Full Text of HB3762 99th General Assembly
HB3762 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB3762 Introduced , by Rep. Thomas Morrison SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/3-101 | from Ch. 108 1/2, par. 3-101 | 40 ILCS 5/3-101.5 new | | 40 ILCS 5/3-150 | from Ch. 108 1/2, par. 3-150 | 40 ILCS 5/4-101 | from Ch. 108 1/2, par. 4-101 | 40 ILCS 5/4-101.5 new | | 40 ILCS 5/4-142 | from Ch. 108 1/2, par. 4-142 | 40 ILCS 5/7-109 | from Ch. 108 1/2, par. 7-109 | 40 ILCS 5/7-134.5 new | | 40 ILCS 5/7-210 | from Ch. 108 1/2, par. 7-210 |
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Amends the Illinois Pension Code. In the Downstate Firefighter and Downstate Police Articles, provides that a municipality may, by ordinance, assume local control of the municipality's police or firefighter's pension fund, with the power to change the terms of the plan. In the IMRF Article, provides that a municipality may end its participation in IMRF and create its own municipal pension fund; specifies certain conditions and provides for transfer of certain contributions and liabilities from IMRF to the new municipal pension fund.
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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 3-101, 3-150, 4-101, 4-142, 7-109, and 7-210 and by | 6 | | adding Sections 3-101.5, 4-101.5, and 7-134.5 as follows:
| 7 | | (40 ILCS 5/3-101) (from Ch. 108 1/2, par. 3-101)
| 8 | | Sec. 3-101. Creation of fund. Except as provided in Section | 9 | | 3-101.5, in In each municipality, as defined in Section 3-103, | 10 | | the city council or
the board of trustees, as the case may be, | 11 | | shall establish and administer a
police pension fund, as | 12 | | prescribed in this Article, for the
benefit of its police | 13 | | officers and of their surviving spouses,
children, and certain | 14 | | other dependents. The duty of the corporate authorities of a | 15 | | municipality to establish and administer a police pension fund | 16 | | shall be suspended during any period during which the fund is | 17 | | dissolved under Section 3-144.6 of this Code.
| 18 | | (Source: P.A. 97-99, eff. 1-1-12.)
| 19 | | (40 ILCS 5/3-101.5 new) | 20 | | Sec. 3-101.5. Local control of pension fund. | 21 | | (a) The corporate authorities of a municipality that has a | 22 | | police pension fund under this Article may, by ordinance, |
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| 1 | | assume control of the police pension fund. Control of the | 2 | | police pension fund shall include responsibility for its | 3 | | liabilities. | 4 | | (b) After assuming control of the police pension fund, | 5 | | including assumption of responsibility for its liabilities, | 6 | | the municipality may, by ordinance, maintain the police pension | 7 | | fund in accordance with this Article or make any changes to the | 8 | | police pension fund that are consistent with the requirements | 9 | | of this Section and the Constitution and laws of the State of | 10 | | Illinois and the United States, including but not limited to | 11 | | developing and implementing a new or different retirement plan. | 12 | | (c) Notwithstanding any other provision of this Article, | 13 | | upon the assumption of control of the police pension fund by | 14 | | the municipality in conformance with this Section, including | 15 | | assumption of responsibility for the police pension fund's | 16 | | liabilities, the provisions of this Article, other than this | 17 | | Section, shall cease to apply to the municipality.
| 18 | | (40 ILCS 5/3-150) (from Ch. 108 1/2, par. 3-150)
| 19 | | Sec. 3-150. Applicability of home rule powers. A home rule
| 20 | | unit, as defined in Article VII of the 1970 Illinois | 21 | | Constitution or any
amendment thereto, shall have no power to | 22 | | change, alter,
or amend in any way the provisions of this
| 23 | | Article , but it may assume local control of its police pension | 24 | | fund in accordance with Section 3-101.5 . A home rule unit which | 25 | | is a municipality, as defined
in Section 3-103, shall not |
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| 1 | | provide for, singly or as a part of any
plan or program, by any | 2 | | means whatsoever, any type of retirement
or annuity benefit to | 3 | | a police officer other than through
establishment
of a fund as | 4 | | provided in this Article , unless it has assumed local control | 5 | | of its police pension fund under Section 3-101.5 .
