100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4055

 

Introduced , by Rep. Mark Batinick

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Pension Code. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date. Provides separate benefits for persons who, on or after 6 months after the effective date, first become participants or members under Article 15 or 16 or a noncovered participant under Article 14. Requires those retirement systems to establish a defined contribution plan for certain members. For Articles 7, 8, 9, 10, 11, 12, 13, and 17, establishes similar benefits if the governing body of the unit of local government adopts those benefits by resolution or ordinance. Requires the 5 State-funded Retirement Systems to offer certain inactive members the opportunity to elect to receive an accelerated pension benefit payment in lieu of receiving any pension benefit and authorizes the issuance of bonds for those payments. Amends other Acts to make conforming changes. In the 5 State-funded retirement systems and the Chicago Teachers Pension Fund, makes funding changes. In Articles 15 and 16, shifts certain costs to the local employer. Amends the Budget Stabilization Act. Provides for the transfer of certain amounts to the Pension Stabilization Fund. Makes other changes. Effective immediately.


LRB100 12851 RPS 26572 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE DEBT IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

HB4055LRB100 12851 RPS 26572 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 State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
 
6    (5 ILCS 375/3)  (from Ch. 127, par. 523)
7    Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13    (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18    (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Articles 2 (including an employee who
21meets the criteria for retirement, but in lieu of receiving an
22annuity under that Article has elected to receive an
23accelerated pension benefit payment under Section 2-154.5 of

 

 

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1that Article), 14 (including an employee who has elected to
2receive an alternative retirement cancellation payment under
3Section 14-108.5 of the Illinois Pension Code in lieu of an
4annuity or who meets the criteria for retirement, but in lieu
5of receiving an annuity under that Article has elected to
6receive an accelerated pension benefit payment under Section
714-147.5 of that Article), 15 (including an employee who has
8retired under the optional retirement program established
9under Section 15-158.2 or who meets the criteria for retirement
10but in lieu of receiving an annuity under that Article has
11elected to receive an accelerated pension benefit payment under
12Section 15-185.5 of the Article), paragraphs (2), (3), or (5)
13of Section 16-106 (including an employee who meets the criteria
14for retirement, but in lieu of receiving an annuity under that
15Article has elected to receive an accelerated pension benefit
16payment under Section 16-190.5 of the Illinois Pension Code),
17or Article 18 (including an employee who meets the criteria for
18retirement, but in lieu of receiving an annuity under that
19Article, has elected to receive an accelerated pension benefit
20payment under Section 18-161.5 of that Article) of the Illinois
21Pension Code; (2) any person who was receiving group insurance
22coverage under this Act as of March 31, 1978 by reason of his
23status as an annuitant, even though the annuity in relation to
24which such coverage was provided is a proportional annuity
25based on less than the minimum period of service required for a
26retirement annuity in the system involved; (3) any person not

 

 

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1otherwise covered by this Act who has retired as a
2participating member under Article 2 of the Illinois Pension
3Code but is ineligible for the retirement annuity under Section
42-119 of the Illinois Pension Code; (4) the spouse of any
5person who is receiving a retirement annuity under Article 18
6of the Illinois Pension Code and who is covered under a group
7health insurance program sponsored by a governmental employer
8other than the State of Illinois and who has irrevocably
9elected to waive his or her coverage under this Act and to have
10his or her spouse considered as the "annuitant" under this Act
11and not as a "dependent"; or (5) an employee who retires, or
12has retired, from a qualified position, as determined according
13to rules promulgated by the Director, under a qualified local
14government, a qualified rehabilitation facility, a qualified
15domestic violence shelter or service, or a qualified child
16advocacy center. (For definition of "retired employee", see (p)
17post).
18    (b-5) (Blank).
19    (b-6) (Blank).
20    (b-7) (Blank).
21    (c) "Carrier" means (1) an insurance company, a corporation
22organized under the Limited Health Service Organization Act or
23the Voluntary Health Services Plan Act, a partnership, or other
24nongovernmental organization, which is authorized to do group
25life or group health insurance business in Illinois, or (2) the
26State of Illinois as a self-insurer.

 

 

HB4055- 4 -LRB100 12851 RPS 26572 b

1    (d) "Compensation" means salary or wages payable on a
2regular payroll by the State Treasurer on a warrant of the
3State Comptroller out of any State, trust or federal fund, or
4by the Governor of the State through a disbursing officer of
5the State out of a trust or out of federal funds, or by any
6Department out of State, trust, federal or other funds held by
7the State Treasurer or the Department, to any person for
8personal services currently performed, and ordinary or
9accidental disability benefits under Articles 2, 14, 15
10(including ordinary or accidental disability benefits under
11the optional retirement program established under Section
1215-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
13Article 18 of the Illinois Pension Code, for disability
14incurred after January 1, 1966, or benefits payable under the
15Workers' Compensation or Occupational Diseases Act or benefits
16payable under a sick pay plan established in accordance with
17Section 36 of the State Finance Act. "Compensation" also means
18salary or wages paid to an employee of any qualified local
19government, qualified rehabilitation facility, qualified
20domestic violence shelter or service, or qualified child
21advocacy center.
22    (e) "Commission" means the State Employees Group Insurance
23Advisory Commission authorized by this Act. Commencing July 1,
241984, "Commission" as used in this Act means the Commission on
25Government Forecasting and Accountability as established by
26the Legislative Commission Reorganization Act of 1984.

 

 

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1    (f) "Contributory", when referred to as contributory
2coverage, shall mean optional coverages or benefits elected by
3the member toward the cost of which such member makes
4contribution, or which are funded in whole or in part through
5the acceptance of a reduction in earnings or the foregoing of
6an increase in earnings by an employee, as distinguished from
7noncontributory coverage or benefits which are paid entirely by
8the State of Illinois without reduction of the member's salary.
9    (g) "Department" means any department, institution, board,
10commission, officer, court or any agency of the State
11government receiving appropriations and having power to
12certify payrolls to the Comptroller authorizing payments of
13salary and wages against such appropriations as are made by the
14General Assembly from any State fund, or against trust funds
15held by the State Treasurer and includes boards of trustees of
16the retirement systems created by Articles 2, 14, 15, 16 and 18
17of the Illinois Pension Code. "Department" also includes the
18Illinois Comprehensive Health Insurance Board, the Board of
19Examiners established under the Illinois Public Accounting
20Act, and the Illinois Finance Authority.
21    (h) "Dependent", when the term is used in the context of
22the health and life plan, means a member's spouse and any child
23(1) from birth to age 26 including an adopted child, a child
24who lives with the member from the time of the filing of a
25petition for adoption until entry of an order of adoption, a
26stepchild or adjudicated child, or a child who lives with the

 

 

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1member if such member is a court appointed guardian of the
2child or (2) age 19 or over who has a mental or physical
3disability from a cause originating prior to the age of 19 (age
426 if enrolled as an adult child dependent). For the health
5plan only, the term "dependent" also includes (1) any person
6enrolled prior to the effective date of this Section who is
7dependent upon the member to the extent that the member may
8claim such person as a dependent for income tax deduction
9purposes and (2) any person who has received after June 30,
102000 an organ transplant and who is financially dependent upon
11the member and eligible to be claimed as a dependent for income
12tax purposes. A member requesting to cover any dependent must
13provide documentation as requested by the Department of Central
14Management Services and file with the Department any and all
15forms required by the Department.
16    (i) "Director" means the Director of the Illinois
17Department of Central Management Services.
18    (j) "Eligibility period" means the period of time a member
19has to elect enrollment in programs or to select benefits
20without regard to age, sex or health.
21    (k) "Employee" means and includes each officer or employee
22in the service of a department who (1) receives his
23compensation for service rendered to the department on a
24warrant issued pursuant to a payroll certified by a department
25or on a warrant or check issued and drawn by a department upon
26a trust, federal or other fund or on a warrant issued pursuant

 

 

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1to a payroll certified by an elected or duly appointed officer
2of the State or who receives payment of the performance of
3personal services on a warrant issued pursuant to a payroll
4certified by a Department and drawn by the Comptroller upon the
5State Treasurer against appropriations made by the General
6Assembly from any fund or against trust funds held by the State
7Treasurer, and (2) is employed full-time or part-time in a
8position normally requiring actual performance of duty during
9not less than 1/2 of a normal work period, as established by
10the Director in cooperation with each department, except that
11persons elected by popular vote will be considered employees
12during the entire term for which they are elected regardless of
13hours devoted to the service of the State, and (3) except that
14"employee" does not include any person who is not eligible by
15reason of such person's employment to participate in one of the
16State retirement systems under Articles 2, 14, 15 (either the
17regular Article 15 system or the optional retirement program
18established under Section 15-158.2) or 18, or under paragraph
19(2), (3), or (5) of Section 16-106, of the Illinois Pension
20Code, but such term does include persons who are employed
21during the 6 month qualifying period under Article 14 of the
22Illinois Pension Code. Such term also includes any person who
23(1) after January 1, 1966, is receiving ordinary or accidental
24disability benefits under Articles 2, 14, 15 (including
25ordinary or accidental disability benefits under the optional
26retirement program established under Section 15-158.2),

 

 

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1paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
2the Illinois Pension Code, for disability incurred after
3January 1, 1966, (2) receives total permanent or total
4temporary disability under the Workers' Compensation Act or
5Occupational Disease Act as a result of injuries sustained or
6illness contracted in the course of employment with the State
7of Illinois, or (3) is not otherwise covered under this Act and
8has retired as a participating member under Article 2 of the
9Illinois Pension Code but is ineligible for the retirement
10annuity under Section 2-119 of the Illinois Pension Code.
11However, a person who satisfies the criteria of the foregoing
12definition of "employee" except that such person is made
13ineligible to participate in the State Universities Retirement
14System by clause (4) of subsection (a) of Section 15-107 of the
15Illinois Pension Code is also an "employee" for the purposes of
16this Act. "Employee" also includes any person receiving or
17eligible for benefits under a sick pay plan established in
18accordance with Section 36 of the State Finance Act. "Employee"
19also includes (i) each officer or employee in the service of a
20qualified local government, including persons appointed as
21trustees of sanitary districts regardless of hours devoted to
22the service of the sanitary district, (ii) each employee in the
23service of a qualified rehabilitation facility, (iii) each
24full-time employee in the service of a qualified domestic
25violence shelter or service, and (iv) each full-time employee
26in the service of a qualified child advocacy center, as

 

 

HB4055- 9 -LRB100 12851 RPS 26572 b

1determined according to rules promulgated by the Director.
2    (l) "Member" means an employee, annuitant, retired
3employee or survivor. In the case of an annuitant or retired
4employee who first becomes an annuitant or retired employee on
5or after the effective date of this amendatory Act of the 97th
6General Assembly, the individual must meet the minimum vesting
7requirements of the applicable retirement system in order to be
8eligible for group insurance benefits under that system. In the
9case of a survivor who first becomes a survivor on or after the
10effective date of this amendatory Act of the 97th General
11Assembly, the deceased employee, annuitant, or retired
12employee upon whom the annuity is based must have been eligible
13to participate in the group insurance system under the
14applicable retirement system in order for the survivor to be
15eligible for group insurance benefits under that system.
16    (m) "Optional coverages or benefits" means those coverages
17or benefits available to the member on his or her voluntary
18election, and at his or her own expense.
19    (n) "Program" means the group life insurance, health
20benefits and other employee benefits designed and contracted
21for by the Director under this Act.
22    (o) "Health plan" means a health benefits program offered
23by the State of Illinois for persons eligible for the plan.
24    (p) "Retired employee" means any person who would be an
25annuitant as that term is defined herein but for the fact that
26such person retired prior to January 1, 1966. Such term also

 

 

