Illinois General Assembly - Full Text of HB1444
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Full Text of HB1444  98th General Assembly




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1    AN ACT concerning public employee benefits.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 7-135, 7-146, 7-172, 7-173, and 7-177 as follows:
6    (40 ILCS 5/7-135)  (from Ch. 108 1/2, par. 7-135)
7    Sec. 7-135. Authorized agents.
8    (a) Each participating municipality and participating
9instrumentality shall appoint an authorized agent who shall
10have the powers and duties set forth in this section. In
11absence of such appointment, the duties of the authorized agent
12shall devolve upon the clerk or secretary of the municipality
13or instrumentality, the township supervisor in the case of a
14township, and in the case of township school trustees upon the
15township school treasurer. In townships the Authorized Agent
16shall be the township supervisor.
17    (b) The authorized agent shall have the following powers
18and duties:
19        1. To certify to the fund whether or not a given person
20    is authorized to participate in the fund;
21        2. To certify to the fund when a participating employee
22    is on a leave of absence authorized by the municipality;
23        3. To request the proper officer to cause employee



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1    contributions to be withheld from earnings and transmitted
2    to the fund;
3        4. To request the proper officer to cause municipality
4    contributions to be forwarded to the fund promptly;
5        5. To forward promptly to all participating employees
6    any communications from the fund for such employees;
7        6. To forward promptly to the fund all applications,
8    claims, reports and other communications delivered to him
9    by participating employees;
10        7. To perform all duties related to the administration
11    of this retirement system as requested by the fund and the
12    governing body of his municipality.
13    (c) The governing body of each participating municipality
14and participating instrumentality may delegate any or all of
15the following powers and duties to its authorized agent:
16        1. To file a petition for nomination of an executive
17    trustee of the fund.
18        2. To cast the ballot for election of an executive
19    trustee of the fund.
20    If a governing body does not authorize its agent to perform
21the powers and duties set forth in this paragraph (c), they
22shall be performed by the governing body itself, unless the
23governing body by resolution duly certified to the fund
24delegates them to some other officer or employee.
25    (d) The delivery of any communication or document by an
26employee or a participating municipality or participating



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1instrumentality to its authorized agent shall not constitute
2delivery to the fund.
3(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12.)
4    (40 ILCS 5/7-146)  (from Ch. 108 1/2, par. 7-146)
5    Sec. 7-146. Temporary disability benefits - Eligibility.
6Temporary disability benefits shall be payable to
7participating employees as hereinafter provided.
8    (a) The participating employee shall be considered
9temporarily disabled if:
10        1. He is unable to perform the duties of any position
11    which might reasonably be assigned to him by his employing
12    municipality or instrumentality thereof or participating
13    instrumentality due to mental or physical disability
14    caused by bodily injury or disease, other than as a result
15    of self-inflicted injury or addiction to narcotic drugs;
16        2. The Board has received written certifications from
17    at least one licensed and practicing physician and the
18    governing body of the employing municipality or
19    instrumentality thereof or participating instrumentality
20    stating that the employee meets the conditions set forth in
21    subparagraph 1 of this paragraph (a).
22    (b) A temporary disability benefit shall be payable to a
23temporarily disabled employee provided:
24        1. He:
25            (i) has at least one year of service immediately



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1        preceding at the date the temporary disability was
2        incurred and has made contributions to the fund for at
3        least the number of months of service normally required
4        in his position during a 12-month period, or has at
5        least 5 years of service credit, the last year of which
6        immediately precedes such date; or
7            (ii) had qualified under clause (i) above, but had
8        an interruption in service with the same participating
9        municipality or participating instrumentality of not
10        more than 3 months in the 12 months preceding the date
11        the temporary disability was incurred and was not paid
12        a separation benefit; or
13            (iii) had qualified under clause (i) above, but had
14        an interruption after 20 or more years of creditable
15        service, was not paid a separation benefit, and
16        returned to service prior to the date the disability
17        was incurred.
18        Item (iii) of this subdivision shall apply to all
19    employees whose disabilities were incurred on or after July
20    1, 1985, and any such employee who becomes eligible for a
21    disability benefit under item (iii) shall be entitled to
22    receive a lump sum payment of any accumulated disability
23    benefits which may accrue from the date the disability was
24    incurred until the effective date of this amendatory Act of
25    1987.
26        Periods of qualified leave granted in compliance with



