Public Act 097-0968
 
HB4996 EnrolledLRB097 14805 JDS 59833 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 15-113, 15-135, 15-136, 15-136.4, 15-139, 15-153.2,
and 15-186 and by adding Sections 15-139.5 and 15-168.2 as
follows:
 
    (40 ILCS 5/15-113)  (from Ch. 108 1/2, par. 15-113)
    Sec. 15-113. Service. "Service": The periods defined in
Sections 15-113.1 through 15-113.9 and Section 15-113.11.
(Source: P.A. 84-1472.)
 
    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
    Sec. 15-135. Retirement annuities - Conditions.
    (a) A participant who retires in one of the following
specified years with the specified amount of service is
entitled to a retirement annuity at any age under the
retirement program applicable to the participant:
        35 years if retirement is in 1997 or before;
        34 years if retirement is in 1998;
        33 years if retirement is in 1999;
        32 years if retirement is in 2000;
        31 years if retirement is in 2001;
        30 years if retirement is in 2002 or later.
    A participant with 8 or more years of service after
September 1, 1941, is entitled to a retirement annuity on or
after attainment of age 55.
    A participant with at least 5 but less than 8 years of
service after September 1, 1941, is entitled to a retirement
annuity on or after attainment of age 62.
    A participant who has at least 25 years of service in this
system as a police officer or firefighter is entitled to a
retirement annuity on or after the attainment of age 50, if
Rule 4 of Section 15-136 is applicable to the participant.
    (b) The annuity payment period shall begin on the date
specified by the participant or the recipient of a disability
retirement annuity submitting a written application, which
date shall not be prior to termination of employment or more
than one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains age 70 1/2, the annuity payment period shall begin on
that date regardless of whether an application has been filed.
    (c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 92-749, eff. 8-2-02.)
 
    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
    Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
    (a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
    Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective
prescribed rate of interest in effect at the time the
retirement annuity begins:
        (i) the normal annuity which can be provided on an
    actuarially equivalent basis, by the accumulated normal
    contributions as of the date the annuity begins;
        (ii) an annuity from employer contributions of an
    amount equal to that which can be provided on an
    actuarially equivalent basis from the accumulated normal
    contributions made by the participant under Section
    15-113.6 and Section 15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
        (iii) the annuity that can be provided on an
    actuarially equivalent basis from the entire contribution
    made by the participant under Section 15-113.3.
    With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
    The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
    This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
    This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
    Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
    Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
        (i) service that is performed while the person is an
    employee under subsection (h) of Section 15-107; and
        (ii) in the case of an individual who was a
    participating employee employed in the fire department of
    the University of Illinois's Champaign-Urbana campus
    immediately prior to the elimination of that fire
    department and who immediately after the elimination of
    that fire department transferred to another job with the
    University of Illinois, service performed as an employee of
    the University of Illinois in a position other than police
    officer or firefighter, from the date of that transfer
    until the employee's next termination of service with the
    University of Illinois.
    Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed rate of interest in effect
at the time the retirement annuity begins:
        (i) the normal annuity which can be provided on an
    actuarially equivalent basis, by the accumulated normal
    contributions as of the date the annuity begins; and
        (ii) an annuity from employer contributions of an
    amount equal to that which can be provided on an
    actuarially equivalent basis from the accumulated normal
    contributions made by the participant under Section
    15-113.6 and Section 15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
        (iii) an annuity which can be provided on an
    actuarially equivalent basis from the employee
    contribution for early retirement under Section 15-136.2,
    and an annuity from employer contributions of an amount
    equal to that which can be provided on an actuarially
    equivalent basis from the employee contribution for early
    retirement under Section 15-136.2.
    In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
    With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
    The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor employer contribution for early retirement under Section
15-136.2, nor any other employer contribution, shall be used in
the calculation of the amount of a retirement annuity under
this Rule 5.
    The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
    The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
    (b) The retirement annuity provided under Rules 1 and 3
above shall be reduced by 1/2 of 1% for each month the
participant is under age 60 at the time of retirement. However,
this reduction shall not apply in the following cases:
        (1) For a disabled participant whose disability
    benefits have been discontinued because he or she has
    exhausted eligibility for disability benefits under clause
    (6) of Section 15-152;
        (2) For a participant who has at least the number of
    years of service required to retire at any age under
    subsection (a) of Section 15-135; or
        (3) For that portion of a retirement annuity which has
    been provided on account of service of the participant
    during periods when he or she performed the duties of a
    police officer or firefighter, if these duties were
    performed for at least 5 years immediately preceding the
    date the retirement annuity is to begin.