HB4055- 10 -LRB100 12851 RPS 26572 b

1includes any person formerly employed by the University of
2Illinois in the Cooperative Extension Service who would be an
3annuitant but for the fact that such person was made ineligible
4to participate in the State Universities Retirement System by
5clause (4) of subsection (a) of Section 15-107 of the Illinois
6Pension Code.
7    (q) "Survivor" means a person receiving an annuity as a
8survivor of an employee or of an annuitant. "Survivor" also
9includes: (1) the surviving dependent of a person who satisfies
10the definition of "employee" except that such person is made
11ineligible to participate in the State Universities Retirement
12System by clause (4) of subsection (a) of Section 15-107 of the
13Illinois Pension Code; (2) the surviving dependent of any
14person formerly employed by the University of Illinois in the
15Cooperative Extension Service who would be an annuitant except
16for the fact that such person was made ineligible to
17participate in the State Universities Retirement System by
18clause (4) of subsection (a) of Section 15-107 of the Illinois
19Pension Code; and (3) the surviving dependent of a person who
20was an annuitant under this Act by virtue of receiving an
21alternative retirement cancellation payment under Section
2214-108.5 of the Illinois Pension Code.
23    (q-2) "SERS" means the State Employees' Retirement System
24of Illinois, created under Article 14 of the Illinois Pension
25Code.
26    (q-3) "SURS" means the State Universities Retirement

 

 

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1System, created under Article 15 of the Illinois Pension Code.
2    (q-4) "TRS" means the Teachers' Retirement System of the
3State of Illinois, created under Article 16 of the Illinois
4Pension Code.
5    (q-5) (Blank).
6    (q-6) (Blank).
7    (q-7) (Blank).
8    (r) "Medical services" means the services provided within
9the scope of their licenses by practitioners in all categories
10licensed under the Medical Practice Act of 1987.
11    (s) "Unit of local government" means any county,
12municipality, township, school district (including a
13combination of school districts under the Intergovernmental
14Cooperation Act), special district or other unit, designated as
15a unit of local government by law, which exercises limited
16governmental powers or powers in respect to limited
17governmental subjects, any not-for-profit association with a
18membership that primarily includes townships and township
19officials, that has duties that include provision of research
20service, dissemination of information, and other acts for the
21purpose of improving township government, and that is funded
22wholly or partly in accordance with Section 85-15 of the
23Township Code; any not-for-profit corporation or association,
24with a membership consisting primarily of municipalities, that
25operates its own utility system, and provides research,
26training, dissemination of information, or other acts to

 

 

HB4055- 12 -LRB100 12851 RPS 26572 b

1promote cooperation between and among municipalities that
2provide utility services and for the advancement of the goals
3and purposes of its membership; the Southern Illinois
4Collegiate Common Market, which is a consortium of higher
5education institutions in Southern Illinois; the Illinois
6Association of Park Districts; and any hospital provider that
7is owned by a county that has 100 or fewer hospital beds and
8has not already joined the program. "Qualified local
9government" means a unit of local government approved by the
10Director and participating in a program created under
11subsection (i) of Section 10 of this Act.
12    (t) "Qualified rehabilitation facility" means any
13not-for-profit organization that is accredited by the
14Commission on Accreditation of Rehabilitation Facilities or
15certified by the Department of Human Services (as successor to
16the Department of Mental Health and Developmental
17Disabilities) to provide services to persons with disabilities
18and which receives funds from the State of Illinois for
19providing those services, approved by the Director and
20participating in a program created under subsection (j) of
21Section 10 of this Act.
22    (u) "Qualified domestic violence shelter or service" means
23any Illinois domestic violence shelter or service and its
24administrative offices funded by the Department of Human
25Services (as successor to the Illinois Department of Public
26Aid), approved by the Director and participating in a program

 

 

HB4055- 13 -LRB100 12851 RPS 26572 b

1created under subsection (k) of Section 10.
2    (v) "TRS benefit recipient" means a person who:
3        (1) is not a "member" as defined in this Section; and
4        (2) is receiving a monthly benefit or retirement
5    annuity under Article 16 of the Illinois Pension Code; and
6        (3) either (i) has at least 8 years of creditable
7    service under Article 16 of the Illinois Pension Code, or
8    (ii) was enrolled in the health insurance program offered
9    under that Article on January 1, 1996, or (iii) is the
10    survivor of a benefit recipient who had at least 8 years of
11    creditable service under Article 16 of the Illinois Pension
12    Code or was enrolled in the health insurance program
13    offered under that Article on the effective date of this
14    amendatory Act of 1995, or (iv) is a recipient or survivor
15    of a recipient of a disability benefit under Article 16 of
16    the Illinois Pension Code.
17    (w) "TRS dependent beneficiary" means a person who:
18        (1) is not a "member" or "dependent" as defined in this
19    Section; and
20        (2) is a TRS benefit recipient's: (A) spouse, (B)
21    dependent parent who is receiving at least half of his or
22    her support from the TRS benefit recipient, or (C) natural,
23    step, adjudicated, or adopted child who is (i) under age
24    26, (ii) was, on January 1, 1996, participating as a
25    dependent beneficiary in the health insurance program
26    offered under Article 16 of the Illinois Pension Code, or

 

 

HB4055- 14 -LRB100 12851 RPS 26572 b

1    (iii) age 19 or over who has a mental or physical
2    disability from a cause originating prior to the age of 19
3    (age 26 if enrolled as an adult child).
4    "TRS dependent beneficiary" does not include, as indicated
5under paragraph (2) of this subsection (w), a dependent of the
6survivor of a TRS benefit recipient who first becomes a
7dependent of a survivor of a TRS benefit recipient on or after
8the effective date of this amendatory Act of the 97th General
9Assembly unless that dependent would have been eligible for
10coverage as a dependent of the deceased TRS benefit recipient
11upon whom the survivor benefit is based.
12    (x) "Military leave" refers to individuals in basic
13training for reserves, special/advanced training, annual
14training, emergency call up, activation by the President of the
15United States, or any other training or duty in service to the
16United States Armed Forces.
17    (y) (Blank).
18    (z) "Community college benefit recipient" means a person
19who:
20        (1) is not a "member" as defined in this Section; and
21        (2) is receiving a monthly survivor's annuity or
22    retirement annuity under Article 15 of the Illinois Pension
23    Code; and
24        (3) either (i) was a full-time employee of a community
25    college district or an association of community college
26    boards created under the Public Community College Act

 

 

HB4055- 15 -LRB100 12851 RPS 26572 b

1    (other than an employee whose last employer under Article
2    15 of the Illinois Pension Code was a community college
3    district subject to Article VII of the Public Community
4    College Act) and was eligible to participate in a group
5    health benefit plan as an employee during the time of
6    employment with a community college district (other than a
7    community college district subject to Article VII of the
8    Public Community College Act) or an association of
9    community college boards, or (ii) is the survivor of a
10    person described in item (i).
11    (aa) "Community college dependent beneficiary" means a
12person who:
13        (1) is not a "member" or "dependent" as defined in this
14    Section; and
15        (2) is a community college benefit recipient's: (A)
16    spouse, (B) dependent parent who is receiving at least half
17    of his or her support from the community college benefit
18    recipient, or (C) natural, step, adjudicated, or adopted
19    child who is (i) under age 26, or (ii) age 19 or over and
20    has a mental or physical disability from a cause
21    originating prior to the age of 19 (age 26 if enrolled as
22    an adult child).
23    "Community college dependent beneficiary" does not
24include, as indicated under paragraph (2) of this subsection
25(aa), a dependent of the survivor of a community college
26benefit recipient who first becomes a dependent of a survivor

 

 

HB4055- 16 -LRB100 12851 RPS 26572 b

1of a community college benefit recipient on or after the
2effective date of this amendatory Act of the 97th General
3Assembly unless that dependent would have been eligible for
4coverage as a dependent of the deceased community college
5benefit recipient upon whom the survivor annuity is based.
6    (bb) "Qualified child advocacy center" means any Illinois
7child advocacy center and its administrative offices funded by
8the Department of Children and Family Services, as defined by
9the Children's Advocacy Center Act (55 ILCS 80/), approved by
10the Director and participating in a program created under
11subsection (n) of Section 10.
12(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
13    (5 ILCS 375/10)  (from Ch. 127, par. 530)
14    Sec. 10. Contributions by the State and members.
15    (a) The State shall pay the cost of basic non-contributory
16group life insurance and, subject to member paid contributions
17set by the Department or required by this Section and except as
18provided in this Section, the basic program of group health
19benefits on each eligible member, except a member, not
20otherwise covered by this Act, who has retired as a
21participating member under Article 2 of the Illinois Pension
22Code but is ineligible for the retirement annuity under Section
232-119 of the Illinois Pension Code, and part of each eligible
24member's and retired member's premiums for health insurance
25coverage for enrolled dependents as provided by Section 9. The

 

 

HB4055- 17 -LRB100 12851 RPS 26572 b

1State shall pay the cost of the basic program of group health
2benefits only after benefits are reduced by the amount of
3benefits covered by Medicare for all members and dependents who
4are eligible for benefits under Social Security or the Railroad
5Retirement system or who had sufficient Medicare-covered
6government employment, except that such reduction in benefits
7shall apply only to those members and dependents who (1) first
8become eligible for such Medicare coverage on or after July 1,
91992; or (2) are Medicare-eligible members or dependents of a
10local government unit which began participation in the program
11on or after July 1, 1992; or (3) remain eligible for, but no
12longer receive Medicare coverage which they had been receiving
13on or after July 1, 1992. The Department may determine the
14aggregate level of the State's contribution on the basis of
15actual cost of medical services adjusted for age, sex or
16geographic or other demographic characteristics which affect
17the costs of such programs.
18    The cost of participation in the basic program of group
19health benefits for the dependent or survivor of a living or
20deceased retired employee who was formerly employed by the
21University of Illinois in the Cooperative Extension Service and
22would be an annuitant but for the fact that he or she was made
23ineligible to participate in the State Universities Retirement
24System by clause (4) of subsection (a) of Section 15-107 of the
25Illinois Pension Code shall not be greater than the cost of
26participation that would otherwise apply to that dependent or

 

 

HB4055- 18 -LRB100 12851 RPS 26572 b

1survivor if he or she were the dependent or survivor of an
2annuitant under the State Universities Retirement System.
3    (a-1) (Blank).
4    (a-2) (Blank).
5    (a-3) (Blank).
6    (a-4) (Blank).
7    (a-5) (Blank).
8    (a-6) (Blank).
9    (a-7) (Blank).
10    (a-8) Any annuitant, survivor, or retired employee may
11waive or terminate coverage in the program of group health
12benefits. Any such annuitant, survivor, or retired employee who
13has waived or terminated coverage may enroll or re-enroll in
14the program of group health benefits only during the annual
15benefit choice period, as determined by the Director; except
16that in the event of termination of coverage due to nonpayment
17of premiums, the annuitant, survivor, or retired employee may
18not re-enroll in the program.
19    (a-8.5) Beginning on the effective date of this amendatory
20Act of the 97th General Assembly, the Director of Central
21Management Services shall, on an annual basis, determine the
22amount that the State shall contribute toward the basic program
23of group health benefits on behalf of annuitants (including
24individuals who (i) participated in the General Assembly
25Retirement System, the State Employees' Retirement System of
26Illinois, the State Universities Retirement System, the

 

 