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1    the federal Family and Medical Leave Act shall be ignored
2    for purposes of determining the number of consecutive
3    months of employment under this subdivision (b)1.
4        2. He has been temporarily disabled for at least 30
5    days, except where a former temporary or permanent and
6    total disability has reoccurred within 6 months after the
7    employee has returned to service.
8        3. He is receiving no earnings from a participating
9    municipality or instrumentality thereof or participating
10    instrumentality, except as allowed under subsection (f) of
11    Section 7-152.
12        4. He has not refused to submit to a reasonable
13    physical examination by a physician appointed by the Board.
14        5. His disability is not the result of a mental or
15    physical condition which existed on the earliest date of
16    service from which he has uninterrupted service, including
17    prior service, at the date of his disability, provided that
18    this limitation is not applicable if the date of disability
19    is after December 31, 2001, nor is it applicable to a
20    participating employee who: (i) on the date of disability
21    has 5 years of creditable service, exclusive of creditable
22    service for periods of disability; or (ii) received no
23    medical treatment for the condition for the 3 years
24    immediately prior to such earliest date of service.
25        6. He is not separated from the service of the
26    participating municipality or instrumentality thereof or



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1    participating instrumentality which employed him on the
2    date his temporary disability was incurred; for the
3    purposes of payment of temporary disability benefits, a
4    participating employee, whose employment relationship is
5    terminated by his employing municipality, shall be deemed
6    not to be separated from the service of his employing
7    municipality or participating instrumentality if he
8    continues disabled by the same condition and so long as he
9    is otherwise entitled to such disability benefit.
10        7. He has not failed or refused to consent to and sign
11    an authorization allowing the Board to receive copies of or
12    to examine his medical and hospital records.
13        8. He has not failed or refused to provide complete
14    information regarding any other employment for
15    compensation he has received since becoming disabled.
16(Source: P.A. 97-415, eff. 8-16-11.)
17    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
18    Sec. 7-172. Contributions by participating municipalities
19and participating instrumentalities.
20    (a) Each participating municipality and each participating
21instrumentality shall make payment to the fund as follows:
22        1. municipality contributions in an amount determined
23    by applying the municipality contribution rate to each
24    payment of earnings paid to each of its participating
25    employees;



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1        2. an amount equal to the employee contributions
2    provided by paragraph (a) of Section 7-173, whether or not
3    the employee contributions are withheld as permitted by
4    that Section;
5        3. all accounts receivable, together with interest
6    charged thereon, as provided in Section 7-209;
7        4. if it has no participating employees with current
8    earnings, an amount payable which, over a closed period of
9    20 years for participating municipalities and 10 years for
10    participating instrumentalities, will amortize, at the
11    effective rate for that year, any unfunded obligation. The
12    unfunded obligation shall be computed as provided in
13    paragraph 2 of subsection (b);
14        5. if it has fewer than 7 participating employees or a
15    negative balance in its municipality reserve, the greater
16    of (A) an amount payable that, over a period of 20 years,
17    will amortize at the effective rate for that year any
18    unfunded obligation, computed as provided in paragraph 2 of
19    subsection (b) or (B) the amount required by paragraph 1 of
20    this subsection (a).
21    (b) A separate municipality contribution rate shall be
22determined for each calendar year for all participating
23municipalities together with all instrumentalities thereof.
24The municipality contribution rate shall be determined for
25participating instrumentalities as if they were participating
26municipalities. The municipality contribution rate shall be



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1the sum of the following percentages:
2        1. The percentage of earnings of all the participating
3    employees of all participating municipalities and
4    participating instrumentalities which, if paid over the
5    entire period of their service, will be sufficient when
6    combined with all employee contributions available for the
7    payment of benefits, to provide all annuities for
8    participating employees, and the $3,000 death benefit
9    payable under Sections 7-158 and 7-164, such percentage to
10    be known as the normal cost rate.
11        2. The percentage of earnings of the participating
12    employees of each participating municipality and
13    participating instrumentalities necessary to adjust for
14    the difference between the present value of all benefits,
15    excluding temporary and total and permanent disability and
16    death benefits, to be provided for its participating
17    employees and the sum of its accumulated municipality
18    contributions and the accumulated employee contributions
19    and the present value of expected future employee and
20    municipality contributions pursuant to subparagraph 1 of
21    this paragraph (b). This adjustment shall be spread over a
22    period determined by the Board, not to exceed 30 years for
23    participating municipalities or 10 years for participating
24    instrumentalities the remainder of the period that is
25    allowable under generally accepted accounting principles.
26        3. The percentage of earnings of the participating