    (c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
    (d) An annuitant whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his
or her retirement annuity as follows:
    Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from the
date the retirement annuity payments began to January 1, 1972,
plus 0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
    The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
    Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a percentage
of the total annuity payable at the time of the increase,
including all increases previously granted under this Article.
    The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
    (e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
    (f) A participant is entitled to such additional annuity as
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
    (g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole
or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
    (h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
    (i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
    (40 ILCS 5/15-136.4)
    Sec. 15-136.4. Retirement and Survivor Benefits Under
Portable Benefit Package.
    (a) This Section 15-136.4 describes the form of annuity and
survivor benefits available to a participant who has elected
the portable benefit package and has completed the one-year
waiting period required under subsection (e) of Section
15-134.5. For purposes of this Section, the term "eligible
spouse" means the husband or wife of a participant to whom the
participant is married on the date the participant's annuity
payment period begins, provided however, that if the
participant should die prior to the commencement of retirement
annuity benefits, then "eligible spouse" means the husband or
wife, if any, to whom the participant was married throughout
the one-year period preceding the date of his or her death.
    (b) This subsection (b) describes the normal form of
annuity payable to a participant subject to this Section
15-136.4. If the participant is unmarried on the date his or
her annuity payment period begins, then the annuity payments
shall be made in the form of a single-life annuity as described
in Section 15-118. If the participant is married on the date
his or her annuity payments commence, then the annuity payments
shall be paid in the form of a qualified joint and survivor
annuity that is the actuarial equivalent of the single-life
annuity. Under the "qualified joint and survivor annuity", a
reduced amount shall be paid to the participant for his or her
lifetime and his or her eligible spouse, if surviving at the
participant's death, shall be entitled to receive thereafter a
lifetime survivorship annuity in a monthly amount equal to 50%
of the reduced monthly amount that was payable to the
participant. The last payment of a qualified joint and survivor
annuity shall be made as of the first day of the month in which
the death of the survivor occurs.
    (c) Instead of the normal form of annuity that would be
paid under subsection (b), a participant may elect in writing
within the 180-day 90-day period prior to the date his or her
annuity payments commence to waive the normal form of annuity
payment and receive an optional form of payment as described in
subsection (h). If the participant is married and elects an
optional form of payment under subsection (h) other than a
joint and survivor annuity with the eligible spouse designated
as the contingent annuitant, then such election shall require
the consent of his or her eligible spouse in the manner
described in subsection (d). At any time during the 180-day
90-day period preceding the date the participant's payment
period begins, the participant may revoke the optional form of
payment elected under this subsection (c) and reinstate
coverage under the qualified joint and survivor annuity without
the spouse's consent, but an election to revoke the optional
form elected and elect a new optional form of payment or
designate a different contingent annuitant shall not be
effective without the eligible spouse's consent.
    (d) The eligible spouse's consent to any election made
pursuant to this Section that requires the eligible spouse's
consent shall be in writing and shall acknowledge the effect of
the consent. In addition, the eligible spouse's signature on
the written consent must be witnessed by a notary public. The
eligible spouse's consent need not be obtained if the system is
satisfied that there is no eligible spouse, that the eligible
spouse cannot be located, or because of any other relevant
circumstances. An eligible spouse's consent under this Section
is valid only with respect to the specified optional form of
payment and, if applicable, contingent annuitant designated by
the participant. If the optional form of payment or the
contingent annuitant is subsequently changed (other than by a
revocation of the optional form of payment and reinstatement of
the qualified joint and survivor annuity), a new consent by the
eligible spouse is required. The eligible spouse's consent to
an election made by a participant pursuant to this Section,
once made, may not be revoked by the eligible spouse.
    (e) Within a reasonable period of time preceding the date a
participant's annuity commences, a participant shall be
supplied with a written explanation of (1) the terms and
conditions of the normal form single-life annuity and qualified
joint and survivor annuity, (2) the participant's right to
elect a single-life annuity or an optional form of payment
under subsection (h) subject to his or her eligible spouse's
consent, if applicable, and (3) the participant's right to
reinstate coverage under the qualified joint and survivor
annuity prior to his or her annuity commencement date by
revoking an election of an optional form of payment under
subsection (h).
