Illinois General Assembly - Full Text of HB1165
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Full Text of HB1165  98th General Assembly

HB1165ham006 98TH GENERAL ASSEMBLY

Rep. Michael J. Madigan

Filed: 3/19/2013

 

 


 

 


 
09800HB1165ham006LRB098 08854 JDS 43588 a

1
AMENDMENT TO HOUSE BILL 1165

2    AMENDMENT NO. ______. Amend House Bill 1165, AS AMENDED, by
3inserting after the end of Section 1 the following:
 
4    "Section 4. The Illinois Pension Code is amended by
5changing Sections 2-119.1, 14-114, 15-136, and 16-133.1 and by
6adding Sections 2-105.1, 2-105.2, 14-103.40, 14-103.41,
715-107.1, 15-107.2, 16-106.4, and 16-106.5 as follows:
 
8    (40 ILCS 5/2-105.1 new)
9    Sec. 2-105.1. Tier I participant. "Tier I participant": A
10participant who first became a participant before January 1,
112011.
 
12    (40 ILCS 5/2-105.2 new)
13    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
14former Tier I participant who is receiving a retirement
15annuity.
 

 

 

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1    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
2    Sec. 2-119.1. Automatic increase in retirement annuity.
3    (a) Except as provided in subsections (a-1) and (a-2), a A
4participant who retires after June 30, 1967, and who has not
5received an initial increase under this Section before the
6effective date of this amendatory Act of 1991, shall, in
7January or July next following the first anniversary of
8retirement, whichever occurs first, and in the same month of
9each year thereafter, but in no event prior to age 60, have the
10amount of the originally granted retirement annuity increased
11as follows: for each year through 1971, 1 1/2%; for each year
12from 1972 through 1979, 2%; and for 1980 and each year
13thereafter, 3%. Annuitants who have received an initial
14increase under this subsection prior to the effective date of
15this amendatory Act of 1991 shall continue to receive their
16annual increases in the same month as the initial increase.
17    (a-1) Notwithstanding any other provision of this Article,
18for a Tier I retiree, the amount of each automatic annual
19increase in retirement annuity occurring on or after the
20effective date of this amendatory Act of the 98th General
21Assembly shall be the lesser of $750 or 3% of the total annuity
22payable at the time of the increase, including previous
23increases granted.
24    (a-2) Notwithstanding any other provision of this Article,
25for a Tier I retiree, the monthly retirement annuity shall

 

 

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1first be subject to annual increases on the January 1 occurring
2on or next after the attainment of age 67 or the January 1
3occurring on or next after the fifth anniversary of the annuity
4start date, whichever occurs earlier. If on the effective date
5of this amendatory Act of the 98th General Assembly a Tier I
6retiree has already received an annual increase under this
7Section but does not yet meet the new eligibility requirements
8of this subsection, the annual increases already received shall
9continue in force, but no additional annual increase shall be
10granted until the Tier I retiree meets the new eligibility
11requirements.
12    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
13and (a-2) apply without regard to whether or not the Tier I
14retiree is in active service under this Article on or after the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (b) Beginning January 1, 1990, for eligible participants
18who remain in service after attaining 20 years of creditable
19service, the 3% increases provided under subsection (a) shall
20begin to accrue on the January 1 next following the date upon
21which the participant (1) attains age 55, or (2) attains 20
22years of creditable service, whichever occurs later, and shall
23continue to accrue while the participant remains in service;
24such increases shall become payable on January 1 or July 1,
25whichever occurs first, next following the first anniversary of
26retirement. For any person who has service credit in the System

 

 

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1for the entire period from January 15, 1969 through December
231, 1992, regardless of the date of termination of service, the
3reference to age 55 in clause (1) of this subsection (b) shall
4be deemed to mean age 50.
5    This subsection (b) does not apply to any person who first
6becomes a member of the System after August 8, 2003 (the
7effective date of Public Act 93-494) this amendatory Act of the
893rd General Assembly.
9    (b-5) Notwithstanding any other provision of this Article,
10a participant who first becomes a participant on or after
11January 1, 2011 (the effective date of Public Act 96-889)
12shall, in January or July next following the first anniversary
13of retirement, whichever occurs first, and in the same month of
14each year thereafter, but in no event prior to age 67, have the
15amount of the retirement annuity then being paid increased by
163% or the annual unadjusted percentage increase in the Consumer
17Price Index for All Urban Consumers as determined by the Public
18Pension Division of the Department of Insurance under
19subsection (a) of Section 2-108.1, whichever is less.
20    (c) The foregoing provisions relating to automatic
21increases are not applicable to a participant who retires
22before having made contributions (at the rate prescribed in
23Section 2-126) for automatic increases for less than the
24equivalent of one full year. However, in order to be eligible
25for the automatic increases, such a participant may make
26arrangements to pay to the system the amount required to bring

