Public Act 096-1140
 
HB4960 EnrolledLRB096 15968 AMC 31213 b

    AN ACT concerning public employee benefits.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Pension Code is amended by changing
Sections 7-118, 7-137, 7-172, and 7-220 as follows:
 
    (40 ILCS 5/7-118)  (from Ch. 108 1/2, par. 7-118)
    Sec. 7-118. "Beneficiary". :
    (a) "Beneficiary" means:
        (1) Any person or persons, trust, or charity designated
    as a beneficiary by an employee, former employee who has
    not yet received a retirement annuity or separation
    benefit, or employee annuitant. If no designation is on
    file or no beneficiary so designated survives, the estate
    of the employee, former employee who has not yet received a
    retirement annuity or separation benefit, or employee
    annuitant.
        (2) Any person or persons, trust, or charity designated
    as a beneficiary by a beneficiary annuitant or, if no
    designation is on file or no beneficiary so designated
    survives, the estate of the beneficiary annuitant. The
    surviving spouse of an employee or of an employee
    annuitant, or if no surviving spouse survives, the person
    or persons designated by a participating employee or
    employee annuitant, or if no person so designated survives,
    or if no designation is on file, the estate of the employee
    or employee annuitant. The person or persons designated by
    a beneficiary annuitant, or if no person designated
    survives, or if no designation is on file, the estate of
    the beneficiary annuitant.
        (3) The estate of a surviving spouse annuitant where
    the employee or employee annuitant filed no designation, or
    no person designated survives at the death of a surviving
    spouse annuitant.
    (b) Designations of beneficiaries shall be in writing on
forms prescribed by the board and effective upon filing in the
fund offices. The designation forms shall provide for
contingent beneficiaries. Divorce, dissolution or annulment of
marriage revokes the designation of an employee's former spouse
as a beneficiary on a designation executed before entry of
judgment for divorce, dissolution or annulment of marriage.
    (b) Notwithstanding the foregoing, an employee, former
employee who has not yet received a retirement annuity or
separation benefit, or employee annuitant may elect to name any
person, trust or charity to be the primary beneficiary of any
death benefit payable by reason of his death. Such election
shall state specifically whether it is his intention to exclude
the spouse, shall be in writing, and may be revoked at any
time. Such election or revocation shall take effect upon being
filed in the fund offices.
    (c) If a surviving spouse annuity is payable to a former
spouse upon the death of an employee annuitant, the former
spouse, unless designated by the employee annuitant after
dissolution of the marriage, shall not be the beneficiary for
the purposes of the $3,000 death benefit payable under
subparagraph 6 of Section 7-164. This benefit shall be paid to
the designated beneficiary of the employee annuitant or, if
there is no designation, then to the estate of the employee
annuitant.
(Source: P.A. 89-136, eff. 7-14-95; 90-448, eff. 8-16-97.)
 
