Full Text of SB2193 100th General Assembly
SB2193 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB2193 Introduced 4/27/2017, by Sen. Christine Radogno SYNOPSIS AS INTRODUCED: | | |
Amends the General Assembly Article of the Illinois Pension Code. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date of the amendatory Act. Beginning in fiscal year 2018, makes funding changes. Requires the Board to recalculate and recertify the amount of the State's required contribution for fiscal year 2018. Establishes a voluntary defined contribution plan for certain Tier 1 members and makes conforming changes in the Retirement Systems Reciprocal Act (Article 20 of the Code). Repeals provisions concerning a defined contribution plan added by Public Act 98-599, which has been held unconstitutional. 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 2-101, 2-105, 2-107, 2-124, 2-134, and 2-162, 20-121, | 6 | | 20-123, 20-124, and 20-125 and by adding Sections 2-105.3, | 7 | | 2-165.1, and 2-166.1 as follows: | 8 | | (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
| 9 | | Sec. 2-101. Creation of system. A retirement system is | 10 | | created to provide
retirement annuities, survivor's annuities | 11 | | and other benefits for certain
members of the General Assembly, | 12 | | certain elected state officials , and their
beneficiaries.
| 13 | | The system shall be known as the "General Assembly | 14 | | Retirement System".
All its funds and property shall be a trust | 15 | | separate from all other
entities, maintained for the purpose of | 16 | | securing payment of annuities and
benefits under this Article.
| 17 | | Participation in the retirement system created under this | 18 | | Article is
restricted to persons who became participants before | 19 | | the effective date of this amendatory Act of the 100th General | 20 | | Assembly.
Beginning on that date, the System shall not accept | 21 | | any new participants.
| 22 | | (Source: P.A. 83-1440.)
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| 1 | | (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
| 2 | | Sec. 2-105. Member. "Member": Members of the General | 3 | | Assembly of this
State , including persons who enter military | 4 | | service while a member of the
General Assembly , and any person | 5 | | serving as Governor, Lieutenant Governor,
Secretary of State, | 6 | | Treasurer, Comptroller, or Attorney General for the period
of | 7 | | service in such office.
| 8 | | Any person who has served for 10 or more years as Clerk or | 9 | | Assistant Clerk
of the House of Representatives, Secretary or | 10 | | Assistant Secretary of the
Senate, or any combination thereof, | 11 | | may elect to become a member
of this system while thenceforth | 12 | | engaged in such service by filing a
written election with the | 13 | | board. Any person so electing shall be
deemed an active member | 14 | | of the General Assembly for the purpose of validating
and | 15 | | transferring any service credits earned under any of the funds | 16 | | and systems
established under Articles 3 through 18 of this | 17 | | Code.
| 18 | | However, notwithstanding any other provision of this | 19 | | Article, a person
shall not be deemed a member for the purposes | 20 | | of this Article unless he or she
became a participant of the | 21 | | System before the effective date of this amendatory Act of the | 22 | | 100th General Assembly.
| 23 | | (Source: P.A. 85-1008.)
| 24 | | (40 ILCS 5/2-105.3 new) | 25 | | Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A |
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| 1 | | participant who first became a participant before January 1, | 2 | | 2011.
| 3 | | (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
| 4 | | Sec. 2-107. Participant. "Participant": Any member who | 5 | | elects to
participate; and any former member who elects to | 6 | | continue participation
under Section 2-117.1, for the duration | 7 | | of such continued participation. However, notwithstanding any | 8 | | other provision of this Article, a person
shall not be deemed a | 9 | | participant for the purposes of this Article unless he or she
| 10 | | became a participant of the System before the effective date of | 11 | | this amendatory Act of the 100th General Assembly.
| 12 | | (Source: P.A. 86-1488.)
| 13 | | (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
| 14 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 15 | | which has been
held unconstitutional)
| 16 | | Sec. 2-124. Contributions by State.
| 17 | | (a) The State shall make contributions to the System by
| 18 | | appropriations of amounts which, together with the | 19 | | contributions of
participants, interest earned on investments, | 20 | | and other income
will meet the cost of maintaining and | 21 | | administering the System on a 90%
funded basis in accordance | 22 | | with actuarial recommendations.
| 23 | | (b) The Board shall determine the amount of State
| 24 | | contributions required for each fiscal year on the basis of the
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| 1 | | actuarial tables and other assumptions adopted by the Board and | 2 | | the
prescribed rate of interest, using the formula in | 3 | | subsection (c).
