State of Illinois
92nd General Assembly

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 1        AN ACT in relation to 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
 5    changing Section 3-110 as follows:

 6        (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
 7        Sec. 3-110.  Creditable service.
 8        (a)  "Creditable service" is the time served by a  police
 9    officer  as  a member of a regularly constituted police force
10    of a municipality. In computing creditable service  furloughs
11    without  pay  exceeding 30 days shall not be counted, but all
12    leaves of absence for  illness  or  accident,  regardless  of
13    length,  and all periods of disability retirement for which a
14    police officer has received no  disability  pension  payments
15    under this Article shall be counted.
16        (b)  Creditable  service  includes all periods of service
17    in the military, naval or air forces  of  the  United  States
18    entered   upon   while   an   active   police  officer  of  a
19    municipality, provided that upon  applying  for  a  permanent
20    pension,  and  in accordance with the rules of the board, the
21    police officer pays into the  fund  the  amount  the  officer
22    would  have  contributed  if  he  or  she  had been a regular
23    contributor during  such  period,  to  the  extent  that  the
24    municipality  which  the  police  officer served has not made
25    such contributions in the officer's behalf.  The total amount
26    of such creditable service shall not exceed 5  years,  except
27    that  any  police officer who on July 1, 1973 had more than 5
28    years of such creditable  service  shall  receive  the  total
29    amount thereof.
30        (b-1)  In  addition to any creditable service established
31    under subsection (b), creditable service may be  granted  for
                            -2-                LRB9204840LDcs
 1    up  to 24 months of service in the armed forces of the United
 2    States that was not immediately preceded by employment  as  a
 3    police  officer,  but  only if the governing authority of the
 4    municipality has adopted a resolution or ordinance  approving
 5    the establishment of creditable service under this subsection
 6    (b-1) by police officers of the municipality.
 7        In  order  to  receive  creditable  service  for military
 8    service under this subsection (b-1), a  police  officer  must
 9    (1)  apply to the Fund in writing and provide evidence of the
10    military service that is satisfactory to the  Board  and  (2)
11    make  contributions  to  the  Fund  equal to (i) the employee
12    contributions that would have been required had  the  service
13    been  rendered as a member, plus (ii) an amount determined by
14    the board to be equal to the employer's normal  cost  of  the
15    benefits  accrued  for  that  military  service,  plus  (iii)
16    interest  on  items  (i) and (ii) at the rate of 6% per year,
17    compounded annually, from the date of first membership in the
18    Fund to the date of payment..
19        (c)  Creditable service also includes service rendered by
20    a police officer while on leave  of  absence  from  a  police
21    department  to serve as an executive of an organization whose
22    membership  consists  of  members  of  a  police  department,
23    subject to the following conditions:  (i) the police  officer
24    is  a  participant  of  a fund established under this Article
25    with at least 10 years of service as a police  officer;  (ii)
26    the  police officer received no credit for such service under
27    any other retirement system, pension  fund,  or  annuity  and
28    benefit  fund  included  in  this Code; (iii) pursuant to the
29    rules of the board the police officer pays to  the  fund  the
30    amount  he or she would have contributed had the officer been
31    an active member of  the  police  department;  and  (iv)  the
32    organization  pays a contribution equal to the municipality's
33    normal cost for that period of service.
34        (d)(1)  Creditable  service  also  includes  periods   of
                            -3-                LRB9204840LDcs
 1    service originally established in another police pension fund
 2    under this Article or in the Fund established under Article 7
 3    of  this  Code  for  which  (i)  the  contributions have been
 4    transferred under Section 3-110.7 or Section 7-139.9 and (ii)
 5    any additional contribution required under paragraph  (2)  of
 6    this  subsection has been paid in full in accordance with the
 7    requirements of this subsection (d).
 8        (2)  If the board of the pension fund to which creditable