 

 

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1the total contributions for the automatic increase to the
2equivalent of one year's contributions based upon his or her
3last salary.
4    (d) A participant who terminated service prior to July 1,
51967, with at least 14 years of service is entitled to an
6increase in retirement annuity beginning January, 1976, and to
7additional increases in January of each year thereafter.
8    The initial increase shall be 1 1/2% of the originally
9granted retirement annuity multiplied by the number of full
10years that the annuitant was in receipt of such annuity prior
11to January 1, 1972, plus 2% of the originally granted
12retirement annuity for each year after that date. The
13subsequent annual increases shall be at the rate of 2% of the
14originally granted retirement annuity for each year through
151979 and at the rate of 3% for 1980 and thereafter.
16    (e) Beginning January 1, 1990, all automatic annual
17increases payable under this Section shall be calculated as a
18percentage of the total annuity payable at the time of the
19increase, including previous increases granted under this
20Article.
21(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
22    (40 ILCS 5/14-103.40 new)
23    Sec. 14-103.40. Tier I member. "Tier I member": A member of
24this System who first became a member or participant before
25January 1, 2011 under any reciprocal retirement system or

 

 

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1pension fund established under this Code other than a
2retirement system or pension fund established under Article 2,
33, 4, 5, 6, or 18 of this Code.
 
4    (40 ILCS 5/14-103.41 new)
5    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
6Tier I member who is receiving a retirement annuity.
 
7    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
8    Sec. 14-114. Automatic increase in retirement annuity.
9    (a) Except as provided in subsections (a-1) and (a-2), any
10Any person receiving a retirement annuity under this Article
11who retires having attained age 60, or who retires before age
1260 having at least 35 years of creditable service, or who
13retires on or after January 1, 2001 at an age which, when added
14to the number of years of his or her creditable service, equals
15at least 85, shall, on January 1 next following the first full
16year of retirement, have the amount of the then fixed and
17payable monthly retirement annuity increased 3%. Any person
18receiving a retirement annuity under this Article who retires
19before attainment of age 60 and with less than (i) 35 years of
20creditable service if retirement is before January 1, 2001, or
21(ii) the number of years of creditable service which, when
22added to the member's age, would equal 85, if retirement is on
23or after January 1, 2001, shall have the amount of the fixed
24and payable retirement annuity increased by 3% on the January 1

 

 

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1occurring on or next following (1) attainment of age 60, or (2)
2the first anniversary of retirement, whichever occurs later.
3However, for persons who receive the alternative retirement
4annuity under Section 14-110, references in this subsection (a)
5to attainment of age 60 shall be deemed to refer to attainment
6of age 55. For a person receiving early retirement incentives
7under Section 14-108.3 whose retirement annuity began after
8January 1, 1992 pursuant to an extension granted under
9subsection (e) of that Section, the first anniversary of
10retirement shall be deemed to be January 1, 1993. For a person
11who retires on or after June 28, 2001 and on or before October
121, 2001, and whose retirement annuity is calculated, in whole
13or in part, under Section 14-110 or subsection (g) or (h) of
14Section 14-108, the first anniversary of retirement shall be
15deemed to be January 1, 2002.
16    On each January 1 following the date of the initial
17increase under this subsection, the employee's monthly
18retirement annuity shall be increased by an additional 3%.
19    Beginning January 1, 1990 and except as provided in
20subsections (a-1) and (a-2), all automatic annual increases
21payable under this Section shall be calculated as a percentage
22of the total annuity payable at the time of the increase,
23including previous increases granted under this Article.
24    (a-1) Notwithstanding any other provision of this Article,
25for a Tier I retiree, the amount of each automatic annual
26increase in retirement annuity occurring on or after the

