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: | | |
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.
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| | FISCAL NOTE ACT MAY APPLY | PENSION IMPACT NOTE ACT MAY APPLY | STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT |
| | A BILL FOR |
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| | | SB2103 | | LRB102 12567 RPS 17905 b |
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| 1 | | AN ACT concerning public employee benefits.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Pension Code is amended by | 5 | | changing Section 15-202 as follows: | 6 | | (40 ILCS 5/15-202) | 7 | | Sec. 15-202. Optional defined contribution plan benefit . | 8 | | As soon as practicable after the effective date of this | 9 | | amendatory Act of the 100th General Assembly, the System shall | 10 | | offer a defined contribution plan benefit to active members of | 11 | | the System. The defined contribution plan benefit shall be an | 12 | | optional benefit to any member who chooses to participate. As | 13 | | soon as practicable after the effective date of this | 14 | | amendatory Act of the 102nd General Assembly, the defined | 15 | | contribution plan shall provide for one or more automatic | 16 | | contribution arrangements, at least one of which shall be an | 17 | | eligible automatic contribution arrangement that permits a | 18 | | withdrawal of default elective contributions in accordance | 19 | | with Section 414(w) of the Internal Revenue Code of 1986, as | 20 | | amended, and United States Department of Treasury regulations | 21 | | promulgated thereunder. The defined contribution plan benefit | 22 | | shall collect optional employee and optional employer | 23 | | contributions into an account and shall offer investment |
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| 1 | | options to the participant. The plan benefit under this | 2 | | Section shall be operated in full compliance with any | 3 | | applicable State and federal laws, and the System shall | 4 | | utilize generally accepted practices in creating and | 5 | | maintaining the plan benefit for the best interest of the | 6 | | participants. The System may use funds from the employee and | 7 | | employer contributions to defray any and all costs of creating | 8 | | and maintaining the plan benefit . The System shall produce an | 9 | | annual report on the participation in the plan benefit and | 10 | | shall make the report public.
| 11 | | (Source: P.A. 100-769, eff. 8-10-18.) | 12 | | Section 10. The Illinois Pension Code is amended by | 13 | | changing 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 | 16 | | the separation benefits shall be the sum of the employee's
| 17 | | accumulated normal, survivor and additional contributions , | 18 | | plus interest credited to the end of the preceding calendar | 19 | | year for contributions made under paragraph (2) of subsection | 20 | | (a) of Section 7-173, to the extent permitted by the federal | 21 | | Internal 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)
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| 1 | | Sec. 7-173. Contributions by employees.
| 2 | | (a) Each participating employee shall make contributions | 3 | | to 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 |
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| 1 | | corresponding payment
of earnings paid to each employee and | 2 | | shall be remitted to the board by
the participating | 3 | | municipality or participating instrumentality making
such | 4 | | payment. The remittance, together with a report of the | 5 | | earnings
and contributions shall be made as directed by the | 6 | | board. For township
treasurers and employees of township | 7 | | treasurers qualifying as employees
hereunder, the | 8 | | contributions herein required as deductions from salary
shall | 9 | | be withheld by the school township trustees from funds | 10 | | available
for the payment of the compensation of such | 11 | | treasurers and employees as
provided in the School Code and | 12 | | remitted to the board.
| 13 | | (d) An employee who has made additional contributions | 14 | | under
paragraph (a)2 of this Section may upon retirement or at | 15 | | any time prior
thereto, elect to withdraw the total of such | 16 | | additional contributions
including interest credited thereon | 17 | | to the end of the preceding calendar
year, to the extent | 18 | | permitted by the federal Internal Revenue Code of 1986, as now | 19 | | or hereafter amended. The Board has the ability to limit the | 20 | | number of such withdrawals permitted to an amount not less | 21 | | than once per calendar year and to charge an administrative | 22 | | fee to cover the costs of processing such withdrawals.
| 23 | | (e) Failure to make the deductions for employee | 24 | | contributions
provided in paragraph (c) of this Section shall | 25 | | not relieve the employee
from liability for such | 26 | | contributions. The amount of such liability may
be deducted, |
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| 1 | | with interest charged under Section 7-209, from any
annuities | 2 | | or benefits payable hereunder to the employee or any other
| 3 | | person receiving an annuity or benefit by reason of such | 4 | | employee's
participation.
| 5 | | (f) A participating employee who has at least 40 years of | 6 | | creditable
service in the Fund may elect to cease making the | 7 | | contributions required
under this Section. The status of the | 8 | | employee under this Article shall be
unaffected by this | 9 | | election, except that the employee shall not receive any
| 10 | | additional creditable service for the periods of employment | 11 | | following the
election. An election under this subsection | 12 | | relieves the employer from
making additional employer | 13 | | contributions in relation to that employee.
| 14 | | (Source: P.A. 97-333, eff. 8-12-11; 97-933, eff. 8-10-12; | 15 | | 98-218, eff. 8-9-13.)
| 16 | | (40 ILCS 5/24-105.2) | 17 | | Sec. 24-105.2. Automatic enrollment for certain members. | 18 | | The Department of Central Management Services shall | 19 | | automatically enroll in the State Employees Deferred | 20 | | Compensation Plan any employee who, on or after July 1, 2020 ( 6 | 21 | | months after the effective date of Public Act 101-277) this | 22 | | amendatory Act of the 101st General Assembly , first becomes a | 23 | | member or participant of a retirement system created under | 24 | | Article 2, 14, or 18 and shall automatically enroll in the | 25 | | State Employees Deferred Compensation Plan any employee who is |
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| 1 | | a member under a retirement system or pension fund created | 2 | | under Article 14, 16, or 17, regardless of when the employee | 3 | | first became a member under that Article . An employee | 4 | | automatically enrolled under this Section shall have 3% of his | 5 | | or her pre-tax gross compensation for each compensation period | 6 | | deferred into his or her deferred compensation account. | 7 | | An employee shall have 30 days from the start date of | 8 | | employment to elect to not participate in the deferred | 9 | | compensation plan or to elect to increase or reduce the amount | 10 | | of pre-tax gross compensation deferred. An employee shall be | 11 | | automatically enrolled in the Plan beginning the first day of | 12 | | the pay period following the employee's thirtieth day of | 13 | | employment or the pay period following the effective date of | 14 | | this amendatory Act of the 102nd General Assembly if the | 15 | | employee is a member under Article 14, 16, or 17 on the | 16 | | effective date of this amendatory Act of the 102nd General | 17 | | Assembly . An employee who has been automatically enrolled in | 18 | | the Plan may elect, within 90 days of enrollment, to withdraw | 19 | | from the Plan and receive a refund of amounts deferred. An | 20 | | employee making such an election shall forfeit all employer | 21 | | matching contributions, if any, made prior to the election. | 22 | | Any refunded amount shall be included in the employee's gross | 23 | | income 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 |
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| 1 | | Section 8.45 as follows: | 2 | | (30 ILCS 805/8.45 new) | 3 | | Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and | 4 | | 8 of this Act, no reimbursement by the State is required for | 5 | | the implementation of any mandate created by this amendatory | 6 | | Act of the 102nd General Assembly.
| 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law, except that Sections 10 and 90 take effect | 9 | | January 1, 2022.
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INDEX
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Statutes amended in order of appearance
| | 3 | | 40 ILCS 5/15-202 | | | 4 | | 40 ILCS 5/7-168 | from Ch. 108 1/2, par. 7-168 | | 5 | | 40 ILCS 5/7-173 | from Ch. 108 1/2, par. 7-173 | | 6 | | 40 ILCS 5/24-105.2 | | | 7 | | 30 ILCS 805/8.45 new | |
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