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1    employees of all municipalities and participating
2    instrumentalities necessary to provide the present value
3    of all temporary and total and permanent disability
4    benefits granted during the most recent year for which
5    information is available.
6        4. The percentage of earnings of the participating
7    employees of all participating municipalities and
8    participating instrumentalities necessary to provide the
9    present value of the net single sum death benefits expected
10    to become payable from the reserve established under
11    Section 7-206 during the year for which this rate is fixed.
12        5. The percentage of earnings necessary to meet any
13    deficiency arising in the Terminated Municipality Reserve.
14    (c) A separate municipality contribution rate shall be
15computed for each participating municipality or participating
16instrumentality for its sheriff's law enforcement employees.
17    A separate municipality contribution rate shall be
18computed for the sheriff's law enforcement employees of each
19forest preserve district that elects to have such employees.
20For the period from January 1, 1986 to December 31, 1986, such
21rate shall be the forest preserve district's regular rate plus
23    In the event that the Board determines that there is an
24actuarial deficiency in the account of any municipality with
25respect to a person who has elected to participate in the Fund
26under Section 3-109.1 of this Code, the Board may adjust the



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1municipality's contribution rate so as to make up that
2deficiency over such reasonable period of time as the Board may
4    (d) The Board may establish a separate municipality
5contribution rate for all employees who are program
6participants employed under the federal Comprehensive
7Employment Training Act by all of the participating
8municipalities and instrumentalities. The Board may also
9provide that, in lieu of a separate municipality rate for these
10employees, a portion of the municipality contributions for such
11program participants shall be refunded or an extra charge
12assessed so that the amount of municipality contributions
13retained or received by the fund for all CETA program
14participants shall be an amount equal to that which would be
15provided by the separate municipality contribution rate for all
16such program participants. Refunds shall be made to prime
17sponsors of programs upon submission of a claim therefor and
18extra charges shall be assessed to participating
19municipalities and instrumentalities. In establishing the
20municipality contribution rate as provided in paragraph (b) of
21this Section, the use of a separate municipality contribution
22rate for program participants or the refund of a portion of the
23municipality contributions, as the case may be, may be
25    (e) Computations of municipality contribution rates for
26the following calendar year shall be made prior to the



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1beginning of each year, from the information available at the
2time the computations are made, and on the assumption that the
3employees in each participating municipality or participating
4instrumentality at such time will continue in service until the
5end of such calendar year at their respective rates of earnings
6at such time.
7    (f) Any municipality which is the recipient of State
8allocations representing that municipality's contributions for
9retirement annuity purposes on behalf of its employees as
10provided in Section 12-21.16 of the Illinois Public Aid Code
11shall pay the allocations so received to the Board for such
12purpose. Estimates of State allocations to be received during
13any taxable year shall be considered in the determination of
14the municipality's tax rate for that year under Section 7-171.
15If a special tax is levied under Section 7-171, none of the
16proceeds may be used to reimburse the municipality for the
17amount of State allocations received and paid to the Board. Any
18multiple-county or consolidated health department which
19receives contributions from a county under Section 11.2 of "An
20Act in relation to establishment and maintenance of county and
21multiple-county health departments", approved July 9, 1943, as
22amended, or distributions under Section 3 of the Department of
23Public Health Act, shall use these only for municipality
24contributions by the health department.
25    (g) Municipality contributions for the several purposes
26specified shall, for township treasurers and employees in the



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1offices of the township treasurers who meet the qualifying
2conditions for coverage hereunder, be allocated among the
3several school districts and parts of school districts serviced
4by such treasurers and employees in the proportion which the
5amount of school funds of each district or part of a district
6handled by the treasurer bears to the total amount of all
7school funds handled by the treasurer.
8    From the funds subject to allocation among districts and
9parts of districts pursuant to the School Code, the trustees
10shall withhold the proportionate share of the liability for
11municipality contributions imposed upon such districts by this
12Section, in respect to such township treasurers and employees
13and remit the same to the Board.
14    The municipality contribution rate for an educational
15service center shall initially be the same rate for each year
16as the regional office of education or school district which
17serves as its administrative agent. When actuarial data become
18available, a separate rate shall be established as provided in
19subparagraph (i) of this Section.
20    The municipality contribution rate for a public agency,
21other than a vocational education cooperative, formed under the
22Intergovernmental Cooperation Act shall initially be the
23average rate for the municipalities which are parties to the
24intergovernmental agreement. When actuarial data become
25available, a separate rate shall be established as provided in
26subparagraph (i) of this Section.