| 4 | | (c) For State fiscal years 2018 through 2045, the minimum | 5 | | contribution to the System to be made by the State for each | 6 | | fiscal year shall be an amount determined by the System to be | 7 | | sufficient to bring the total assets of the System up to 90% of | 8 | | the total actuarial liabilities of the System by the end of | 9 | | State fiscal year 2045. In making these determinations, the | 10 | | required State contribution shall be calculated each year as a | 11 | | level percentage of total payroll, including payroll that is | 12 | | not deemed pensionable, but excluding payroll attributable to | 13 | | participants in the defined contribution plan under Section | 14 | | 2-165.1, over the years remaining to and including fiscal year | 15 | | 2045 and shall be determined under the projected unit credit | 16 | | actuarial cost method. | 17 | | Beginning in State fiscal year 2018, any increase or | 18 | | decrease in State contribution over the prior fiscal year due | 19 | | exclusively to changes in actuarial or investment assumptions | 20 | | adopted by the Board shall be included in the State | 21 | | contribution to the System, as a percentage of the applicable | 22 | | employee payroll, and shall be increased in equal annual | 23 | | increments so that by the State fiscal year occurring 5 years | 24 | | after the adoption of the actuarial or investment assumptions, | 25 | | the State is contributing at the rate otherwise required under | 26 | | this Section. |
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| 1 | | For State fiscal years 2012 through 2017 2045 , the minimum | 2 | | contribution
to the System to be made by the State for each | 3 | | fiscal year shall be an amount
determined by the System to be | 4 | | sufficient to bring the total assets of the
System up to 90% of | 5 | | the total actuarial liabilities of the System by the end of
| 6 | | State fiscal year 2045. In making these determinations, the | 7 | | required State
contribution shall be calculated each year as a | 8 | | level percentage of payroll
over the years remaining to and | 9 | | including fiscal year 2045 and shall be
determined under the | 10 | | projected unit credit actuarial cost method.
| 11 | | For State fiscal years 1996 through 2005, the State | 12 | | contribution to
the System, as a percentage of the applicable | 13 | | employee payroll, shall be
increased in equal annual increments | 14 | | so that by State fiscal year 2011, the
State is contributing at | 15 | | the rate required under this Section.
| 16 | | Notwithstanding any other provision of this Article, the | 17 | | total required State
contribution for State fiscal year 2006 is | 18 | | $4,157,000.
| 19 | | Notwithstanding any other provision of this Article, the | 20 | | total required State
contribution for State fiscal year 2007 is | 21 | | $5,220,300.
| 22 | | For each of State fiscal years 2008 through 2009, the State | 23 | | contribution to
the System, as a percentage of the applicable | 24 | | employee payroll, shall be
increased in equal annual increments | 25 | | from the required State contribution for State fiscal year | 26 | | 2007, so that by State fiscal year 2011, the
State is |
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| 1 | | contributing at the rate otherwise required under this Section.
| 2 | | Notwithstanding any other provision of this Article, the | 3 | | total required State contribution for State fiscal year 2010 is | 4 | | $10,454,000 and shall be made from the proceeds of bonds sold | 5 | | in fiscal year 2010 pursuant to Section 7.2 of the General | 6 | | Obligation Bond Act, less (i) the pro rata share of bond sale | 7 | | expenses determined by the System's share of total bond | 8 | | proceeds, (ii) any amounts received from the General Revenue | 9 | | Fund in fiscal year 2010, and (iii) any reduction in bond | 10 | | proceeds due to the issuance of discounted bonds, if | 11 | | applicable. | 12 | | Notwithstanding any other provision of this Article, the
| 13 | | total required State contribution for State fiscal year 2011 is
| 14 | | the amount recertified by the System on or before April 1, 2011 | 15 | | pursuant to Section 2-134 and shall be made from the proceeds | 16 | | of bonds sold
in fiscal year 2011 pursuant to Section 7.2 of | 17 | | the General
Obligation Bond Act, less (i) the pro rata share of | 18 | | bond sale
expenses determined by the System's share of total | 19 | | bond
proceeds, (ii) any amounts received from the General | 20 | | Revenue
Fund in fiscal year 2011, and (iii) any reduction in | 21 | | bond
proceeds due to the issuance of discounted bonds, if
| 22 | | applicable. | 23 | | Beginning in State fiscal year 2046, the minimum State | 24 | | contribution for
each fiscal year shall be the amount needed to | 25 | | maintain the total assets of
the System at 90% of the total | 26 | | actuarial liabilities of the System.
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| 1 | | Amounts received by the System pursuant to Section 25 of | 2 | | the Budget Stabilization Act or Section 8.12 of the State | 3 | | Finance Act in any fiscal year do not reduce and do not | 4 | | constitute payment of any portion of the minimum State | 5 | | contribution required under this Article in that fiscal year. | 6 | | Such amounts shall not reduce, and shall not be included in the | 7 | | calculation of, the required State contributions under this | 8 | | Article in any future year until the System has reached a | 9 | | funding ratio of at least 90%. A reference in this Article to | 10 | | the "required State contribution" or any substantially similar | 11 | | term does not include or apply to any amounts payable to the | 12 | | System under Section 25 of the Budget Stabilization Act.
