HB2966 EnrolledLRB100 09048 RPS 19197 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 7-172 and 7-174 as follows:
 
6    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
7    Sec. 7-172. Contributions by participating municipalities
8and participating instrumentalities.
9    (a) Each participating municipality and each participating
10instrumentality shall make payment to the fund as follows:
11        1. municipality contributions in an amount determined
12    by applying the municipality contribution rate to each
13    payment of earnings paid to each of its participating
14    employees;
15        2. an amount equal to the employee contributions
16    provided by paragraph (a) of Section 7-173, whether or not
17    the employee contributions are withheld as permitted by
18    that Section;
19        3. all accounts receivable, together with interest
20    charged thereon, as provided in Section 7-209, and any
21    amounts due under subsection (a-5) of Section 7-144;
22        4. if it has no participating employees with current
23    earnings, an amount payable which, over a closed period of

 

 

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1    20 years for participating municipalities and 10 years for
2    participating instrumentalities, will amortize, at the
3    effective rate for that year, any unfunded obligation. The
4    unfunded obligation shall be computed as provided in
5    paragraph 2 of subsection (b);
6        5. if it has fewer than 7 participating employees or a
7    negative balance in its municipality reserve, the greater
8    of (A) an amount payable that, over a period of 20 years,
9    will amortize at the effective rate for that year any
10    unfunded obligation, computed as provided in paragraph 2 of
11    subsection (b) or (B) the amount required by paragraph 1 of
12    this subsection (a).
13    (b) A separate municipality contribution rate shall be
14determined for each calendar year for all participating
15municipalities together with all instrumentalities thereof.
16The municipality contribution rate shall be determined for
17participating instrumentalities as if they were participating
18municipalities. The municipality contribution rate shall be
19the sum of the following percentages:
20        1. The percentage of earnings of all the participating
21    employees of all participating municipalities and
22    participating instrumentalities which, if paid over the
23    entire period of their service, will be sufficient when
24    combined with all employee contributions available for the
25    payment of benefits, to provide all annuities for
26    participating employees, and the $3,000 death benefit

 

 

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1    payable under Sections 7-158 and 7-164, such percentage to
2    be known as the normal cost rate.
3        2. The percentage of earnings of the participating
4    employees of each participating municipality and
5    participating instrumentalities necessary to adjust for
6    the difference between the present value of all benefits,
7    excluding temporary and total and permanent disability and
8    death benefits, to be provided for its participating
9    employees and the sum of its accumulated municipality
10    contributions and the accumulated employee contributions
11    and the present value of expected future employee and
12    municipality contributions pursuant to subparagraph 1 of
13    this paragraph (b). This adjustment shall be spread over a
14    period determined by the Board, not to exceed 30 years for
15    participating municipalities or 10 years for participating
16    instrumentalities.
17        3. The percentage of earnings of the participating
18    employees of all municipalities and participating
19    instrumentalities necessary to provide the present value
20    of all temporary and total and permanent disability
21    benefits granted during the most recent year for which
22    information is available.
23        4. The percentage of earnings of the participating
24    employees of all participating municipalities and
25    participating instrumentalities necessary to provide the
26    present value of the net single sum death benefits expected

 

 

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1    to become payable from the reserve established under
2    Section 7-206 during the year for which this rate is fixed.
3        5. The percentage of earnings necessary to meet any
4    deficiency arising in the Terminated Municipality Reserve.
5    (c) A separate municipality contribution rate shall be
6computed for each participating municipality or participating
7instrumentality for its sheriff's law enforcement employees.
8    A separate municipality contribution rate shall be
9computed for the sheriff's law enforcement employees of each
10forest preserve district that elects to have such employees.
11For the period from January 1, 1986 to December 31, 1986, such
12rate shall be the forest preserve district's regular rate plus
132%.
14    In the event that the Board determines that there is an
15actuarial deficiency in the account of any municipality with
16respect to a person who has elected to participate in the Fund
17under Section 3-109.1 of this Code, the Board may adjust the
18municipality's contribution rate so as to make up that
19deficiency over such reasonable period of time as the Board may
20determine.
21    (d) The Board may establish a separate municipality
22contribution rate for all employees who are program
23participants employed under the federal Comprehensive
24Employment Training Act by all of the participating
25municipalities and instrumentalities. The Board may also
26provide that, in lieu of a separate municipality rate for these

 

 

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1employees, a portion of the municipality contributions for such
2program participants shall be refunded or an extra charge
3assessed so that the amount of municipality contributions
4retained or received by the fund for all CETA program
5participants shall be an amount equal to that which would be
6provided by the separate municipality contribution rate for all
7such program participants. Refunds shall be made to prime
8sponsors of programs upon submission of a claim therefor and
9extra charges shall be assessed to participating
10municipalities and instrumentalities. In establishing the
11municipality contribution rate as provided in paragraph (b) of
12this Section, the use of a separate municipality contribution
13rate for program participants or the refund of a portion of the
14municipality contributions, as the case may be, may be
15considered.
16    (e) Computations of municipality contribution rates for
17the following calendar year shall be made prior to the
18beginning of each year, from the information available at the
19time the computations are made, and on the assumption that the
20employees in each participating municipality or participating
21instrumentality at such time will continue in service until the
22end of such calendar year at their respective rates of earnings
23at such time.
24    (f) Any municipality which is the recipient of State
25allocations representing that municipality's contributions for
26retirement annuity purposes on behalf of its employees as

