Illinois General Assembly - Full Text of SB2954
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Full Text of SB2954  100th General Assembly

SB2954sam001 100TH GENERAL ASSEMBLY

Sen. Omar Aquino

Filed: 4/11/2018

 

 


 

 


 
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AMENDMENT TO SENATE BILL 2954

2    AMENDMENT NO. ______. Amend Senate Bill 2954 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Section 15-155 as follows:
 
6    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
7    Sec. 15-155. Employer contributions.
8    (a) The State of Illinois shall make contributions by
9appropriations of amounts which, together with the other
10employer contributions from trust, federal, and other funds,
11employee contributions, income from investments, and other
12income of this System, will be sufficient to meet the cost of
13maintaining and administering the System on a 90% funded basis
14in accordance with actuarial recommendations.
15    The Board shall determine the amount of State contributions
16required for each fiscal year on the basis of the actuarial

 

 

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1tables and other assumptions adopted by the Board and the
2recommendations of the actuary, using the formula in subsection
3(a-1).
4    (a-1) For State fiscal years 2012 through 2045, the minimum
5contribution to the System to be made by the State for each
6fiscal year shall be an amount determined by the System to be
7sufficient to bring the total assets of the System up to 90% of
8the total actuarial liabilities of the System by the end of
9State fiscal year 2045. In making these determinations, the
10required State contribution shall be calculated each year as a
11level percentage of payroll over the years remaining to and
12including fiscal year 2045 and shall be determined under the
13projected unit credit actuarial cost method.
14    For each of State fiscal years 2018, 2019, and 2020, the
15State shall make an additional contribution to the System equal
16to 2% of the total payroll of each employee who is deemed to
17have elected the benefits under Section 1-161 or who has made
18the election under subsection (c) of Section 1-161.
19    A change in an actuarial or investment assumption that
20increases or decreases the required State contribution and
21first applies in State fiscal year 2018 or thereafter shall be
22implemented in equal annual amounts over a 5-year period
23beginning in the State fiscal year in which the actuarial
24change first applies to the required State contribution.
25    A change in an actuarial or investment assumption that
26increases or decreases the required State contribution and

 

 

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1first applied to the State contribution in fiscal year 2014,
22015, 2016, or 2017 shall be implemented:
3        (i) as already applied in State fiscal years before
4    2018; and
5        (ii) in the portion of the 5-year period beginning in
6    the State fiscal year in which the actuarial change first
7    applied that occurs in State fiscal year 2018 or
8    thereafter, by calculating the change in equal annual
9    amounts over that 5-year period and then implementing it at
10    the resulting annual rate in each of the remaining fiscal
11    years in that 5-year period.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2006 is
19$166,641,900.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2007 is
22$252,064,100.
23    For each of State fiscal years 2008 through 2009, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26from the required State contribution for State fiscal year

 

 

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12007, so that by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2010 is
5$702,514,000 and shall be made from the State Pensions Fund and
6proceeds of bonds sold in fiscal year 2010 pursuant to Section
77.2 of the General Obligation Bond Act, less (i) the pro rata
8share of bond sale expenses determined by the System's share of
9total bond proceeds, (ii) any amounts received from the General
10Revenue Fund in fiscal year 2010, (iii) any reduction in bond
11proceeds due to the issuance of discounted bonds, if
12applicable.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2011 is
15the amount recertified by the System on or before April 1, 2011
16pursuant to Section 15-165 and shall be made from the State
17Pensions Fund and proceeds of bonds sold in fiscal year 2011
18pursuant to Section 7.2 of the General Obligation Bond Act,
19less (i) the pro rata share of bond sale expenses determined by
20the System's share of total bond proceeds, (ii) any amounts
21received from the General Revenue Fund in fiscal year 2011, and
22(iii) any reduction in bond proceeds due to the issuance of
23discounted bonds, if applicable.
24    Beginning in State fiscal year 2046, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 90% of the total

 

 

