Full Text of HB1371 98th General Assembly
HB1371 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB1371 Introduced 2/6/2013, by Rep. David Harris SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/3-125 | from Ch. 108 1/2, par. 3-125 |
40 ILCS 5/4-118 | from Ch. 108 1/2, par. 4-118 |
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Amends the Downstate Police and Firefighter Articles of the Illinois Pension Code. Delays by one year a procedure under which the Comptroller is required to divert certain State payments from the intended recipient to a pension fund when the intended recipient is more than 90 days overdue in making a required contribution to the pension fund. Effective immediately.
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| | FISCAL NOTE ACT MAY APPLY | | PENSION IMPACT NOTE ACT MAY APPLY |
| | A BILL FOR |
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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 changing | 5 | | Sections 3-125 and 4-118 as follows:
| 6 | | (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
| 7 | | Sec. 3-125. Financing. | 8 | | (a) The city council or the board of trustees of
the | 9 | | municipality shall annually levy a tax upon all
the taxable | 10 | | property of the municipality at the rate on the dollar which
| 11 | | will produce an amount which, when added to the deductions from | 12 | | the salaries
or wages of police officers, and revenues
| 13 | | available from other
sources, will equal a sum sufficient to | 14 | | meet
the annual requirements of the police pension fund. The | 15 | | annual
requirements to be provided by such tax levy are equal
| 16 | | to (1) the normal cost of the pension fund for the year | 17 | | involved, plus
(2) an amount sufficient to bring the total | 18 | | assets of the pension fund up to 90% of the total actuarial | 19 | | liabilities of the pension fund by the end of municipal fiscal | 20 | | year 2040, as annually updated and determined by an enrolled | 21 | | actuary employed by the Illinois Department of Insurance or by | 22 | | an enrolled actuary retained by the pension fund or the | 23 | | municipality. In making these determinations, the required |
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| 1 | | minimum employer contribution shall be calculated each year as | 2 | | a level percentage of payroll over the years remaining up to | 3 | | and including fiscal year 2040 and shall be determined under | 4 | | the projected unit credit actuarial cost method. The tax shall | 5 | | be levied and
collected in the same manner as the general taxes
| 6 | | of the municipality, and in addition to all other taxes now or | 7 | | hereafter authorized to
be levied upon all property within the | 8 | | municipality, and shall be in
addition to the amount authorized | 9 | | to be levied for general purposes as
provided by Section 8-3-1 | 10 | | of the Illinois Municipal Code, approved May
29, 1961, as | 11 | | amended. The tax shall be forwarded directly to the treasurer | 12 | | of the board within 30 business days after receipt by the | 13 | | county.
| 14 | | (b) For purposes of determining the required employer | 15 | | contribution to a pension fund, the value of the pension fund's | 16 | | assets shall be equal to the actuarial value of the pension | 17 | | fund's assets, which shall be calculated as follows: | 18 | | (1) On March 30, 2011, the actuarial value of a pension | 19 | | fund's assets shall be equal to the market value of the | 20 | | assets as of that date. | 21 | | (2) In determining the actuarial value of the System's | 22 | | assets for fiscal years after March 30, 2011, any actuarial | 23 | | gains or losses from investment return incurred in a fiscal | 24 | | year shall be recognized in equal annual amounts over the | 25 | | 5-year period following that fiscal year. | 26 | | (c) If a participating municipality fails to transmit to |
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| 1 | | the fund contributions required of it under this Article for | 2 | | more than 90 days after the payment of those contributions is | 3 | | due, the fund may, after giving notice to the municipality, | 4 | | certify to the State Comptroller the amounts of the delinquent | 5 | | payments, and the Comptroller must, beginning in fiscal year | 6 | | 2017 2016 , deduct and deposit into the fund the certified | 7 | | amounts or a portion of those amounts from the following | 8 | | proportions of grants of State funds to the municipality: | 9 | | (1) in fiscal year 2017 2016 , one-third of the total | 10 | | amount of any grants of State funds to the municipality; | 11 | | (2) in fiscal year 2018 2017 , two-thirds of the total | 12 | | amount of any grants of State funds to the municipality; | 13 | | and | 14 | | (3) in fiscal year 2019 2018 and each fiscal year | 15 | | thereafter, the total amount of any grants of State funds | 16 | | to the municipality. | 17 | | The State Comptroller may not deduct from any grants of | 18 | | State funds to the municipality more than the amount of | 19 | | delinquent payments certified to the State Comptroller by the | 20 | | fund. | 21 | | (d) The police pension fund shall consist of the following | 22 | | moneys which
shall be set apart by the treasurer of the | 23 | | municipality:
| 24 | | (1) All moneys derived from the taxes levied hereunder;
| 25 | | (2) Contributions by police officers under Section | 26 | | 3-125.1;
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| 1 | | (3) All moneys accumulated by the municipality under | 2 | | any previous
legislation establishing a fund for the | 3 | | benefit of disabled or retired
police officers;
| 4 | | (4) Donations, gifts or other transfers authorized by | 5 | | this
Article.