| 6 | | (Source: P.A. 83-1440.)
| 7 | | (40 ILCS 5/4-101) (from Ch. 108 1/2, par. 4-101)
| 8 | | Sec. 4-101. Creation of fund. Except as provided in Section | 9 | | 4-101.5, in In each municipality as defined in Section 4-103, | 10 | | the city council or
the board of trustees, as the case may be, | 11 | | shall establish and administer
a firefighters' pension fund as
| 12 | | prescribed in this Article, for the
benefit of its firefighters
| 13 | | and of their surviving spouses,
children and certain other | 14 | | dependents. The duty of the corporate authorities of a | 15 | | municipality to establish and administer a firefighters' | 16 | | pension fund shall be suspended during any period during which | 17 | | the fund is dissolved under subsection (c) of Section 4-106.1 | 18 | | of this Code.
| 19 | | (Source: P.A. 97-99, eff. 1-1-12.)
| 20 | | (40 ILCS 5/4-101.5 new) | 21 | | Sec. 4-101.5. Local control of pension fund. | 22 | | (a) The corporate authorities of a municipality that has a | 23 | | firefighters' pension fund under this Article may, by | 24 | | ordinance, assume control of the firefighters' pension fund. |
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| 1 | | Control of the firefighters' pension fund shall include | 2 | | responsibility for its liabilities. | 3 | | (b) After assuming control of the firefighters' pension | 4 | | fund, including assumption of responsibility for its | 5 | | liabilities, the municipality may, by ordinance, maintain the | 6 | | firefighters' pension fund in accordance with this Article or | 7 | | make any changes to the firefighters' pension fund that are | 8 | | consistent with the requirements of this Section and the | 9 | | Constitution and laws of the State of Illinois and the United | 10 | | States, including but not limited to developing and | 11 | | implementing a new or different retirement plan. | 12 | | (c) Notwithstanding any other provision of this Article, | 13 | | upon the assumption of control of the firefighters' pension | 14 | | fund by the municipality in conformance with this Section, | 15 | | including assumption of responsibility for the firefighters' | 16 | | pension fund's liabilities, the provisions of this Article, | 17 | | other than this Section, shall cease to apply to the | 18 | | municipality.
| 19 | | (40 ILCS 5/4-142) (from Ch. 108 1/2, par. 4-142)
| 20 | | Sec. 4-142. Applicability of home rule powers. A home rule
| 21 | | unit, as defined in Article VII of the 1970 Illinois | 22 | | Constitution or
any amendment thereto, shall have no power to | 23 | | change, alter,
or amend in any way
the provisions of this | 24 | | Article , but it may assume local control of its firefighters' | 25 | | pension fund in accordance with Section 4-101.5 .
A home rule |
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| 1 | | unit
which is a municipality, as defined in Section 4-103, | 2 | | shall not provide
for, singly or as a part of any plan or | 3 | | program, by any means whatsoever,
any type of retirement or | 4 | | annuity benefit to a firefighter
other than through
| 5 | | establishment of a fund as provided in this Article as now or | 6 | | hereafter
amended , unless it has assumed local control of its | 7 | | firefighters' pension fund under Section 3-101.5 .
| 8 | | (Source: P.A. 83-1440.)
| 9 | | (40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
| 10 | | Sec. 7-109. Employee.
| 11 | | (1) "Employee" means any person who:
| 12 | | (a) 1. Receives earnings as payment for the performance | 13 | | of personal
services or official duties out of the general | 14 | | fund of a municipality,
or out of any special fund or funds | 15 | | controlled by a municipality, or by
an instrumentality | 16 | | thereof, or a participating instrumentality, including,
in | 17 | | counties, the fees or earnings of any county fee office; | 18 | | and
| 19 | | 2. Under the usual common law rules applicable in | 20 | | determining the
employer-employee relationship, has the | 21 | | status of an employee with a
municipality, or any | 22 | | instrumentality thereof, or a participating
| 23 | | instrumentality, including aldermen, county supervisors | 24 | | and other
persons (excepting those employed as independent | 25 | | contractors) who are
paid compensation, fees, allowances |
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| 1 | | or other emolument for official
duties, and, in counties, | 2 | | the several county fee offices.