 

 

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1effective date of this amendatory Act of the 98th General
2Assembly shall be the lesser of $600 ($750 if the annuity is
3based primarily upon service as a noncovered employee) or 3% of
4the total annuity payable at the time of the increase,
5including previous increases granted.
6    (a-2) Notwithstanding any other provision of this Article,
7for a Tier I retiree, the monthly retirement annuity shall
8first be subject to annual increases on the January 1 occurring
9on or next after the attainment of age 67 or the January 1
10occurring on or next after the fifth anniversary of the annuity
11start date, whichever occurs earlier. If on the effective date
12of this amendatory Act of the 98th General Assembly a Tier I
13retiree has already received an annual increase under this
14Section but does not yet meet the new eligibility requirements
15of this subsection, the annual increases already received shall
16continue in force, but no additional annual increase shall be
17granted until the Tier I retiree meets the new eligibility
18requirements.
19    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
20and (a-2) apply without regard to whether or not the Tier I
21retiree is in active service under this Article on or after the
22effective date of this amendatory Act of the 98th General
23Assembly.
24    (b) The provisions of subsection (a) of this Section shall
25be applicable to an employee only if the employee makes the
26additional contributions required after December 31, 1969 for

 

 

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1the purpose of the automatic increases for not less than the
2equivalent of one full year. If an employee becomes an
3annuitant before his additional contributions equal one full
4year's contributions based on his salary at the date of
5retirement, the employee may pay the necessary balance of the
6contributions to the system, without interest, and be eligible
7for the increasing annuity authorized by this Section.
8    (c) The provisions of subsection (a) of this Section shall
9not be applicable to any annuitant who is on retirement on
10December 31, 1969, and thereafter returns to State service,
11unless the member has established at least one year of
12additional creditable service following reentry into service.
13    (d) In addition to other increases which may be provided by
14this Section, on January 1, 1981 any annuitant who was
15receiving a retirement annuity on or before January 1, 1971
16shall have his retirement annuity then being paid increased $1
17per month for each year of creditable service. On January 1,
181982, any annuitant who began receiving a retirement annuity on
19or before January 1, 1977, shall have his retirement annuity
20then being paid increased $1 per month for each year of
21creditable service.
22    On January 1, 1987, any annuitant who began receiving a
23retirement annuity on or before January 1, 1977, shall have the
24monthly retirement annuity increased by an amount equal to 8˘
25per year of creditable service times the number of years that
26have elapsed since the annuity began.

 

 

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1    (e) Every person who receives the alternative retirement
2annuity under Section 14-110 and who is eligible to receive the
33% increase under subsection (a) on January 1, 1986, shall also
4receive on that date a one-time increase in retirement annuity
5equal to the difference between (1) his actual retirement
6annuity on that date, including any increases received under
7subsection (a), and (2) the amount of retirement annuity he
8would have received on that date if the amendments to
9subsection (a) made by Public Act 84-162 had been in effect
10since the date of his retirement.
11(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1292-651, eff. 7-11-02.)
 
13    (40 ILCS 5/15-107.1 new)
14    Sec. 15-107.1. Tier I participant. "Tier I participant": A
15participant under this Article, other than a participant in the
16self-managed plan under Section 15-158.2, who first became a
17member or participant before January 1, 2011 under any
18reciprocal retirement system or pension fund established under
19this Code other than a retirement system or pension fund
20established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/15-107.2 new)
22    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
23Tier I participant who is receiving a retirement annuity.
24    A person does not become a Tier I retiree by virtue of

 

 

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1receiving a reversionary, survivors, beneficiary, or
2disability annuity.
 