| 13 | | Notwithstanding any other provision of this Section, the | 14 | | required State
contribution for State fiscal year 2005 and for | 15 | | fiscal year 2008 and each fiscal year thereafter, as
calculated | 16 | | under this Section and
certified under Section 2-134, shall not | 17 | | exceed an amount equal to (i) the
amount of the required State | 18 | | contribution that would have been calculated under
this Section | 19 | | for that fiscal year if the System had not received any | 20 | | payments
under subsection (d) of Section 7.2 of the General | 21 | | Obligation Bond Act, minus
(ii) the portion of the State's | 22 | | total debt service payments for that fiscal
year on the bonds | 23 | | issued in fiscal year 2003 for the purposes of that Section | 24 | | 7.2, as determined
and certified by the Comptroller, that is | 25 | | the same as the System's portion of
the total moneys | 26 | | distributed under subsection (d) of Section 7.2 of the General
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| 1 | | Obligation Bond Act. In determining this maximum for State | 2 | | fiscal years 2008 through 2010, however, the amount referred to | 3 | | in item (i) shall be increased, as a percentage of the | 4 | | applicable employee payroll, in equal increments calculated | 5 | | from the sum of the required State contribution for State | 6 | | fiscal year 2007 plus the applicable portion of the State's | 7 | | total debt service payments for fiscal year 2007 on the bonds | 8 | | issued in fiscal year 2003 for the purposes of Section 7.2 of | 9 | | the General
Obligation Bond Act, so that, by State fiscal year | 10 | | 2011, the
State is contributing at the rate otherwise required | 11 | | under this Section.
| 12 | | (d) For purposes of determining the required State | 13 | | contribution to the System, the value of the System's assets | 14 | | shall be equal to the actuarial value of the System's assets, | 15 | | which shall be calculated as follows: | 16 | | As of June 30, 2008, the actuarial value of the System's | 17 | | assets shall be equal to the market value of the assets as of | 18 | | that date. In determining the actuarial value of the System's | 19 | | assets for fiscal years after June 30, 2008, any actuarial | 20 | | gains or losses from investment return incurred in a fiscal | 21 | | year shall be recognized in equal annual amounts over the | 22 | | 5-year period following that fiscal year. | 23 | | (e) For purposes of determining the required State | 24 | | contribution to the system for a particular year, the actuarial | 25 | | value of assets shall be assumed to earn a rate of return equal | 26 | | to the system's actuarially assumed rate of return. |
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| 1 | | (Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; | 2 | | 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff. | 3 | | 7-13-12.)
| 4 | | (40 ILCS 5/2-134)
(from Ch. 108 1/2, par. 2-134)
| 5 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 6 | | which has been
held unconstitutional)
| 7 | | Sec. 2-134. To certify required State contributions and | 8 | | submit vouchers.
| 9 | | (a) The Board shall certify to the Governor on or before | 10 | | December 15 of each
year until December 15, 2011 the amount of | 11 | | the required State contribution to the System for the next
| 12 | | fiscal year and shall specifically identify the System's | 13 | | projected State normal cost for that fiscal year. The | 14 | | certification shall include a copy of the actuarial
| 15 | | recommendations upon which it is based and shall specifically | 16 | | identify the System's projected State normal cost for that | 17 | | fiscal year.
| 18 | | On or before November 1 of each year, beginning November 1, | 19 | | 2012, the Board shall submit to the State Actuary, the | 20 | | Governor, and the General Assembly a proposed certification of | 21 | | the amount of the required State contribution to the System for | 22 | | the next fiscal year, along with all of the actuarial | 23 | | assumptions, calculations, and data upon which that proposed | 24 | | certification is based. On or before January 1 of each year | 25 | | beginning January 1, 2013, the State Actuary shall issue a |
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| 1 | | preliminary report concerning the proposed certification and | 2 | | identifying, if necessary, recommended changes in actuarial | 3 | | assumptions that the Board must consider before finalizing its | 4 | | certification of the required State contributions. On or before | 5 | | January 15, 2013 and every January 15 thereafter, the Board | 6 | | shall certify to the Governor and the General Assembly the | 7 | | amount of the required State contribution for the next fiscal | 8 | | year. The Board's certification must note any deviations from | 9 | | the State Actuary's recommended changes, the reason or reasons | 10 | | for not following the State Actuary's recommended changes, and | 11 | | the fiscal impact of not following the State Actuary's | 12 | | recommended changes on the required State contribution. | 13 | | On or before May 1, 2004, the Board shall recalculate and | 14 | | recertify to
the Governor the amount of the required State | 15 | | contribution to the System for
State fiscal year 2005, taking | 16 | | into account the amounts appropriated to and
received by the | 17 | | System under subsection (d) of Section 7.2 of the General
| 18 | | Obligation Bond Act.
| 19 | | On or before July 1, 2005, the Board shall recalculate and | 20 | | recertify
to the Governor the amount of the required State
| 21 | | contribution to the System for State fiscal year 2006, taking | 22 | | into account the changes in required State contributions made | 23 | | by this amendatory Act of the 94th General Assembly.