HB4055- 19 -LRB100 12851 RPS 26572 b

1Teachers' Retirement System of the State of Illinois, or the
2Judges Retirement System of Illinois and (ii) qualify as
3annuitants under subsection (b) of Section 3 of this Act),
4survivors (including individuals who (i) receive an annuity as
5a survivor of an individual who participated in the General
6Assembly Retirement System, the State Employees' Retirement
7System of Illinois, the State Universities Retirement System,
8the Teachers' Retirement System of the State of Illinois, or
9the Judges Retirement System of Illinois and (ii) qualify as
10survivors under subsection (q) of Section 3 of this Act), and
11retired employees (as defined in subsection (p) of Section 3 of
12this Act). The remainder of the cost of coverage for each
13annuitant, survivor, or retired employee, as determined by the
14Director of Central Management Services, shall be the
15responsibility of that annuitant, survivor, or retired
16employee.
17    Contributions required of annuitants, survivors, and
18retired employees shall be the same for all retirement systems
19and shall also be based on whether an individual has made an
20election under Section 15-135.1 of the Illinois Pension Code.
21Contributions may be based on annuitants', survivors', or
22retired employees' Medicare eligibility, but may not be based
23on Social Security eligibility.
24    (a-9) No later than May 1 of each calendar year, the
25Director of Central Management Services shall certify in
26writing to the Executive Secretary of the State Employees'

 

 

HB4055- 20 -LRB100 12851 RPS 26572 b

1Retirement System of Illinois the amounts of the Medicare
2supplement health care premiums and the amounts of the health
3care premiums for all other retirees who are not Medicare
4eligible.
5    A separate calculation of the premiums based upon the
6actual cost of each health care plan shall be so certified.
7    The Director of Central Management Services shall provide
8to the Executive Secretary of the State Employees' Retirement
9System of Illinois such information, statistics, and other data
10as he or she may require to review the premium amounts
11certified by the Director of Central Management Services.
12    The Department of Central Management Services, or any
13successor agency designated to procure healthcare contracts
14pursuant to this Act, is authorized to establish funds,
15separate accounts provided by any bank or banks as defined by
16the Illinois Banking Act, or separate accounts provided by any
17savings and loan association or associations as defined by the
18Illinois Savings and Loan Act of 1985 to be held by the
19Director, outside the State treasury, for the purpose of
20receiving the transfer of moneys from the Local Government
21Health Insurance Reserve Fund. The Department may promulgate
22rules further defining the methodology for the transfers. Any
23interest earned by moneys in the funds or accounts shall inure
24to the Local Government Health Insurance Reserve Fund. The
25transferred moneys, and interest accrued thereon, shall be used
26exclusively for transfers to administrative service

 

 

HB4055- 21 -LRB100 12851 RPS 26572 b

1organizations or their financial institutions for payments of
2claims to claimants and providers under the self-insurance
3health plan. The transferred moneys, and interest accrued
4thereon, shall not be used for any other purpose including, but
5not limited to, reimbursement of administration fees due the
6administrative service organization pursuant to its contract
7or contracts with the Department.
8    (a-10) To the extent that participation, benefits, or
9premiums under this Act are based on a person's service credit
10under an Article of the Illinois Pension Code, service credit
11terminated in exchange for an accelerated pension benefit
12payment under Section 2-154.5, 14-147.5, 15-185.5, 16-190.5,
13or 18-161.5 of that Code shall be included in determining a
14person's service credit for the purposes of this Act.
15    (b) State employees who become eligible for this program on
16or after January 1, 1980 in positions normally requiring actual
17performance of duty not less than 1/2 of a normal work period
18but not equal to that of a normal work period, shall be given
19the option of participating in the available program. If the
20employee elects coverage, the State shall contribute on behalf
21of such employee to the cost of the employee's benefit and any
22applicable dependent supplement, that sum which bears the same
23percentage as that percentage of time the employee regularly
24works when compared to normal work period.
25    (c) The basic non-contributory coverage from the basic
26program of group health benefits shall be continued for each

 

 

HB4055- 22 -LRB100 12851 RPS 26572 b

1employee not in pay status or on active service by reason of
2(1) leave of absence due to illness or injury, (2) authorized
3educational leave of absence or sabbatical leave, or (3)
4military leave. This coverage shall continue until expiration
5of authorized leave and return to active service, but not to
6exceed 24 months for leaves under item (1) or (2). This
724-month limitation and the requirement of returning to active
8service shall not apply to persons receiving ordinary or
9accidental disability benefits or retirement benefits through
10the appropriate State retirement system or benefits under the
11Workers' Compensation or Occupational Disease Act.
12    (d) The basic group life insurance coverage shall continue,
13with full State contribution, where such person is (1) absent
14from active service by reason of disability arising from any
15cause other than self-inflicted, (2) on authorized educational
16leave of absence or sabbatical leave, or (3) on military leave.
17    (e) Where the person is in non-pay status for a period in
18excess of 30 days or on leave of absence, other than by reason
19of disability, educational or sabbatical leave, or military
20leave, such person may continue coverage only by making
21personal payment equal to the amount normally contributed by
22the State on such person's behalf. Such payments and coverage
23may be continued: (1) until such time as the person returns to
24a status eligible for coverage at State expense, but not to
25exceed 24 months or (2) until such person's employment or
26annuitant status with the State is terminated (exclusive of any

 

 

HB4055- 23 -LRB100 12851 RPS 26572 b

1additional service imposed pursuant to law).
2    (f) The Department shall establish by rule the extent to
3which other employee benefits will continue for persons in
4non-pay status or who are not in active service.
5    (g) The State shall not pay the cost of the basic
6non-contributory group life insurance, program of health
7benefits and other employee benefits for members who are
8survivors as defined by paragraphs (1) and (2) of subsection
9(q) of Section 3 of this Act. The costs of benefits for these
10survivors shall be paid by the survivors or by the University
11of Illinois Cooperative Extension Service, or any combination
12thereof. However, the State shall pay the amount of the
13reduction in the cost of participation, if any, resulting from
14the amendment to subsection (a) made by this amendatory Act of
15the 91st General Assembly.
16    (h) Those persons occupying positions with any department
17as a result of emergency appointments pursuant to Section 8b.8
18of the Personnel Code who are not considered employees under
19this Act shall be given the option of participating in the
20programs of group life insurance, health benefits and other
21employee benefits. Such persons electing coverage may
22participate only by making payment equal to the amount normally
23contributed by the State for similarly situated employees. Such
24amounts shall be determined by the Director. Such payments and
25coverage may be continued until such time as the person becomes
26an employee pursuant to this Act or such person's appointment

 

 

HB4055- 24 -LRB100 12851 RPS 26572 b

1is terminated.
2    (i) Any unit of local government within the State of
3Illinois may apply to the Director to have its employees,
4annuitants, and their dependents provided group health
5coverage under this Act on a non-insured basis. To participate,
6a unit of local government must agree to enroll all of its
7employees, who may select coverage under either the State group
8health benefits plan or a health maintenance organization that
9has contracted with the State to be available as a health care
10provider for employees as defined in this Act. A unit of local
11government must remit the entire cost of providing coverage
12under the State group health benefits plan or, for coverage
13under a health maintenance organization, an amount determined
14by the Director based on an analysis of the sex, age,
15geographic location, or other relevant demographic variables
16for its employees, except that the unit of local government
17shall not be required to enroll those of its employees who are
18covered spouses or dependents under this plan or another group
19policy or plan providing health benefits as long as (1) an
20appropriate official from the unit of local government attests
21that each employee not enrolled is a covered spouse or
22dependent under this plan or another group policy or plan, and
23(2) at least 50% of the employees are enrolled and the unit of
24local government remits the entire cost of providing coverage
25to those employees, except that a participating school district
26must have enrolled at least 50% of its full-time employees who

 

 

HB4055- 25 -LRB100 12851 RPS 26572 b

1have not waived coverage under the district's group health plan
2by participating in a component of the district's cafeteria
3plan. A participating school district is not required to enroll
4a full-time employee who has waived coverage under the
5district's health plan, provided that an appropriate official
6from the participating school district attests that the
7full-time employee has waived coverage by participating in a
8component of the district's cafeteria plan. For the purposes of
9this subsection, "participating school district" includes a
10unit of local government whose primary purpose is education as
11defined by the Department's rules.
12    Employees of a participating unit of local government who
13are not enrolled due to coverage under another group health
14policy or plan may enroll in the event of a qualifying change
15in status, special enrollment, special circumstance as defined
16by the Director, or during the annual Benefit Choice Period. A
17participating unit of local government may also elect to cover
18its annuitants. Dependent coverage shall be offered on an
19optional basis, with the costs paid by the unit of local
20government, its employees, or some combination of the two as
21determined by the unit of local government. The unit of local
22government shall be responsible for timely collection and
23transmission of dependent premiums.
24    The Director shall annually determine monthly rates of
25payment, subject to the following constraints:
26        (1) In the first year of coverage, the rates shall be

 

 

HB4055- 26 -LRB100 12851 RPS 26572 b

1    equal to the amount normally charged to State employees for
2    elected optional coverages or for enrolled dependents
3    coverages or other contributory coverages, or contributed
4    by the State for basic insurance coverages on behalf of its
5    employees, adjusted for differences between State
6    employees and employees of the local government in age,
7    sex, geographic location or other relevant demographic
8    variables, plus an amount sufficient to pay for the
9    additional administrative costs of providing coverage to
10    employees of the unit of local government and their
11    dependents.
12        (2) In subsequent years, a further adjustment shall be
13    made to reflect the actual prior years' claims experience
14    of the employees of the unit of local government.
15    In the case of coverage of local government employees under
16a health maintenance organization, the Director shall annually
17determine for each participating unit of local government the
18maximum monthly amount the unit may contribute toward that
19coverage, based on an analysis of (i) the age, sex, geographic
20location, and other relevant demographic variables of the
21unit's employees and (ii) the cost to cover those employees
22under the State group health benefits plan. The Director may
23similarly determine the maximum monthly amount each unit of
24local government may contribute toward coverage of its
25employees' dependents under a health maintenance organization.
26    Monthly payments by the unit of local government or its

 

 

HB4055- 27 -LRB100 12851 RPS 26572 b

1employees for group health benefits plan or health maintenance
2organization coverage shall be deposited in the Local
3Government Health Insurance Reserve Fund.
4    The Local Government Health Insurance Reserve Fund is
5hereby created as a nonappropriated trust fund to be held
6outside the State Treasury, with the State Treasurer as
7custodian. The Local Government Health Insurance Reserve Fund
8shall be a continuing fund not subject to fiscal year
9limitations. The Local Government Health Insurance Reserve
10Fund is not subject to administrative charges or charge-backs,
11including but not limited to those authorized under Section 8h
12of the State Finance Act. All revenues arising from the
13administration of the health benefits program established
14under this Section shall be deposited into the Local Government
15Health Insurance Reserve Fund. Any interest earned on moneys in
16the Local Government Health Insurance Reserve Fund shall be
17deposited into the Fund. All expenditures from this Fund shall
18be used for payments for health care benefits for local
19government and rehabilitation facility employees, annuitants,
20and dependents, and to reimburse the Department or its
21administrative service organization for all expenses incurred
22in the administration of benefits. No other State funds may be
23used for these purposes.
24    A local government employer's participation or desire to
25participate in a program created under this subsection shall
26not limit that employer's duty to bargain with the

 

 

HB4055- 28 -LRB100 12851 RPS 26572 b

1representative of any collective bargaining unit of its
2employees.
3    (j) Any rehabilitation facility within the State of
4Illinois may apply to the Director to have its employees,
5annuitants, and their eligible dependents provided group
6health coverage under this Act on a non-insured basis. To
7participate, a rehabilitation facility must agree to enroll all
8of its employees and remit the entire cost of providing such
9coverage for its employees, except that the rehabilitation
10facility shall not be required to enroll those of its employees
11who are covered spouses or dependents under this plan or
12another group policy or plan providing health benefits as long
13as (1) an appropriate official from the rehabilitation facility
14attests that each employee not enrolled is a covered spouse or
15dependent under this plan or another group policy or plan, and
16(2) at least 50% of the employees are enrolled and the
17rehabilitation facility remits the entire cost of providing
18coverage to those employees. Employees of a participating
19rehabilitation facility who are not enrolled due to coverage
20under another group health policy or plan may enroll in the
21event of a qualifying change in status, special enrollment,
22special circumstance as defined by the Director, or during the
23annual Benefit Choice Period. A participating rehabilitation
24facility may also elect to cover its annuitants. Dependent
25coverage shall be offered on an optional basis, with the costs
26paid by the rehabilitation facility, its employees, or some

