Illinois General Assembly - Full Text of SB2103
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Full Text of SB2103  102nd General Assembly

SB2103 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2103

 

Introduced 2/26/2021, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Pension Code. In the State Universities Article, provides that the optional defined contribution plan shall provide for one or more automatic contribution arrangements, at least one of which shall be an eligible automatic contribution arrangement that permits a withdrawal of default elective contributions in accordance with a specified provision of the Internal Revenue Code of 1986. In the Illinois Municipal Retirement Fund (IMRF) Article, provides that the amount of the separation benefit shall include interest credited to the end of the preceding calendar year for contributions made under provisions authorizing employees to make additional contributions for retirement annuity purposes. Provides that employees who first participate in the Fund on or after 6 months after the effective date of the amendatory Act shall automatically contribute 3% of each payment of earnings as additional contributions for retirement annuity purposes. Provides that employees may change such contributions to an amount not to exceed 10% of each payment of earnings at any time. Provides that the Board may limit the number of withdrawals of those additional contributions to an amount not less than once per calendar year and may charge an administrative fee. In the Deferred Compensation Article, provides for automatic enrollment of any employee who is a member under the State Employee, Downstate Teacher, or Chicago Teacher Article, regardless of when the employee first became a member under that Article. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that the changes to the IMRF and Deferred Compensation Articles of the Illinois Pension Code and to the State Mandates Act take effect January 1, 2022.


LRB102 12567 RPS 17905 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

SB2103LRB102 12567 RPS 17905 b

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
5changing Section 15-202 as follows:
 
6    (40 ILCS 5/15-202)
7    Sec. 15-202. Optional defined contribution plan benefit.
8As soon as practicable after the effective date of this
9amendatory Act of the 100th General Assembly, the System shall
10offer a defined contribution plan benefit to active members of
11the System. The defined contribution plan benefit shall be an
12optional benefit to any member who chooses to participate. As
13soon as practicable after the effective date of this
14amendatory Act of the 102nd General Assembly, the defined
15contribution plan shall provide for one or more automatic
16contribution arrangements, at least one of which shall be an
17eligible automatic contribution arrangement that permits a
18withdrawal of default elective contributions in accordance
19with Section 414(w) of the Internal Revenue Code of 1986, as
20amended, and United States Department of Treasury regulations
21promulgated thereunder. The defined contribution plan benefit
22shall collect optional employee and optional employer
23contributions into an account and shall offer investment

 

 

SB2103- 2 -LRB102 12567 RPS 17905 b

1options to the participant. The plan benefit under this
2Section shall be operated in full compliance with any
3applicable State and federal laws, and the System shall
4utilize generally accepted practices in creating and
5maintaining the plan benefit for the best interest of the
6participants. The System may use funds from the employee and
7employer contributions to defray any and all costs of creating
8and maintaining the plan benefit. The System shall produce an
9annual report on the participation in the plan benefit and
10shall make the report public.
11(Source: P.A. 100-769, eff. 8-10-18.)
 
12    Section 10. The Illinois Pension Code is amended by
13changing Sections 7-168, 7-173, and 24-105.2 as follows:
 
14    (40 ILCS 5/7-168)  (from Ch. 108 1/2, par. 7-168)
15    Sec. 7-168. Separation benefits - Amount. The amount of
16the separation benefits shall be the sum of the employee's
17accumulated normal, survivor and additional contributions,
18plus interest credited to the end of the preceding calendar
19year for contributions made under paragraph (2) of subsection
20(a) of Section 7-173, to the extent permitted by the federal
21Internal Revenue Code of 1986, as now or hereafter amended.
22(Source: P.A. 87-740.)
 
23    (40 ILCS 5/7-173)  (from Ch. 108 1/2, par. 7-173)

 

 

SB2103- 3 -LRB102 12567 RPS 17905 b

1    Sec. 7-173. Contributions by employees.
2    (a) Each participating employee shall make contributions
3to the fund as follows:
4        1. For retirement annuity purposes, normal
5    contributions of 3 3/4% of earnings.
6        2. Additional contributions of such percentages of
7    each payment of earnings, as shall be elected by the
8    employee for retirement annuity purposes, but not in
9    excess of 10%. The selected rate shall be applicable to
10    all earnings paid following receipt by the Board of
11    written notice of election to make such contributions.
12    Additional contributions at the selected rate shall be
13    made concurrently with normal contributions.
14        Employees who first participate in the Fund on or
15    after 6 months after the effective date of this amendatory
16    Act of the 102nd General Assembly shall automatically
17    contribute 3% of each payment of earnings as additional
18    contributions for retirement annuity purposes beginning
19    immediately upon enrollment in the Fund as a participating
20    employee. Employees may change such contributions to an
21    amount not to exceed 10% of each payment of earnings at any
22    time by written notice to the Board.
23        3. Survivor contributions, by each participating
24    employee, of 3/4% of each payment of earnings.
25    (b) (Blank).
26    (c) Contributions shall be deducted from each