3    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
4    Sec. 15-136. Retirement annuities - Amount. The provisions
5of this Section 15-136 apply only to those participants who are
6participating in the traditional benefit package or the
7portable benefit package and do not apply to participants who
8are participating in the self-managed plan.
9    (a) The amount of a participant's retirement annuity,
10expressed in the form of a single-life annuity, shall be
11determined by whichever of the following rules is applicable
12and provides the largest annuity:
13    Rule 1: The retirement annuity shall be 1.67% of final rate
14of earnings for each of the first 10 years of service, 1.90%
15for each of the next 10 years of service, 2.10% for each year
16of service in excess of 20 but not exceeding 30, and 2.30% for
17each year in excess of 30; or for persons who retire on or
18after January 1, 1998, 2.2% of the final rate of earnings for
19each year of service.
20    Rule 2: The retirement annuity shall be the sum of the
21following, determined from amounts credited to the participant
22in accordance with the actuarial tables and the effective rate
23of interest in effect at the time the retirement annuity
24begins:
25        (i) the normal annuity which can be provided on an

 

 

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1    actuarially equivalent basis, by the accumulated normal
2    contributions as of the date the annuity begins;
3        (ii) an annuity from employer contributions of an
4    amount equal to that which can be provided on an
5    actuarially equivalent basis from the accumulated normal
6    contributions made by the participant under Section
7    15-113.6 and Section 15-113.7 plus 1.4 times all other
8    accumulated normal contributions made by the participant;
9    and
10        (iii) the annuity that can be provided on an
11    actuarially equivalent basis from the entire contribution
12    made by the participant under Section 15-113.3.
13    With respect to a police officer or firefighter who retires
14on or after August 14, 1998, the accumulated normal
15contributions taken into account under clauses (i) and (ii) of
16this Rule 2 shall include the additional normal contributions
17made by the police officer or firefighter under Section
1815-157(a).
19    The amount of a retirement annuity calculated under this
20Rule 2 shall be computed solely on the basis of the
21participant's accumulated normal contributions, as specified
22in this Rule and defined in Section 15-116. Neither an employee
23or employer contribution for early retirement under Section
2415-136.2 nor any other employer contribution shall be used in
25the calculation of the amount of a retirement annuity under
26this Rule 2.

 

 

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1    This amendatory Act of the 91st General Assembly is a
2clarification of existing law and applies to every participant
3and annuitant without regard to whether status as an employee
4terminates before the effective date of this amendatory Act.
5    This Rule 2 does not apply to a person who first becomes an
6employee under this Article on or after July 1, 2005.
7    Rule 3: The retirement annuity of a participant who is
8employed at least one-half time during the period on which his
9or her final rate of earnings is based, shall be equal to the
10participant's years of service not to exceed 30, multiplied by
11(1) $96 if the participant's final rate of earnings is less
12than $3,500, (2) $108 if the final rate of earnings is at least
13$3,500 but less than $4,500, (3) $120 if the final rate of
14earnings is at least $4,500 but less than $5,500, (4) $132 if
15the final rate of earnings is at least $5,500 but less than
16$6,500, (5) $144 if the final rate of earnings is at least
17$6,500 but less than $7,500, (6) $156 if the final rate of
18earnings is at least $7,500 but less than $8,500, (7) $168 if
19the final rate of earnings is at least $8,500 but less than
20$9,500, and (8) $180 if the final rate of earnings is $9,500 or
21more, except that the annuity for those persons having made an
22election under Section 15-154(a-1) shall be calculated and
23payable under the portable retirement benefit program pursuant
24to the provisions of Section 15-136.4.
25    Rule 4: A participant who is at least age 50 and has 25 or
26more years of service as a police officer or firefighter, and a

 

 

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1participant who is age 55 or over and has at least 20 but less
2than 25 years of service as a police officer or firefighter,
3shall be entitled to a retirement annuity of 2 1/4% of the
4final rate of earnings for each of the first 10 years of
5service as a police officer or firefighter, 2 1/2% for each of
6the next 10 years of service as a police officer or
7firefighter, and 2 3/4% for each year of service as a police
8officer or firefighter in excess of 20. The retirement annuity
9for all other service shall be computed under Rule 1.
10    For purposes of this Rule 4, a participant's service as a
11firefighter shall also include the following:
12        (i) service that is performed while the person is an
13    employee under subsection (h) of Section 15-107; and
14        (ii) in the case of an individual who was a
15    participating employee employed in the fire department of
16    the University of Illinois's Champaign-Urbana campus
17    immediately prior to the elimination of that fire
18    department and who immediately after the elimination of
19    that fire department transferred to another job with the
20    University of Illinois, service performed as an employee of
21    the University of Illinois in a position other than police
22    officer or firefighter, from the date of that transfer
23    until the employee's next termination of service with the
24    University of Illinois.
25    Rule 5: The retirement annuity of a participant who elected
26early retirement under the provisions of Section 15-136.2 and