| 6 | | (e) The Commission on Government Forecasting and
| 7 | | Accountability shall conduct a study of all funds established
| 8 | | under this Article and shall report its findings to the General
| 9 | | Assembly on or before January 1, 2013. To the fullest extent | 10 | | possible, the study shall include, but not be limited to, the | 11 | | following: | 12 | | (1) fund balances; | 13 | | (2) historical employer contribution rates for each
| 14 | | fund; | 15 | | (3) the actuarial formulas used as a basis for employer
| 16 | | contributions, including the actual assumed rate of return
| 17 | | for each year, for each fund; | 18 | | (4) available contribution funding sources; | 19 | | (5) the impact of any revenue limitations caused by
| 20 | | PTELL and employer home rule or non-home rule status; and | 21 | | (6) existing statutory funding compliance procedures
| 22 | | and funding enforcement mechanisms for all municipal
| 23 | | pension funds. | 24 | | (Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
| 25 | | (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
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| 1 | | Sec. 4-118. Financing.
| 2 | | (a) The city council or the board of trustees
of the | 3 | | municipality shall annually levy a tax upon all the taxable | 4 | | property
of the municipality at the rate on the dollar which | 5 | | will produce an amount
which, when added to the deductions from | 6 | | the salaries or wages of
firefighters and revenues available | 7 | | from other sources, will equal a sum
sufficient to meet the | 8 | | annual actuarial requirements of the pension fund,
as | 9 | | determined by an enrolled actuary employed by the Illinois | 10 | | Department of
Insurance or by an enrolled actuary retained by | 11 | | the pension fund or
municipality. For the purposes of this | 12 | | Section, the annual actuarial
requirements of the pension fund | 13 | | are equal to (1) the normal cost of the
pension fund, or 17.5% | 14 | | of the salaries and wages to be paid to firefighters
for the | 15 | | year involved, whichever is greater, plus (2) an annual amount
| 16 | | sufficient to bring the total assets of the pension fund up to | 17 | | 90% of the total actuarial liabilities of the pension fund by | 18 | | the end of municipal fiscal year 2040, as annually updated and | 19 | | determined by an enrolled actuary employed by the Illinois | 20 | | Department of Insurance or by an enrolled actuary retained by | 21 | | the pension fund or the municipality. In making these | 22 | | determinations, the required minimum employer contribution | 23 | | shall be calculated each year as a level percentage of payroll | 24 | | over the years remaining up to and including fiscal year 2040 | 25 | | and shall be determined under the projected unit credit | 26 | | actuarial cost method. The amount
to be applied towards the |
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| 1 | | amortization of the unfunded accrued liability in any
year | 2 | | shall not be less than the annual amount required to amortize | 3 | | the unfunded
accrued liability, including interest, as a level | 4 | | percentage of payroll over
the number of years remaining in the | 5 | | 40 year amortization period.
| 6 | | (a-5) For purposes of determining the required employer | 7 | | contribution to a pension fund, the value of the pension fund's | 8 | | assets shall be equal to the actuarial value of the pension | 9 | | fund's assets, which shall be calculated as follows: | 10 | | (1) On March 30, 2011, the actuarial value of a pension | 11 | | fund's assets shall be equal to the market value of the | 12 | | assets as of that date. | 13 | | (2) In determining the actuarial value of the pension | 14 | | fund's assets for fiscal years after March 30, 2011, any | 15 | | actuarial gains or losses from investment return incurred | 16 | | in a fiscal year shall be recognized in equal annual | 17 | | amounts over the 5-year period following that fiscal year. | 18 | | (b) The tax shall be levied and collected in the same | 19 | | manner
as the general taxes of the municipality, and shall be | 20 | | in addition
to all other taxes now or hereafter authorized to | 21 | | be levied upon all
property within the municipality, and in | 22 | | addition to the amount authorized
to be levied for general | 23 | | purposes, under Section 8-3-1 of the Illinois
Municipal Code or | 24 | | under Section 14 of the Fire Protection District Act. The
tax | 25 | | shall be forwarded directly to the treasurer of the board | 26 | | within 30
business days of receipt by the county
(or, in the |
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| 1 | | case of amounts
added to the tax levy under subsection (f), | 2 | | used by the municipality to pay the
employer contributions | 3 | | required under subsection (b-1) of Section 15-155 of
this | 4 | | Code).
