State of Illinois
90th General Assembly
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90_SB0311

      40 ILCS 5/15-157          from Ch. 108 1/2, par. 15-157
      40 ILCS 5/15-157.1        from Ch. 108 1/2, par. 15-157.1
          Amends the State  Universities  Article  of  the  Pension
      Code.      Authorizes   participating   employees   to   make
      contributions for the purchase of service credit.  Authorizes
      pickup  of optional contributions by the employer for federal
      tax purposes.  Effective immediately.
                                                     LRB9002488EGfg
                                               LRB9002488EGfg
 1        AN ACT to amend the Illinois  Pension  Code  by  changing
 2    Sections 15-157 and 15-157.1.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The  Illinois  Pension  Code  is  amended  by
 6    changing Sections 15-157 and 15-157.1 as follows:
 7        (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
 8        Sec. 15-157.  Employee Contributions.
 9        (a)  Each participating employee shall make contributions
10    towards  the  retirement  annuity of each payment of earnings
11    applicable to employment under this system on and  after  the
12    date   of  becoming  a  participant  as  follows:   Prior  to
13    September 1, 1949, 3 1/2% of earnings; from September 1, 1949
14    to August 31, 1955, 5%; from September 1, 1955 to August  31,
15    1969,   6%;   from   September   1,  1969,  6  1/2%.    These
16    contributions are to be considered  as  normal  contributions
17    for purposes of this Article.
18        Each  participant  who is a police officer or firefighter
19    shall make normal contributions of  8%  of  each  payment  of
20    earnings  applicable  to  employment  as  a police officer or
21    firefighter under this system on or after September 1,  1981,
22    unless  he  or  she files with the board within 60 days after
23    the effective date of this amendatory Act of 1991 or 60  days
24    after the board receives notice that he or she is employed as
25    a  police  officer  or  firefighter,  whichever  is  later, a
26    written notice waiving the  retirement  formula  provided  by
27    Rule  4 of Section 15-136.  This waiver shall be irrevocable.
28    If a participant had met the conditions set forth in  Section
29    15-132.1  prior  to the effective date of this amendatory Act
30    of  1991  but  failed   to   make   the   additional   normal
31    contributions required by this paragraph, he or she may elect
                            -2-                LRB9002488EGfg
 1    to pay the additional contributions plus compound interest at
 2    the  effective  rate.   If  such  payment  is received by the
 3    board, the service shall  be  considered  as  police  officer
 4    service in calculating the retirement annuity under Rule 4 of
 5    Section 15-136.
 6        (b)  Starting   September  1,  1969,  each  participating
 7    employee shall make additional contributions of 1/2 of 1%  of
 8    earnings  to  finance  a  portion  of  the cost of the annual
 9    increases  in  retirement  annuity  provided  under   Section
10    15-136.
11        (c)  Each  participating  employee  shall  make survivors
12    insurance contributions of 1% of  earnings  applicable  under
13    this  system  on  and after August 1, 1959.  Contributions in
14    excess of $80 during any fiscal  year  beginning  August  31,
15    1969  and in excess of $120 during any fiscal year thereafter
16    until September 1, 1971 shall  be  considered  as  additional
17    contributions for purposes of this Article.
18        (d)  If the board by board rule so permits and subject to
19    such  conditions  and  limitations as may be specified in its
20    rules, a participant may make other additional  contributions
21    of  such percentage of earnings or amounts as the participant
22    shall elect in a  written  notice  thereof  received  by  the
23    board.
24        (e)  That  fraction  of a participant's total accumulated
25    normal contributions, the numerator of which is equal to  the
26    number  of  years  of  service  in  excess  of  that which is
27    required to qualify for the maximum retirement  annuity,  and
28    the denominator of which is equal to the total service of the
29    participant,  shall  be  considered as accumulated additional
30    contributions.  The determination of the  applicable  maximum
31    annuity  and the adjustment in contributions required by this
32    provision shall be made as of the date of  the  participant's
33    retirement.
34        (f)  Notwithstanding   the   foregoing,  a  participating
                            -3-                LRB9002488EGfg
 1    employee shall not be required to  make  contributions  under
 2    this  Section  after  the date upon which continuance of such
 3    contributions would otherwise cause  his  or  her  retirement
 4    annuity to exceed the maximum retirement annuity as specified
 5    in clause (1) of subsection (c) of Section 15-136.
 6        (g)  A  participating employee may make contributions for
 7    the purchase of service credit under this Article.
 8    (Source: P.A. 86-272; 86-1488.)
 9        (40 ILCS 5/15-157.1) (from Ch. 108 1/2, par. 15-157.1)
10        Sec. 15-157.1.  Pickup Pick up of employee contributions.
11        (a)  Each   employer   shall   pick   up   the   employee
12    contributions required under subsections (a), (b), and (c) of
13    Section 15-157 for all earnings payments made  on  and  after
14    January  1, 1981, and the contributions so picked up shall be
15    treated  as  employer  contributions   in   determining   tax
16    treatment  under  the  United  States  Internal Revenue Code.
17    These contributions shall not be included as gross income  of
18    the  participant  until  such time as they are distributed or
19    made  available.   The  employer  shall  pay  these  employee
20    contributions from the same source of funds which is used  in
21    paying  earnings  to  the employee.  The employer may pick up
22    these contributions by a reduction in the cash salary of  the
23    participants,  or  by  an  offset  against  a  future  salary
24    increase,  or  by  a combination of a reduction in salary and
25    offset against a future salary increase.
26        (b)  Subject  to  the  requirements  of  federal  law,  a
27    participating employee may elect to have the employer pick up
28    optional contributions that the participant  has  elected  to
29    pay   to   the   System  under  Section  15-157(g),  and  the
30    contributions so picked  up  shall  be  treated  as  employer
31    contributions  for  the  purposes  of determining federal tax
32    treatment under the federal Internal Revenue  Code  of  1986.
33    These  contributions shall not be included as gross income of
                            -4-                LRB9002488EGfg
 1    the participant until such time as they  are  distributed  or
 2    made available.  The employer shall pick up the contributions
 3    by  a  reduction  in  the  cash salary of the participant and
 4    shall pay the contributions from the  same  source  of  funds
 5    that  is  used  to  pay  earnings  to  the  participant.  The
 6    election  to  have  optional  contributions  picked   up   is
 7    irrevocable.
 8    (Source: P.A. 83-1440.)
 9        Section  99.  Effective date.  This Act takes effect upon
10    becoming law.

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