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1actuarial liabilities of the System.
2    Amounts received by the System pursuant to Section 25 of
3the Budget Stabilization Act or Section 8.12 of the State
4Finance Act in any fiscal year do not reduce and do not
5constitute payment of any portion of the minimum State
6contribution required under this Article in that fiscal year.
7Such amounts shall not reduce, and shall not be included in the
8calculation of, the required State contributions under this
9Article in any future year until the System has reached a
10funding ratio of at least 90%. A reference in this Article to
11the "required State contribution" or any substantially similar
12term does not include or apply to any amounts payable to the
13System under Section 25 of the Budget Stabilization Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter, as calculated
17under this Section and certified under Section 15-165, shall
18not exceed an amount equal to (i) the amount of the required
19State contribution that would have been calculated under this
20Section for that fiscal year if the System had not received any
21payments under subsection (d) of Section 7.2 of the General
22Obligation Bond Act, minus (ii) the portion of the State's
23total debt service payments for that fiscal year on the bonds
24issued in fiscal year 2003 for the purposes of that Section
257.2, as determined and certified by the Comptroller, that is
26the same as the System's portion of the total moneys

 

 

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1distributed under subsection (d) of Section 7.2 of the General
2Obligation Bond Act. In determining this maximum for State
3fiscal years 2008 through 2010, however, the amount referred to
4in item (i) shall be increased, as a percentage of the
5applicable employee payroll, in equal increments calculated
6from the sum of the required State contribution for State
7fiscal year 2007 plus the applicable portion of the State's
8total debt service payments for fiscal year 2007 on the bonds
9issued in fiscal year 2003 for the purposes of Section 7.2 of
10the General Obligation Bond Act, so that, by State fiscal year
112011, the State is contributing at the rate otherwise required
12under this Section.
13    (a-2) Beginning in fiscal year 2018, each employer under
14this Article shall pay to the System a required contribution
15determined as a percentage of projected payroll and sufficient
16to produce an annual amount equal to:
17        (i) for each of fiscal years 2018, 2019, and 2020, the
18    defined benefit normal cost of the defined benefit plan,
19    less the employee contribution, for each employee of that
20    employer who has elected or who is deemed to have elected
21    the benefits under Section 1-161 or who has made the
22    election under subsection (c) of Section 1-161; for fiscal
23    year 2021 and each fiscal year thereafter, the defined
24    benefit normal cost of the defined benefit plan, less the
25    employee contribution, plus 2%, for each employee of that
26    employer who has elected or who is deemed to have elected

 

 

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1    the benefits under Section 1-161 or who has made the
2    election under subsection (c) of Section 1-161; plus
3        (ii) the amount required for that fiscal year to
4    amortize any unfunded actuarial accrued liability
5    associated with the present value of liabilities
6    attributable to the employer's account under Section
7    15-155.2, determined as a level percentage of payroll over
8    a 30-year rolling amortization period.
9    In determining contributions required under item (i) of
10this subsection, the System shall determine an aggregate rate
11for all employers, expressed as a percentage of projected
12payroll.
13    In determining the contributions required under item (ii)
14of this subsection, the amount shall be computed by the System
15on the basis of the actuarial assumptions and tables used in
16the most recent actuarial valuation of the System that is
17available at the time of the computation.
18    The contributions required under this subsection (a-2)
19shall be paid by an employer concurrently with that employer's
20payroll payment period. The State, as the actual employer of an
21employee, shall make the required contributions under this
22subsection.
23    As used in this subsection, "academic year" means the
2412-month period beginning September 1.
25    (b) If an employee is paid from trust or federal funds, the
26employer shall pay to the Board contributions from those funds

 

 

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1which are sufficient to cover the accruing normal costs on
2behalf of the employee. However, universities having employees
3who are compensated out of local auxiliary funds, income funds,
4or service enterprise funds are not required to pay such
5contributions on behalf of those employees. The local auxiliary
6funds, income funds, and service enterprise funds of
7universities shall not be considered trust funds for the
8purpose of this Article, but funds of alumni associations,
9foundations, and athletic associations which are affiliated
10with the universities included as employers under this Article
11and other employers which do not receive State appropriations
12are considered to be trust funds for the purpose of this
13Article.
14    (b-1) The City of Urbana and the City of Champaign shall
15each make employer contributions to this System for their
16respective firefighter employees who participate in this
17System pursuant to subsection (h) of Section 15-107. The rate
18of contributions to be made by those municipalities shall be
19determined annually by the Board on the basis of the actuarial
20assumptions adopted by the Board and the recommendations of the
21actuary, and shall be expressed as a percentage of salary for
22each such employee. The Board shall certify the rate to the
23affected municipalities as soon as may be practical. The
24employer contributions required under this subsection shall be
25remitted by the municipality to the System at the same time and
26in the same manner as employee contributions.