 

 

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1who, on or before February 16, 1995, brought administrative
2proceedings pursuant to the administrative rules adopted by the
3System to challenge the calculation of his or her retirement
4annuity shall be the sum of the following, determined from
5amounts credited to the participant in accordance with the
6actuarial tables and the prescribed rate of interest in effect
7at the time the retirement annuity begins:
8        (i) the normal annuity which can be provided on an
9    actuarially equivalent basis, by the accumulated normal
10    contributions as of the date the annuity begins; and
11        (ii) an annuity from employer contributions of an
12    amount equal to that which can be provided on an
13    actuarially equivalent basis from the accumulated normal
14    contributions made by the participant under Section
15    15-113.6 and Section 15-113.7 plus 1.4 times all other
16    accumulated normal contributions made by the participant;
17    and
18        (iii) an annuity which can be provided on an
19    actuarially equivalent basis from the employee
20    contribution for early retirement under Section 15-136.2,
21    and an annuity from employer contributions of an amount
22    equal to that which can be provided on an actuarially
23    equivalent basis from the employee contribution for early
24    retirement under Section 15-136.2.
25    In no event shall a retirement annuity under this Rule 5 be
26lower than the amount obtained by adding (1) the monthly amount

 

 

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1obtained by dividing the combined employee and employer
2contributions made under Section 15-136.2 by the System's
3annuity factor for the age of the participant at the beginning
4of the annuity payment period and (2) the amount equal to the
5participant's annuity if calculated under Rule 1, reduced under
6Section 15-136(b) as if no contributions had been made under
7Section 15-136.2.
8    With respect to a participant who is qualified for a
9retirement annuity under this Rule 5 whose retirement annuity
10began before the effective date of this amendatory Act of the
1191st General Assembly, and for whom an employee contribution
12was made under Section 15-136.2, the System shall recalculate
13the retirement annuity under this Rule 5 and shall pay any
14additional amounts due in the manner provided in Section
1515-186.1 for benefits mistakenly set too low.
16    The amount of a retirement annuity calculated under this
17Rule 5 shall be computed solely on the basis of those
18contributions specifically set forth in this Rule 5. Except as
19provided in clause (iii) of this Rule 5, neither an employee
20nor employer contribution for early retirement under Section
2115-136.2, nor any other employer contribution, shall be used in
22the calculation of the amount of a retirement annuity under
23this Rule 5.
24    The General Assembly has adopted the changes set forth in
25Section 25 of this amendatory Act of the 91st General Assembly
26in recognition that the decision of the Appellate Court for the

 

 

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

 

 

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1    performed for at least 5 years immediately preceding the
2    date the retirement annuity is to begin.
3    (c) The maximum retirement annuity provided under Rules 1,
42, 4, and 5 shall be the lesser of (1) the annual limit of
5benefits as specified in Section 415 of the Internal Revenue
6Code of 1986, as such Section may be amended from time to time
7and as such benefit limits shall be adjusted by the
8Commissioner of Internal Revenue, and (2) 80% of final rate of
9earnings.
10    (d) Subject to the provisions of subsection (d-1), an An
11annuitant whose status as an employee terminates after August
1214, 1969 shall receive automatic increases in his or her
13retirement annuity as follows:
14    Effective January 1 immediately following the date the
15retirement annuity begins, the annuitant shall receive an
16increase in his or her monthly retirement annuity of 0.125% of
17the monthly retirement annuity provided under Rule 1, Rule 2,
18Rule 3, Rule 4, or Rule 5, contained in this Section,
19multiplied by the number of full months which elapsed from the
20date the retirement annuity payments began to January 1, 1972,
21plus 0.1667% of such annuity, multiplied by the number of full
22months which elapsed from January 1, 1972, or the date the
23retirement annuity payments began, whichever is later, to
24January 1, 1978, plus 0.25% of such annuity multiplied by the
25number of full months which elapsed from January 1, 1978, or
26the date the retirement annuity payments began, whichever is

 

 