| 24 | | On or before April 1, 2011, the Board shall recalculate and | 25 | | recertify to the Governor the amount of the required State | 26 | | contribution to the System for State fiscal year 2011, applying |
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| 1 | | the changes made by Public Act 96-889 to the System's assets | 2 | | and liabilities as of June 30, 2009 as though Public Act 96-889 | 3 | | was approved on that date. | 4 | | As soon as practical after the effective date of this | 5 | | amendatory Act of the 100th General Assembly, the Board shall | 6 | | recalculate and recertify to the State Actuary, the Governor, | 7 | | and the General Assembly the amount of the State contribution | 8 | | to the System for State fiscal year 2018, taking into account | 9 | | the changes in required State contributions made by this | 10 | | amendatory Act of the 100th General Assembly. The State Actuary | 11 | | shall review the assumptions and valuations underlying the | 12 | | Board's revised certification and issue a preliminary report | 13 | | concerning the proposed recertification and identifying, if | 14 | | necessary, recommended changes in actuarial assumptions that | 15 | | the Board must consider before finalizing its certification of | 16 | | the required State contributions. The Board's final | 17 | | certification must note any deviations from the State Actuary's | 18 | | recommended changes, the reason or reasons for not following | 19 | | the State Actuary's recommended changes, and the fiscal impact | 20 | | of not following the State Actuary's recommended changes on the | 21 | | required State contribution. | 22 | | (b) Beginning in State fiscal year 1996, on or as soon as | 23 | | possible after the
15th day of each month the Board shall | 24 | | submit vouchers for payment of State
contributions to the | 25 | | System, in a total monthly amount of one-twelfth of the
| 26 | | required annual State contribution certified under subsection |
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| 1 | | (a).
From the effective date of this amendatory Act
of the 93rd | 2 | | General Assembly through June 30, 2004, the Board shall not
| 3 | | submit vouchers for the remainder of fiscal year 2004 in excess | 4 | | of the
fiscal year 2004 certified contribution amount | 5 | | determined
under this Section after taking into consideration | 6 | | the transfer to the
System under subsection (d) of Section | 7 | | 6z-61 of the State Finance Act.
These
vouchers shall be paid by | 8 | | the State Comptroller and Treasurer by warrants drawn
on the | 9 | | funds appropriated to the System for that fiscal year. If in | 10 | | any month
the amount remaining unexpended from all other | 11 | | appropriations to the System for
the applicable fiscal year | 12 | | (including the appropriations to the System under
Section 8.12 | 13 | | of the State Finance Act and Section 1 of the State Pension | 14 | | Funds
Continuing Appropriation Act) is less than the amount | 15 | | lawfully vouchered under
this Section, the difference shall be | 16 | | paid from the General Revenue Fund under
the continuing | 17 | | appropriation authority provided in Section 1.1 of the State
| 18 | | Pension Funds Continuing Appropriation Act.
| 19 | | (c) The full amount of any annual appropriation for the | 20 | | System for
State fiscal year 1995 shall be transferred and made | 21 | | available to the System
at the beginning of that fiscal year at | 22 | | the request of the Board.
Any excess funds remaining at the end | 23 | | of any fiscal year from appropriations
shall be retained by the | 24 | | System as a general reserve to meet the System's
accrued | 25 | | liabilities.
| 26 | | (Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; |
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| 1 | | 97-694, eff. 6-18-12.)
| 2 | | (40 ILCS 5/2-162) | 3 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 4 | | which has been
held unconstitutional)
| 5 | | Sec. 2-162. Application and expiration of new benefit | 6 | | increases. | 7 | | (a) As used in this Section, "new benefit increase" means | 8 | | an increase in the amount of any benefit provided under this | 9 | | Article, or an expansion of the conditions of eligibility for | 10 | | any benefit under this Article, that results from an amendment | 11 | | to this Code that takes effect after the effective date of this | 12 | | amendatory Act of the 94th General Assembly. "New benefit | 13 | | increase", however, does not include any benefit increase | 14 | | resulting from the changes made to this Article by this | 15 | | amendatory Act of the 100th General Assembly. | 16 | | (b) Notwithstanding any other provision of this Code or any | 17 | | subsequent amendment to this Code, every new benefit increase | 18 | | is subject to this Section and shall be deemed to be granted | 19 | | only in conformance with and contingent upon compliance with | 20 | | the provisions of this Section.