 

 

HB4055- 29 -LRB100 12851 RPS 26572 b

1combination of the 2 as determined by the rehabilitation
2facility. The rehabilitation facility shall be responsible for
3timely collection and transmission of dependent premiums.
4    The Director shall annually determine quarterly rates of
5payment, subject to the following constraints:
6        (1) In the first year of coverage, the rates shall be
7    equal to the amount normally charged to State employees for
8    elected optional coverages or for enrolled dependents
9    coverages or other contributory coverages on behalf of its
10    employees, adjusted for differences between State
11    employees and employees of the rehabilitation facility in
12    age, sex, geographic location or other relevant
13    demographic variables, plus an amount sufficient to pay for
14    the additional administrative costs of providing coverage
15    to employees of the rehabilitation facility and their
16    dependents.
17        (2) In subsequent years, a further adjustment shall be
18    made to reflect the actual prior years' claims experience
19    of the employees of the rehabilitation facility.
20    Monthly payments by the rehabilitation facility or its
21employees for group health benefits shall be deposited in the
22Local Government Health Insurance Reserve Fund.
23    (k) Any domestic violence shelter or service within the
24State of Illinois may apply to the Director to have its
25employees, annuitants, and their dependents provided group
26health coverage under this Act on a non-insured basis. To

 

 

HB4055- 30 -LRB100 12851 RPS 26572 b

1participate, a domestic violence shelter or service must agree
2to enroll all of its employees and pay the entire cost of
3providing such coverage for its employees. The domestic
4violence shelter shall not be required to enroll those of its
5employees who are covered spouses or dependents under this plan
6or another group policy or plan providing health benefits as
7long as (1) an appropriate official from the domestic violence
8shelter attests that each employee not enrolled is a covered
9spouse or dependent under this plan or another group policy or
10plan and (2) at least 50% of the employees are enrolled and the
11domestic violence shelter remits the entire cost of providing
12coverage to those employees. Employees of a participating
13domestic violence shelter who are not enrolled due to coverage
14under another group health policy or plan may enroll in the
15event of a qualifying change in status, special enrollment, or
16special circumstance as defined by the Director or during the
17annual Benefit Choice Period. A participating domestic
18violence shelter may also elect to cover its annuitants.
19Dependent coverage shall be offered on an optional basis, with
20employees, or some combination of the 2 as determined by the
21domestic violence shelter or service. The domestic violence
22shelter or service shall be responsible for timely collection
23and transmission of dependent premiums.
24    The Director shall annually determine rates of payment,
25subject to the following constraints:
26        (1) In the first year of coverage, the rates shall be

 

 

HB4055- 31 -LRB100 12851 RPS 26572 b

1    equal to the amount normally charged to State employees for
2    elected optional coverages or for enrolled dependents
3    coverages or other contributory coverages on behalf of its
4    employees, adjusted for differences between State
5    employees and employees of the domestic violence shelter or
6    service in age, sex, geographic location or other relevant
7    demographic variables, plus an amount sufficient to pay for
8    the additional administrative costs of providing coverage
9    to employees of the domestic violence shelter or service
10    and their dependents.
11        (2) In subsequent years, a further adjustment shall be
12    made to reflect the actual prior years' claims experience
13    of the employees of the domestic violence shelter or
14    service.
15    Monthly payments by the domestic violence shelter or
16service or its employees for group health insurance shall be
17deposited in the Local Government Health Insurance Reserve
18Fund.
19    (l) A public community college or entity organized pursuant
20to the Public Community College Act may apply to the Director
21initially to have only annuitants not covered prior to July 1,
221992 by the district's health plan provided health coverage
23under this Act on a non-insured basis. The community college
24must execute a 2-year contract to participate in the Local
25Government Health Plan. Any annuitant may enroll in the event
26of a qualifying change in status, special enrollment, special

 

 

HB4055- 32 -LRB100 12851 RPS 26572 b

1circumstance as defined by the Director, or during the annual
2Benefit Choice Period.
3    The Director shall annually determine monthly rates of
4payment subject to the following constraints: for those
5community colleges with annuitants only enrolled, first year
6rates shall be equal to the average cost to cover claims for a
7State member adjusted for demographics, Medicare
8participation, and other factors; and in the second year, a
9further adjustment of rates shall be made to reflect the actual
10first year's claims experience of the covered annuitants.
11    (l-5) The provisions of subsection (l) become inoperative
12on July 1, 1999.
13    (m) The Director shall adopt any rules deemed necessary for
14implementation of this amendatory Act of 1989 (Public Act
1586-978).
16    (n) Any child advocacy center within the State of Illinois
17may apply to the Director to have its employees, annuitants,
18and their dependents provided group health coverage under this
19Act on a non-insured basis. To participate, a child advocacy
20center must agree to enroll all of its employees and pay the
21entire cost of providing coverage for its employees. The child
22advocacy center shall not be required to enroll those of its
23employees who are covered spouses or dependents under this plan
24or another group policy or plan providing health benefits as
25long as (1) an appropriate official from the child advocacy
26center attests that each employee not enrolled is a covered

 

 

HB4055- 33 -LRB100 12851 RPS 26572 b

1spouse or dependent under this plan or another group policy or
2plan and (2) at least 50% of the employees are enrolled and the
3child advocacy center remits the entire cost of providing
4coverage to those employees. Employees of a participating child
5advocacy center who are not enrolled due to coverage under
6another group health policy or plan may enroll in the event of
7a qualifying change in status, special enrollment, or special
8circumstance as defined by the Director or during the annual
9Benefit Choice Period. A participating child advocacy center
10may also elect to cover its annuitants. Dependent coverage
11shall be offered on an optional basis, with the costs paid by
12the child advocacy center, its employees, or some combination
13of the 2 as determined by the child advocacy center. The child
14advocacy center shall be responsible for timely collection and
15transmission of dependent premiums.
16    The Director shall annually determine rates of payment,
17subject to the following constraints:
18        (1) In the first year of coverage, the rates shall be
19    equal to the amount normally charged to State employees for
20    elected optional coverages or for enrolled dependents
21    coverages or other contributory coverages on behalf of its
22    employees, adjusted for differences between State
23    employees and employees of the child advocacy center in
24    age, sex, geographic location, or other relevant
25    demographic variables, plus an amount sufficient to pay for
26    the additional administrative costs of providing coverage

 

 

HB4055- 34 -LRB100 12851 RPS 26572 b

1    to employees of the child advocacy center and their
2    dependents.
3        (2) In subsequent years, a further adjustment shall be
4    made to reflect the actual prior years' claims experience
5    of the employees of the child advocacy center.
6    Monthly payments by the child advocacy center or its
7employees for group health insurance shall be deposited into
8the Local Government Health Insurance Reserve Fund.
9(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
 
10    Section 10. The Illinois Finance Authority Act is amended
11by changing Section 801-40 as follows:
 
12    (20 ILCS 3501/801-40)
13    Sec. 801-40. In addition to the powers otherwise authorized
14by law and in addition to the foregoing general corporate
15powers, the Authority shall also have the following additional
16specific powers to be exercised in furtherance of the purposes
17of this Act.
18    (a) The Authority shall have power (i) to accept grants,
19loans or appropriations from the federal government or the
20State, or any agency or instrumentality thereof, to be used for
21the operating expenses of the Authority, or for any purposes of
22the Authority, including the making of direct loans of such
23funds with respect to projects, and (ii) to enter into any
24agreement with the federal government or the State, or any

 

 

HB4055- 35 -LRB100 12851 RPS 26572 b

1agency or instrumentality thereof, in relationship to such
2grants, loans or appropriations.
3    (b) The Authority shall have power to procure and enter
4into contracts for any type of insurance and indemnity
5agreements covering loss or damage to property from any cause,
6including loss of use and occupancy, or covering any other
7insurable risk.
8    (c) The Authority shall have the continuing power to issue
9bonds for its corporate purposes. Bonds may be issued by the
10Authority in one or more series and may provide for the payment
11of any interest deemed necessary on such bonds, of the costs of
12issuance of such bonds, of any premium on any insurance, or of
13the cost of any guarantees, letters of credit or other similar
14documents, may provide for the funding of the reserves deemed
15necessary in connection with such bonds, and may provide for
16the refunding or advance refunding of any bonds or for accounts
17deemed necessary in connection with any purpose of the
18Authority. The bonds may bear interest payable at any time or
19times and at any rate or rates, notwithstanding any other
20provision of law to the contrary, and such rate or rates may be
21established by an index or formula which may be implemented or
22established by persons appointed or retained therefor by the
23Authority, or may bear no interest or may bear interest payable
24at maturity or upon redemption prior to maturity, may bear such
25date or dates, may be payable at such time or times and at such
26place or places, may mature at any time or times not later than

 

 

HB4055- 36 -LRB100 12851 RPS 26572 b

140 years from the date of issuance, may be sold at public or
2private sale at such time or times and at such price or prices,
3may be secured by such pledges, reserves, guarantees, letters
4of credit, insurance contracts or other similar credit support
5or liquidity instruments, may be executed in such manner, may
6be subject to redemption prior to maturity, may provide for the
7registration of the bonds, and may be subject to such other
8terms and conditions all as may be provided by the resolution
9or indenture authorizing the issuance of such bonds. The holder
10or holders of any bonds issued by the Authority may bring suits
11at law or proceedings in equity to compel the performance and
12observance by any person or by the Authority or any of its
13agents or employees of any contract or covenant made with the
14holders of such bonds and to compel such person or the
15Authority and any of its agents or employees to perform any
16duties required to be performed for the benefit of the holders
17of any such bonds by the provision of the resolution
18authorizing their issuance, and to enjoin such person or the
19Authority and any of its agents or employees from taking any
20action in conflict with any such contract or covenant.
21Notwithstanding the form and tenor of any such bonds and in the
22absence of any express recital on the face thereof that it is
23non-negotiable, all such bonds shall be negotiable
24instruments. Pending the preparation and execution of any such
25bonds, temporary bonds may be issued as provided by the
26resolution. The bonds shall be sold by the Authority in such

 

 

HB4055- 37 -LRB100 12851 RPS 26572 b

1manner as it shall determine. The bonds may be secured as
2provided in the authorizing resolution by the receipts,
3revenues, income and other available funds of the Authority and
4by any amounts derived by the Authority from the loan agreement
5or lease agreement with respect to the project or projects; and
6bonds may be issued as general obligations of the Authority
7payable from such revenues, funds and obligations of the
8Authority as the bond resolution shall provide, or may be
9issued as limited obligations with a claim for payment solely
10from such revenues, funds and obligations as the bond
11resolution shall provide. The Authority may grant a specific
12pledge or assignment of and lien on or security interest in
13such rights, revenues, income, or amounts and may grant a
14specific pledge or assignment of and lien on or security
15interest in any reserves, funds or accounts established in the
16resolution authorizing the issuance of bonds. Any such pledge,
17assignment, lien or security interest for the benefit of the
18holders of the Authority's bonds shall be valid and binding
19from the time the bonds are issued without any physical
20delivery or further act, and shall be valid and binding as
21against and prior to the claims of all other parties having
22claims against the Authority or any other person irrespective
23of whether the other parties have notice of the pledge,
24assignment, lien or security interest. As evidence of such
25pledge, assignment, lien and security interest, the Authority
26may execute and deliver a mortgage, trust agreement, indenture