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1later, to the effective date of the increase.
2    The annuitant shall receive an increase in his or her
3monthly retirement annuity on each January 1 thereafter during
4the annuitant's life of 3% of the monthly annuity provided
5under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
6this Section. The change made under this subsection by P.A.
781-970 is effective January 1, 1980 and applies to each
8annuitant whose status as an employee terminates before or
9after that date.
10    Beginning January 1, 1990 and except as provided in
11subsections (d-1) and (d-2), all automatic annual increases
12payable under this Section shall be calculated as a percentage
13of the total annuity payable at the time of the increase,
14including all increases previously granted under this Article.
15    The change made in this subsection by P.A. 85-1008 is
16effective January 26, 1988, and is applicable without regard to
17whether status as an employee terminated before that date.
18    (d-1) Notwithstanding any other provision of this Article,
19for a Tier I retiree, the amount of each automatic annual
20increase in retirement annuity occurring on or after the
21effective date of this amendatory Act of the 98th General
22Assembly shall be the lesser of $750 or 3% of the total annuity
23payable at the time of the increase, including previous
24increases granted.
25    (d-2) Notwithstanding any other provision of this Article,
26for a Tier I retiree, the monthly retirement annuity shall

 

 

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1first be subject to annual increases on the January 1 occurring
2on or next after the attainment of age 67 or the January 1
3occurring on or next after the fifth anniversary of the annuity
4start date, whichever occurs earlier. If on the effective date
5of this amendatory Act of the 98th General Assembly a Tier I
6retiree has already received an annual increase under this
7Section but does not yet meet the new eligibility requirements
8of this subsection, the annual increases already received shall
9continue in force, but no additional annual increase shall be
10granted until the Tier I retiree meets the new eligibility
11requirements.
12    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
13and (d-2) apply without regard to whether or not the Tier I
14retiree is in active service under this Article on or after the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (e) If, on January 1, 1987, or the date the retirement
18annuity payment period begins, whichever is later, the sum of
19the retirement annuity provided under Rule 1 or Rule 2 of this
20Section and the automatic annual increases provided under the
21preceding subsection or Section 15-136.1, amounts to less than
22the retirement annuity which would be provided by Rule 3, the
23retirement annuity shall be increased as of January 1, 1987, or
24the date the retirement annuity payment period begins,
25whichever is later, to the amount which would be provided by
26Rule 3 of this Section. Such increased amount shall be

 

 

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1considered as the retirement annuity in determining benefits
2provided under other Sections of this Article. This paragraph
3applies without regard to whether status as an employee
4terminated before the effective date of this amendatory Act of
51987, provided that the annuitant was employed at least
6one-half time during the period on which the final rate of
7earnings was based.
8    (f) A participant is entitled to such additional annuity as
9may be provided on an actuarially equivalent basis, by any
10accumulated additional contributions to his or her credit.
11However, the additional contributions made by the participant
12toward the automatic increases in annuity provided under this
13Section shall not be taken into account in determining the
14amount of such additional annuity.
15    (g) If, (1) by law, a function of a governmental unit, as
16defined by Section 20-107 of this Code, is transferred in whole
17or in part to an employer, and (2) a participant transfers
18employment from such governmental unit to such employer within
196 months after the transfer of the function, and (3) the sum of
20(A) the annuity payable to the participant under Rule 1, 2, or
213 of this Section (B) all proportional annuities payable to the
22participant by all other retirement systems covered by Article
2320, and (C) the initial primary insurance amount to which the
24participant is entitled under the Social Security Act, is less
25than the retirement annuity which would have been payable if
26all of the participant's pension credits validated under

 

 

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1Section 20-109 had been validated under this system, a
2supplemental annuity equal to the difference in such amounts
3shall be payable to the participant.
4    (h) On January 1, 1981, an annuitant who was receiving a
5retirement annuity on or before January 1, 1971 shall have his
6or her retirement annuity then being paid increased $1 per
7month for each year of creditable service. On January 1, 1982,
8an annuitant whose retirement annuity began on or before
9January 1, 1977, shall have his or her retirement annuity then
10being paid increased $1 per month for each year of creditable
11service.
12    (i) On January 1, 1987, any annuitant whose retirement
13annuity began on or before January 1, 1977, shall have the
14monthly retirement annuity increased by an amount equal to 8˘
15per year of creditable service times the number of years that
16have elapsed since the annuity began.
17(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
18    (40 ILCS 5/16-106.4 new)
19    Sec. 16-106.4. Tier I member. "Tier I member": A member
20under this Article who first became a member or participant
21before January 1, 2011 under any reciprocal retirement system
22or pension fund established under this Code other than a
23retirement system or pension fund established under Article 2,
243, 4, 5, 6, or 18 of this Code.
 