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1    (h) Each participating municipality and participating
2instrumentality shall make the contributions in the amounts
3provided in this Section in the manner prescribed from time to
4time by the Board and all such contributions shall be
5obligations of the respective participating municipalities and
6participating instrumentalities to this fund. The failure to
7deduct any employee contributions shall not relieve the
8participating municipality or participating instrumentality of
9its obligation to this fund. Delinquent payments of
10contributions due under this Section may, with interest, be
11recovered by civil action against the participating
12municipalities or participating instrumentalities.
13Municipality contributions, other than the amount necessary
14for employee contributions, for periods of service by employees
15from whose earnings no deductions were made for employee
16contributions to the fund, may be charged to the municipality
17reserve for the municipality or participating instrumentality.
18    (i) Contributions by participating instrumentalities shall
19be determined as provided herein except that the percentage
20derived under subparagraph 2 of paragraph (b) of this Section,
21and the amount payable under subparagraph 4 of paragraph (a) of
22this Section, shall be based on an amortization period of 10
24    (j) Notwithstanding the other provisions of this Section,
25the additional unfunded liability accruing as a result of this
26amendatory Act of the 94th General Assembly shall be amortized



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1over a period of 30 years beginning on January 1 of the second
2calendar year following the calendar year in which this
3amendatory Act takes effect, except that the employer may
4provide for a longer amortization period by adopting a
5resolution or ordinance specifying a 35-year or 40-year period
6and submitting a certified copy of the ordinance or resolution
7to the fund no later than June 1 of the calendar year following
8the calendar year in which this amendatory Act takes effect.
9    (k) If the amount of a participating employee's reported
10earnings for any of the 12-month periods used to determine the
11final rate of earnings exceeds the employee's 12 month reported
12earnings with the same employer for the previous year by the
13greater of 6% or 1.5 times the annual increase in the Consumer
14Price Index-U, as established by the United States Department
15of Labor for the preceding September, the participating
16municipality or participating instrumentality that paid those
17earnings shall pay to the Fund, in addition to any other
18contributions required under this Article, the present value of
19the increase in the pension resulting from the portion of the
20increase in salary that is in excess of the greater of 6% or
211.5 times the annual increase in the Consumer Price Index-U, as
22determined by the Fund. This present value shall be computed on
23the basis of the actuarial assumptions and tables used in the
24most recent actuarial valuation of the Fund that is available
25at the time of the computation.
26    Whenever it determines that a payment is or may be required



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1under this subsection (k), the fund shall calculate the amount
2of the payment and bill the participating municipality or
3participating instrumentality for that amount. The bill shall
4specify the calculations used to determine the amount due. If
5the participating municipality or participating
6instrumentality disputes the amount of the bill, it may, within
730 days after receipt of the bill, apply to the fund in writing
8for a recalculation. The application must specify in detail the
9grounds of the dispute. Upon receiving a timely application for
10recalculation, the fund shall review the application and, if
11appropriate, recalculate the amount due. The participating
12municipality and participating instrumentality contributions
13required under this subsection (k) may be paid in the form of a
14lump sum within 90 days after receipt of the bill. If the
15participating municipality and participating instrumentality
16contributions are not paid within 90 days after receipt of the
17bill, then interest will be charged at a rate equal to the
18fund's annual actuarially assumed rate of return on investment
19compounded annually from the 91st day after receipt of the
20bill. Payments must be concluded within 3 years after receipt
21of the bill by the participating municipality or participating
23    When assessing payment for any amount due under this
24subsection (k), the fund shall exclude earnings increases
25resulting from overload or overtime earnings.
26    When assessing payment for any amount due under this