 

 

HB4055- 38 -LRB100 12851 RPS 26572 b

1or security agreement or an assignment thereof. A remedy for
2any breach or default of the terms of any such agreement by the
3Authority may be by mandamus proceedings in any court of
4competent jurisdiction to compel the performance and
5compliance therewith, but the agreement may prescribe by whom
6or on whose behalf such action may be instituted. It is
7expressly understood that the Authority may, but need not,
8acquire title to any project with respect to which it exercises
9its authority.
10    (c-5) The Authority shall have the power to issue State
11Pension Obligation Acceleration Bonds if in any fiscal year the
12amount appropriated for all accelerated pension benefit
13payments is less than the amount required for those payments.
14The proceeds from the State Pension Obligation Acceleration
15Bonds issued under this subsection may only be used to pay for
16accelerated pension benefit payments for the fiscal year in
17which the State Pension Obligation Acceleration Bonds are
18issued.
19    The Authority shall not have outstanding at any one time
20State Pension Obligation Acceleration Bonds for any of the
21purposes of this subsection in an aggregate principal amount
22exceeding $250,000,000, excluding bonds issued to refund
23outstanding State Pension Obligation Acceleration Bonds.
24    (d) With respect to the powers granted by this Act, the
25Authority may adopt rules and regulations prescribing the
26procedures by which persons may apply for assistance under this

 

 

HB4055- 39 -LRB100 12851 RPS 26572 b

1Act. Nothing herein shall be deemed to preclude the Authority,
2prior to the filing of any formal application, from conducting
3preliminary discussions and investigations with respect to the
4subject matter of any prospective application.
5    (e) The Authority shall have power to acquire by purchase,
6lease, gift or otherwise any property or rights therein from
7any person useful for its purposes, whether improved for the
8purposes of any prospective project, or unimproved. The
9Authority may also accept any donation of funds for its
10purposes from any such source. The Authority shall have no
11independent power of condemnation but may acquire any property
12or rights therein obtained upon condemnation by any other
13authority, governmental entity or unit of local government with
14such power.
15    (f) The Authority shall have power to develop, construct
16and improve either under its own direction, or through
17collaboration with any approved applicant, or to acquire
18through purchase or otherwise, any project, using for such
19purpose the proceeds derived from the sale of its bonds or from
20governmental loans or grants, and to hold title in the name of
21the Authority to such projects.
22    (g) The Authority shall have power to lease pursuant to a
23lease agreement any project so developed and constructed or
24acquired to the approved tenant on such terms and conditions as
25may be appropriate to further the purposes of this Act and to
26maintain the credit of the Authority. Any such lease may

 

 

HB4055- 40 -LRB100 12851 RPS 26572 b

1provide for either the Authority or the approved tenant to
2assume initially, in whole or in part, the costs of
3maintenance, repair and improvements during the leasehold
4period. In no case, however, shall the total rentals from any
5project during any initial leasehold period or the total loan
6repayments to be made pursuant to any loan agreement, be less
7than an amount necessary to return over such lease or loan
8period (1) all costs incurred in connection with the
9development, construction, acquisition or improvement of the
10project and for repair, maintenance and improvements thereto
11during the period of the lease or loan; provided, however, that
12the rentals or loan repayments need not include costs met
13through the use of funds other than those obtained by the
14Authority through the issuance of its bonds or governmental
15loans; (2) a reasonable percentage additive to be agreed upon
16by the Authority and the borrower or tenant to cover a properly
17allocable portion of the Authority's general expenses,
18including, but not limited to, administrative expenses,
19salaries and general insurance, and (3) an amount sufficient to
20pay when due all principal of, interest and premium, if any on,
21any bonds issued by the Authority with respect to the project.
22The portion of total rentals payable under clause (3) of this
23subsection (g) shall be deposited in such special accounts,
24including all sinking funds, acquisition or construction
25funds, debt service and other funds as provided by any
26resolution, mortgage or trust agreement of the Authority

 

 

HB4055- 41 -LRB100 12851 RPS 26572 b

1pursuant to which any bond is issued.
2    (h) The Authority has the power, upon the termination of
3any leasehold period of any project, to sell or lease for a
4further term or terms such project on such terms and conditions
5as the Authority shall deem reasonable and consistent with the
6purposes of the Act. The net proceeds from all such sales and
7the revenues or income from such leases shall be used to
8satisfy any indebtedness of the Authority with respect to such
9project and any balance may be used to pay any expenses of the
10Authority or be used for the further development, construction,
11acquisition or improvement of projects. In the event any
12project is vacated by a tenant prior to the termination of the
13initial leasehold period, the Authority shall sell or lease the
14facilities of the project on the most advantageous terms
15available. The net proceeds of any such disposition shall be
16treated in the same manner as the proceeds from sales or the
17revenues or income from leases subsequent to the termination of
18any initial leasehold period.
19    (i) The Authority shall have the power to make loans to
20persons to finance a project, to enter into loan agreements
21with respect thereto, and to accept guarantees from persons of
22its loans or the resultant evidences of obligations of the
23Authority.
24    (j) The Authority may fix, determine, charge and collect
25any premiums, fees, charges, costs and expenses, including,
26without limitation, any application fees, commitment fees,

 

 

HB4055- 42 -LRB100 12851 RPS 26572 b

1program fees, financing charges or publication fees from any
2person in connection with its activities under this Act.
3    (k) In addition to the funds established as provided
4herein, the Authority shall have the power to create and
5establish such reserve funds and accounts as may be necessary
6or desirable to accomplish its purposes under this Act and to
7deposit its available monies into the funds and accounts.
8    (l) At the request of the governing body of any unit of
9local government, the Authority is authorized to market such
10local government's revenue bond offerings by preparing bond
11issues for sale, advertising for sealed bids, receiving bids at
12its offices, making the award to the bidder that offers the
13most favorable terms or arranging for negotiated placements or
14underwritings of such securities. The Authority may, at its
15discretion, offer for concurrent sale the revenue bonds of
16several local governments. Sales by the Authority of revenue
17bonds under this Section shall in no way imply State guarantee
18of such debt issue. The Authority may require such financial
19information from participating local governments as it deems
20necessary in order to carry out the purposes of this subsection
21(1).
22    (m) The Authority may make grants to any county to which
23Division 5-37 of the Counties Code is applicable to assist in
24the financing of capital development, construction and
25renovation of new or existing facilities for hospitals and
26health care facilities under that Act. Such grants may only be

 

 

HB4055- 43 -LRB100 12851 RPS 26572 b

1made from funds appropriated for such purposes from the Build
2Illinois Bond Fund.
3    (n) The Authority may establish an urban development action
4grant program for the purpose of assisting municipalities in
5Illinois which are experiencing severe economic distress to
6help stimulate economic development activities needed to aid in
7economic recovery. The Authority shall determine the types of
8activities and projects for which the urban development action
9grants may be used, provided that such projects and activities
10are broadly defined to include all reasonable projects and
11activities the primary objectives of which are the development
12of viable urban communities, including decent housing and a
13suitable living environment, and expansion of economic
14opportunity, principally for persons of low and moderate
15incomes. The Authority shall enter into grant agreements from
16monies appropriated for such purposes from the Build Illinois
17Bond Fund. The Authority shall monitor the use of the grants,
18and shall provide for audits of the funds as well as recovery
19by the Authority of any funds determined to have been spent in
20violation of this subsection (n) or any rule or regulation
21promulgated hereunder. The Authority shall provide technical
22assistance with regard to the effective use of the urban
23development action grants. The Authority shall file an annual
24report to the General Assembly concerning the progress of the
25grant program.
26    (o) The Authority may establish a Housing Partnership

 

 

HB4055- 44 -LRB100 12851 RPS 26572 b

1Program whereby the Authority provides zero-interest loans to
2municipalities for the purpose of assisting in the financing of
3projects for the rehabilitation of affordable multi-family
4housing for low and moderate income residents. The Authority
5may provide such loans only upon a municipality's providing
6evidence that it has obtained private funding for the
7rehabilitation project. The Authority shall provide 3 State
8dollars for every 7 dollars obtained by the municipality from
9sources other than the State of Illinois. The loans shall be
10made from monies appropriated for such purpose from the Build
11Illinois Bond Fund. The total amount of loans available under
12the Housing Partnership Program shall not exceed $30,000,000.
13State loan monies under this subsection shall be used only for
14the acquisition and rehabilitation of existing buildings
15containing 4 or more dwelling units. The terms of any loan made
16by the municipality under this subsection shall require
17repayment of the loan to the municipality upon any sale or
18other transfer of the project.
19    (p) The Authority may award grants to universities and
20research institutions, research consortiums and other
21not-for-profit entities for the purposes of: remodeling or
22otherwise physically altering existing laboratory or research
23facilities, expansion or physical additions to existing
24laboratory or research facilities, construction of new
25laboratory or research facilities or acquisition of modern
26equipment to support laboratory or research operations

 

 

HB4055- 45 -LRB100 12851 RPS 26572 b

1provided that such grants (i) be used solely in support of
2project and equipment acquisitions which enhance technology
3transfer, and (ii) not constitute more than 60 percent of the
4total project or acquisition cost.
5    (q) Grants may be awarded by the Authority to units of
6local government for the purpose of developing the appropriate
7infrastructure or defraying other costs to the local government
8in support of laboratory or research facilities provided that
9such grants may not exceed 40% of the cost to the unit of local
10government.
11    (r) The Authority may establish a Direct Loan Program to
12make loans to individuals, partnerships or corporations for the
13purpose of an industrial project, as defined in Section 801-10
14of this Act. For the purposes of such program and not by way of
15limitation on any other program of the Authority, the Authority
16shall have the power to issue bonds, notes, or other evidences
17of indebtedness including commercial paper for purposes of
18providing a fund of capital from which it may make such loans.
19The Authority shall have the power to use any appropriations
20from the State made especially for the Authority's Direct Loan
21Program for additional capital to make such loans or for the
22purposes of reserve funds or pledged funds which secure the
23Authority's obligations of repayment of any bond, note or other
24form of indebtedness established for the purpose of providing
25capital for which it intends to make such loans under the
26Direct Loan Program. For the purpose of obtaining such capital,

 

 

HB4055- 46 -LRB100 12851 RPS 26572 b

1the Authority may also enter into agreements with financial
2institutions and other persons for the purpose of selling loans
3and developing a secondary market for such loans. Loans made
4under the Direct Loan Program may be in an amount not to exceed
5$300,000 and shall be made for a portion of an industrial
6project which does not exceed 50% of the total project. No loan
7may be made by the Authority unless approved by the affirmative
8vote of at least 8 members of the board. The Authority shall
9establish procedures and publish rules which shall provide for
10the submission, review, and analysis of each direct loan
11application and which shall preserve the ability of each board
12member to reach an individual business judgment regarding the
13propriety of making each direct loan. The collective discretion
14of the board to approve or disapprove each loan shall be
15unencumbered. The Authority may establish and collect such fees
16and charges, determine and enforce such terms and conditions,
17and charge such interest rates as it determines to be necessary
18and appropriate to the successful administration of the Direct
19Loan Program. The Authority may require such interests in
20collateral and such guarantees as it determines are necessary
21to project the Authority's interest in the repayment of the
22principal and interest of each loan made under the Direct Loan
23Program.
24    (s) The Authority may guarantee private loans to third
25parties up to a specified dollar amount in order to promote
26economic development in this State.