| 21 | | (c) The Public Act enacting a new benefit increase must | 22 | | identify and provide for payment to the System of additional | 23 | | funding at least sufficient to fund the resulting annual | 24 | | increase in cost to the System as it accrues. | 25 | | Every new benefit increase is contingent upon the General |
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| 1 | | Assembly providing the additional funding required under this | 2 | | subsection. The Commission on Government Forecasting and | 3 | | Accountability shall analyze whether adequate additional | 4 | | funding has been provided for the new benefit increase and | 5 | | shall report its analysis to the Public Pension Division of the | 6 | | Department of Insurance Financial and Professional Regulation . | 7 | | A new benefit increase created by a Public Act that does not | 8 | | include the additional funding required under this subsection | 9 | | is null and void. If the Public Pension Division determines | 10 | | that the additional funding provided for a new benefit increase | 11 | | under this subsection is or has become inadequate, it may so | 12 | | certify to the Governor and the State Comptroller and, in the | 13 | | absence of corrective action by the General Assembly, the new | 14 | | benefit increase shall expire at the end of the fiscal year in | 15 | | which the certification is made.
| 16 | | (d) Every new benefit increase shall expire 5 years after | 17 | | its effective date or on such earlier date as may be specified | 18 | | in the language enacting the new benefit increase or provided | 19 | | under subsection (c). This does not prevent the General | 20 | | Assembly from extending or re-creating a new benefit increase | 21 | | by law. | 22 | | (e) Except as otherwise provided in the language creating | 23 | | the new benefit increase, a new benefit increase that expires | 24 | | under this Section continues to apply to persons who applied | 25 | | and qualified for the affected benefit while the new benefit | 26 | | increase was in effect and to the affected beneficiaries and |
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| 1 | | alternate payees of such persons, but does not apply to any | 2 | | other person, including without limitation a person who | 3 | | continues in service after the expiration date and did not | 4 | | apply and qualify for the affected benefit while the new | 5 | | benefit increase was in effect.
| 6 | | (Source: P.A. 94-4, eff. 6-1-05.) | 7 | | (40 ILCS 5/2-165.1 new) | 8 | | Sec. 2-165.1. Defined contribution plan. | 9 | | (a) By July 1, 2018, the System shall prepare and implement | 10 | | a voluntary defined contribution plan for up to 5% of eligible | 11 | | active Tier 1 employees. The System shall determine the 5% cap | 12 | | by the number of active Tier 1 employees on the effective date | 13 | | of this Section. The defined contribution plan developed under | 14 | | this Section shall be a plan that aggregates employer and | 15 | | employee contributions in individual participant accounts | 16 | | which, after meeting any other requirements, are used for | 17 | | payouts after retirement in accordance with this Section and | 18 | | any other applicable laws. | 19 | | As used in this Section, "defined benefit plan" means the | 20 | | retirement plan available under this Article to Tier 1 | 21 | | employees who have not made the election authorized under this | 22 | | Section. | 23 | | (1) Under the defined contribution plan, an active
Tier | 24 | | 1 employee of this System could elect to cease accruing | 25 | | benefits in the defined benefit plan under this Article and |
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| 1 | | begin accruing benefits for future service in the defined | 2 | | contribution plan. Service credit under the defined | 3 | | contribution plan may be used for determining retirement | 4 | | eligibility under the defined benefit plan. | 5 | | (2) Participants in the defined contribution plan
| 6 | | shall pay employee contributions at the same rate as Tier 1 | 7 | | employees in this System who do not participate in the | 8 | | defined contribution plan. | 9 | | (3) State contributions shall be paid into the
accounts | 10 | | of all participants in the defined contribution plan at a | 11 | | uniform rate, expressed as a percentage of salary and | 12 | | determined for each year. This rate shall be no higher than | 13 | | the employer's normal cost for Tier 1 employees in the | 14 | | defined benefit plan for that year, as determined by the | 15 | | System and expressed as a percentage of salary, and shall | 16 | | be no lower than 3% of salary. The State shall adjust this | 17 | | rate annually. | 18 | | (4) The defined contribution plan shall require 5
years | 19 | | of participation in the defined contribution plan before | 20 | | vesting in State contributions. If the participant fails to | 21 | | vest in them, the State contributions, and the earnings | 22 | | thereon, shall be forfeited. | 23 | | (5) The defined contribution plan may provide for
| 24 | | participants in the plan to be eligible for defined | 25 | | disability benefits. If it does, the System shall reduce | 26 | | the employee contributions credited to the participant's |
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| 1 | | defined contribution plan account by an amount determined | 2 | | by the System to cover the cost of offering such benefits. | 3 | | (6) The defined contribution plan shall provide a
| 4 | | variety of options for investments. These options shall | 5 | | include investments handled by the Illinois State Board of | 6 | | Investment as well as private sector investment options. | 7 | | (7) The defined contribution plan shall provide a
| 8 | | variety of options for payouts to retirees and their | 9 | | survivors. | 10 | | (8) To the extent authorized under federal law and
as | 11 | | authorized by the System, the plan shall allow former | 12 | | participants in the plan to transfer or roll over employee | 13 | | and vested State contributions, and the earnings thereon, | 14 | | into other qualified retirement plans. | 15 | | (9) The System shall reduce the employee
