Illinois General Assembly - Full Text of SB2156
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Full Text of SB2156  99th General Assembly




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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 15-106, 15-107, 15-110, 15-111, 15-168, and 15-168.2
6and by adding Section 15-111.5 as follows:
7    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 15-106. Employer. "Employer": The University of
11Illinois, Southern Illinois University, Chicago State
12University, Eastern Illinois University, Governors State
13University, Illinois State University, Northeastern Illinois
14University, Northern Illinois University, Western Illinois
15University, the State Board of Higher Education, the Illinois
16Mathematics and Science Academy, the University Civil Service
17Merit Board, the Board of Trustees of the State Universities
18Retirement System, the Illinois Community College Board,
19community college boards, any association of community college
20boards organized under Section 3-55 of the Public Community
21College Act, the Board of Examiners established under the
22Illinois Public Accounting Act, and, only during the period for
23which employer contributions required under Section 15-155 are



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1paid, the following organizations: the alumni associations,
2the foundations and the athletic associations which are
3affiliated with the universities and colleges included in this
4Section as employers. An individual that begins employment on
5or after the effective date of this amendatory Act of the 99th
6General Assembly with any association of community college
7boards organized under Section 3-55 of the Public Community
8College Act, the Association of Illinois Middle-Grade Schools,
9the Illinois Association of School Administrators, the
10Illinois Association for Supervision and Curriculum
11Development, the Illinois Principals Association, the Illinois
12Association of School Business Officials, the Illinois Special
13Olympics, or an entity not defined as an employer in this
14Section shall not be deemed an employee for the purposes of
15this Article with respect to that employment and shall not be
16eligible to participate in the System with respect to that
17employment; provided, however, that those individuals who are
18both employed by such an entity and are participating in the
19System with respect to that employment on the effective date of
20this amendatory Act of the 99th General Assembly shall be
21allowed to continue as participants in the System for the
22duration of that employment.
23    A department as defined in Section 14-103.04 is an employer
24for any person appointed by the Governor under the Civil
25Administrative Code of Illinois who is a participating employee
26as defined in Section 15-109. The Department of Central



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1Management Services is an employer with respect to persons
2employed by the State Board of Higher Education in positions
3with the Illinois Century Network as of June 30, 2004 who
4remain continuously employed after that date by the Department
5of Central Management Services in positions with the Illinois
6Century Network, the Bureau of Communication and Computer
7Services, or, if applicable, any successor bureau.
8    The cities of Champaign and Urbana shall be considered
9employers, but only during the period for which contributions
10are required to be made under subsection (b-1) of Section
1115-155 and only with respect to individuals described in
12subsection (h) of Section 15-107.
13(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
14Sec. 999.)
15    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
16    (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18    Sec. 15-107. Employee.
19    (a) "Employee" means any member of the educational,
20administrative, secretarial, clerical, mechanical, labor or
21other staff of an employer whose employment is permanent and
22continuous or who is employed in a position in which services
23are expected to be rendered on a continuous basis for at least
244 months or one academic term, whichever is less, who (A)
25receives payment for personal services on a warrant issued



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1pursuant to a payroll voucher certified by an employer and
2drawn by the State Comptroller upon the State Treasurer or by
3an employer upon trust, federal or other funds, or (B) is on a
4leave of absence without pay. Employment which is irregular,
5intermittent or temporary shall not be considered continuous
6for purposes of this paragraph.
7    However, a person is not an "employee" if he or she:
8        (1) is a student enrolled in and regularly attending
9    classes in a college or university which is an employer,
10    and is employed on a temporary basis at less than full
11    time;
12        (2) is currently receiving a retirement annuity or a
13    disability retirement annuity under Section 15-153.2 from
14    this System;
15        (3) is on a military leave of absence;
16        (4) is eligible to participate in the Federal Civil
17    Service Retirement System and is currently making
18    contributions to that system based upon earnings paid by an
19    employer;
20        (5) is on leave of absence without pay for more than 60
21    days immediately following termination of disability
22    benefits under this Article;
23        (6) is hired after June 30, 1979 as a public service
24    employment program participant under the Federal
25    Comprehensive Employment and Training Act and receives
26    earnings in whole or in part from funds provided under that



