State of Illinois
90th General Assembly
Legislation

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90_SB0654

      40 ILCS 5/7-171           from Ch. 108 1/2, par. 7-171
      40 ILCS 5/7-199.3 new
      30 ILCS 805/8.21 new
          Amends the Illinois Municipal Retirement Fund Article  of
      the  Pension  Code  to  provide  a  program  of  group health
      insurance for retired employees of participating  educational
      employers   and   their   spouses.    Requires   both  active
      educational employees and their employers to contribute  0.5%
      of  earnings  toward  the  costs of the program.   Amends the
      State  Mandates  Act  to   require   implementation   without
      reimbursement.  Effective immediately.
                                                     LRB9001610EGfg
                                               LRB9001610EGfg
 1        AN  ACT  to amend the Illinois Pension Code and the State
 2    Mandates Act.
 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 Section 7-171 and adding Section 7-199.3 as follows:
 7        (40 ILCS 5/7-171) (from Ch. 108 1/2, par. 7-171)
 8        Sec. 7-171. Finance; taxes.
 9        (a)  Each municipality other than a school district shall
10    appropriate an amount sufficient to provide for  the  current
11    municipality contributions required by Sections Section 7-172
12    and  7-199.3  of  this Article  for the fiscal year for which
13    the appropriation is made and all amounts due  for  municipal
14    contributions  for  previous  years.  A municipality that has
15    Those municipalities  which  have  been  assessed  an  annual
16    amount  to  amortize  its unfunded obligation, as provided in
17    subparagraph 5 of paragraph (a)  of  Section  7-172  of  this
18    Article,   shall  include  in  the  appropriation  an  amount
19    sufficient to pay the  amount  assessed.   The  appropriation
20    shall  be  based  upon  an  estimate  of assets available for
21    municipality contributions and liabilities therefor  for  the
22    fiscal   year  for  which  appropriations  are  to  be  made,
23    including funds available from levies  for  this  purpose  in
24    prior years.
25        (b)  For the purpose of providing monies for municipality
26    contributions, beginning for the year in which a municipality
27    is included in this fund:
28             (1)  A municipality other than a school district may
29        levy a tax which shall not exceed the amount appropriated
30        for municipality contributions.
31             (2)  A  school  district may levy a tax in an amount
                            -2-                LRB9001610EGfg
 1        reasonably calculated at the time of the levy to  provide
 2        for   the   municipality   contributions  required  under
 3        Sections Section 7-172 and 7-199.3 of  this  Article  for
 4        the fiscal years for which revenues from the levy will be
 5        received  and all amounts due for municipal contributions
 6        for  previous  years.   Any  levy  adopted   before   the
 7        effective date of this amendatory Act of 1995 by a school
 8        district  shall be considered valid and authorized to the
 9        extent that the amount was reasonably calculated  at  the
10        time   of  the  levy  to  provide  for  the  municipality
11        contributions required under Section 7-172 for the fiscal
12        years for which revenues from the levy will  be  received
13        and  all  amounts  due  for  municipal  contributions for
14        previous years.  In no event shall a budget adopted by  a
15        school  district  limit  a  levy  of that school district
16        adopted under this Section.
17        (c)  Any county which is a part of an educational service
18    region comprised of two or more counties formed under Section
19    3A of the School Code may include  in  its  appropriation  an
20    amount  sufficient  to provide its proportionate share of the
21    municipality contributions of  the  region.    The  tax  levy
22    authorized by this Section may include an amount necessary to
23    provide monies for this contribution.
24        (d)  Any  county  that  is  a  part  of a multiple-county
25    health department or consolidated health department which  is
26    formed  under  "An  Act  in relation to the establishment and
27    maintenance  of  county  and  multiple-county  public  health
28    departments", approved July 9, 1943, as amended, and which is
29    a participating instrumentality may include in  the  county's
30    appropriation   an   amount   sufficient   to   provide   its
31    proportionate  share  of  municipality  contributions  of the
32    department.  The tax levy  authorized  by  this  Section  may
33    include  the  amount  necessary  to  provide  monies for this
34    contribution.
                            -3-                LRB9001610EGfg
 1        (e)  Such tax shall  be  levied  and  collected  in  like
 2    manner,  with the general taxes of the municipality and shall
 3    be in addition to all other taxes which the  municipality  is
 4    now  or  may hereafter be authorized to levy upon all taxable
 5    property therein, and shall be exclusive of and  in  addition
 6    to  the  amount  of  tax  levied  for  general purposes under
 7    Section 8-3-1 of the "Illinois Municipal Code", approved  May
 8    29,  1961,  as  amended, or under any other law or laws which
 9    may limit the amount of tax which the municipality  may  levy
10    for general purposes.  The tax may be levied by the governing
11    body  of  the  municipality without being authorized as being
12    additional to all other taxes by a vote of the people of  the
13    municipality.
14        (f)  The  county  clerk  of  the county in which any such
15    municipality is located, in reducing  tax  levies  shall  not
16    consider  any  such tax as a part of the general tax levy for
17    municipality purposes, and shall not include the same in  the
18    limitation of any other tax rate which may be extended.
19        (g)  The  amount  of  the  tax  to  be levied in any year
20    shall, within the limits herein prescribed, be determined  by
21    the governing body of the respective municipality.
22        (h)  The  revenue derived from any such tax levy shall be
23    used only for the purposes specified in this Article, and, as
24    collected, shall be paid to the treasurer of the municipality
25    levying the tax.  Monies received by a county  treasurer  for
26    use  in  making  contributions  to a consolidated educational
27    service region for its municipality  contributions  shall  be
28    held  by  him  for that purpose and paid to the region in the
29    same manner as other monies appropriated for the  expense  of