contributions | 16 | | credited to the participant's defined contribution plan | 17 | | account by an amount determined by the System to cover the | 18 | | cost of offering these benefits and any applicable | 19 | | administrative fees. | 20 | | (b) Only persons who are active Tier 1 employees of the | 21 | | System on the effective date of this Section are eligible to | 22 | | participate in the defined contribution plan. Participation in | 23 | | the defined contribution plan shall be limited to the first 5% | 24 | | of eligible persons who elect to participate. The election to | 25 | | participate in the defined contribution plan is voluntary and | 26 | | irrevocable. |
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| 1 | | (c) An eligible active Tier 1 employee may irrevocably | 2 | | elect to participate in the defined contribution plan by filing | 3 | | with the System a written application to participate that is | 4 | | received by the System prior to its determination that 5% of | 5 | | eligible persons have elected to participate in the defined | 6 | | contribution plan. | 7 | | When the System first determines that 5% of eligible | 8 | | persons have elected to participate in the defined contribution | 9 | | plan, the System shall provide notice to previously eligible | 10 | | employees that the plan is no longer available and shall cease | 11 | | accepting applications to participate. | 12 | | (d) The System shall make a good faith effort to contact | 13 | | each active Tier 1 employee who is eligible to participate in | 14 | | the defined contribution plan. The System shall mail | 15 | | information describing the option to join the defined | 16 | | contribution plan to each of these employees to his or her last | 17 | | known address on file with the System. If the employee is not | 18 | | responsive to other means of contact, it is sufficient for the | 19 | | System to publish the details of the option on its website. | 20 | | Upon request for further information describing the | 21 | | option, the System shall provide employees with information | 22 | | from the System before exercising the option to join the plan, | 23 | | including information on the impact to their vested benefits or | 24 | | non-vested service. The individual consultation shall include | 25 | | projections of the participant's defined benefits at | 26 | | retirement or earlier termination of service and the value of |
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| 1 | | the participant's account at retirement or earlier termination | 2 | | of service. The System shall not provide advice or counseling | 3 | | with respect to whether the employee should exercise the | 4 | | option. The System shall inform Tier 1 employees who are | 5 | | eligible to participate in the defined contribution plan that | 6 | | they may also wish to obtain information and counsel relating | 7 | | to their option from any other available source, including but | 8 | | not limited to labor organizations, private counsel, and | 9 | | financial advisors. | 10 | | (e) In no event shall the System, its staff, its authorized | 11 | | representatives, or the Board be liable for any information | 12 | | given to an employee under this Section. The System may | 13 | | coordinate with the Illinois Department of Central Management | 14 | | Services and other retirement systems administering a defined | 15 | | contribution plan to provide information concerning the impact | 16 | | of the option set forth in this Section. | 17 | | (f) Notwithstanding any other provision of this Section, no | 18 | | person shall begin participating in the defined contribution | 19 | | plan until it has attained qualified plan status and received | 20 | | all necessary approvals from the U.S. Internal Revenue Service. | 21 | | (g) The System shall report on its progress under this | 22 | | Section, including the available details of the defined | 23 | | contribution plan and the System's plans for informing eligible | 24 | | Tier 1 employees about the plan, to the Governor and the | 25 | | General Assembly on or before January 15, 2018. | 26 | | (h) The Illinois State Board of Investments shall be the |
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| 1 | | plan sponsor for the defined contribution plan established | 2 | | under this Section. | 3 | | (i) The intent of this amendatory Act of the 100th General | 4 | | Assembly is to ensure that the State's normal cost of | 5 | | participation in the defined contribution plan is similar, and | 6 | | if possible equal, to the State's normal cost of participation | 7 | | in the defined benefit plan, unless a lower State's normal cost | 8 | | is necessary to ensure cost neutrality. | 9 | | (40 ILCS 5/2-166.1 new) | 10 | | Sec. 2-166.1. Defined contribution plan; termination. If | 11 | | the defined contribution plan is terminated or becomes | 12 | | inoperative pursuant to law, then each participant in the plan | 13 | | shall automatically be deemed to have been a contributing Tier | 14 | | 1 employee in the System's defined benefit plan during the time | 15 | | in which he or she participated in the defined contribution | 16 | | plan, and for that purpose the System shall be entitled to | 17 | | recover the amounts in the participant's defined contribution | 18 | | accounts.
| 19 | | (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
| 20 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 21 | | which has been held unconstitutional)
| 22 | | Sec. 20-121. Calculation of proportional retirement | 23 | | annuities. | 24 | | (a) Upon
retirement of the employee, a proportional |
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| 1 | | retirement annuity shall be computed
by each participating | 2 | | system in which pension credit has been established on
the | 3 | | basis of pension credits under each system. The computation | 4 | | shall be in
accordance with the formula or method prescribed by | 5 | | each participating system
which is in effect at the date of the | 6 | | employee's latest withdrawal from service
covered by any of the | 7 | | systems in which he has pension credits which he elects
to have | 8 | | considered under this Article. However, the amount of any | 9 | | retirement
annuity payable under the self-managed plan | 10 | | established under Section 15-158.2
of this Code or under the | 11 | | defined contribution plan established under Article 2 of this | 12 | | Code depends solely on the value of the participant's vested | 13 | | account
balances and is not subject to any proportional | 14 | | adjustment under this
Section.