| 3 | | (b) Serves as a township treasurer appointed under the | 4 | | School
Code, as heretofore or hereafter amended, and
who | 5 | | receives for such services regular compensation as | 6 | | distinguished
from per diem compensation, and any regular | 7 | | employee in the office of
any township treasurer whether or | 8 | | not his earnings are paid from the
income of the permanent | 9 | | township fund or from funds subject to
distribution to the | 10 | | several school districts and parts of school
districts as | 11 | | provided in the School Code, or from both such sources; or | 12 | | is the chief executive officer, chief educational officer, | 13 | | chief fiscal officer, or other employee of a Financial | 14 | | Oversight Panel established pursuant to Article 1H of the | 15 | | School Code, other than a superintendent or certified | 16 | | school business official, except that such person shall not | 17 | | be treated as an employee under this Section if that person | 18 | | has negotiated with the Financial Oversight Panel, in | 19 | | conjunction with the school district, a contractual | 20 | | agreement for exclusion from this Section.
| 21 | | (c) Holds an elective office in a municipality, | 22 | | instrumentality
thereof or participating instrumentality.
| 23 | | (2) "Employee" does not include persons who:
| 24 | | (a) Are eligible for inclusion under any of the | 25 | | following laws:
| 26 | | 1. "An Act in relation to an Illinois State |
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| 1 | | Teachers' Pension and
Retirement Fund", approved May | 2 | | 27, 1915, as amended;
| 3 | | 2. Articles 15 and 16 of this Code.
| 4 | | However, such persons shall be included as employees to | 5 | | the extent of
earnings that are not eligible for inclusion | 6 | | under the foregoing laws
for services not of an | 7 | | instructional nature of any kind.
| 8 | | However, any member of the armed forces who is employed | 9 | | as a teacher
of subjects in the Reserve Officers Training | 10 | | Corps of any school and who
is not certified under the law | 11 | | governing the certification of teachers
shall be included | 12 | | as an employee.
| 13 | | (b) Are designated by the governing body of a | 14 | | municipality in which a
pension fund is required by law to | 15 | | be established for policemen or
firemen, respectively, as | 16 | | performing police or fire protection duties,
except that | 17 | | when such persons are the heads of the police or fire
| 18 | | department and are not eligible to be included within any | 19 | | such pension
fund, they shall be included within this | 20 | | Article; provided, that such
persons shall not be excluded | 21 | | to the extent of concurrent service and
earnings not | 22 | | designated as being for police or fire protection duties.
| 23 | | However, (i) any head of a police department who was a | 24 | | participant under this
Article immediately before October | 25 | | 1, 1977 and did not elect, under Section
3-109 of this Act, | 26 | | to participate in a police pension fund shall be an
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| 1 | | "employee", and (ii) any chief of police who elects to | 2 | | participate in this
Fund under Section 3-109.1 of this | 3 | | Code, regardless of whether such person
continues to be | 4 | | employed as chief of police or is employed in some other
| 5 | | rank or capacity within the police department, shall be an | 6 | | employee under
this Article for so long as such person is | 7 | | employed to perform police
duties by a participating | 8 | | municipality and has not lawfully rescinded that
election. | 9 | | (c) Are contributors to or eligible to contribute to a | 10 | | Taft-Hartley pension plan and to which the participating | 11 | | municipality is required to contribute as the person's | 12 | | employer based on earnings from the municipality. Nothing | 13 | | in this paragraph shall affect service credit or creditable | 14 | | service for any period of service prior to the effective | 15 | | date of this amendatory Act of the 98th General Assembly, | 16 | | and this paragraph shall not apply to individuals who are | 17 | | participating in the Fund prior to the effective date of | 18 | | this amendatory Act of the 98th General Assembly.