    (40 ILCS 5/7-137)  (from Ch. 108 1/2, par. 7-137)
    Sec. 7-137. Participating and covered employees.
    (a) The persons described in this paragraph (a) shall be
included within and be subject to this Article and eligible to
benefits from this fund, beginning upon the dates hereinafter
specified:
        1. Except as to the employees specifically excluded
    under the provisions of this Article, all persons who are
    employees of any municipality (or instrumentality thereof)
    or participating instrumentality on the effective date of
    participation of the municipality or participating
    instrumentality beginning upon such effective date.
        2. Except as to the employees specifically excluded
    under the provisions of this Article, all persons, who
    became employees of any participating municipality (or
    instrumentality thereof) or participating instrumentality
    after the effective date of participation of such
    municipality or participating instrumentality, beginning
    upon the date such person becomes an employee.
        3. All persons who file notice with the board as
    provided in paragraph (b) 2 and 3 of this Section,
    beginning upon the date of filing such notice.
    (b) The following described persons shall not be considered
participating employees eligible for benefits from this fund,
but shall be included within and be subject to this Article
(each of the descriptions is not exclusive but is cumulative):
        1. Any person who occupies an office or is employed in
    a position normally requiring performance of duty during
    less than 600 hours a year for a municipality (including
    all instrumentalities thereof) or a participating
    instrumentality. If a school treasurer performs services
    for more than one school district, the total number of
    hours of service normally required for the several school
    districts shall be considered to determine whether he
    qualifies under this paragraph;
        2. Any person who holds elective office unless he has
    elected while in that office in a written notice on file
    with the board to become a participating employee;
        3. Any person working for a city hospital unless any
    such person, while in active employment, has elected in a
    written notice on file with the board to become a
    participating employee and notification thereof is
    received by the board;
        4. Any person who becomes an employee after June 30,
    1979 as a public service employment program participant
    under the federal Comprehensive Employment and Training
    Act and whose wages or fringe benefits are paid in whole or
    in part by funds provided under such Act;
        5. Any person who is actively employed by a
    municipality on its effective date of participation in the
    Fund if that municipality (i) has at least 35 employees on
    its effective date of participation; (ii) is located in a
    county with at least 2,000,000 inhabitants; and (iii)
    maintains an independent defined benefit pension plan for
    the benefit of its eligible employees, unless the person
    files with the board within 90 days after the
    municipality's effective date of participation an
    irrevocable election to participate.
    (c) Any person electing to be a participating employee,
pursuant to paragraph (b) of this Section may not change such
election, except as provided in Section 7-137.1.
    (d) Any employee who occupied the position of school nurse
in any participating municipality on August 8, 1961 and
continuously thereafter until the effective date of the
exercise of the option authorized by this subparagraph, who on
August 7, 1961 was a member of the Teachers' Retirement System
of Illinois, by virtue of certification by the Department of
Registration and Education as a public health nurse, may elect
to terminate participation in this Fund in order to
re-establish membership in such System. The election may be
exercised by filing written notice thereof with the Board or
with the Board of Trustees of said Teachers' Retirement System,
not later than September 30, 1963, and shall be effective on
the first day of the calendar month next following the month in
which the notice was filed. If the written notice is filed with
such Teachers' Retirement System, that System shall
immediately notify this Fund, but neither failure nor delay in
notification shall affect the validity of the employee's
election. If the option is exercised, the Fund shall notify
such Teachers' Retirement System of such fact and transfer to
that system the amounts contributed by the employee to this
Fund, including interest at 3% per annum, but excluding
contributions applicable to social security coverage during
the period beginning August 8, 1961 to the effective date of
the employee's election. Participation in this Fund as to any
credits on or after August 8, 1961 and up to the effective date
of the employee's election shall terminate on such effective
date.
    (e) Any participating municipality or participating
instrumentality, other than a school district or special
education joint agreement created under Section 10-22.31 of the
School Code, may, by a resolution or ordinance duly adopted by
its governing body, elect to exclude from participation and
eligibility for benefits all persons who are employed after the
effective date of such resolution or ordinance and who occupy
an office or are employed in a position normally requiring
performance of duty for less than 1000 hours per year for the
participating municipality (including all instrumentalities
thereof) or participating instrumentality except for persons
employed in a position normally requiring performance of duty
for 600 hours or more per year (i) by such participating
municipality or participating instrumentality prior to the
effective date of the resolution or ordinance and , (ii) by any
participating municipality or participating instrumentality
prior to January 1, 1982 and (iii) by a participating
municipality or participating instrumentality, which had not
adopted such a resolution when the person was employed, and the
function served by the employee's position is assumed by
another participating municipality or participating
instrumentality. A participating municipality or participating
instrumentality included in and subject to this Article after
January 1, 1982 may adopt such resolution or ordinance only
prior to the date it becomes included in and subject to this
Article. Notwithstanding the foregoing, a participating
municipality or participating instrumentality which is formed
solely to succeed to the functions of a participating
municipality or participating instrumentality shall be
considered to have adopted any such resolution or ordinance
which may have been applicable to the employees performing such
functions. The election made by the resolution or ordinance
shall take effect at the time specified in the resolution or
ordinance, and once effective shall be irrevocable.
(Source: P.A. 93-933, eff. 8-13-04.)
 