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1    Act; or
2        (7) is employed on or after July 1, 1991 to perform
3    services that are excluded by subdivision (a)(7)(f) or
4    (a)(19) of Section 210 of the federal Social Security Act
5    from the definition of employment given in that Section (42
6    U.S.C. 410).
7    (b) Any employer may, by filing a written notice with the
8board, exclude from the definition of "employee" all persons
9employed pursuant to a federally funded contract entered into
10after July 1, 1982 with a federal military department in a
11program providing training in military courses to federal
12military personnel on a military site owned by the United
13States Government, if this exclusion is not prohibited by the
14federally funded contract or federal laws or rules governing
15the administration of the contract.
16    (c) Any person appointed by the Governor under the Civil
17Administrative Code of the State is an employee, if he or she
18is a participant in this system on the effective date of the
20    (d) A participant on lay-off status under civil service
21rules is considered an employee for not more than 120 days from
22the date of the lay-off.
23    (e) A participant is considered an employee during (1) the
24first 60 days of disability leave, (2) the period, not to
25exceed one year, in which his or her eligibility for disability
26benefits is being considered by the board or reviewed by the



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1courts, and (3) the period he or she receives disability
2benefits under the provisions of Section 15-152, workers'
3compensation or occupational disease benefits, or disability
4income under an insurance contract financed wholly or partially
5by the employer.
6    (f) Absences without pay, other than formal leaves of
7absence, of less than 30 calendar days, are not considered as
8an interruption of a person's status as an employee. If such
9absences during any period of 12 months exceed 30 work days,
10the employee status of the person is considered as interrupted
11as of the 31st work day.
12    (g) A staff member whose employment contract requires
13services during an academic term is to be considered an
14employee during the summer and other vacation periods, unless
15he or she declines an employment contract for the succeeding
16academic term or his or her employment status is otherwise
17terminated, and he or she receives no earnings during these
19    (h) An individual who was a participating employee employed
20in the fire department of the University of Illinois's
21Champaign-Urbana campus immediately prior to the elimination
22of that fire department and who immediately after the
23elimination of that fire department became employed by the fire
24department of the City of Urbana or the City of Champaign shall
25continue to be considered as an employee for purposes of this
26Article for so long as the individual remains employed as a



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1firefighter by the City of Urbana or the City of Champaign. The
2individual shall cease to be considered an employee under this
3subsection (h) upon the first termination of the individual's
4employment as a firefighter by the City of Urbana or the City
5of Champaign.
6    (i) An individual who is employed on a full-time basis as
7an officer or employee of a statewide teacher organization that
8serves System participants or an officer of a national teacher
9organization that serves System participants may participate
10in the System and shall be deemed an employee, provided that
11(1) the individual has previously earned creditable service
12under this Article, (2) the individual files with the System an
13irrevocable election to become a participant before the
14effective date of this amendatory Act of the 97th General
15Assembly, (3) the individual does not receive credit for that
16employment under any other Article of this Code, and (4) the
17individual first became a full-time employee of the teacher
18organization and becomes a participant before the effective
19date of this amendatory Act of the 97th General Assembly. An
20employee under this subsection (i) is responsible for paying to
21the System both (A) employee contributions based on the actual
22compensation received for service with the teacher
23organization and (B) employer contributions equal to the normal
24costs (as defined in Section 15-155) resulting from that
25service; all or any part of these contributions may be paid on
26the employee's behalf or picked up for tax purposes (if



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1authorized under federal law) by the teacher organization.
2    A person who is an employee as defined in this subsection
3(i) may establish service credit for similar employment prior
4to becoming an employee under this subsection by paying to the
5System for that employment the contributions specified in this
6subsection, plus interest at the effective rate from the date
7of service to the date of payment. However, credit shall not be
8granted under this subsection for any such prior employment for
9which the applicant received credit under any other provision
10of this Code, or during which the applicant was on a leave of
11absence under Section 15-113.2.
12    (j) A person employed by the State Board of Higher
13Education in a position with the Illinois Century Network as of
14June 30, 2004 shall be considered to be an employee for so long
15as he or she remains continuously employed after that date by
16the Department of Central Management Services in a position
17with the Illinois Century Network, the Bureau of Communication
18and Computer Services, or, if applicable, any successor bureau
19and meets the requirements of subsection (a).
20    (k) In the case of doubt as to whether any person is an
21employee within the meaning of this Section or any rule adopted
22by the Board, the decision of the Board shall be final.
23(Source: P.A. 97-651, eff. 1-5-12.)
24    (40 ILCS 5/15-110)  (from Ch. 108 1/2, par. 15-110)
25    Sec. 15-110. Basic compensation. "Basic compensation":