 

 

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1provided in Section 12-21.16 of the Illinois Public Aid Code
2shall pay the allocations so received to the Board for such
3purpose. Estimates of State allocations to be received during
4any taxable year shall be considered in the determination of
5the municipality's tax rate for that year under Section 7-171.
6If a special tax is levied under Section 7-171, none of the
7proceeds may be used to reimburse the municipality for the
8amount of State allocations received and paid to the Board. Any
9multiple-county or consolidated health department which
10receives contributions from a county under Section 11.2 of "An
11Act in relation to establishment and maintenance of county and
12multiple-county health departments", approved July 9, 1943, as
13amended, or distributions under Section 3 of the Department of
14Public Health Act, shall use these only for municipality
15contributions by the health department.
16    (g) Municipality contributions for the several purposes
17specified shall, for township treasurers and employees in the
18offices of the township treasurers who meet the qualifying
19conditions for coverage hereunder, be allocated among the
20several school districts and parts of school districts serviced
21by such treasurers and employees in the proportion which the
22amount of school funds of each district or part of a district
23handled by the treasurer bears to the total amount of all
24school funds handled by the treasurer.
25    From the funds subject to allocation among districts and
26parts of districts pursuant to the School Code, the trustees

 

 

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1shall withhold the proportionate share of the liability for
2municipality contributions imposed upon such districts by this
3Section, in respect to such township treasurers and employees
4and remit the same to the Board.
5    The municipality contribution rate for an educational
6service center shall initially be the same rate for each year
7as the regional office of education or school district which
8serves as its administrative agent. When actuarial data become
9available, a separate rate shall be established as provided in
10subparagraph (i) of this Section.
11    The municipality contribution rate for a public agency,
12other than a vocational education cooperative, formed under the
13Intergovernmental Cooperation Act shall initially be the
14average rate for the municipalities which are parties to the
15intergovernmental agreement. When actuarial data become
16available, a separate rate shall be established as provided in
17subparagraph (i) of this Section.
18    (h) Each participating municipality and participating
19instrumentality shall make the contributions in the amounts
20provided in this Section in the manner prescribed from time to
21time by the Board and all such contributions shall be
22obligations of the respective participating municipalities and
23participating instrumentalities to this fund. The failure to
24deduct any employee contributions shall not relieve the
25participating municipality or participating instrumentality of
26its obligation to this fund. Delinquent payments of

 

 

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1contributions due under this Section may, with interest, be
2recovered by civil action against the participating
3municipalities or participating instrumentalities.
4Municipality contributions, other than the amount necessary
5for employee contributions, for periods of service by employees
6from whose earnings no deductions were made for employee
7contributions to the fund, may be charged to the municipality
8reserve for the municipality or participating instrumentality.
9    (i) Contributions by participating instrumentalities shall
10be determined as provided herein except that the percentage
11derived under subparagraph 2 of paragraph (b) of this Section,
12and the amount payable under subparagraph 4 of paragraph (a) of
13this Section, shall be based on an amortization period of 10
14years.
15    (j) Notwithstanding the other provisions of this Section,
16the additional unfunded liability accruing as a result of this
17amendatory Act of the 94th General Assembly shall be amortized
18over a period of 30 years beginning on January 1 of the second
19calendar year following the calendar year in which this
20amendatory Act takes effect, except that the employer may
21provide for a longer amortization period by adopting a
22resolution or ordinance specifying a 35-year or 40-year period
23and submitting a certified copy of the ordinance or resolution
24to the fund no later than June 1 of the calendar year following
25the calendar year in which this amendatory Act takes effect.
26    (k) If the amount of a participating employee's reported

 

 

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1earnings for any of the 12-month periods used to determine the
2final rate of earnings exceeds the employee's 12 month reported
3earnings with the same employer for the previous year by the
4greater of 6% or 1.5 times the annual increase in the Consumer
5Price Index-U, as established by the United States Department
6of Labor for the preceding September, the participating
7municipality or participating instrumentality that paid those
8earnings shall pay to the Fund, in addition to any other
9contributions required under this Article, the present value of
10the increase in the pension resulting from the portion of the
11increase in reported earnings salary that is in excess of the
12greater of 6% or 1.5 times the annual increase in the Consumer
13Price Index-U, as determined by the Fund. This present value
14shall be computed on the basis of the actuarial assumptions and
15tables used in the most recent actuarial valuation of the Fund
16that is available at the time of the computation.
17    Whenever it determines that a payment is or may be required
18under this subsection (k), the fund shall calculate the amount
19of the payment and bill the participating municipality or
20participating instrumentality for that amount. The bill shall
21specify the calculations used to determine the amount due. If
22the participating municipality or participating
23instrumentality disputes the amount of the bill, it may, within
2430 days after receipt of the bill, apply to the fund in writing
25for a recalculation. The application must specify in detail the
26grounds of the dispute. Upon receiving a timely application for