    (f) If a married participant with at least 1.5 years of
service dies prior to commencing retirement annuity payments
and prior to taking a refund under Section 15-154, his or her
eligible spouse is entitled to receive a pre-retirement
survivor annuity, if there is not then in effect a waiver of
the pre-retirement survivor annuity. The pre-retirement
survivor annuity payable under this subsection shall be a
monthly annuity payable for the eligible spouse's life,
commencing as of the beginning of the month next following the
later of the date of the participant's death or the date the
participant would have first met the eligibility requirements
for retirement, and continuing through the beginning of the
month in which the death of the eligible spouse occurs. The
monthly amount payable to the spouse under the pre-retirement
survivor annuity shall be equal to the monthly amount that
would be payable as a survivor annuity under the qualified
joint and survivor annuity described in subsection (b) if: (1)
in the case of a participant who dies on or after the date on
which the participant has met the eligibility requirements for
retirement, the participant had retired with an immediate
qualified joint and survivor annuity on the day before the
participant's date of death; or (2) in the case of a
participant who dies before the earliest date on which the
participant would have met the eligibility requirements for
retirement age, the participant had separated from service on
the date of death, survived to the earliest retirement age
based on service prior to his or her death, retired with an
immediate qualified joint and survivor annuity at the earliest
retirement age, and died on the day after the day on which the
participant would have attained the earliest retirement age.
    (g) A married participant who has not retired may elect at
any time to waive the pre-retirement survivor annuity described
in subsection (f). Any such election shall require the consent
of the participant's eligible spouse in the manner described in
subsection (d). A waiver of the pre-retirement survivor annuity
shall increase the lump sum death benefit payable under
subsection (b) of Section 15-141. Prior to electing any waiver
of the pre-retirement survivor annuity, the participant shall
be provided with a written explanation of (1) the terms and
conditions of the pre-retirement survivor annuity and the death
benefits payable from the system both with and without the
pre-retirement survivor annuity, (2) the participant's right
to elect a waiver of the pre-retirement survivor annuity
coverage subject to his or her spouse's consent, and (3) the
participant's right to reinstate pre-retirement survivor
annuity coverage at any time by revoking a prior waiver of such
coverage.
    (h) By filing a timely election with the system, a
participant who will be eligible to receive a retirement
annuity under this Section may waive the normal form of annuity
payment described in subsection (b), subject to obtaining the
consent of his or her eligible spouse, if applicable, and elect
to receive any one of the following optional forms of payment:
        (1) Joint and Survivor Annuity Options: The
    participant may elect to receive a reduced annuity payable
    for his or her life and to have a lifetime survivorship
    annuity in a monthly amount equal to 50%, 75%, or 100% (as
    elected by the participant) of that reduced monthly amount,
    to be paid after the participant's death to his or her
    contingent annuitant, if the contingent annuitant is alive
    at the time of the participant's death.
        (2) Single-Life Annuity Option (optional for married
    participants). The participant may elect to receive a
    single-life annuity payable for his or her life only.
        (3) Lump sum retirement benefit. The participant may
    elect to receive a lump sum retirement benefit that is
    equal to the amount of a refund payable under Section
    15-154(a-2).
All joint and survivor annuity forms shall be in an amount that
is the actuarial equivalent of the single-life annuity.
    For the purposes of this Section, the term "contingent
annuitant" means the beneficiary who is designated by a
participant at the time the participant elects a joint and
survivor annuity to receive the lifetime survivorship annuity
in the event the beneficiary survives the participant at the
participant's death.
    (i) Under no circumstances may an option be elected,
changed, or revoked after the date the participant's retirement
annuity commences.
    (j) An election made pursuant to subsection (h) shall
become inoperative if the participant or the contingent
annuitant dies before the date the participant's annuity
payments commence, or if the eligible spouse's consent is
required and not given.
    (k) (Blank).
    (l) The automatic annual increases described in subsection
(d) of Section 15-136 shall apply to retirement benefits under
the portable benefit package and the automatic annual increases
described in subsection (j) of Section 15-145 shall apply to
survivor benefits under the portable benefit package.
(Source: P.A. 96-586, eff. 8-18-09.)
 
    (40 ILCS 5/15-139)  (from Ch. 108 1/2, par. 15-139)
    Sec. 15-139. Retirement annuities; cancellation; suspended
during employment.
    (a) If an annuitant returns to employment for an employer
within 60 days after the beginning of the retirement annuity
payment period, the retirement annuity shall be cancelled, and
the annuitant shall refund to the System the total amount of
the retirement annuity payments which he or she received. If
the retirement annuity is cancelled, the participant shall
continue to participate in the System.