 

 

HB4055- 47 -LRB100 12851 RPS 26572 b

1    (t) The Authority may adopt rules and regulations as may be
2necessary or advisable to implement the powers conferred by
3this Act.
4    (u) The Authority shall have the power to issue bonds,
5notes or other evidences of indebtedness, which may be used to
6make loans to units of local government which are authorized to
7enter into loan agreements and other documents and to issue
8bonds, notes and other evidences of indebtedness for the
9purpose of financing the protection of storm sewer outfalls,
10the construction of adequate storm sewer outfalls, and the
11provision for flood protection of sanitary sewage treatment
12plans, in counties that have established a stormwater
13management planning committee in accordance with Section
145-1062 of the Counties Code. Any such loan shall be made by the
15Authority pursuant to the provisions of Section 820-5 to 820-60
16of this Act. The unit of local government shall pay back to the
17Authority the principal amount of the loan, plus annual
18interest as determined by the Authority. The Authority shall
19have the power, subject to appropriations by the General
20Assembly, to subsidize or buy down a portion of the interest on
21such loans, up to 4% per annum.
22    (v) The Authority may accept security interests as provided
23in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
24    (w) Moral Obligation. In the event that the Authority
25determines that monies of the Authority will not be sufficient
26for the payment of the principal of and interest on its bonds

 

 

HB4055- 48 -LRB100 12851 RPS 26572 b

1during the next State fiscal year, the Chairperson, as soon as
2practicable, shall certify to the Governor the amount required
3by the Authority to enable it to pay such principal of and
4interest on the bonds. The Governor shall submit the amount so
5certified to the General Assembly as soon as practicable, but
6no later than the end of the current State fiscal year. This
7subsection shall apply only to any bonds or notes as to which
8the Authority shall have determined, in the resolution
9authorizing the issuance of the bonds or notes, that this
10subsection shall apply. Whenever the Authority makes such a
11determination, that fact shall be plainly stated on the face of
12the bonds or notes and that fact shall also be reported to the
13Governor. In the event of a withdrawal of moneys from a reserve
14fund established with respect to any issue or issues of bonds
15of the Authority to pay principal or interest on those bonds,
16the Chairperson of the Authority, as soon as practicable, shall
17certify to the Governor the amount required to restore the
18reserve fund to the level required in the resolution or
19indenture securing those bonds. The Governor shall submit the
20amount so certified to the General Assembly as soon as
21practicable, but no later than the end of the current State
22fiscal year. The Authority shall obtain written approval from
23the Governor for any bonds and notes to be issued under this
24Section. In addition to any other bonds authorized to be issued
25under Sections 825-60, 825-65(e), 830-25 and 845-5, the
26principal amount of Authority bonds outstanding issued under

 

 

HB4055- 49 -LRB100 12851 RPS 26572 b

1this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
2360/2-6(c), which have been assumed by the Authority, shall not
3exceed $150,000,000. This subsection (w) shall in no way be
4applied to any bonds issued by the Authority on behalf of the
5Illinois Power Agency under Section 825-90 of this Act.
6    (x) The Authority may enter into agreements or contracts
7with any person necessary or appropriate to place the payment
8obligations of the Authority under any of its bonds in whole or
9in part on any interest rate basis, cash flow basis, or other
10basis desired by the Authority, including without limitation
11agreements or contracts commonly known as "interest rate swap
12agreements", "forward payment conversion agreements", and
13"futures", or agreements or contracts to exchange cash flows or
14a series of payments, or agreements or contracts, including
15without limitation agreements or contracts commonly known as
16"options", "puts", or "calls", to hedge payment, rate spread,
17or similar exposure; provided that any such agreement or
18contract shall not constitute an obligation for borrowed money
19and shall not be taken into account under Section 845-5 of this
20Act or any other debt limit of the Authority or the State of
21Illinois.
22    (y) The Authority shall publish summaries of projects and
23actions approved by the members of the Authority on its
24website. These summaries shall include, but not be limited to,
25information regarding the:
26        (1) project;

 

 

HB4055- 50 -LRB100 12851 RPS 26572 b

1        (2) Board's action or actions;
2        (3) purpose of the project;
3        (4) Authority's program and contribution;
4        (5) volume cap;
5        (6) jobs retained;
6        (7) projected new jobs;
7        (8) construction jobs created;
8        (9) estimated sources and uses of funds;
9        (10) financing summary;
10        (11) project summary;
11        (12) business summary;
12        (13) ownership or economic disclosure statement;
13        (14) professional and financial information;
14        (15) service area; and
15        (16) legislative district.
16    The disclosure of information pursuant to this subsection
17shall comply with the Freedom of Information Act.
18(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07;
1995-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of
20P.A. 96-793 for the effective date of changes made by P.A.
2196-795).)
 
22    Section 15. The State Finance Act is amended by adding
23Section 5.878 as follows:
 
24    (30 ILCS 105/5.878 new)

 

 

HB4055- 51 -LRB100 12851 RPS 26572 b

1    Sec. 5.878. The State Pension Obligation Acceleration Bond
2Fund.
 
3    Section 20. The Budget Stabilization Act is amended by
4changing Section 20 as follows:
 
5    (30 ILCS 122/20)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 20. Pension Stabilization Fund.
9    (a) The Pension Stabilization Fund is hereby created as a
10special fund in the State treasury. Moneys in the fund shall be
11used for the sole purpose of making payments to the designated
12retirement systems as provided in Section 25.
13    (b) For each fiscal year through State fiscal year 2020,
14when the General Assembly's appropriations and transfers or
15diversions as required by law from general funds do not exceed
1699% of the estimated general funds revenues pursuant to
17subsection (a) of Section 10, the Comptroller shall transfer
18from the General Revenue Fund as provided by this Section a
19total amount equal to 0.5% of the estimated general funds
20revenues to the Pension Stabilization Fund.
21    (c) For each fiscal year through State fiscal year 2020,
22when the General Assembly's appropriations and transfers or
23diversions as required by law from general funds do not exceed
2498% of the estimated general funds revenues pursuant to

 

 

HB4055- 52 -LRB100 12851 RPS 26572 b

1subsection (b) of Section 10, the Comptroller shall transfer
2from the General Revenue Fund as provided by this Section a
3total amount equal to 1.0% of the estimated general funds
4revenues to the Pension Stabilization Fund.
5    (c-5) In addition to any other amounts required to be
6transferred under this Section, in State fiscal year 2021 and
7each fiscal year thereafter through State fiscal year 2045, or
8when each of the designated retirement systems, as defined in
9Section 25, has achieved 100% funding, whichever occurs first,
10the State Comptroller shall order transferred and the State
11Treasurer shall transfer from the General Revenue Fund to the
12Pension Stabilization Fund an amount equal to (1) the sum of
13the amounts certified by the designated retirement systems
14under subsection (a-10) of Section 14-135.08, subsection
15(a-10) of Section 15-165, and subsection (a-10) of Section
1616-158 of this Code for that fiscal year minus (2) the sum of
17the required State contributions certified by the retirement
18systems under subsection (a-5) of Section 14-135.08,
19subsection (a-5) of Section 15-165, and subsection (a-5) of
20Section 16-158 of this Code for that fiscal year. The
21transferred amount is intended to represent the annual savings
22to the State resulting from the enactment of Section 1-161 and
23Section 14-155.2, the enactment of subsection (a-2) of Section
2415-155 and subsection (b-4) of Section 16-158, and the changes
25made to Section 1-160 by this amendatory Act of the 100th
26General Assembly.

 

 

HB4055- 53 -LRB100 12851 RPS 26572 b

1    (d) The Comptroller shall transfer 1/12 of the total amount
2to be transferred each fiscal year under this Section into the
3Pension Stabilization Fund on the first day of each month of
4that fiscal year or as soon thereafter as possible; except that
5the final transfer of the fiscal year shall be made as soon as
6practical after the August 31 following the end of the fiscal
7year.
8    Until State fiscal year 2021, before Before the final
9transfer for a fiscal year is made, the Comptroller shall
10reconcile the estimated general funds revenues used in
11calculating the other transfers under this Section for that
12fiscal year with the actual general funds revenues for that
13fiscal year. The final transfer for the fiscal year shall be
14adjusted so that the total amount transferred under this
15Section for that fiscal year is equal to the percentage
16specified in subsection (b) or (c) of this Section, whichever
17is applicable, of the actual general funds revenues for that
18fiscal year. The actual general funds revenues for the fiscal
19year shall be calculated in a manner consistent with subsection
20(c) of Section 10 of this Act.
21(Source: P.A. 94-839, eff. 6-6-06.)
 
22    Section 25. The General Obligation Bond Act is amended by
23changing Sections 2, 2.5, 9, 11, 12, and 13 and by adding
24Section 7.6 as follows:
 

 

 

HB4055- 54 -LRB100 12851 RPS 26572 b

1    (30 ILCS 330/2)  (from Ch. 127, par. 652)
2    Sec. 2. Authorization for Bonds. The State of Illinois is
3authorized to issue, sell and provide for the retirement of
4General Obligation Bonds of the State of Illinois for the
5categories and specific purposes expressed in Sections 2
6through 8 of this Act, in the total amount of $50,167,925,743
7$49,917,925,743.
8    The bonds authorized in this Section 2 and in Section 16 of
9this Act are herein called "Bonds".
10    Of the total amount of Bonds authorized in this Act, up to
11$2,200,000,000 in aggregate original principal amount may be
12issued and sold in accordance with the Baccalaureate Savings
13Act in the form of General Obligation College Savings Bonds.
14    Of the total amount of Bonds authorized in this Act, up to
15$300,000,000 in aggregate original principal amount may be
16issued and sold in accordance with the Retirement Savings Act
17in the form of General Obligation Retirement Savings Bonds.
18    Of the total amount of Bonds authorized in this Act, the
19additional $10,000,000,000 authorized by Public Act 93-2, the
20$3,466,000,000 authorized by Public Act 96-43, and the
21$4,096,348,300 authorized by Public Act 96-1497 shall be used
22solely as provided in Section 7.2.
23    Of the total amount of Bonds authorized in this Act, the
24additional $250,000,000 authorized by this amendatory Act of
25the 100th General Assembly shall be used solely as provided in
26Section 7.6.

 

 

HB4055- 55 -LRB100 12851 RPS 26572 b

1    The issuance and sale of Bonds pursuant to the General
2Obligation Bond Act is an economical and efficient method of
3financing the long-term capital needs of the State. This Act
4will permit the issuance of a multi-purpose General Obligation
5Bond with uniform terms and features. This will not only lower
6the cost of registration but also reduce the overall cost of
7issuing debt by improving the marketability of Illinois General
8Obligation Bonds.
9(Source: P.A. 97-333, eff. 8-12-11; 97-771, eff. 7-10-12;
1097-813, eff. 7-13-12; 98-94, eff. 7-17-13; 98-463, eff.
118-16-13; 98-781, eff. 7-22-14.)
 
12    (30 ILCS 330/2.5)
13    Sec. 2.5. Limitation on issuance of Bonds.
14    (a) Except as provided in subsection (b), no Bonds may be
15issued if, after the issuance, in the next State fiscal year
16after the issuance of the Bonds, the amount of debt service
17(including principal, whether payable at maturity or pursuant
18to mandatory sinking fund installments, and interest) on all
19then-outstanding Bonds, other than (i) Bonds authorized by this
20amendatory Act of the 100th General Assembly, (ii) Bonds
21authorized by Public Act 96-43, and (iii) other than Bonds
22authorized by Public Act 96-1497, would exceed 7% of the
23aggregate appropriations from the general funds (which consist
24of the General Revenue Fund, the Common School Fund, the
25General Revenue Common School Special Account Fund, and the

 

 

HB4055- 56 -LRB100 12851 RPS 26572 b

1Education Assistance Fund) and the Road Fund for the fiscal
2year immediately prior to the fiscal year of the issuance.
3    (b) If the Comptroller and Treasurer each consent in
4writing, Bonds may be issued even if the issuance does not
5comply with subsection (a). In addition, $2,000,000,000 in
6Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7,
7and $2,000,000,000 in Refunding Bonds under Section 16, may be
8issued during State fiscal year 2017 without complying with
9subsection (a).
10(Source: P.A. 99-523, eff. 6-30-16.)
 