| 5 | | (b-5) If a participating municipality fails to transmit to | 6 | | the fund contributions required of it under this Article for | 7 | | more than 90 days after the payment of those contributions is | 8 | | due, the fund may, after giving notice to the municipality, | 9 | | certify to the State Comptroller the amounts of the delinquent | 10 | | payments, and the Comptroller must, beginning in fiscal year | 11 | | 2017 2016 , deduct and deposit into the fund the certified | 12 | | amounts or a portion of those amounts from the following | 13 | | proportions of grants of State funds to the municipality: | 14 | | (1) in fiscal year 2017 2016 , one-third of the total | 15 | | amount of any grants of State funds to the municipality; | 16 | | (2) in fiscal year 2018 2017 , two-thirds of the total | 17 | | amount of any grants of State funds to the municipality; | 18 | | and | 19 | | (3) in fiscal year 2019 2018 and each fiscal year | 20 | | thereafter, the total amount of any grants of State funds | 21 | | to the municipality. | 22 | | The State Comptroller may not deduct from any grants of | 23 | | State funds to the municipality more than the amount of | 24 | | delinquent payments certified to the State Comptroller by the | 25 | | fund. | 26 | | (c) The board shall make available to the membership and |
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| 1 | | the general public
for inspection and copying at reasonable | 2 | | times the most recent Actuarial
Valuation Balance Sheet and Tax | 3 | | Levy Requirement issued to the fund by the
Department of | 4 | | Insurance.
| 5 | | (d) The firefighters' pension fund shall consist of the | 6 | | following moneys
which shall be set apart by the treasurer of | 7 | | the municipality: (1) all
moneys derived from the taxes levied | 8 | | hereunder; (2) contributions
by firefighters as provided under | 9 | | Section 4-118.1; (3) all
rewards in money, fees, gifts, and | 10 | | emoluments that may be paid or given
for or on account of | 11 | | extraordinary service by the fire department or any
member | 12 | | thereof, except when allowed to be retained by competitive | 13 | | awards;
and (4) any money, real estate or personal property | 14 | | received by the board.
| 15 | | (e) For the purposes of this Section, "enrolled actuary" | 16 | | means an actuary:
(1) who is a member of the Society of | 17 | | Actuaries or the American
Academy of Actuaries; and (2) who is | 18 | | enrolled under Subtitle
C of Title III of the Employee | 19 | | Retirement Income Security Act of 1974, or
who has been engaged | 20 | | in providing actuarial services to one or more public
| 21 | | retirement systems for a period of at least 3 years as of July | 22 | | 1, 1983.
| 23 | | (f) The corporate authorities of a municipality that | 24 | | employs a person
who is described in subdivision (d) of Section | 25 | | 4-106 may add to the tax levy
otherwise provided for in this | 26 | | Section an amount equal to the projected cost of
the employer |
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| 1 | | contributions required to be paid by the municipality to the | 2 | | State
Universities Retirement System under subsection (b-1) of | 3 | | Section 15-155 of this
Code. | 4 | | (g) The Commission on Government Forecasting and
| 5 | | Accountability shall conduct a study of all funds established
| 6 | | under this Article and shall report its findings to the General
| 7 | | Assembly on or before January 1, 2013. To the fullest extent | 8 | | possible, the study shall include, but not be limited to, the | 9 | | following: | 10 | | (1) fund balances; | 11 | | (2) historical employer contribution rates for each
| 12 | | fund; | 13 | | (3) the actuarial formulas used as a basis for employer
| 14 | | contributions, including the actual assumed rate of return
| 15 | | for each year, for each fund; | 16 | | (4) available contribution funding sources; | 17 | | (5) the impact of any revenue limitations caused by
| 18 | | PTELL and employer home rule or non-home rule status; and | 19 | | (6) existing statutory funding compliance procedures
| 20 | | and funding enforcement mechanisms for all municipal
| 21 | | pension funds.
| 22 | | (Source: P.A. 96-1495, eff. 1-1-11.)
| 23 | | Section 99. Effective date. This Act takes effect upon | 24 | | becoming law.
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