| 15 | | (a-5) For persons who participate in a defined contribution | 16 | | plan established under Article 2 of this Code to whom the | 17 | | provisions of this Article apply, the pension credits | 18 | | established under the defined contribution plan may be | 19 | | considered in
determining eligibility for or the amount of the | 20 | | defined benefit retirement annuity that is
payable by any other | 21 | | participating system. | 22 | | (b) Combined pension credit under all retirement systems | 23 | | subject to this
Article shall be considered in determining | 24 | | whether the minimum qualification
has been met and the formula | 25 | | or method of computation which shall be applied , except as may | 26 | | be otherwise provided with respect to vesting in State or |
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| 1 | | employer contributions in a defined contribution plan .
If a | 2 | | system has a step-rate formula for calculation of the | 3 | | retirement annuity,
pension credits covering previous service | 4 | | which have been established under
another system shall be | 5 | | considered in determining which range or ranges of
the | 6 | | step-rate formula are to be applicable to the employee.
| 7 | | (c) Interest on pension credit shall continue to accumulate | 8 | | in accordance with
the provisions of the law governing the | 9 | | retirement system in which the same
has been established during | 10 | | the time an employee is in the service of another
employer, on | 11 | | the assumption such employee, for interest purposes for pension
| 12 | | credit, is continuing in the service covered by such retirement | 13 | | system.
| 14 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 15 | | (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
| 16 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 17 | | which has been held unconstitutional)
| 18 | | Sec. 20-123. Survivor's annuity. The provisions governing | 19 | | a retirement
annuity shall be applicable to a survivor's | 20 | | annuity. Appropriate credits shall
be established for | 21 | | survivor's annuity purposes in those participating systems
| 22 | | which provide survivor's annuities, according to the same | 23 | | conditions and
subject to the same limitations and restrictions | 24 | | herein prescribed for a
retirement annuity. If a participating | 25 | | system has no survivor's annuity
benefit, or if the survivor's |
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| 1 | | annuity benefit under that system is waived,
pension credit | 2 | | established in that system shall not be considered
in | 3 | | determining eligibility for or the amount of the survivor's | 4 | | annuity which
may be payable by any other participating system.
| 5 | | For persons who participate in the self-managed plan | 6 | | established under
Section 15-158.2 or the portable benefit | 7 | | package established under Section
15-136.4, pension credit | 8 | | established under Article 15 may be considered in
determining | 9 | | eligibility for or the amount of the survivor's annuity that is
| 10 | | payable by any other participating system, but pension credit | 11 | | established in
any other system shall not result in any right | 12 | | to a survivor's annuity under
the Article 15 system.
| 13 | | For persons who participate in a defined contribution plan | 14 | | established under Article 2 of this Code to whom the provisions | 15 | | of this Article apply, the pension credits established under | 16 | | the defined contribution plan may be considered in
determining | 17 | | eligibility for or the amount of the defined benefit survivor's | 18 | | annuity that is
payable by any other participating system, but | 19 | | pension credits established in
any other system shall not | 20 | | result in any right to or increase in the value of a survivor's | 21 | | annuity under
the defined contribution plan, which depends | 22 | | solely on the options chosen and the value of the participant's | 23 | | vested account
balances and is not subject to any proportional | 24 | | adjustment under this
Section. | 25 | | (Source: P.A. 91-887, eff. 7-6-00.)
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| 1 | | (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
| 2 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 3 | | which has been held unconstitutional)
| 4 | | Sec. 20-124. Maximum benefits. | 5 | | (a) In no event shall the combined retirement
or survivors | 6 | | annuities exceed the highest annuity which would have been | 7 | | payable
by any participating system in which the employee has | 8 | | pension credits, if all
of his pension credits had been | 9 | | validated in that system.
| 10 | | If the combined annuities should exceed the highest maximum | 11 | | as determined
in accordance with this Section, the respective | 12 | | annuities shall be reduced
proportionately according to the | 13 | | ratio which the amount of each proportional
annuity bears to | 14 | | the aggregate of all such annuities.
| 15 | | (b) In the case of a participant in the self-managed plan | 16 | | established under
Section 15-158.2 of this Code to whom the | 17 | | provisions of this Article apply:
| 18 | | (i) For purposes of calculating the combined | 19 | | retirement annuity and
the proportionate reduction, if | 20 | | any, in a retirement annuity other than one
payable under | 21 | | the self-managed plan, the amount of the Article 15 | 22 | | retirement
annuity shall be deemed to be the highest | 23 | | annuity to which the annuitant would
have been entitled if | 24 | | he or she had participated in the traditional benefit
| 25 | | package as defined in Section 15-103.1 rather than the | 26 | | self-managed plan.