 

 

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1    (40 ILCS 5/16-106.5 new)
2    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
3Tier I member who is receiving a retirement annuity.
 
4    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
5    Sec. 16-133.1. Automatic annual increase in annuity.
6    (a) Each member with creditable service and retiring on or
7after August 26, 1969 is entitled to the automatic annual
8increases in annuity provided under this Section while
9receiving a retirement annuity or disability retirement
10annuity from the system.
11    An annuitant shall first be entitled to an initial increase
12under this Section on the January 1 next following the first
13anniversary of retirement, or January 1 of the year next
14following attainment of age 61, whichever is later. At such
15time, the system shall pay an initial increase determined as
16follows or as provided in subsections (a-1) and (a-2):
17        (1) 1.5% of the originally granted retirement annuity
18    or disability retirement annuity multiplied by the number
19    of years elapsed, if any, from the date of retirement until
20    January 1, 1972, plus
21        (2) 2% of the originally granted annuity multiplied by
22    the number of years elapsed, if any, from the date of
23    retirement or January 1, 1972, whichever is later, until
24    January 1, 1978, plus
25        (3) 3% of the originally granted annuity multiplied by

 

 

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1    the number of years elapsed from the date of retirement or
2    January 1, 1978, whichever is later, until the effective
3    date of the initial increase.
4However, the initial annual increase calculated under this
5Section for the recipient of a disability retirement annuity
6granted under Section 16-149.2 shall be reduced by an amount
7equal to the total of all increases in that annuity received
8under Section 16-149.5 (but not exceeding 100% of the amount of
9the initial increase otherwise provided under this Section).
10    Following the initial increase, automatic annual increases
11in annuity shall be payable on each January 1 thereafter during
12the lifetime of the annuitant, determined as a percentage of
13the originally granted retirement annuity or disability
14retirement annuity for increases granted prior to January 1,
151990, and calculated as a percentage of the total amount of
16annuity, including previous increases under this Section, for
17increases granted on or after January 1, 1990, as follows: 1.5%
18for periods prior to January 1, 1972, 2% for periods after
19December 31, 1971 and prior to January 1, 1978, and 3% for
20periods after December 31, 1977, or as provided in subsections
21(a-1) and (a-2).
22    (a-1) Notwithstanding any other provision of this Article,
23for a Tier I retiree, the amount of each automatic annual
24increase in retirement annuity occurring on or after the
25effective date of this amendatory Act of the 98th General
26Assembly shall be the lesser of $750 or 3% of the total annuity

 

 

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

 

 

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1one full year's contributions based on the salary at the date
2of retirement, he or she may pay the necessary balance of the
3contributions to the system and be eligible for the automatic
4annual increases in annuity provided under this Section.
5    (c) Each member shall make contributions toward the cost of
6the automatic annual increases in annuity as provided under
7Section 16-152.
8    (d) An annuitant receiving a retirement annuity or
9disability retirement annuity on July 1, 1969, who subsequently
10re-enters service as a teacher is eligible for the automatic
11annual increases in annuity provided under this Section if he
12or she renders at least one year of creditable service
13following the latest re-entry.
14    (e) In addition to the automatic annual increases in
15annuity provided under this Section, an annuitant who meets the
16service requirements of this Section and whose retirement
17annuity or disability retirement annuity began on or before
18January 1, 1971 shall receive, on January 1, 1981, an increase
19in the annuity then being paid of one dollar per month for each
20year of creditable service. On January 1, 1982, an annuitant
21whose retirement annuity or disability retirement annuity
22began on or before January 1, 1977 shall receive an increase in
23the annuity then being paid of one dollar per month for each
24year of creditable service.
25    On January 1, 1987, any annuitant whose retirement annuity
26began on or before January 1, 1977, shall receive an increase

 

 

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1in the monthly retirement annuity equal to 8˘ per year of
2creditable service times the number of years that have elapsed
3since the annuity began.
4(Source: P.A. 91-927, eff. 12-14-00.)".