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1subsection (k), the fund shall also exclude earnings increases
2attributable to standard employment promotions resulting in
3increased responsibility and workload.
4    This subsection (k) does not apply to earnings increases
5paid to individuals under contracts or collective bargaining
6agreements entered into, amended, or renewed before January 1,
72012 (the effective date of Public Act 97-609), earnings
8increases paid to members who are 10 years or more from
9retirement eligibility, or earnings increases resulting from
10an increase in the number of hours required to be worked.
11    When assessing payment for any amount due under this
12subsection (k), the fund shall also exclude earnings
13attributable to personnel policies adopted before January 1,
142012 (the effective date of Public Act 97-609) as long as those
15policies are not applicable to employees who begin service on
16or after January 1, 2012 (the effective date of Public Act
18(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
1997-333, eff. 8-12-11; 97-609, eff. 1-1-12; 97-933, eff.
21    (40 ILCS 5/7-173)  (from Ch. 108 1/2, par. 7-173)
22    Sec. 7-173. Contributions by employees.
23    (a) Each participating employee shall make contributions
24to the fund as follows:
25        1. For retirement annuity purposes, normal



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1    contributions of 3 3/4% of earnings.
2        2. Additional contributions of such percentages of
3    each payment of earnings, as shall be elected by the
4    employee for retirement annuity purposes, but not in excess
5    of 10%. The selected rate shall be applicable to all
6    earnings paid following receipt by the Board of written
7    notice of election to make such contributions. Additional
8    contributions at the selected rate shall be made
9    concurrently with normal contributions.
10        3. Survivor contributions, by each participating
11    employee, of 3/4% of each payment of earnings.
12    (b) (Blank).
13    (c) Contributions shall be deducted from each
14corresponding payment of earnings paid to each employee and
15shall be remitted to the board by the participating
16municipality or participating instrumentality making such
17payment. The remittance, together with a report of the earnings
18and contributions shall be made as directed by the board. For
19township treasurers and employees of township treasurers
20qualifying as employees hereunder, the contributions herein
21required as deductions from salary shall be withheld by the
22school township trustees from funds available for the payment
23of the compensation of such treasurers and employees as
24provided in the School Code and remitted to the board.
25    (d) An employee who has made additional contributions under
26paragraph (a)2 of this Section may upon retirement or at any



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1time prior thereto, elect to withdraw the total of such
2additional contributions including interest credited thereon
3to the end of the preceding calendar year, to the extent
4permitted by the federal Internal Revenue Code of 1986, as now
5or hereafter amended.
6    (e) Failure to make the deductions for employee
7contributions provided in paragraph (c) of this Section shall
8not relieve the employee from liability for such contributions.
9The amount of such liability may be deducted, with interest
10charged under Section 7-209, from any annuities or benefits
11payable hereunder to the employee or any other person receiving
12an annuity or benefit by reason of such employee's
14    (f) A participating employee who has at least 40 years of
15creditable service in the Fund may elect to cease making the
16contributions required under this Section. The status of the
17employee under this Article shall be unaffected by this
18election, except that the employee shall not receive any
19additional creditable service for the periods of employment
20following the election. An election under this subsection
21relieves the employer from making additional employer
22contributions in relation to that employee.
23(Source: P.A. 96-1084, eff. 7-16-10; 96-1258, eff. 7-23-10;
2497-333, eff. 8-12-11; 97-933, eff. 8-10-12.)
25    (40 ILCS 5/7-177)  (from Ch. 108 1/2, par. 7-177)



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1    Sec. 7-177. Board meetings.
2    The board shall hold regular monthly meetings at least 4
3times in each year and such special meetings at such other
4times as may be called by the executive director upon written
5notice of at least 3 trustees. At least 5 days' notice of each
6meeting shall be given to each trustee. All meetings of the
7board shall be open to the public and shall be held in the
8offices of the board or in any other place specifically
9designated in the notice of any meeting.
10(Source: Laws 1963, p. 161.)
11    Section 90. The State Mandates Act is amended by adding
12Section 8.37 as follows:
13    (30 ILCS 805/8.37 new)
14    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
15of this Act, no reimbursement by the State is required for the
16implementation of any mandate created by this amendatory Act of
17the 98th General Assembly.
18    Section 99. Effective date. This Act takes effect upon
19becoming law.