 

 

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1recalculation, the fund shall review the application and, if
2appropriate, recalculate the amount due. The participating
3municipality and participating instrumentality contributions
4required under this subsection (k) may be paid in the form of a
5lump sum within 90 days after receipt of the bill. If the
6participating municipality and participating instrumentality
7contributions are not paid within 90 days after receipt of the
8bill, then interest will be charged at a rate equal to the
9fund's annual actuarially assumed rate of return on investment
10compounded annually from the 91st day after receipt of the
11bill. Payments must be concluded within 3 years after receipt
12of the bill by the participating municipality or participating
13instrumentality.
14    When assessing payment for any amount due under this
15subsection (k), the fund shall exclude earnings increases
16resulting from overload or overtime earnings.
17    When assessing payment for any amount due under this
18subsection (k), the fund shall also exclude earnings increases
19attributable to standard employment promotions resulting in
20increased responsibility and workload.
21    This subsection (k) does not apply to earnings increases
22paid to individuals under contracts or collective bargaining
23agreements entered into, amended, or renewed before January 1,
242012 (the effective date of Public Act 97-609), earnings
25increases paid to members who are 10 years or more from
26retirement eligibility, or earnings increases resulting from

 

 

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1an increase in the number of hours required to be worked.
2    When assessing payment for any amount due under this
3subsection (k), the fund shall also exclude earnings
4attributable to personnel policies adopted before January 1,
52012 (the effective date of Public Act 97-609) as long as those
6policies are not applicable to employees who begin service on
7or after January 1, 2012 (the effective date of Public Act
897-609).
9    The change made to this Section by this amendatory Act of
10the 100th General Assembly is a clarification of existing law
11and is intended to be retroactive to January 1, 2012 (the
12effective date of Public Act 97-609).
13(Source: P.A. 98-218, eff. 8-9-13; 99-745, eff. 8-5-16.)
 
14    (40 ILCS 5/7-174)  (from Ch. 108 1/2, par. 7-174)
15    Sec. 7-174. Board created.
16    (a) A board of 8 members shall constitute a board of
17trustees authorized to carry out the provisions of this
18Article. Each trustee shall be a participating employee of a
19participating municipality or participating instrumentality or
20an annuitant of the Fund and no person shall be eligible to
21become a trustee after January 1, 1979 who does not have the
22minimum service credit in this Fund to qualify for a pension at
23least 8 years of creditable service.
24    (b) The board shall consist of representatives of various
25groups as follows:

 

 

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1        1. 4 trustees shall be a chief executive officer, chief
2    finance officer, or other officer, executive or department
3    head of a participating municipality or participating
4    instrumentality, and each such trustee shall be designated
5    as an executive trustee.
6        2. 3 trustees shall be employees of a participating
7    municipality or participating instrumentality and each
8    such trustee shall be designated as an employee trustee.
9        3. One trustee shall be an annuitant of the Fund, who
10    shall be designated the annuitant trustee.
11    (c) A person elected as a trustee shall qualify as a
12trustee, after declaration by the board that he has been duly
13elected, upon taking and subscribing to the constitutional oath
14of office and filing same in the office of the Fund.
15    (d) The term of office of each trustee shall begin upon
16January 1 of the year following the year in which he is elected
17and shall continue for a period of 5 years and until a
18successor has been elected and qualified, or until prior
19resignation, death, incapacity or disqualification.
20    (e) Any elected trustee (other than the annuitant trustee)
21shall be disqualified immediately upon termination of
22employment with all participating municipalities and
23instrumentalities thereof or upon any change in status which
24removes any such trustee from all employments within the group
25he represents. The annuitant trustee shall be disqualified upon
26termination of his or her annuity.

 

 

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1    (f) The trustees shall fill any vacancy in the board by
2appointment, for the period until the next election of
3trustees, or, if the remaining term is less than 2 years, for
4the remainder of the term, and until his successor has been
5elected and qualified.
6    (g) Trustees shall serve without compensation, but shall be
7reimbursed for any reasonable expenses incurred in attending
8meetings of the board and in performing duties on behalf of the
9Fund and for the amount of any earnings withheld by any
10employing municipality or participating instrumentality
11because of attendance at any board meeting.
12    (h) Each trustee shall be entitled to one vote on any and
13all actions before the board. At least 5 concurring votes shall
14be necessary for every decision or action by the board at any
15of its meetings. No decision or action shall become effective
16unless presented and so approved at a regular or duly called
17special meeting of the board.
18(Source: P.A. 95-890, eff. 8-22-08.)
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.