    (b) If an annuitant retires prior to age 60 and receives or
becomes entitled to receive during any month compensation in
excess of the monthly retirement annuity (including any
automatic annual increases) for services performed after the
date of retirement for any employer under this System, that
portion of the monthly retirement annuity provided by employer
contributions shall not be payable.
    If an annuitant retires at age 60 or over and receives or
becomes entitled to receive during any academic year
compensation in excess of the difference between his or her
highest annual earnings prior to retirement and his or her
annual retirement annuity computed under Rule 1, Rule 2, Rule
3, Rule 4, or Rule 5 of Section 15-136, or under Section
15-136.4, for services performed after the date of retirement
for any employer under this System, that portion of the monthly
retirement annuity provided by employer contributions shall be
reduced by an amount equal to the compensation that exceeds
such difference.
    However, any remuneration received for serving as a member
of the Illinois Educational Labor Relations Board shall be
excluded from "compensation" for the purposes of this
subsection (b), and serving as a member of the Illinois
Educational Labor Relations Board shall not be deemed to be a
return to employment for the purposes of this Section. This
provision applies without regard to whether service was
terminated prior to the effective date of this amendatory Act
of 1991.
    (c) If an employer certifies that an annuitant has been
reemployed on a permanent and continuous basis or in a position
in which the annuitant is expected to serve for at least 9
months, the annuitant shall resume his or her status as a
participating employee and shall be entitled to all rights
applicable to participating employees upon filing with the
board an election to forgo forego all annuity payments during
the period of reemployment. Upon subsequent retirement, the
retirement annuity shall consist of the annuity which was
terminated by the reemployment, plus the additional retirement
annuity based upon service granted during the period of
reemployment, but the combined retirement annuity shall not
exceed the maximum annuity applicable on the date of the last
retirement.
    The total service and earnings credited before and after
the initial date of retirement shall be considered in
determining eligibility of the employee or the employee's
beneficiary to benefits under this Article, and in calculating
final rate of earnings.
    In determining the death benefit payable to a beneficiary
of an annuitant who again becomes a participating employee
under this Section, accumulated normal and additional
contributions shall be considered as the sum of the accumulated
normal and additional contributions at the date of initial
retirement and the accumulated normal and additional
contributions credited after that date, less the sum of the
annuity payments received by the annuitant.
    The survivors insurance benefits provided under Section
15-145 shall not be applicable to an annuitant who resumes his
or her status as a participating employee, unless the
annuitant, at the time of initial retirement, has a survivors
insurance beneficiary who could qualify for such benefits.
    If the participant's annuitant's employment is terminated
because of circumstances other than death before 9 months from
the date of reemployment, the provisions of this Section
regarding resumption of status as a participating employee
shall not apply. The normal and survivors insurance
contributions which are deducted during this period shall be
refunded to the annuitant without interest, and subsequent
benefits under this Article shall be the same as those which
were applicable prior to the date the annuitant resumed
employment.
    The amendments made to this Section by this amendatory Act
of the 91st General Assembly apply without regard to whether
the annuitant was in service on or after the effective date of
this amendatory Act.
(Source: P.A. 91-887 (Sections 10 and 25), eff. 7-6-00; 92-16,
eff. 6-28-01.)
 
    (40 ILCS 5/15-139.5 new)
    Sec. 15-139.5. Return to work by affected annuitant; notice
and contribution by employer.
    (a) An employer who employs or re-employs a person
receiving a retirement annuity from the System in an academic
year beginning on or after August 1, 2013 must notify the
System of that employment within 60 days after employing the
annuitant. The notice must include a copy of the contract of
employment; if no written contract of employment exists, then
the notice must specify the rate of compensation and the
anticipated length of employment of that annuitant. The notice
must specify whether the annuitant will be compensated from
federal, corporate, foundation, or trust funds or grants of
State funds that identify the principal investigator by name.
The notice must include the employer's determination of whether
or not the annuitant is an "affected annuitant" as defined in
subsection (b).
    The employer must also record, document, and certify to the
System (i) the number of paid days and paid weeks worked by the
annuitant in the academic year, (ii) the amount of compensation
paid to the annuitant for employment during the academic year,
and (iii) the amount of that compensation, if any, that comes
from either federal, corporate, foundation, or trust funds or
grants of State funds that identify the principal investigator
by name.
    As used in this Section, "academic year" has the meaning
ascribed to that term in Section 15-126.1; "paid day" means a
day on which a person performs personal services for an
employer and for which the person is compensated by the
employer; and "paid week" means a calendar week in which a
person has at least one paid day.
