An eligible person may establish up to 5 years of creditable service
under this Article, in increments of one month, by making the contributions
specified in subsection (c). In addition, for each month of creditable
service established under this Section, a person's age at retirement shall
be deemed to be one month older than it actually is.
The creditable service established under this Section may be used for
all purposes under this Article and the Retirement Systems Reciprocal Act,
except for the computation of final average compensation under Section
14-103.12 or the determination of compensation under this or any other
Article of this Code.
The age enhancement established under this Section may not be used to
enable any person to begin receiving a retirement annuity calculated under
Section 14-110 before actually attaining age 50 (without any age enhancement
under this Section). The age enhancement established under this Section may
be used for all other purposes under this Article (including calculation of
a proportionate annuity payable by this System under the Retirement Systems
Reciprocal Act), except for purposes of the level income option in Section
14-112, the reversionary annuity under Section 14-113, and the required
distributions under Section 14-121.1.
The age enhancement established under this Section may be used in
determining benefits payable under Article 16 of this Code under the
Retirement Systems Reciprocal Act, if the person has at least 5 years of
service credit in the Article 16 system that was earned while participating
in that system as a teacher (as defined in Section 16-106) employed by a
department (as defined in Section 14-103.04).
Age enhancement established under this Section shall not otherwise be used
in determining benefits payable under other Articles of this Code under the
Retirement Systems Reciprocal Act.
(c) For all creditable service established under this Section, a person
must pay to the System an employee contribution to be determined by the
System, based on the member's rate of compensation on June 1, 2002 (or
the last date before June 1, 2002 for which a rate can be determined) and
the retirement contribution rate in effect on June 1, 2002 for the member
(or for members with the same social security and alternative formula status
as the member).
If the member receives a lump sum payment for accumulated vacation, sick
leave and personal leave upon withdrawal from service, and the net amount of
that lump sum payment is at least as great as the amount of the contribution
required under this Section, the entire contribution must be paid by the
employee by payroll deduction. If there is no such lump sum payment, or if
it is less than the contribution required under this Section, the member shall
make an initial payment by payroll deduction, equal to the net amount of the
lump sum payment for accumulated vacation, sick leave, and personal leave,
and have the remaining amount due treated as a reduction from the retirement
annuity in 24 equal monthly installments beginning in the month in which the
retirement annuity takes effect. The required contribution may be paid as a
pre-tax deduction from earnings. For federal and Illinois tax purposes, the
monthly amount by which the annuitant's benefit is reduced shall not be
treated as a contribution by the annuitant, but rather as a reduction of the
annuitant's monthly benefit.
(c-5) The reduction in retirement annuity provided in subsection (c) of
Section 14-108 does not apply to the annuity of a person who retires under this
Section. A person who has received any age enhancement or creditable service
under this Section may begin to receive an unreduced retirement annuity upon
attainment of age 55 with at least 25 years of creditable service (including
any age enhancement and creditable service established under this Section).
(d) In order to ensure that the efficient operation of State government
is not jeopardized by the simultaneous retirement of large numbers of key
personnel, the director or other head of a department may, for key employees
of that department, extend the December 31, 2002 deadline for terminating
employment under this Article established in subdivision (a)(4) of this
Section to a date not later than April 30, 2003 by so notifying the System
in writing by December 31, 2002.
(e) Notwithstanding Section 14-111, a person who has received any
age enhancement or creditable service under this Section and who reenters
service under this Article (or as an employee of a department under Article
16) other than as a temporary employee thereby forfeits that age enhancement
and creditable service and is entitled to a refund of the contributions
made pursuant to this Section.
(f) The System shall determine the amount of the increase in the present value of future benefits resulting from the granting of early retirement incentives
under this Section and shall report that amount to the Governor and the Commission on Government Forecasting and Accountability
on or after the effective date of this amendatory Act of the 93rd General Assembly and on or before November 15,
2004. Beginning with State fiscal year 2008, the increase
reported under this subsection (f) shall be included in the
calculation of the required State contribution under Section 14-131.
(g) In addition to the contributions otherwise required under this Article,
the State shall appropriate and pay to the System an amount equal to
$70,000,000 in State fiscal years 2004 and 2005.
(h) The Commission on Government Forecasting and Accountability (i) shall hold one or more hearings on or before the last session day during the fall veto session of 2004 to review recommendations relating to funding of early retirement incentives under this Section and (ii) shall file its report with the General Assembly on or before December 31, 2004 making its recommendations relating to funding of early retirement incentives under this Section; the Commission's report may contain both majority recommendations and minority recommendations. The System shall recalculate and recertify to the Governor by January 31, 2005 the amount of the required State contribution to the System for State fiscal year 2005 with respect to those incentives. The Pension Laws Commission (or its successor, the
Commission on Government Forecasting and Accountability) shall determine
and report to the General
Assembly, on or before January 1, 2004 and annually thereafter through the year
2006, its estimate of (1) the annual amount of payroll savings likely to be
realized by the State as a result of the early retirement of persons receiving
early retirement incentives under this Section and (2) the net annual savings
or cost to the State from the program of early retirement incentives created
under this Section.
The System, the Department of Central Management Services, the
Governor's Office of Management and Budget (formerly
the Budget), and all other departments shall provide to the Commission any
assistance that the Commission may request with respect to its reports under
this Section. The Commission may require departments to provide it with any
information that it deems necessary or useful with respect to its reports under
this Section, including without limitation information about (1) the final
earnings of former department employees who elected to receive benefits under
this Section, (2) the earnings of current department employees holding the
positions vacated by persons who elected to receive benefits under this
Section, and (3) positions vacated by persons who elected to receive benefits
under this Section that have not yet been refilled.
(i) The changes made to this Section by this amendatory Act of the 92nd
General Assembly do not apply to persons who retired under this Section on or
before May 1, 1992.
(Source: P.A. 93-632, eff. 2-1-04; 93-839, eff. 7-30-04; 93-1067, eff. 1-15-05; 94-4, eff. 6-1-05; 94-1057, eff. 7-31-06.)