11    (30 ILCS 330/7.6 new)
12    Sec. 7.6. State Pension Obligation Acceleration Bonds.
13    (a) As used in this Act, "State Pension Obligation
14Acceleration Bonds" means Bonds authorized by this amendatory
15Act of the 100th General Assembly and used for the purposes set
16forth in subsection (c-5) of Section 801-40 of the Illinois
17Finance Authority Act.
18    (b) State Pension Obligation Acceleration Bonds in the
19amount of $250,000,000 are hereby authorized to be used for the
20purposes set forth in subsection (c-5) of Section 801-40 of the
21Illinois Finance Authority Act.
22    (c) The proceeds of State Pension Obligation Acceleration
23Bonds authorized in subsection (b) of this Section, less the
24amounts authorized in the Bond Sale Order to be directly paid
25out for bond sale expenses under Section 8, shall be deposited

 

 

HB4055- 57 -LRB100 12851 RPS 26572 b

1directly into the State Pension Obligation Acceleration Bond
2Fund, and the Comptroller and the Treasurer shall, as soon as
3practical, make payments as contemplated by subsection (c-5) of
4Section 801-40 of the Illinois Finance Authority Act.
5    (d) There is created the State Pension Obligation
6Acceleration Bond Fund as a special fund in the State Treasury.
7Funds deposited in the State Pension Obligation Acceleration
8Bond Fund may only be used for the purposes set forth in
9subsection (c-5) of Section 801-40 of the Illinois Finance
10Authority Act or for the payment of principal and interest due
11on State Pension Obligation Acceleration Bonds.
 
12    (30 ILCS 330/9)  (from Ch. 127, par. 659)
13    Sec. 9. Conditions for Issuance and Sale of Bonds -
14Requirements for Bonds.
15    (a) Except as otherwise provided in this subsection and
16subsection (h), Bonds shall be issued and sold from time to
17time, in one or more series, in such amounts and at such prices
18as may be directed by the Governor, upon recommendation by the
19Director of the Governor's Office of Management and Budget.
20Bonds shall be in such form (either coupon, registered or book
21entry), in such denominations, payable within 25 years from
22their date, subject to such terms of redemption with or without
23premium, bear interest payable at such times and at such fixed
24or variable rate or rates, and be dated as shall be fixed and
25determined by the Director of the Governor's Office of

 

 

HB4055- 58 -LRB100 12851 RPS 26572 b

1Management and Budget in the order authorizing the issuance and
2sale of any series of Bonds, which order shall be approved by
3the Governor and is herein called a "Bond Sale Order"; provided
4however, that interest payable at fixed or variable rates shall
5not exceed that permitted in the Bond Authorization Act, as now
6or hereafter amended. Bonds shall be payable at such place or
7places, within or without the State of Illinois, and may be
8made registrable as to either principal or as to both principal
9and interest, as shall be specified in the Bond Sale Order.
10Bonds may be callable or subject to purchase and retirement or
11tender and remarketing as fixed and determined in the Bond Sale
12Order. Bonds, other than Bonds issued under Section 3 of this
13Act for the costs associated with the purchase and
14implementation of information technology, (i) except for
15refunding Bonds satisfying the requirements of Section 16 of
16this Act and sold during fiscal year 2009, 2010, 2011, or 2017
17must be issued with principal or mandatory redemption amounts
18in equal amounts, with the first maturity issued occurring
19within the fiscal year in which the Bonds are issued or within
20the next succeeding fiscal year and (ii) must mature or be
21subject to mandatory redemption each fiscal year thereafter up
22to 25 years, except for refunding Bonds satisfying the
23requirements of Section 16 of this Act and sold during fiscal
24year 2009, 2010, or 2011 which must mature or be subject to
25mandatory redemption each fiscal year thereafter up to 16
26years. Bonds issued under Section 3 of this Act for the costs

 

 

HB4055- 59 -LRB100 12851 RPS 26572 b

1associated with the purchase and implementation of information
2technology must be issued with principal or mandatory
3redemption amounts in equal amounts, with the first maturity
4issued occurring with the fiscal year in which the respective
5bonds are issued or with the next succeeding fiscal year, with
6the respective bonds issued maturing or subject to mandatory
7redemption each fiscal year thereafter up to 10 years.
8Notwithstanding any provision of this Act to the contrary, the
9Bonds authorized by Public Act 96-43 shall be payable within 5
10years from their date and must be issued with principal or
11mandatory redemption amounts in equal amounts, with payment of
12principal or mandatory redemption beginning in the first fiscal
13year following the fiscal year in which the Bonds are issued.
14    Notwithstanding any provision of this Act to the contrary,
15the Bonds authorized by Public Act 96-1497 shall be payable
16within 8 years from their date and shall be issued with payment
17of maturing principal or scheduled mandatory redemptions in
18accordance with the following schedule, except the following
19amounts shall be prorated if less than the total additional
20amount of Bonds authorized by Public Act 96-1497 are issued:
21    Fiscal Year After Issuance    Amount
22        1-2                        $0 
23        3                          $110,712,120
24        4                          $332,136,360
25        5                          $664,272,720
26        6-8                        $996,409,080

 

 

HB4055- 60 -LRB100 12851 RPS 26572 b

1    In the case of any series of Bonds bearing interest at a
2variable interest rate ("Variable Rate Bonds"), in lieu of
3determining the rate or rates at which such series of Variable
4Rate Bonds shall bear interest and the price or prices at which
5such Variable Rate Bonds shall be initially sold or remarketed
6(in the event of purchase and subsequent resale), the Bond Sale
7Order may provide that such interest rates and prices may vary
8from time to time depending on criteria established in such
9Bond Sale Order, which criteria may include, without
10limitation, references to indices or variations in interest
11rates as may, in the judgment of a remarketing agent, be
12necessary to cause Variable Rate Bonds of such series to be
13remarketable from time to time at a price equal to their
14principal amount, and may provide for appointment of a bank,
15trust company, investment bank, or other financial institution
16to serve as remarketing agent in that connection. The Bond Sale
17Order may provide that alternative interest rates or provisions
18for establishing alternative interest rates, different
19security or claim priorities, or different call or amortization
20provisions will apply during such times as Variable Rate Bonds
21of any series are held by a person providing credit or
22liquidity enhancement arrangements for such Bonds as
23authorized in subsection (b) of this Section. The Bond Sale
24Order may also provide for such variable interest rates to be
25established pursuant to a process generally known as an auction
26rate process and may provide for appointment of one or more

 

 

HB4055- 61 -LRB100 12851 RPS 26572 b

1financial institutions to serve as auction agents and
2broker-dealers in connection with the establishment of such
3interest rates and the sale and remarketing of such Bonds.
4    (b) In connection with the issuance of any series of Bonds,
5the State may enter into arrangements to provide additional
6security and liquidity for such Bonds, including, without
7limitation, bond or interest rate insurance or letters of
8credit, lines of credit, bond purchase contracts, or other
9arrangements whereby funds are made available to retire or
10purchase Bonds, thereby assuring the ability of owners of the
11Bonds to sell or redeem their Bonds. The State may enter into
12contracts and may agree to pay fees to persons providing such
13arrangements, but only under circumstances where the Director
14of the Governor's Office of Management and Budget certifies
15that he or she reasonably expects the total interest paid or to
16be paid on the Bonds, together with the fees for the
17arrangements (being treated as if interest), would not, taken
18together, cause the Bonds to bear interest, calculated to their
19stated maturity, at a rate in excess of the rate that the Bonds
20would bear in the absence of such arrangements.
21    The State may, with respect to Bonds issued or anticipated
22to be issued, participate in and enter into arrangements with
23respect to interest rate protection or exchange agreements,
24guarantees, or financial futures contracts for the purpose of
25limiting, reducing, or managing interest rate exposure. The
26authority granted under this paragraph, however, shall not

 

 

HB4055- 62 -LRB100 12851 RPS 26572 b

1increase the principal amount of Bonds authorized to be issued
2by law. The arrangements may be executed and delivered by the
3Director of the Governor's Office of Management and Budget on
4behalf of the State. Net payments for such arrangements shall
5constitute interest on the Bonds and shall be paid from the
6General Obligation Bond Retirement and Interest Fund. The
7Director of the Governor's Office of Management and Budget
8shall at least annually certify to the Governor and the State
9Comptroller his or her estimate of the amounts of such net
10payments to be included in the calculation of interest required
11to be paid by the State.
12    (c) Prior to the issuance of any Variable Rate Bonds
13pursuant to subsection (a), the Director of the Governor's
14Office of Management and Budget shall adopt an interest rate
15risk management policy providing that the amount of the State's
16variable rate exposure with respect to Bonds shall not exceed
1720%. This policy shall remain in effect while any Bonds are
18outstanding and the issuance of Bonds shall be subject to the
19terms of such policy. The terms of this policy may be amended
20from time to time by the Director of the Governor's Office of
21Management and Budget but in no event shall any amendment cause
22the permitted level of the State's variable rate exposure with
23respect to Bonds to exceed 20%.
24    (d) "Build America Bonds" in this Section means Bonds
25authorized by Section 54AA of the Internal Revenue Code of
261986, as amended ("Internal Revenue Code"), and bonds issued

 

 

HB4055- 63 -LRB100 12851 RPS 26572 b

1from time to time to refund or continue to refund "Build
2America Bonds".
3    (e) Notwithstanding any other provision of this Section,
4Qualified School Construction Bonds shall be issued and sold
5from time to time, in one or more series, in such amounts and
6at such prices as may be directed by the Governor, upon
7recommendation by the Director of the Governor's Office of
8Management and Budget. Qualified School Construction Bonds
9shall be in such form (either coupon, registered or book
10entry), in such denominations, payable within 25 years from
11their date, subject to such terms of redemption with or without
12premium, and if the Qualified School Construction Bonds are
13issued with a supplemental coupon, bear interest payable at
14such times and at such fixed or variable rate or rates, and be
15dated as shall be fixed and determined by the Director of the
16Governor's Office of Management and Budget in the order
17authorizing the issuance and sale of any series of Qualified
18School Construction Bonds, which order shall be approved by the
19Governor and is herein called a "Bond Sale Order"; except that
20interest payable at fixed or variable rates, if any, shall not
21exceed that permitted in the Bond Authorization Act, as now or
22hereafter amended. Qualified School Construction Bonds shall
23be payable at such place or places, within or without the State
24of Illinois, and may be made registrable as to either principal
25or as to both principal and interest, as shall be specified in
26the Bond Sale Order. Qualified School Construction Bonds may be

 

 

HB4055- 64 -LRB100 12851 RPS 26572 b

1callable or subject to purchase and retirement or tender and
2remarketing as fixed and determined in the Bond Sale Order.
3Qualified School Construction Bonds must be issued with
4principal or mandatory redemption amounts or sinking fund
5payments into the General Obligation Bond Retirement and
6Interest Fund (or subaccount therefor) in equal amounts, with
7the first maturity issued, mandatory redemption payment or
8sinking fund payment occurring within the fiscal year in which
9the Qualified School Construction Bonds are issued or within
10the next succeeding fiscal year, with Qualified School
11Construction Bonds issued maturing or subject to mandatory
12redemption or with sinking fund payments thereof deposited each
13fiscal year thereafter up to 25 years. Sinking fund payments
14set forth in this subsection shall be permitted only to the
15extent authorized in Section 54F of the Internal Revenue Code
16or as otherwise determined by the Director of the Governor's
17Office of Management and Budget. "Qualified School
18Construction Bonds" in this subsection means Bonds authorized
19by Section 54F of the Internal Revenue Code and for bonds
20issued from time to time to refund or continue to refund such
21"Qualified School Construction Bonds".
22    (f) Beginning with the next issuance by the Governor's
23Office of Management and Budget to the Procurement Policy Board
24of a request for quotation for the purpose of formulating a new
25pool of qualified underwriting banks list, all entities
26responding to such a request for quotation for inclusion on