    For the purposes of this Section, an annuitant whose
employment by an employer extends over more than one academic
year shall be deemed to be re-employed by that employer in each
of those academic years.
    The System may specify the time, form, and manner of
providing the determinations, notifications, certifications,
and documentation required under this Section.
    (b) A person receiving a retirement annuity from the System
becomes an "affected annuitant" on the first day of the
academic year following the academic year in which the
annuitant first meets both of the following conditions:
        (1) While receiving a retirement annuity under this
    Article, the annuitant has been employed on or after August
    1, 2013 by one or more employers under this Article for a
    total of more than 18 paid weeks (which need not have been
    with the same employer or in the same academic year);
    except that any periods of employment for which the
    annuitant was compensated solely from federal, corporate,
    foundation, or trust funds or grants of State funds that
    identify the principal investigator by name are excluded.
        (2) While receiving a retirement annuity under this
    Article, the annuitant was employed on or after August 1,
    2013 by one or more employers under this Article and
    received or became entitled to receive during an academic
    year compensation for that employment in excess of 40% of
    his or her highest annual earnings prior to retirement;
    except that compensation paid from federal, corporate,
    foundation, or trust funds or grants of State funds that
    identify the principal investigator by name is excluded.
    A person who becomes an affected annuitant remains an
affected annuitant, except for any period during which the
person returns to active service and does not receive a
retirement annuity from the System.
    (c) It is the obligation of the employer to determine
whether an annuitant is an affected annuitant before employing
the annuitant. For that purpose the employer may require the
annuitant to disclose and document his or her relevant prior
employment and earnings history. Failure of the employer to
make this determination correctly and in a timely manner or to
include this determination with the notification required
under subsection (a) does not excuse the employer from making
the contribution required under subsection (e).
    The System may assist the employer in determining whether a
person is an affected annuitant. The System shall inform the
employer if it discovers that the employer's determination is
inconsistent with the employment and earnings information in
the System's records.
    (d) Upon the request of an annuitant, the System shall
certify to the annuitant the following information as reported
by the employers, as that information is indicated in the
records of the System: (i) the annuitant's highest annual
earnings prior to retirement, (ii) the number of paid weeks
worked by the annuitant for an employer on or after August 1,
2013, (iii) the compensation paid for that employment in each
academic year, and (iv) whether any of that employment or
compensation has been certified to the System as being paid
from federal, corporate, foundation, or trust funds or grants
of State funds that identify the principal investigator by
name. The System shall only be required to certify information
that is received from the employers.
    (e) In addition to the requirements of subsection (a), an
employer who employs an affected annuitant must pay to the
System an employer contribution in the amount and manner
provided in this Section, unless the annuitant is compensated
by that employer solely from federal, corporate, foundation, or
trust funds or grants of State funds that identify the
principal investigator by name.
    The employer contribution required under this Section for
employment of an affected annuitant in an academic year shall
be equal to 12 times the amount of the gross monthly retirement
annuity payable to the annuitant for the month in which the
first paid day of that employment in that academic year occurs,
after any reduction in that annuity that may be imposed under
subsection (b) of Section 15-139.
    If an affected annuitant is employed by more than one
employer in an academic year, the employer contribution
required under this Section shall be divided among those
employers in proportion to their respective portions of the
total compensation paid to the affected annuitant for that
employment during that academic year.
    If the System determines that an employer, without
reasonable justification, has failed to make the determination
of affected annuitant status correctly and in a timely manner,
or has failed to notify the System or to correctly document or
certify to the System any of the information required by this
Section, and that failure results in a delayed determination by
the System that a contribution is payable under this Section,
then the amount of that employer's contribution otherwise
determined under this Section shall be doubled.
    The System shall deem a failure to correctly determine the
annuitant's status to be justified if the employer establishes
to the System's satisfaction that the employer, after due
diligence, made an erroneous determination that the annuitant
was not an affected annuitant due to reasonable reliance on
false or misleading information provided by the annuitant or
another employer, or an error in the annuitant's official
employment or earnings records.
    (f) Whenever the System determines that an employer is
liable for a contribution under this Section, it shall so
notify the employer and certify the amount of the contribution.
The employer may pay the required contribution without interest
at any time within one year after receipt of the certification.