 

 

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1    (c) Through State fiscal year 1995: The total employer
2contribution shall be apportioned among the various funds of
3the State and other employers, whether trust, federal, or other
4funds, in accordance with actuarial procedures approved by the
5Board. State of Illinois contributions for employers receiving
6State appropriations for personal services shall be payable
7from appropriations made to the employers or to the System. The
8contributions for Class I community colleges covering earnings
9other than those paid from trust and federal funds, shall be
10payable solely from appropriations to the Illinois Community
11College Board or the System for employer contributions.
12    (d) Beginning in State fiscal year 1996, the required State
13contributions to the System shall be appropriated directly to
14the System and shall be payable through vouchers issued in
15accordance with subsection (c) of Section 15-165, except as
16provided in subsection (g).
17    (e) The State Comptroller shall draw warrants payable to
18the System upon proper certification by the System or by the
19employer in accordance with the appropriation laws and this
20Code.
21    (f) Normal costs under this Section means liability for
22pensions and other benefits which accrues to the System because
23of the credits earned for service rendered by the participants
24during the fiscal year and expenses of administering the
25System, but shall not include the principal of or any
26redemption premium or interest on any bonds issued by the Board

 

 

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

 

 

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1employer asserts that the calculation is subject to subsection
2(h) or (i) of this Section, must include an affidavit setting
3forth and attesting to all facts within the employer's
4knowledge that are pertinent to the applicability of subsection
5(h) or (i). Upon receiving a timely application for
6recalculation, the System shall review the application and, if
7appropriate, recalculate the amount due.
8    The employer contributions required under this subsection
9(g) may be paid in the form of a lump sum within 90 days after
10receipt of the bill. If the employer contributions are not paid
11within 90 days after receipt of the bill, then interest will be
12charged at a rate equal to the System's annual actuarially
13assumed rate of return on investment compounded annually from
14the 91st day after receipt of the bill. Payments must be
15concluded within 3 years after the employer's receipt of the
16bill.
17    When assessing payment for any amount due under this
18subsection (g), the System shall include earnings, to the
19extent not established by a participant under Section 15-113.11
20or 15-113.12, that would have been paid to the participant had
21the participant not taken (i) periods of voluntary or
22involuntary furlough occurring on or after July 1, 2015 and on
23or before June 30, 2017 or (ii) periods of voluntary pay
24reduction in lieu of furlough occurring on or after July 1,
252015 and on or before June 30, 2017. Determining earnings that
26would have been paid to a participant had the participant not

 

 

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1taken periods of voluntary or involuntary furlough or periods
2of voluntary pay reduction shall be the responsibility of the
3employer, and shall be reported in a manner prescribed by the
4System.
5    (h) This subsection (h) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to
12participants under contracts or collective bargaining
13agreements entered into, amended, or renewed before June 1,
142005.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases paid to a
17participant at a time when the participant is 10 or more years
18from retirement eligibility under Section 15-135.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases resulting from
21overload work, including a contract for summer teaching, or
22overtime when the employer has certified to the System, and the
23System has approved the certification, that: (i) in the case of
24overloads (A) the overload work is for the sole purpose of
25academic instruction in excess of the standard number of
26instruction hours for a full-time employee occurring during the

 

 

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1academic year that the overload is paid and (B) the earnings
2increases are equal to or less than the rate of pay for
3academic instruction computed using the participant's current
4salary rate and work schedule; and (ii) in the case of
5overtime, the overtime was necessary for the educational
6mission.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude any earnings increase resulting
9from (i) a promotion for which the employee moves from one
10classification to a higher classification under the State
11Universities Civil Service System, (ii) a promotion in academic
12rank for a tenured or tenure-track faculty position, or (iii) a
13promotion that the Illinois Community College Board has
14recommended in accordance with subsection (k) of this Section.
15These earnings increases shall be excluded only if the
16promotion is to a position that has existed and been filled by
17a member for no less than one complete academic year and the
18earnings increase as a result of the promotion is an increase
19that results in an amount no greater than the average salary
20paid for other similar positions.
21    (i) When assessing payment for any amount due under
22subsection (g), the System shall exclude any salary increase
23described in subsection (h) of this Section given on or after
24July 1, 2011 but before July 1, 2014 under a contract or
25collective bargaining agreement entered into, amended, or
26renewed on or after June 1, 2005 but before July 1, 2011.