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1Subject to Section 15-111.5, the The gross basic rate of salary
2or wages payable by an employer, including:
3        (1) the value of maintenance, board, living quarters,
4    personal laundry, or other allowances furnished in lieu of
5    salary which are considered gross income under the federal
6    Federal Internal Revenue Code of 1986, as amended; ,
7        (2) the employee contributions required under Section
8    15-157; , and
9        (3) the amount paid by any employer to a custodial
10    account for investment in regulated investment company
11    stocks for the benefit of the employee pursuant to the
12    University Employees Custodial Accounts Act; "An Act in
13    relation to payments to custodial accounts for the benefit
14    of employees of public institutions of higher education",
15    approved September 9, 1983, and
16        (4) the amount of the premium payable by any employer
17    to an insurance company or companies on an annuity
18    contract, pursuant to the employee's election to accept a
19    reduction in earnings or forego an increase in earnings
20    under Section 30c of the State Finance Act "An Act in
21    relation to State Finance," approved June 10, 1919, as
22    amended, or a tax-sheltered annuity plan approved by any
23    employer; and
24        (5) the amount of any elective deferral to a deferred
25    compensation plan established under Article 24 of this Code
26    pursuant to Section 457(b) of the federal Internal Revenue



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1    Code of 1986, as amended.
2    Basic compensation does not include (1) salary or wages for
3overtime or other extra service; (2) prospective salary or
4wages under a summer teaching contract not yet entered upon;
5and (3) overseas differential allowances, quarters allowances,
6post allowances, educational allowances and transportation
7allowances paid by an employer under a contract with the
8federal government or its agencies for services rendered in
9other countries. If an employee elects to receive in lieu of
10cash salary or wages, fringe benefits which are not taxable
11under the federal Federal Internal Revenue Code of 1986, as
12amended, the amount of the cash salary or wages which is waived
13shall be included in determining basic compensation.
14(Source: P.A. 84-1308.)
15    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
16    (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18    Sec. 15-111. Earnings.
19    (a) "Earnings": Subject to Section 15-111.5, an An amount
20paid for personal services equal to the sum of the basic
21compensation plus extra compensation for summer teaching,
22overtime or other extra service. For periods for which an
23employee receives service credit under subsection (c) of
24Section 15-113.1 or Section 15-113.2, earnings are equal to the
25basic compensation on which contributions are paid by the



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1employee during such periods. Compensation for employment
2which is irregular, intermittent and temporary shall not be
3considered earnings, unless the participant is also receiving
4earnings from the employer as an employee under Section 15-107.
5    With respect to transition pay paid by the University of
6Illinois to a person who was a participating employee employed
7in the fire department of the University of Illinois's
8Champaign-Urbana campus immediately prior to the elimination
9of that fire department:
10        (1) "Earnings" includes transition pay paid to the
11    employee on or after the effective date of this amendatory
12    Act of the 91st General Assembly.
13        (2) "Earnings" includes transition pay paid to the
14    employee before the effective date of this amendatory Act
15    of the 91st General Assembly only if (i) employee
16    contributions under Section 15-157 have been withheld from
17    that transition pay or (ii) the employee pays to the System
18    before January 1, 2001 an amount representing employee
19    contributions under Section 15-157 on that transition pay.
20    Employee contributions under item (ii) may be paid in a
21    lump sum, by withholding from additional transition pay
22    accruing before January 1, 2001, or in any other manner
23    approved by the System. Upon payment of the employee
24    contributions on transition pay, the corresponding
25    employer contributions become an obligation of the State.
26    (b) For a Tier 2 member, the annual earnings shall not