| 19 | | (d) Become an employee of any of the following | 20 | | participating instrumentalities on or after the effective | 21 | | date of this amendatory Act of the 98th General Assembly: | 22 | | the Illinois Municipal League; the Illinois Association of | 23 | | Park Districts; the Illinois Supervisors, County | 24 | | Commissioners and Superintendents of Highways Association; | 25 | | an association, or not-for-profit corporation, membership | 26 | | in which is authorized under Section 85-15 of the Township |
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| 1 | | Code; the United Counties Council; or the Will County | 2 | | Governmental League. | 3 | | (e) Are employees of a former participating | 4 | | municipality that has terminated participation in this | 5 | | Fund and established its own municipal pension fund in | 6 | | accordance with Section 7-134.5. | 7 | | (3) All persons, including, without limitation, public | 8 | | defenders and
probation officers, who receive earnings from | 9 | | general or special funds
of a county for performance of | 10 | | personal services or official duties
within the territorial | 11 | | limits of the county, are employees of the county
(unless | 12 | | excluded by subsection (2) of this Section) notwithstanding | 13 | | that
they may be appointed by and are subject to the direction | 14 | | of a person or
persons other than a county board or a county | 15 | | officer. It is hereby
established that an employer-employee | 16 | | relationship under the usual
common law rules exists between | 17 | | such employees and the county paying
their salaries by reason | 18 | | of the fact that the county boards fix their
rates of | 19 | | compensation, appropriate funds for payment of their earnings
| 20 | | and otherwise exercise control over them. This finding and this
| 21 | | amendatory Act shall apply to all such employees from the date | 22 | | of
appointment whether such date is prior to or after the | 23 | | effective date of
this amendatory Act and is intended to | 24 | | clarify existing law pertaining
to their status as | 25 | | participating employees in the Fund.
| 26 | | (Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11; |
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| 1 | | 97-813, eff. 7-13-12; 98-599, eff. 6-1-14; 98-712, eff. | 2 | | 7-16-14.)
| 3 | | (40 ILCS 5/7-134.5 new) | 4 | | Sec. 7-134.5. Termination of participation; creation of | 5 | | new municipal pension fund. | 6 | | (a) The corporate authorities of a participating | 7 | | municipality under this Article may, by ordinance, terminate | 8 | | its participation in this Fund and establish its own municipal | 9 | | pension fund. The ordinance must explicitly include: | 10 | | (1) a provision accepting the terms of subsection | 11 | | (d-10) of Section 7-210 of this Code; | 12 | | (2) a provision assuming responsibility for any | 13 | | liabilities arising out of the termination of the | 14 | | municipality's participation in IMRF and the creation of | 15 | | the new municipal pension fund; and | 16 | | (3) a provision detailing the effect of the ordinance | 17 | | on the Social Security status of the affected employees. | 18 | | (b) The retirement plan of the new municipal pension fund | 19 | | may take any form that the corporate authorities may specify by | 20 | | ordinance, so long as it is consistent with the requirements of | 21 | | this Section, the Constitution and laws of the State of | 22 | | Illinois and the United States, and any applicable contracts or | 23 | | collective bargaining agreements. | 24 | | (c) Upon termination of participation in IMRF, the | 25 | | provisions of this Article, other than this Section and |
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| 1 | | subsection (d-10) of Section 7-210, shall cease to apply to the | 2 | | municipality.
| 3 | | (40 ILCS 5/7-210) (from Ch. 108 1/2, par. 7-210)
| 4 | | Sec. 7-210. Funds. | 5 | | (a) All money received by the board shall immediately be | 6 | | deposited
with the State Treasurer for the account of the fund, | 7 | | or in the case of
funds received under Section 7-199.1, in a | 8 | | separate account maintained for
that purpose. All | 9 | | disbursements
of funds held by the State Treasurer shall be | 10 | | made only upon warrants
of the State Comptroller drawn upon the
| 11 | | Treasurer as custodian of this fund upon vouchers signed by the | 12 | | person
or persons designated for such purpose by resolution of | 13 | | the board. The
Comptroller is authorized to draw such warrants | 14 | | upon vouchers so signed,
including warrants payable to the Fund | 15 | | for deposit in a revolving account
authorized by Section | 16 | | 7-195.1. The Treasurer shall accept all warrants
so signed and | 17 | | shall be released from liability for all payments made
thereon. | 18 | | Vouchers shall be drawn only upon proper authorization by the
| 19 | | board as properly recorded in the official minute books of the | 20 | | meetings
of the board.