    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
    Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
    (a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
        1. municipality contributions in an amount determined
    by applying the municipality contribution rate to each
    payment of earnings paid to each of its participating
    employees;
        2. an amount equal to the employee contributions
    provided by paragraphs (a) and (b) of Section 7-173,
    whether or not the employee contributions are withheld as
    permitted by that Section;
        3. all accounts receivable, together with interest
    charged thereon, as provided in Section 7-209;
        4. if it has no participating employees with current
    earnings, an amount payable which, over a closed period of
    20 years for participating municipalities and 10 years for
    participating instrumentalities beginning with the year
    following an award of benefit, will amortize, at the
    effective rate for that year, any unfunded obligation. The
    unfunded obligation shall be computed as provided in
    paragraph 2 of subsection (b); negative balance in its
    municipality reserve resulting from the award. This amount
    when established will be payable as a separate contribution
    whether or not it later has participating employees.
        5. if it has fewer than 7 participating employees or a
    negative balance in its municipality reserve, the greater
    of (A) an amount payable that, over a period of 20 years,
    will amortize at the effective rate for that year any
    unfunded obligation, computed as provided in paragraph 2 of
    subsection (b) or (B) the amount required by paragraph 1 of
    this subsection (a).
    (b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be
the sum of the following percentages:
        1. The percentage of earnings of all the participating
    employees of all participating municipalities and
    participating instrumentalities which, if paid over the
    entire period of their service, will be sufficient when
    combined with all employee contributions available for the
    payment of benefits, to provide all annuities for
    participating employees, and the $3,000 death benefit
    payable under Sections 7-158 and 7-164, such percentage to
    be known as the normal cost rate.
        2. The percentage of earnings of the participating
    employees of each participating municipality and
    participating instrumentalities necessary to adjust for
    the difference between the present value of all benefits,
    excluding temporary and total and permanent disability and
    death benefits, to be provided for its participating
    employees and the sum of its accumulated municipality
    contributions and the accumulated employee contributions
    and the present value of expected future employee and
    municipality contributions pursuant to subparagraph 1 of
    this paragraph (b). This adjustment shall be spread over
    the remainder of the period that is allowable under
    generally accepted accounting principles.
        3. The percentage of earnings of the participating
    employees of all municipalities and participating
    instrumentalities necessary to provide the present value
    of all temporary and total and permanent disability
    benefits granted during the most recent year for which
    information is available.
        4. The percentage of earnings of the participating
    employees of all participating municipalities and
    participating instrumentalities necessary to provide the
    present value of the net single sum death benefits expected
    to become payable from the reserve established under
    Section 7-206 during the year for which this rate is fixed.
        5. The percentage of earnings necessary to meet any
    deficiency arising in the Terminated Municipality Reserve.
    (c) A separate municipality contribution rate shall be
computed for each participating municipality or participating
instrumentality for its sheriff's law enforcement employees.
    A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
    In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the
municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board may
determine.
    (d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also
provide that, in lieu of a separate municipality rate for these
employees, a portion of the municipality contributions for such
program participants shall be refunded or an extra charge
assessed so that the amount of municipality contributions
retained or received by the fund for all CETA program
participants shall be an amount equal to that which would be
provided by the separate municipality contribution rate for all
such program participants. Refunds shall be made to prime
sponsors of programs upon submission of a claim therefor and
extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
    (e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the
beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until the
end of such calendar year at their respective rates of earnings
at such time.
    (f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such
purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board. Any
multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and
multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
    (g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the
offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts serviced
by such treasurers and employees in the proportion which the
amount of school funds of each district or part of a district
handled by the treasurer bears to the total amount of all
school funds handled by the treasurer.
    From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this
Section, in respect to such township treasurers and employees
and remit the same to the Board.
    The municipality contribution rate for an educational
service center shall initially be the same rate for each year
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
    The municipality contribution rate for a public agency,
other than a vocational education cooperative, formed under the
Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
    (h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating
municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions and Social Security contributions,
for periods of service by employees from whose earnings no
deductions were made for employee contributions to the fund,
may be charged to the municipality reserve for the municipality
or participating instrumentality.
    (i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,
and the amount payable under subparagraph 5 of paragraph (a) of
this Section, shall be based on an amortization period of 10
years.
    (j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of this
amendatory Act of the 94th General Assembly shall be amortized
over a period of 30 years beginning on January 1 of the second
calendar year following the calendar year in which this
amendatory Act takes effect, except that the employer may
provide for a longer amortization period by adopting a
resolution or ordinance specifying a 35-year or 40-year period
and submitting a certified copy of the ordinance or resolution
to the fund no later than June 1 of the calendar year following
the calendar year in which this amendatory Act takes effect.
(Source: P.A. 94-712, eff. 6-1-06.)
 
    (40 ILCS 5/7-220)  (from Ch. 108 1/2, par. 7-220)
    Sec. 7-220. Administrative review. The provisions of the
Administrative Review Law, and all amendments and
modifications thereof and the rules adopted pursuant thereto
shall apply to and govern all proceedings for the judicial
review of final administrative decisions of the retirement
board provided for under this Article. The term "administrative
decision" is as defined in Section 3-101 of the Code of Civil
Procedure. The venue for actions brought under the
Administrative Review Law shall be any county in which the
Board maintains an office or the county in which the member's
plaintiff's employing participating municipality or
participating instrumentality has its main office.
(Source: P.A. 82-783.)
 
    Section 90. The State Mandates Act is amended by adding
Section 8.34 as follows:
 
    (30 ILCS 805/8.34 new)
    Sec. 8.34. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 96th General Assembly.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.