 

 

SB2103- 4 -LRB102 12567 RPS 17905 b

1corresponding payment of earnings paid to each employee and
2shall be remitted to the board by the participating
3municipality or participating instrumentality making such
4payment. The remittance, together with a report of the
5earnings and contributions shall be made as directed by the
6board. For township treasurers and employees of township
7treasurers qualifying as employees hereunder, the
8contributions herein required as deductions from salary shall
9be withheld by the school township trustees from funds
10available for the payment of the compensation of such
11treasurers and employees as provided in the School Code and
12remitted to the board.
13    (d) An employee who has made additional contributions
14under paragraph (a)2 of this Section may upon retirement or at
15any time prior thereto, elect to withdraw the total of such
16additional contributions including interest credited thereon
17to the end of the preceding calendar year, to the extent
18permitted by the federal Internal Revenue Code of 1986, as now
19or hereafter amended. The Board has the ability to limit the
20number of such withdrawals permitted to an amount not less
21than once per calendar year and to charge an administrative
22fee to cover the costs of processing such withdrawals.
23    (e) Failure to make the deductions for employee
24contributions provided in paragraph (c) of this Section shall
25not relieve the employee from liability for such
26contributions. The amount of such liability may be deducted,

 

 

SB2103- 5 -LRB102 12567 RPS 17905 b

1with interest charged under Section 7-209, from any annuities
2or benefits payable hereunder to the employee or any other
3person receiving an annuity or benefit by reason of such
4employee's participation.
5    (f) A participating employee who has at least 40 years of
6creditable service in the Fund may elect to cease making the
7contributions required under this Section. The status of the
8employee under this Article shall be unaffected by this
9election, except that the employee shall not receive any
10additional creditable service for the periods of employment
11following the election. An election under this subsection
12relieves the employer from making additional employer
13contributions in relation to that employee.
14(Source: P.A. 97-333, eff. 8-12-11; 97-933, eff. 8-10-12;
1598-218, eff. 8-9-13.)
 
16    (40 ILCS 5/24-105.2)
17    Sec. 24-105.2. Automatic enrollment for certain members.
18The Department of Central Management Services shall
19automatically enroll in the State Employees Deferred
20Compensation Plan any employee who, on or after July 1, 2020 (6
21months after the effective date of Public Act 101-277) this
22amendatory Act of the 101st General Assembly, first becomes a
23member or participant of a retirement system created under
24Article 2, 14, or 18 and shall automatically enroll in the
25State Employees Deferred Compensation Plan any employee who is

 

 

SB2103- 6 -LRB102 12567 RPS 17905 b

1a member under a retirement system or pension fund created
2under Article 14, 16, or 17, regardless of when the employee
3first became a member under that Article. An employee
4automatically enrolled under this Section shall have 3% of his
5or her pre-tax gross compensation for each compensation period
6deferred into his or her deferred compensation account.
7    An employee shall have 30 days from the start date of
8employment to elect to not participate in the deferred
9compensation plan or to elect to increase or reduce the amount
10of pre-tax gross compensation deferred. An employee shall be
11automatically enrolled in the Plan beginning the first day of
12the pay period following the employee's thirtieth day of
13employment or the pay period following the effective date of
14this amendatory Act of the 102nd General Assembly if the
15employee is a member under Article 14, 16, or 17 on the
16effective date of this amendatory Act of the 102nd General
17Assembly. An employee who has been automatically enrolled in
18the Plan may elect, within 90 days of enrollment, to withdraw
19from the Plan and receive a refund of amounts deferred. An
20employee making such an election shall forfeit all employer
21matching contributions, if any, made prior to the election.
22Any refunded amount shall be included in the employee's gross
23income for the taxable year in which the refund is issued.
24(Source: P.A. 101-277, eff. 1-1-20.)
 
25    Section 90. The State Mandates Act is amended by adding

 

 

SB2103- 7 -LRB102 12567 RPS 17905 b

1Section 8.45 as follows:
 
2    (30 ILCS 805/8.45 new)
3    Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and
48 of this Act, no reimbursement by the State is required for
5the implementation of any mandate created by this amendatory
6Act of the 102nd General Assembly.
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law, except that Sections 10 and 90 take effect
9January 1, 2022.

 

 

SB2103- 8 -LRB102 12567 RPS 17905 b

1 INDEX
2 Statutes amended in order of appearance
3    40 ILCS 5/15-202
4    40 ILCS 5/7-168from Ch. 108 1/2, par. 7-168
5    40 ILCS 5/7-173from Ch. 108 1/2, par. 7-173
6    40 ILCS 5/24-105.2
7    30 ILCS 805/8.45 new