| 21 | | (b) All securities of the fund when received shall be | 22 | | deposited with
the State Treasurer who shall provide adequate | 23 | | safe deposit facilities
for their preservation and have custody | 24 | | of them.
| 25 | | (c) The assets of the fund shall be invested as one fund, |
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| 1 | | and no
particular person, municipality, or instrumentality | 2 | | thereof or
participating instrumentality shall have any right | 3 | | in any specific
security or in any item of cash other than an | 4 | | undivided interest in the
whole.
| 5 | | (d) Except as provided in subsection (d-5), whenever any | 6 | | employees of a municipality or participating
instrumentality | 7 | | have been or shall be excluded from participation in
this fund | 8 | | by virtue of the application of paragraph b of Section 7-109
| 9 | | (2), the board shall issue a voucher authorizing the | 10 | | Comptroller to draw
his warrant upon the Treasurer as custodian | 11 | | of this fund in an amount
equal to the accumulated | 12 | | contributions of such employees. Such warrant
shall be drawn in | 13 | | favor of the appropriate fund of the retirement fund
in which | 14 | | such employees have or shall become participants. Such transfer
| 15 | | shall terminate any further rights of such employees under this | 16 | | fund.
| 17 | | (d-5) Upon creation of a newly established Article 3 police | 18 | | pension fund by referendum under Section 3-145 or by census | 19 | | under Section 3-105, the following amounts shall be transferred | 20 | | from this Fund to the new police pension fund, within 30 days | 21 | | after an application therefor is received from the new pension | 22 | | fund: | 23 | | (1) the amounts actually contributed to this Fund as | 24 | | employee contributions by or on behalf of the police | 25 | | officers transferring to the new pension fund for their | 26 | | service as police officers of the municipality that is |
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| 1 | | establishing the new pension fund, plus interest on those | 2 | | amounts at the rate of 6% per year, compounded annually, | 3 | | from the date of contribution to the date of transfer to | 4 | | the new pension fund, and | 5 | | (2) an amount representing employer contributions, | 6 | | equal to the total amount determined under item (1). | 7 | | This transfer
terminates any further rights of such police | 8 | | officers in this Fund arising out of their service as police | 9 | | officers of the municipality that is establishing the new | 10 | | pension fund. | 11 | | (d-10) Upon termination of a municipality's participation | 12 | | in this Fund and creation of a new municipal pension fund under | 13 | | Section 7-134.5, the following amounts shall be transferred | 14 | | from this Fund to the new pension fund, within 90 days after an | 15 | | application therefor is received from the new pension fund: | 16 | | (1) the amounts actually contributed to this Fund as | 17 | | employee contributions by or on behalf of the employees | 18 | | transferring to the new pension fund for their service as | 19 | | employees of the municipality that is establishing the new | 20 | | pension fund, plus interest on those amounts at the rate of | 21 | | 6% per year, compounded annually, from the date of | 22 | | contribution to the date of transfer to the new pension | 23 | | fund, and | 24 | | (2) an amount representing employer contributions, | 25 | | equal to the total amount determined under item (1). | 26 | | This transfer
terminates any further rights of such employees |
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| 1 | | in this Fund arising out of their service as employees of the | 2 | | municipality that is establishing the new pension fund. | 3 | | (e) If a participating instrumentality terminates | 4 | | participation
because it fails to meet the requirements of | 5 | | Section 7-108, it shall
pay to the fund the amount equal to any | 6 | | net debit balance in its
municipality reserve account and | 7 | | account receivable. Its successors, and
assigns and | 8 | | transferees of its assets shall be obligated to make this
| 9 | | payment to the extent of the value of assets transferred to | 10 | | them. The
fund shall pay an amount equal to any net credit | 11 | | balance to the
participating instrumentality, its successors | 12 | | or assigns. Any remaining
net debit or credit balance not | 13 | | collectible or payable shall be
transferred to the terminated | 14 | | municipality reserve account. The fund
shall pay to each | 15 | | employee of the participating instrumentality an
amount equal | 16 | | to his credits in the employee reserves. The employees
shall | 17 | | have no further rights to any benefits from the fund, except | 18 | | that
annuities awarded prior to the date of termination shall | 19 | | continue to be
paid.
| 20 | | (Source: P.A. 98-729, eff. 7-26-14.)
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