30    the region.
31    (Source: P.A. 89-329, eff. 8-17-95.)
32        (40 ILCS 5/7-199.3 new)
33        Sec.  7-199.3.  To  administer  a program of group health
                            -4-                LRB9001610EGfg
 1    benefits for retired educational employees and their spouses.
 2        (a)  For the purposes of this Section:
 3        "Educational employer" means a school district  or  other
 4    employer  created under or governed by the School Code having
 5    employees who participate in  the  Fund  by  reason  of  that
 6    employment.
 7        "Active  educational  employee"  means  an employee of an
 8    educational employer who is  an  active  participant  in  the
 9    Fund.
10        "Retired  educational  employee"  means  a  person who is
11    receiving a retirement annuity from  the  Fund  based  on  at
12    least  5  years  of  service as an employee of an educational
13    employer.
14        (b)  The Board shall establish and administer  a  program
15    of  group  health  benefits for retired educational employees
16    and their spouses or surviving spouses.  The program  may  be
17    self-funded  or operated under a policy of group accident and
18    health insurance.  In  either  case,  the  program  shall  be
19    entirely independent of the other functions and assets of the
20    Fund,  and  the  assets  and  liabilities  arising out of the
21    operation of the program shall remain separate from the other
22    assets and liabilities of the Fund.
23        The Board may adopt any rules that may  be  necessary  or
24    convenient  relating  to the establishment and administration
25    of  the  program  or  to  the   conditions   and   terms   of
26    participation in the program.
27        (c)  All  retired  educational  employees are eligible to
28    participate in the program established under this Section.
29        (d)  Moneys received by the Board relating to the program
30    established  under  this  Section   shall   not   be   deemed
31    contributions  to  or  assets  of  the Fund.  All such moneys
32    shall be held by the Board in a  separate  account  and  used
33    only  for  the purposes of the program established under this
34    Section.
                            -5-                LRB9001610EGfg
 1        (e)  The Fund shall  pay  from  the  separate  account  a
 2    portion  of  the  cost  of  participation  for  each  retired
 3    educational   employee  who  elects  to  participate  in  the
 4    program, not to exceed the following percentages of the  cost
 5    of  the  retired  educational  employee's  participation (not
 6    including any dependent or optional coverages):
 7             (1)  For persons who have contributed to the program
 8        for less than 48 months, 0%.
 9             (2)  For persons who have contributed to the program
10        for at least 48 months but less than 96 months, 25%.
11             (3)  For persons who have contributed to the program
12        for at least 96 months but less than 144 months, 50%.
13             (4)  For persons who have contributed to the program
14        for at least 144 months but less than 192 months, 75%.
15             (5)  For persons who have contributed to the program
16        for at least 192 months, 100%.
17        (f)  The balance of the  cost  of  participation  in  the
18    program  for  a  retired  educational  employee who elects to
19    participate, together with the entire cost  of  any  optional
20    coverage  or  coverage  for dependent beneficiaries, shall be
21    paid by  deductions  authorized  by  the  participant  to  be
22    withheld from his or her monthly annuity payment, except that
23    any  amount  by which the monthly premium balance exceeds the
24    net amount of the  monthly  annuity  payment  shall  be  paid
25    directly  to  the  Fund  by  the participant.  All amounts so
26    withheld or paid shall be held in trust for the  purposes  of
27    paying the costs of the program.
28        (g)  Beginning  July  1,  1997,  all  active  educational
29    employees  shall  contribute 0.5% of earnings toward the cost
30    of  the  program  established  under  this  Section.    These
31    contributions  shall  be deducted by the employer and paid to
32    the Fund for deposit into the  separate  account  established
33    under  this Section.  The Fund may use the same processes for
34    collecting the contributions required by this subsection that
                            -6-                LRB9001610EGfg
 1    it uses to collect contributions from employees under Section
 2    7-173.  An educational employer may agree to pick up  or  pay
 3    the contributions required under this subsection on behalf of
 4    the  employee.  Contributions made under this Section are not
 5    transferable to other pension funds or retirement systems and
 6    are not refundable upon termination of service.
 7        (h)  Beginning July 1, 1997, every  educational  employer
 8    shall  contribute  toward the cost of the program established
 9    under this Section an amount equal to 0.5% of the earnings of
10    its active educational employees.  These contributions  shall
11    be  paid  by  the  employer  to the Fund for deposit into the
12    separate account established under this  Section.   The  Fund
13    may  use  the same processes for collecting the contributions
14    required  by  this  subsection  that  it  uses   to   collect
15    contributions   from   employers  under  Sections  7-172  and
16    7-172.1.  Contributions for  the  program  established  under
17    this  Section are separate from the contributions to the Fund
18    required under Section 7-172 and shall not be included in the
19    calculation of the contribution rate under that Section.
20        (i)  The Board shall  submit  an  annual  report  of  its
21    activities  under  this  Section to each educational employer
22    participating in the program administered under this Section.
23        (j)  The group  accident  and  health  insurance  program
24    established  under  this  Section  is  not  and  shall not be
25    construed to be a pension or retirement benefit for  purposes
26    of Section 5 of Article XIII of the Illinois Constitution.
27        Section  90.  The State Mandates Act is amended by adding
28    Section 8.21 as follows:
29        (30 ILCS 805/8.21 new)
30        Sec. 8.21. Exempt mandate.   Notwithstanding  Sections  6
31    and  8 of this Act, no reimbursement by the State is required
32    for  the  implementation  of  any  mandate  created  by  this
                            -7-                LRB9001610EGfg
 1    amendatory Act of 1997.
 2        Section 99. Effective date.  This Act takes  effect  upon
 3    becoming law.

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