Full Text of SB0016 100th General Assembly
SB0016sam005 100TH GENERAL ASSEMBLY | Sen. John J. Cullerton Filed: 5/9/2017
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| 1 | | AMENDMENT TO SENATE BILL 16
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 16, AS AMENDED, in | 3 | | Section 45, by replacing all of Sec. 1-162 with the following:
| 4 | | "(40 ILCS 5/1-162 new) | 5 | | Sec. 1-162. Optional benefits for certain Tier 2 members of | 6 | | pension funds under Articles 8, 9, 10, 11, 12, and 17. | 7 | | (a) As used in this Section: | 8 | | "Affected pension fund" means a pension fund established | 9 | | under Article 8, 9, 10, 11, 12, or 17 that the governing body | 10 | | of the unit of local government has designated as an affected | 11 | | pension fund by adoption of a resolution or ordinance. | 12 | | "Resolution or ordinance date" means the date on which the | 13 | | governing body of the unit of local government designates a | 14 | | pension fund under Article 8, 9, 10, 11, 12, or 17 as an | 15 | | affected pension fund by adoption of a resolution or ordinance. | 16 | | (b) Notwithstanding any other provision of this Code to the | 17 | | contrary, the provisions of this Section apply to a person who |
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| 1 | | first becomes a member or a participant in an affected pension | 2 | | fund on or after 6 months after the resolution or ordinance | 3 | | date and who does not make the election under subsection (c). | 4 | | (c) In lieu of the benefits provided under this Section, a | 5 | | member or participant may irrevocably elect the benefits under | 6 | | Section 1-160 and the benefits otherwise applicable to that | 7 | | member or participant. The election must be made within 30 days | 8 | | after becoming a member or participant. Each affected pension | 9 | | fund shall establish procedures for making this election. | 10 | | (d) "Final average salary" means the average monthly (or | 11 | | annual) salary obtained by dividing the total salary or | 12 | | earnings calculated under the Article applicable to the member | 13 | | or participant during the last 120 months (or 10 years) of | 14 | | service in which the total salary or earnings calculated under | 15 | | the applicable Article was the highest by the number of months | 16 | | (or years) of service in that period. For the purposes of a | 17 | | person who first becomes a member or participant of an affected | 18 | | pension fund on or after 6 months after the ordinance or | 19 | | resolution date, in this Code, "final average salary" shall be | 20 | | substituted for the following: | 21 | | (1) In Articles 8, 9, 10, 11, and 12, "highest
average | 22 | | annual salary for any 4 consecutive years within the last | 23 | | 10 years of service immediately preceding the date of | 24 | | withdrawal". | 25 | | (2) In Article 17, "average salary". | 26 | | (e) Beginning 6 months after the resolution or ordinance |
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| 1 | | date, for all purposes under this Code (including without | 2 | | limitation the calculation of benefits and employee | 3 | | contributions), the annual earnings, salary, or wages (based on | 4 | | the plan year) of a member or participant to whom this Section | 5 | | applies shall not at any time exceed the federal Social | 6 | | Security Wage Base then in effect. | 7 | | (f) A member or participant is entitled to a retirement
| 8 | | annuity upon written application if he or she has attained the | 9 | | normal retirement age determined by the Social Security | 10 | | Administration for that member or participant's year of birth, | 11 | | but no earlier than 67 years of age, and has at least 10 years | 12 | | of service credit and is otherwise eligible under the | 13 | | requirements of the applicable Article. | 14 | | (g) The amount of the retirement annuity to which a member | 15 | | or participant is entitled shall be computed by multiplying | 16 | | 1.25% for each year of service credit by his or her final | 17 | | average salary. | 18 | | (h) Any retirement annuity or supplemental annuity shall be | 19 | | subject to annual increases on the first anniversary of the | 20 | | annuity start date. Each annual increase shall be one-half the | 21 | | annual unadjusted percentage increase (but not less than zero) | 22 | | in the consumer price index-w for the 12 months ending with the | 23 | | September preceding each November 1 of the originally granted | 24 | | retirement annuity. If the annual unadjusted percentage change | 25 | | in the consumer price index-w for the 12 months ending with the | 26 | | September preceding each November 1 is zero or there is a |
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| 1 | | decrease, then the annuity shall not be increased. | 2 | | For the purposes of this Section, "consumer price index-w" | 3 | | means the index published by the Bureau of Labor Statistics of | 4 | | the United States Department of Labor that measures the average | 5 | | change in prices of goods and services purchased by Urban Wage | 6 | | Earners and Clerical Workers, United States city average, all | 7 | | items, 1982-84 = 100. The new amount resulting from each annual | 8 | | adjustment shall be determined by the Public Pension Division | 9 | | of the Department of Insurance and made available to the boards | 10 | | of the retirement systems and pension funds by November 1 of | 11 | | each year. | 12 | | (i) The initial survivor's or widow's annuity of an | 13 | | otherwise eligible survivor or widow of a retired member or | 14 | | participant who first became a member or participant on or | 15 | | after 6 months after the resolution or ordinance date shall be | 16 | | in the amount of 66 2/3% of the retired member's or | 17 | | participant's retirement annuity at the date of death. In the | 18 | | case of the death of a member or participant who has not | 19 | | retired and who first became a member or participant on or | 20 | | after 6 months after the resolution or ordinance date, | 21 | | eligibility for a survivor's or widow's annuity shall be | 22 | | determined by the applicable Article of this Code. The benefit | 23 | | shall be 66 2/3% of the earned annuity without a reduction due | 24 | | to age. A child's annuity of an otherwise eligible child shall | 25 | | be in the amount prescribed under each Article if applicable. | 26 | | (j) In lieu of any other employee contributions, except for |