 

 

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1Notwithstanding any other provision of this Section, any
2payments made or salary increases given after June 30, 2014
3shall be used in assessing payment for any amount due under
4subsection (g) of this Section.
5    (j) The System shall prepare a report and file copies of
6the report with the Governor and the General Assembly by
7January 1, 2007 that contains all of the following information:
8        (1) The number of recalculations required by the
9    changes made to this Section by Public Act 94-1057 for each
10    employer.
11        (2) The dollar amount by which each employer's
12    contribution to the System was changed due to
13    recalculations required by Public Act 94-1057.
14        (3) The total amount the System received from each
15    employer as a result of the changes made to this Section by
16    Public Act 94-4.
17        (4) The increase in the required State contribution
18    resulting from the changes made to this Section by Public
19    Act 94-1057.
20    (j-5) For State fiscal academic years beginning on or after
21July 1, 2017, if the amount of a participant's earnings for any
22State fiscal school year, determined on a full-time equivalent
23basis, exceeds the amount of the salary set by law for the
24Governor that is in effect on July 1 of that fiscal year, the
25participant's employer shall pay to the System, in addition to
26all other payments required under this Section and in

 

 

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1accordance with guidelines established by the System, an amount
2determined by the System to be equal to the employer normal
3cost, as established by the System and expressed as a total
4percentage of payroll, multiplied by the amount of earnings in
5excess of the amount of the salary set by law for the Governor.
6This amount shall be computed by the System on the basis of the
7actuarial assumptions and tables used in the most recent
8actuarial valuation of the System that is available at the time
9of the computation. The System may require the employer to
10provide any pertinent information or documentation.
11    Whenever it determines that a payment is or may be required
12under this subsection, the System shall calculate the amount of
13the payment and bill the employer for that amount. The bill
14shall specify the calculation calculations used to determine
15the amount due. If the employer disputes the amount of the
16bill, it may, within 30 days after receipt of the bill, apply
17to the System in writing for a recalculation. The application
18must specify in detail the grounds of the dispute. Upon
19receiving a timely application for recalculation, the System
20shall review the application and, if appropriate, recalculate
21the amount due.
22    The employer contributions required under this subsection
23may be paid in the form of a lump sum within 90 days after
24issuance receipt of the bill. If the employer contributions are
25not paid within 90 days after issuance receipt of the bill,
26then interest will be charged at a rate equal to the System's

 

 

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1annual actuarially assumed rate of return on investment
2compounded annually from the 91st day after issuance receipt of
3the bill. All payments Payments must be received concluded
4within 3 years after issuance the employer's receipt of the
5bill. If the employer fails to make complete payment, including
6applicable interest, within 3 years, then the System may, after
7giving notice to the employer, certify the delinquent amount to
8the State Comptroller, and the Comptroller shall thereupon
9deduct the certified delinquent amount from State funds payable
10to the employer and pay them instead to the System.
11    This subsection (j-5) does not apply to a participant's
12earnings to the extent an employer pays the employer normal
13cost of such earnings.
14    The changes made to this subsection (j-5) by this
15amendatory Act of the 100th General Assembly are intended to
16apply retroactively to July 6, 2017 (the effective date of
17Public Act 100-23).
18    (k) The Illinois Community College Board shall adopt rules
19for recommending lists of promotional positions submitted to
20the Board by community colleges and for reviewing the
21promotional lists on an annual basis. When recommending
22promotional lists, the Board shall consider the similarity of
23the positions submitted to those positions recognized for State
24universities by the State Universities Civil Service System.
25The Illinois Community College Board shall file a copy of its
26findings with the System. The System shall consider the

 

 

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1findings of the Illinois Community College Board when making
2determinations under this Section. The System shall not exclude
3any earnings increases resulting from a promotion when the
4promotion was not submitted by a community college. Nothing in
5this subsection (k) shall require any community college to
6submit any information to the Community College Board.
7    (l) For purposes of determining the required State
8contribution to the System, the value of the System's assets
9shall be equal to the actuarial value of the System's assets,
10which shall be calculated as follows:
11    As of June 30, 2008, the actuarial value of the System's
12assets shall be equal to the market value of the assets as of
13that date. In determining the actuarial value of the System's
14assets for fiscal years after June 30, 2008, any actuarial
15gains or losses from investment return incurred in a fiscal
16year shall be recognized in equal annual amounts over the
175-year period following that fiscal year.
18    (m) For purposes of determining the required State
19contribution to the system for a particular year, the actuarial
20value of assets shall be assumed to earn a rate of return equal
21to the system's actuarially assumed rate of return.
22(Source: P.A. 99-897, eff. 1-1-17; 100-23, eff. 7-6-17.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.".