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1exceed $106,800; however, that amount shall annually
2thereafter be increased by the lesser of (i) 3% of that amount,
3including all previous adjustments, or (ii) one half the annual
4unadjusted percentage increase (but not less than zero) in the
5consumer price index-u for the 12 months ending with the
6September preceding each November 1, including all previous
8    For the purposes of this Section, "consumer price index u"
9means the index published by the Bureau of Labor Statistics of
10the United States Department of Labor that measures the average
11change in prices of goods and services purchased by all urban
12consumers, United States city average, all items, 1982-84 =
13100. The new amount resulting from each annual adjustment shall
14be determined by the Public Pension Division of the Department
15of Insurance and made available to the boards of the retirement
16systems and pension funds by November 1 of each year.
17    (c) With each submission of payroll information in the
18manner prescribed by the System, the employer shall certify
19that the payroll information is correct and complies with all
20applicable State and federal laws.
21(Source: P.A. 98-92, eff. 7-16-13.)
22    (40 ILCS 5/15-111.5 new)
23    Sec. 15-111.5. Basic compensation and earnings
24restrictions. For an employee who first becomes a participant
25on or after the effective date of this amendatory Act of the



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199th General Assembly, basic compensation under Section 15-110
2and earnings under Section 15-111 shall not include bonuses,
3housing allowances, vehicle allowances, or club memberships or
5    (40 ILCS 5/15-168)  (from Ch. 108 1/2, par. 15-168)
6    Sec. 15-168. To require information.
7    (a) To require such information as shall be necessary for
8the proper operation of the system from any participant or
9beneficiary or annuitant benefit recipient or from any current
10or former employer of a participant or annuitant. Such
11information may include, but is not limited to, employment
12contracts current or former participant.
13    (b) When the System submits a request for information under
14subsection (a) of this Section, the employer shall respond
15within 90 calendar days of the System's request. Beginning on
16the 91st calendar day after the System's request, the System
17may assess a penalty of $500 per calendar day until receipt of
18the information by the System, with a maximum penalty of
19$50,000. All payments must be received within one calendar year
20after receipt of the information by the System or one calendar
21year of reaching the maximum penalty of $50,000, whichever
22occurs earlier. If the employer fails to make complete payment
23within the applicable timeframe, then the System may, after
24giving notice to the employer, certify the delinquent amount to
25the State Comptroller, and the Comptroller shall thereupon



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1deduct the certified delinquent amount from State funds payable
2to the employer and pay them instead to the System.
3    (c) If a participant, beneficiary, or annuitant fails to
4provide any information that is necessary for the calculation,
5payment, or finalization of any benefit under this Article
6within 90 calendar days of the date of the System's request
7under subsection (a) of this Section, then the System may
8immediately cease processing the benefit and may not pay any
9additional benefit payment to the participant, beneficiary, or
10annuitant until the requested information is provided.
11(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
12    (40 ILCS 5/15-168.2)
13    Sec. 15-168.2. Audit of employers.
14    (a) Beginning August 1, 2013, the System may audit the
15employment records and payroll records of all employers. When
16the System audits an employer, it shall specify the exact
17information it requires, which may include but need not be
18limited to the names, titles, and earnings history of every
19individual receiving compensation from the employer. If an
20employer is audited by the System, then the employer must
21provide to the System all necessary documents and records
22within 60 calendar days after receiving notification from the
23System. When the System audits an employer, it shall send
24related correspondence by certified mail.
25    (b) When the System submits a request for information under



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1subsection (a) of this Section, the employer shall respond
2within 60 calendar days of the System's request. Beginning on
3the 61st calendar day after the System's request, the System
4may assess a penalty of $500 per calendar day until receipt of
5the information by the System, with a maximum penalty of
6$50,000. All payments must be received by the System within one
7calendar year after receipt of the information by the System or
8one calendar year after reaching the maximum penalty of
9$50,000, whichever occurs earlier. If the employer fails to
10make complete payment within the applicable timeframe, then the
11System may, after giving notice to the employer, certify the
12delinquent amount to the State Comptroller, and the Comptroller
13shall thereupon deduct the certified delinquent amount from
14State funds payable to the employer and pay them instead to the
16(Source: P.A. 97-968, eff. 8-16-12.)