 14 | | earnings applicable to employment as a
police officer or | 15 | | firefighter under this system on or after September 1, 1981,
| 16 | | unless he or she files with the board within 60 days after the | 17 | | effective date
of this amendatory Act of 1991 or 60 days after | 18 | | the board receives notice that
he or she is employed as a | 19 | | police officer or firefighter, whichever is later,
a written | 20 | | notice waiving the retirement formula provided by Rule 4 of | 21 | | Section
15-136. This waiver shall be irrevocable. If a | 22 | | participant had met the
conditions set forth in Section | 23 | | 15-132.1 prior to the effective date of this
amendatory Act of | 24 | | 1991 but failed to make the additional normal contributions
| 25 | | required by this paragraph, he or she may elect to pay the | 26 | | additional
contributions plus compound interest at the |
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| 1 | | effective rate. If such payment
is received by the board, the | 2 | | service shall be considered as police officer
service in | 3 | | calculating the retirement annuity under Rule 4 of Section | 4 | | 15-136.
While performing service described in clause (i) or | 5 | | (ii) of Rule 4 of Section
15-136, a participating employee | 6 | | shall be deemed to be employed as a
firefighter for the purpose | 7 | | of determining the rate of employee contributions
under this | 8 | | Section.
| 9 | | (a-1) In addition to the contributions required under | 10 | | either subsections (a), (b), and (c) or subsection (a-1), an | 11 | | employee who elects to participate in the optional cash balance | 12 | | plan under Section 1-162 shall pay to the System for the | 13 | | purpose of participating in the optional cash balance plan a | 14 | | contribution of 2% of each payment of earnings received while | 15 | | he or she is a participant in the optional cash balance plan. | 16 | | These contributions shall not be used for the purpose of | 17 | | determining any benefit under this Article except as provided | 18 | | in the optional cash balance plan. | 19 | | (b) Starting September 1, 1969, each participating | 20 | | employee shall make
additional contributions of 1/2 of 1% of | 21 | | earnings to finance a portion
of the cost of the annual | 22 | | increases in retirement annuity provided under
Section 15-136, | 23 | | except that with respect to participants in the
self-managed | 24 | | plan this additional contribution shall be used to finance the
| 25 | | benefits obtained under that retirement program.
| 26 | | (c) In addition to the amounts described in subsections (a) |
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| 1 | | and (b) of this
Section, each participating employee shall make | 2 | | contributions of 1% of earnings
applicable under this system on | 3 | | and after August 1, 1959. The contributions
made under this | 4 | | subsection (c) shall be considered as survivor's insurance
| 5 | | contributions for purposes of this Article if the employee is | 6 | | covered under
the traditional benefit package, and such | 7 | | contributions shall be considered
as additional contributions | 8 | | for purposes of this Article if the employee is
participating | 9 | | in the self-managed plan or has elected to participate in the
| 10 | | portable benefit package and has completed the applicable | 11 | | one-year waiting
period. Contributions in excess of $80 during | 12 | | any fiscal year beginning before
August 31, 1969 and in excess | 13 | | of $120 during any fiscal year thereafter until
September 1, | 14 | | 1971 shall be considered as additional contributions for | 15 | | purposes
of this Article.
| 16 | | (d) If the board by board rule so permits and subject to | 17 | | such conditions
and limitations as may be specified in its | 18 | | rules, a participant may make
other additional contributions of | 19 | | such percentage of earnings or amounts as
the participant shall | 20 | | elect in a written notice thereof received by the board.
| 21 | | (e) That fraction of a participant's total accumulated | 22 | | normal
contributions, the numerator of which is equal to the | 23 | | number of years of
service in excess of that which is required | 24 | | to qualify for the maximum
retirement annuity, and the | 25 | | denominator of which is equal to the total
service of the | 26 | | participant, shall be considered as accumulated additional
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| 1 | | contributions. The determination of the applicable maximum | 2 | | annuity and
the adjustment in contributions required by this | 3 | | provision shall be made
as of the date of the participant's | 4 | | retirement.
| 5 | | (f) Notwithstanding the foregoing, a participating | 6 | | employee shall not
be required to make contributions under this | 7 | | Section after the date upon
which continuance of such | 8 | | contributions would otherwise cause his or her
retirement | 9 | | annuity to exceed the maximum retirement annuity as specified | 10 | | in
clause (1) of subsection (c) of Section 15-136.
| 11 | | (g) A participating employee may make contributions for the | 12 | | purchase of
service credit under this Article.
| 13 | | (Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448, | 14 | | eff. 8-16-97;
90-511, eff. 8-22-97; 90-576, eff. 3-31-98; | 15 | | 90-655, eff. 7-30-98; 90-766, eff.