If the employer fails to pay within that year, then interest
shall be charged at a rate equal to the System's prescribed
rate of interest, compounded annually from the 366th day after
receipt of the certification from the System. Payment must be
concluded within 2 years after receipt of the certification by
the employer. If the employer fails to make complete payment,
including applicable interest, within 2 years, then the System
may, after giving notice to the employer, certify the
delinquent amount to the State Comptroller, and the Comptroller
shall thereupon deduct the certified delinquent amount from
State funds payable to the employer and pay them instead to the
System.
    (g) If an employer is required to make a contribution to
the System as a result of employing an affected annuitant and
the annuitant later elects to forgo his or her annuity in that
same academic year pursuant to subsection (c) of Section
15-139, then the required contribution by the employer shall be
waived, and if the contribution has already been paid, it shall
be refunded to the employer without interest.
    (h) Notwithstanding any other provision of this Article,
the employer contribution required under this Section shall not
be included in the determination of any benefit under this
Article or any other Article of this Code, regardless of
whether the annuitant returns to active service, and is in
addition to any other State or employer contribution required
under this Article.
    (i) Notwithstanding any other provision of this Section to
the contrary, if an employer employs an affected annuitant in
order to continue critical operations in the event of either an
employee's unforeseen illness, accident, or death or a
catastrophic incident or disaster, then, for one and only one
academic year, the employer is not required to pay the
contribution set forth in this Section for that annuitant. The
employer shall, however, immediately notify the System upon
employing a person subject to this subsection (i). For the
purposes of this subsection (i), "critical operations" means
teaching services, medical services, student welfare services,
and any other services that are critical to the mission of the
employer.
 
    (40 ILCS 5/15-153.2)  (from Ch. 108 1/2, par. 15-153.2)
    Sec. 15-153.2. Disability retirement annuity. A
participant whose disability benefits are discontinued under
the provisions of clause (6) of Section 15-152 and who is not a
participant in the optional retirement plan established under
Section 15-158.2 is entitled to a disability retirement annuity
of 35% of the basic compensation which was payable to the
participant at the time that disability began, provided that
the board determines that the participant has a medically
determinable physical or mental impairment that prevents him or
her from engaging in any substantial gainful activity, and
which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less
than 12 months.
    The board's determination of whether a participant is
disabled shall be based upon:
        (i) a written certificate from one or more licensed and
    practicing physicians appointed by or acceptable to the
    board, stating that the participant is unable to engage in
    any substantial gainful activity; and
        (ii) any other medical examinations, hospital records,
    laboratory results, or other information necessary for
    determining the employment capacity and condition of the
    participant.
    The terms "medically determinable physical or mental
impairment" and "substantial gainful activity" shall have the
meanings ascribed to them in the federal Social Security Act,
as now or hereafter amended, and the regulations issued
thereunder.
    The disability retirement annuity payment period shall
begin immediately following the expiration of the disability
benefit payments under clause (6) of Section 15-152 and shall
be discontinued for a recipient of a disability retirement
annuity when (1) the physical or mental impairment no longer
prevents the participant from engaging in any substantial
gainful activity, (2) the participant dies or (3) the
participant elects to receive a retirement annuity under
Sections 15-135 and 15-136. If a person's disability retirement
annuity is discontinued under clause (1), all rights and
credits accrued in the system on the date that the disability
retirement annuity began shall be restored, and the disability
retirement annuity paid shall be considered as disability
payments under clause (6) of Section 15-152.
(Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-511,
eff. 8-22-97; 90-766, eff. 8-14-98.)
 
    (40 ILCS 5/15-168.2 new)
    Sec. 15-168.2. Audit of employers. Beginning August 1,
2013, the System may audit the employment records and payroll
records of all employers. When the System audits an employer,
it shall specify the exact information it requires, which may
include but need not be limited to the names, titles, and
earnings history of every individual receiving compensation
from the employer. If an employer is audited by the System,
then the employer must provide to the System all necessary
documents and records within 60 calendar days after receiving
notification from the System. When the System audits an
employer, it shall send related correspondence by certified
mail.
 
    (40 ILCS 5/15-186)  (from Ch. 108 1/2, par. 15-186)
    Sec. 15-186. Fraud.
    Any person who knowingly makes any false statement, or
falsifies or permits to be falsified any record or records of
this system, in any attempt to defraud the system or to mislead
or defraud an employer with respect to employment of an
annuitant under Section 15-139.5, is guilty of a Class A
misdemeanor.
(Source: P.A. 77-2830.)
 
    Section 99. Effective date. This Act takes effect July 1,
2012.