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| 1 | | the contribution to the defined contribution plan under | 2 | | subsection (k) of this Section, each employee shall contribute | 3 | | 6.2% of his her or salary to the affected pension fund. | 4 | | However, the employee contribution under this subsection shall | 5 | | not exceed the amount of the normal cost of the benefits under | 6 | | this Section (except for the defined contribution plan under | 7 | | subsection (k) of this Section), expressed as a percentage of | 8 | | payroll and determined on or before November 1 of each year by | 9 | | the board of trustees of the affected pension fund. If the | 10 | | board of trustees of the affected pension fund determines that | 11 | | the 6.2% employee contribution rate exceeds the normal cost of | 12 | | the benefits under this Section (except for the defined | 13 | | contribution plan under subsection (k) of this Section), then | 14 | | on or before December 1 of that year, the board of trustees | 15 | | shall certify the amount of the normal cost of the benefits | 16 | | under this Section (except for the defined contribution plan | 17 | | under subsection (k) of this Section), expressed as a | 18 | | percentage of payroll, to the State Actuary and the Commission | 19 | | on Government Forecasting and Accountability, and the employee | 20 | | contribution under this subsection shall be reduced to that | 21 | | amount beginning January 1 of the following year. Thereafter, | 22 | | if the normal cost of the benefits under this Section (except | 23 | | for the defined contribution plan under subsection (k) of this | 24 | | Section), expressed as a percentage of payroll and determined | 25 | | on or before November 1 of each year by the board of trustees | 26 | | of the affected pension fund, exceeds 6.2% of salary, then on |
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| 1 | | or before December 1 of that year, the board of trustees shall | 2 | | certify the normal cost to the State Actuary and the Commission | 3 | | on Government Forecasting and Accountability, and the employee | 4 | | contributions shall revert back to 6.2% of salary beginning | 5 | | January 1 of the following year. | 6 | | (k) No later than 5 months after the resolution or | 7 | | ordinance date, an affected pension fund shall prepare and | 8 | | implement a defined contribution plan for members or | 9 | | participants who are subject to this Section. The defined | 10 | | contribution plan developed under this subsection shall be a | 11 | | plan that aggregates employer and employee contributions in | 12 | | individual participant accounts which, after meeting any other | 13 | | requirements, are used for payouts after retirement in | 14 | | accordance with this subsection and any other applicable laws. | 15 | | (1) Each member or participant shall contribute a | 16 | | minimum of 4% of his or her salary to the defined | 17 | | contribution plan. | 18 | | (2) For each participant in the defined contribution | 19 | | plan who has been employed with the same employer for at | 20 | | least one year, employer contributions shall be paid into | 21 | | that participant's accounts at a rate expressed as a | 22 | | percentage of salary. This rate may be set for individual | 23 | | employees, but shall be no higher than 6% of salary and | 24 | | shall be no lower than 2% of salary. | 25 | | (3) Employer contributions shall vest when those | 26 | | contributions are paid into a member's or participant's |
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| 1 | | account. | 2 | | (4) The defined contribution plan shall provide a | 3 | | variety of options for investments. These options shall | 4 | | include investments handled by the Illinois State Board of | 5 | | Investment as well as private sector investment options. | 6 | | (5) The defined contribution plan shall provide a | 7 | | variety of options for payouts to retirees and their | 8 | | survivors. | 9 | | (6) To the extent authorized under federal law and as | 10 | | authorized by the affected pension fund, the defined | 11 | | contribution plan shall allow former participants in the | 12 | | plan to transfer or roll over employee and employer | 13 | | contributions, and the earnings thereon, into other | 14 | | qualified retirement plans. | 15 | | (7) Each affected pension fund shall reduce the | 16 | | employee contributions credited to the member's defined | 17 | | contribution plan account by an amount determined by that | 18 | | affected pension fund to cover the cost of offering the | 19 | | benefits under this subsection and any applicable | 20 | | administrative fees. | 21 | | (8) No person shall begin participating in the defined | 22 | | contribution plan until it has attained qualified plan | 23 | | status and received all necessary approvals from the U.S. | 24 | | Internal Revenue Service. | 25 | | (l) By accepting the benefits under this Section, a member | 26 | | or participant acknowledges and consents that benefits once |
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| 1 | | earned may not be diminished, but that future benefits may be | 2 | | modified, including, but not limited to, changes in the | 3 | | retirement age at which a member or participant becomes | 4 | | eligible to receive future benefits, changes in the amount of | 5 | | the automatic annual increase for those future benefits, or the | 6 | | amount of the retirement annuity. Any increase in benefits | 7 | | under this Section does not apply unless it is approved by | 8 | | resolution or ordinance of the governing body of the unit of | 9 | | local government with regard to the members or participants | 10 | | under that unit of local government. | 11 | | (m) In the case of a conflict between the provisions of | 12 | | this Section and any other provision of this Code, the | 13 | | provisions of this Section shall control. ".
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