8-14-98.)"; and
| 16 | | on page 158, in line 9, after " 16-121. ", by inserting " In | 17 | | addition, a Tier I employee who has made the election under | 18 | | paragraph (1) of subsection (a) of this Section shall receive | 19 | | the right to also participate in the optional cash balance plan | 20 | | established under Section 1-162. Finally, a Tier I employee who | 21 | | has made the election under paragraph (1) of subsection (a) of | 22 | | this Section shall receive the right to the early retirement | 23 | | without discount option under Section 16-133.6. "; and | 24 | | on page 158, in line 17, after " 16-121. ", by inserting " In |
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| 1 | | addition, a Tier I retiree who returns to active service and | 2 | | has made the election under paragraph (1) of subsection (a-5) | 3 | | of this Section shall receive the right to also participate in | 4 | | the optional cash balance plan established under Section | 5 | | 1-162. "; and | 6 | | on page 159, in line 1, after " requirement. ", by inserting " In | 7 | | addition, a Tier I employee who has made the election under | 8 | | paragraph (2) of subsection (a) of this Section shall not | 9 | | receive the right to participate in the optional cash balance | 10 | | plan established under Section 1-162. Finally, a Tier I | 11 | | employee who has made the election under paragraph (1) of | 12 | | subsection (a) of this Section shall receive the right to the | 13 | | early retirement without discount option under Section | 14 | | 16-133.6. "; and | 15 | | on page 159, in line 12, after " requirement. ", by inserting " In | 16 | | addition, a Tier I retiree who returns to active service and | 17 | | has made the election under paragraph (2) of subsection (a-5) | 18 | | of this Section shall not receive the right to participate in | 19 | | the optional cash balance plan established under Section | 20 | | 1-162. "; and | 21 | | on page 171, below line 12, by inserting the following:
| 22 | | "(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
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| 1 | | Sec. 16-152. Contributions by members.
| 2 | | (a) Each member shall make contributions for membership | 3 | | service to this
System as follows:
| 4 | | (1) Effective July 1, 1998, contributions of 7.50% of | 5 | | salary towards the
cost of the retirement annuity. Such | 6 | | contributions shall be deemed "normal
contributions".
| 7 | | (2) Effective July 1, 1969, contributions of 1/2 of 1% | 8 | | of salary toward
the cost of the automatic annual increase | 9 | | in retirement annuity provided
under Section 16-133.1.
| 10 | | (3) Effective July 24, 1959, contributions of 1% of | 11 | | salary towards the
cost of survivor benefits. Such | 12 | | contributions shall not be credited to
the individual | 13 | | account of the member and shall not be subject to refund
| 14 | | except as provided under Section 16-143.2.
| 15 | | (4) Effective July 1, 2005, contributions of 0.40% of | 16 | | salary toward the cost of the early retirement without | 17 | | discount option provided under Section 16-133.2. This | 18 | | contribution shall cease upon termination of the early | 19 | | retirement without discount option as provided in Section | 20 | | 16-176.
| 21 | | (a-1) In addition to the contributions required under | 22 | | subsection (a), a member who elects to participate in the | 23 | | optional cash balance plan under Section 1-162 shall pay to the | 24 | | System for the purpose of participating in the optional cash | 25 | | balance plan a contribution of 2% of each payment of | 26 | | compensation received while he or she is a participant in the |
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| 1 | | optional cash balance plan. These contributions shall not be | 2 | | used for the purpose of determining any benefit under this | 3 | | Article except as provided in the optional cash balance plan. | 4 | | (b) The minimum required contribution for any year of | 5 | | full-time
teaching service shall be $192.
| 6 | | (c) Contributions shall not be required of any annuitant | 7 | | receiving
a retirement annuity who is given employment as | 8 | | permitted under Section 16-118 or 16-150.1.
| 9 | | (d) A person who (i) was a member before July 1, 1998, (ii) | 10 | | retires with
more than 34 years of creditable service, and | 11 | | (iii) does not elect to qualify
for the augmented rate under | 12 | | Section 16-129.1 shall be entitled, at the time
of retirement, | 13 | | to receive a partial refund of contributions made under this
| 14 | | Section for service occurring after the later of June 30, 1998 | 15 | | or attainment
of 34 years of creditable service, in an amount | 16 | | equal to 1.00% of the salary
upon which those contributions | 17 | | were based.
| 18 | | (e) A member's contributions toward the cost of early | 19 | | retirement without discount made under item (a)(4) of this | 20 | | Section shall not be refunded if the member has elected early | 21 | | retirement without discount under Section 16-133.2 and has | 22 | | begun to receive a retirement annuity under this Article | 23 | | calculated in accordance with that election. Otherwise, a | 24 | | member's contributions toward the cost of early retirement | 25 | | without discount made under item (a)(4) of this Section shall | 26 | | be refunded according to whichever one of the following |
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| 1 | | circumstances occurs first: | 2 | | (1) The contributions shall be refunded to the member, | 3 | | without interest, within 120 days after the member's | 4 | | retirement annuity commences, if the member does not elect | 5 | | early retirement without discount under Section 16-133.2. | 6 | | (2) The contributions shall be included, without | 7 | | interest, in any refund claimed by the member under Section | 8 | | 16-151. | 9 | | (3) The contributions shall be refunded to the member's | 10 | | designated beneficiary (or if there is no beneficiary, to | 11 | | the member's estate), without interest, if the member dies | 12 | | without having begun to receive a retirement annuity under | 13 | | this Article. | 14 | | (4) The contributions shall be refunded to the member, | 15 | | without interest, within 120 days after the early | 16 | | retirement without discount option provided under Section | 17 | | 16-133.2 is terminated under Section 16-176.
| 18 | | (Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)"; and
| 19 | | on page 183, in line 7, by changing " by more than 6%, " to "by | 20 | | more than 6%,"; and | 21 | | on page 183, in line 11, by changing " portion of the " to | 22 | | "portion of the"; and | 23 | | on page 183, in line 12, by changing " that is in excess of 6% " |
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| 1 | | to "that is in excess of 6%"; and | 2 | | on page 184, by replacing lines 1 through 8 with "service on or | 3 | | after its effective date.".
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