 9    service  and  related  contributions  are  transferred  under
10    Section  3-110.7  or  7-139.9  determines  that  the   amount
11    transferred is less than the true cost to the pension fund of
12    allowing  that  creditable service to be established, then in
13    order to establish that creditable service the police officer
14    must pay to the  pension  fund,  within  the  payment  period
15    specified  in paragraph (3) of this subsection, an additional
16    contribution equal to the difference, as  determined  by  the
17    board  in  accordance  with  the rules and procedures adopted
18    under paragraph (6) of this subsection.
19        (3)  Except as provided in paragraph (4), the  additional
20    contribution  must  be  paid  to the board (i) within 5 years
21    from the date of the transfer of contributions under  Section
22    3-110.7  or  7-139.9  and  (ii)  before  the  police  officer
23    terminates   service   with   the   fund.    The   additional
24    contribution  may be paid in a lump sum or in accordance with
25    a schedule of installment payments authorized by the board.
26        (4)  If the police officer dies in service before payment
27    in full has been made and before the expiration of the 5-year
28    payment period, the surviving spouse of the officer may elect
29    to pay the unpaid amount on the  officer's  behalf  within  6
30    months  after the date of death, in which case the creditable
31    service shall  be  granted  as  though  the  deceased  police
32    officer  had paid the remaining balance on the day before the
33    date of death.
34        (5)  If the additional contribution is not paid  in  full
                            -4-                LRB9204840LDcs
 1    within the required time, the creditable service shall not be
 2    granted  and  the  police officer (or the officer's surviving
 3    spouse or estate) shall be entitled to receive  a  refund  of
 4    (i)  any  partial payment of the additional contribution that
 5    has been made by the police officer and (ii)  those  portions
 6    of  the  amounts  transferred  under  subdivision  (a)(1)  of
 7    Section  3-110.7 or subdivisions (a)(1) and (a)(3) of Section
 8    7-139.9 that represent employee  contributions  paid  by  the
 9    police  officer  (but  not  the accumulated interest on those
10    contributions) and interest paid by the police officer to the
11    prior pension fund in order to reinstate  service  terminated
12    by acceptance of a refund.
13        At  the  time of paying a refund under this item (5), the
14    pension fund shall also repay to the pension fund from  which
15    the  contributions  were transferred under Section 3-110.7 or
16    7-139.9 the amount originally transferred  under  subdivision
17    (a)(2)  of  that Section, plus interest at the rate of 6% per
18    year, compounded annually, from  the  date  of  the  original
19    transfer  to  the  date  of repayment.  Amounts repaid to the
20    Article 7 fund under this provision shall be credited to  the
21    appropriate municipality.
22        Transferred  credit that is not granted due to failure to
23    pay the additional contribution within the required  time  is
24    lost;  it  may not be transferred to another pension fund and
25    may not be reinstated in the pension fund from which  it  was
26    transferred.
27        (6)  The  Public  Employee  Pension  Fund Division of the
28    Department of Insurance shall establish by rule the manner of
29    making the calculation required under paragraph (2)  of  this
30    subsection,  taking  into  account  the appropriate actuarial
31    assumptions; the police officer's service,  age,  and  salary
32    history;  the  level  of funding of the pension fund to which
33    the credits are being transferred; and any other factors that
34    the Division  determines  to  be  relevant.   The  rules  may
                            -5-                LRB9204840LDcs
 1    require  that  all  calculations  made under paragraph (2) be
 2    reported  to  the  Division  by  the  board  performing   the
 3    calculation,  together  with  documentation of the creditable
 4    service to be transferred, the amounts of  contributions  and
 5    interest   to   be  transferred,  the  manner  in  which  the
 6    calculation was performed, the numbers relied upon in  making
 7    the  calculation,  the  results  of  the calculation, and any
 8    other information the Division may deem useful.
 9    (Source: P.A. 90-460, eff. 8-17-97; 91-887, eff. 7-6-00.)

10        Section 99. Effective date.  This Act takes  effect  upon
11    becoming law.

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