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| 1 | | (ii) For purposes of calculating the combined | 2 | | survivor's annuity and
the proportionate reduction, if | 3 | | any, in a survivor's annuity other than one
payable under | 4 | | the self-managed plan, the amount of the Article 15 | 5 | | survivor's
annuity shall be deemed to be the highest | 6 | | survivor's annuity to which the
survivor would have been | 7 | | entitled if the deceased employee had participated in
the | 8 | | traditional benefit package as defined in Section 15-103.1 | 9 | | rather than the
self-managed plan.
| 10 | | (iii) Benefits payable under the self-managed plan are | 11 | | not subject to
proportionate reduction under this Section.
| 12 | | (c) In the case of a participant in a defined contribution | 13 | | plan established under
Article 2 of this Code to whom the | 14 | | provisions of this Article apply: | 15 | | (i) For purposes of calculating the combined | 16 | | retirement annuity and
the proportionate reduction, if | 17 | | any, in a defined benefit retirement annuity, any benefit | 18 | | payable under the defined contribution plan shall not be | 19 | | considered. | 20 | | (ii) For purposes of calculating the combined | 21 | | survivor's annuity and
the proportionate reduction, if | 22 | | any, in a defined benefit survivor's annuity, any benefit | 23 | | payable under the defined contribution plan shall not be | 24 | | considered. | 25 | | (iii) Benefits payable under a defined contribution | 26 | | plan established under Article 2 of this Code are not |
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| 1 | | subject to
proportionate reduction under this Section. | 2 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 3 | | (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
| 4 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 5 | | which has been held unconstitutional)
| 6 | | Sec. 20-125. Return to employment - suspension of benefits. | 7 | | If a retired
employee returns to employment which is covered by | 8 | | a system from which he is
receiving a proportional annuity | 9 | | under this Article, his proportional annuity
from all | 10 | | participating systems shall be suspended during the period of
| 11 | | re-employment, except that this suspension does not apply to | 12 | | any
distributions payable under the self-managed plan | 13 | | established under Section
15-158.2 or under a defined | 14 | | contribution plan established under Article 2 of this Code.
| 15 | | The provisions of the Article under which such employment | 16 | | would be
covered shall govern the determination of whether the | 17 | | employee has returned
to employment, and if applicable the | 18 | | exemption of temporary employment or
employment not exceeding a | 19 | | specified duration or frequency, for all
participating systems | 20 | | from which the retired employee is receiving a
proportional | 21 | | annuity under this Article, notwithstanding any contrary
| 22 | | provisions in the other Articles governing such systems.
| 23 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 24 | | (40 ILCS 5/2-165 rep.) |
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| 1 | | (40 ILCS 5/2-166 rep.) | 2 | | Section 15. The Illinois Pension Code is amended by | 3 | | repealing Sections 2-165 and 2-166. | 4 | | Section 900. The State Mandates Act is amended by adding | 5 | | Section 8.41 as follows: | 6 | | (30 ILCS 805/8.41 new) | 7 | | Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8 | 8 | | of this Act, no reimbursement by the State is required for the | 9 | | implementation of any mandate created by this amendatory Act of | 10 | | the 100th General Assembly. | 11 | | Section 970. Severability. The provisions of this Act are | 12 | | severable under Section 1.31 of the Statute on Statutes. | 13 | | Section 999. Effective date. This Act takes effect upon | 14 | | becoming law. | | | | SB2193 | - 28 - | LRB100 12287 RPS 24840 b |
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| 1 | |
INDEX
| 2 | |
Statutes amended in order of appearance
| | 3 | | 40 ILCS 5/2-101 | from Ch. 108 1/2, par. 2-101 | | 4 | | 40 ILCS 5/2-105 | from Ch. 108 1/2, par. 2-105 | | 5 | | 40 ILCS 5/2-105.3 new | | | 6 | | 40 ILCS 5/2-107 | from Ch. 108 1/2, par. 2-107 | | 7 | | 40 ILCS 5/2-124 | from Ch. 108 1/2, par. 2-124 | | 8 | | 40 ILCS 5/2-134 | from Ch. 108 1/2, par. 2-134 | | 9 | | 40 ILCS 5/2-162 | | | 10 | | 40 ILCS 5/2-165.1 new | | | 11 | | 40 ILCS 5/2-166.1 new | | | 12 | | 40 ILCS 5/20-121 | from Ch. 108 1/2, par. 20-121 | | 13 | | 40 ILCS 5/20-123 | from Ch. 108 1/2, par. 20-123 | | 14 | | 40 ILCS 5/20-124 | from Ch. 108 1/2, par. 20-124 | | 15 | | 40 ILCS 5/20-125 | from Ch. 108 1/2, par. 20-125 | | 16 | | 40 ILCS 5/2-165 rep. | | | 17 | | 40 ILCS 5/2-166 rep. | | | 18 | | 30 ILCS 805/8.41 new | |
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