 

 

HB4055- 65 -LRB100 12851 RPS 26572 b

1that list shall provide a written report to the Governor's
2Office of Management and Budget and the Illinois Comptroller.
3The written report submitted to the Comptroller shall (i) be
4published on the Comptroller's Internet website and (ii) be
5used by the Governor's Office of Management and Budget for the
6purposes of scoring such a request for quotation. The written
7report, at a minimum, shall:
8        (1) disclose whether, within the past 3 months,
9    pursuant to its credit default swap market-making
10    activities, the firm has entered into any State of Illinois
11    credit default swaps ("CDS");
12        (2) include, in the event of State of Illinois CDS
13    activity, disclosure of the firm's cumulative notional
14    volume of State of Illinois CDS trades and the firm's
15    outstanding gross and net notional amount of State of
16    Illinois CDS, as of the end of the current 3-month period;
17        (3) indicate, pursuant to the firm's proprietary
18    trading activities, disclosure of whether the firm, within
19    the past 3 months, has entered into any proprietary trades
20    for its own account in State of Illinois CDS;
21        (4) include, in the event of State of Illinois
22    proprietary trades, disclosure of the firm's outstanding
23    gross and net notional amount of proprietary State of
24    Illinois CDS and whether the net position is short or long
25    credit protection, as of the end of the current 3-month
26    period;

 

 

HB4055- 66 -LRB100 12851 RPS 26572 b

1        (5) list all time periods during the past 3 months
2    during which the firm held net long or net short State of
3    Illinois CDS proprietary credit protection positions, the
4    amount of such positions, and whether those positions were
5    net long or net short credit protection positions; and
6        (6) indicate whether, within the previous 3 months, the
7    firm released any publicly available research or marketing
8    reports that reference State of Illinois CDS and include
9    those research or marketing reports as attachments.
10    (g) All entities included on a Governor's Office of
11Management and Budget's pool of qualified underwriting banks
12list shall, as soon as possible after March 18, 2011 (the
13effective date of Public Act 96-1554), but not later than
14January 21, 2011, and on a quarterly fiscal basis thereafter,
15provide a written report to the Governor's Office of Management
16and Budget and the Illinois Comptroller. The written reports
17submitted to the Comptroller shall be published on the
18Comptroller's Internet website. The written reports, at a
19minimum, shall:
20        (1) disclose whether, within the past 3 months,
21    pursuant to its credit default swap market-making
22    activities, the firm has entered into any State of Illinois
23    credit default swaps ("CDS");
24        (2) include, in the event of State of Illinois CDS
25    activity, disclosure of the firm's cumulative notional
26    volume of State of Illinois CDS trades and the firm's

 

 

HB4055- 67 -LRB100 12851 RPS 26572 b

1    outstanding gross and net notional amount of State of
2    Illinois CDS, as of the end of the current 3-month period;
3        (3) indicate, pursuant to the firm's proprietary
4    trading activities, disclosure of whether the firm, within
5    the past 3 months, has entered into any proprietary trades
6    for its own account in State of Illinois CDS;
7        (4) include, in the event of State of Illinois
8    proprietary trades, disclosure of the firm's outstanding
9    gross and net notional amount of proprietary State of
10    Illinois CDS and whether the net position is short or long
11    credit protection, as of the end of the current 3-month
12    period;
13        (5) list all time periods during the past 3 months
14    during which the firm held net long or net short State of
15    Illinois CDS proprietary credit protection positions, the
16    amount of such positions, and whether those positions were
17    net long or net short credit protection positions; and
18        (6) indicate whether, within the previous 3 months, the
19    firm released any publicly available research or marketing
20    reports that reference State of Illinois CDS and include
21    those research or marketing reports as attachments.
22    (h) Notwithstanding any other provision of this Section,
23for purposes of maximizing market efficiencies and cost
24savings, State Pension Obligation Acceleration Bonds may be
25issued and sold from time to time, in one or more series, in
26such amounts and at such prices as may be directed by the

 

 

HB4055- 68 -LRB100 12851 RPS 26572 b

1Governor, upon recommendation by the Director of the Governor's
2Office of Management and Budget. State Pension Obligation
3Acceleration Bonds shall be in such form, either coupon,
4registered, or book entry, in such denominations, shall bear
5interest payable at such times and at such fixed or variable
6rate or rates, and be dated as shall be fixed and determined by
7the Director of the Governor's Office of Management and Budget
8in the order authorizing the issuance and sale of any series of
9State Pension Obligation Acceleration Bonds, which order shall
10be approved by the Governor and is herein called a "Bond Sale
11Order"; provided, however, that interest payable at fixed or
12variable rates shall not exceed that permitted in the Bond
13Authorization Act. State Pension Obligation Acceleration Bonds
14shall be payable at such place or places, within or without the
15State of Illinois, and may be made registrable as to either
16principal or as to both principal and interest, as shall be
17specified in the Bond Sale Order. State Pension Obligation
18Acceleration Bonds may be callable or subject to purchase and
19retirement or tender and remarketing as fixed and determined in
20the Bond Sale Order.
21(Source: P.A. 99-523, eff. 6-30-16.)
 
22    (30 ILCS 330/11)  (from Ch. 127, par. 661)
23    Sec. 11. Sale of Bonds. Except as otherwise provided in
24this Section, Bonds shall be sold from time to time pursuant to
25notice of sale and public bid or by negotiated sale in such

 

 

HB4055- 69 -LRB100 12851 RPS 26572 b

1amounts and at such times as is directed by the Governor, upon
2recommendation by the Director of the Governor's Office of
3Management and Budget. At least 25%, based on total principal
4amount, of all Bonds issued each fiscal year shall be sold
5pursuant to notice of sale and public bid. At all times during
6each fiscal year, no more than 75%, based on total principal
7amount, of the Bonds issued each fiscal year, shall have been
8sold by negotiated sale. Failure to satisfy the requirements in
9the preceding 2 sentences shall not affect the validity of any
10previously issued Bonds; provided that all Bonds authorized by
11Public Act 96-43 and Public Act 96-1497 shall not be included
12in determining compliance for any fiscal year with the
13requirements of the preceding 2 sentences; and further provided
14that refunding Bonds satisfying the requirements of Section 16
15of this Act and sold during fiscal year 2009, 2010, 2011, or
162017 shall not be subject to the requirements in the preceding
172 sentences.
18    If any Bonds, including refunding Bonds, are to be sold by
19negotiated sale, the Director of the Governor's Office of
20Management and Budget shall comply with the competitive request
21for proposal process set forth in the Illinois Procurement Code
22and all other applicable requirements of that Code.
23    If Bonds are to be sold pursuant to notice of sale and
24public bid, the Director of the Governor's Office of Management
25and Budget may, from time to time, as Bonds are to be sold,
26advertise the sale of the Bonds in at least 2 daily newspapers,

 

 

HB4055- 70 -LRB100 12851 RPS 26572 b

1one of which is published in the City of Springfield and one in
2the City of Chicago. The sale of the Bonds shall also be
3advertised in the volume of the Illinois Procurement Bulletin
4that is published by the Department of Central Management
5Services, and shall be published once at least 10 days prior to
6the date fixed for the opening of the bids. The Director of the
7Governor's Office of Management and Budget may reschedule the
8date of sale upon the giving of such additional notice as the
9Director deems adequate to inform prospective bidders of such
10change; provided, however, that all other conditions of the
11sale shall continue as originally advertised.
12    Executed Bonds shall, upon payment therefor, be delivered
13to the purchaser, and the proceeds of Bonds shall be paid into
14the State Treasury as directed by Section 12 of this Act.
15    All State Pension Obligation Acceleration Bonds shall
16comply with this Section. Notwithstanding anything to the
17contrary, however, for purposes of complying with this Section,
18State Pension Obligation Acceleration Bonds, regardless of the
19number of series or issuances sold thereunder, shall be
20considered a single issue or series. Furthermore, for purposes
21of complying with the competitive bidding requirements of this
22Section, the words "at all times" shall not apply to any such
23sale of the State Pension Obligation Acceleration Bonds. The
24Director of the Governor's Office of Management and Budget
25shall determine the time and manner of any competitive sale of
26the State Pension Obligation Acceleration Bonds; however, that

 

 

HB4055- 71 -LRB100 12851 RPS 26572 b

1sale shall under no circumstances take place later than 60 days
2after the State closes the sale of 75% of the State Pension
3Obligation Acceleration Bonds by negotiated sale.
4(Source: P.A. 98-44, eff. 6-28-13; 99-523, eff. 6-30-16.)
 
5    (30 ILCS 330/12)  (from Ch. 127, par. 662)
6    Sec. 12. Allocation of Proceeds from Sale of Bonds.
7    (a) Proceeds from the sale of Bonds, authorized by Section
83 of this Act, shall be deposited in the separate fund known as
9the Capital Development Fund.
10    (b) Proceeds from the sale of Bonds, authorized by
11paragraph (a) of Section 4 of this Act, shall be deposited in
12the separate fund known as the Transportation Bond, Series A
13Fund.
14    (c) Proceeds from the sale of Bonds, authorized by
15paragraphs (b) and (c) of Section 4 of this Act, shall be
16deposited in the separate fund known as the Transportation
17Bond, Series B Fund.
18    (c-1) Proceeds from the sale of Bonds, authorized by
19paragraph (d) of Section 4 of this Act, shall be deposited into
20the Transportation Bond Series D Fund, which is hereby created.
21    (d) Proceeds from the sale of Bonds, authorized by Section
225 of this Act, shall be deposited in the separate fund known as
23the School Construction Fund.
24    (e) Proceeds from the sale of Bonds, authorized by Section
256 of this Act, shall be deposited in the separate fund known as

 

 

HB4055- 72 -LRB100 12851 RPS 26572 b

1the Anti-Pollution Fund.
2    (f) Proceeds from the sale of Bonds, authorized by Section
37 of this Act, shall be deposited in the separate fund known as
4the Coal Development Fund.
5    (f-2) Proceeds from the sale of Bonds, authorized by
6Section 7.2 of this Act, shall be deposited as set forth in
7Section 7.2.
8    (f-5) Proceeds from the sale of Bonds, authorized by
9Section 7.5 of this Act, shall be deposited as set forth in
10Section 7.5.
11    (f-7) Proceeds from the sale of Bonds, authorized by
12Section 7.6 of this Act, shall be deposited as set forth in
13Section 7.6.
14    (g) Proceeds from the sale of Bonds, authorized by Section
158 of this Act, shall be deposited in the Capital Development
16Fund.
17    (h) Subsequent to the issuance of any Bonds for the
18purposes described in Sections 2 through 8 of this Act, the
19Governor and the Director of the Governor's Office of
20Management and Budget may provide for the reallocation of
21unspent proceeds of such Bonds to any other purposes authorized
22under said Sections of this Act, subject to the limitations on
23aggregate principal amounts contained therein. Upon any such
24reallocation, such unspent proceeds shall be transferred to the
25appropriate funds as determined by reference to paragraphs (a)
26through (g) of this Section.

 

 

HB4055- 73 -LRB100 12851 RPS 26572 b

1(Source: P.A. 96-36, eff. 7-13-09.)
 
2    (30 ILCS 330/13)  (from Ch. 127, par. 663)
3    Sec. 13. Appropriation of Proceeds from Sale of Bonds.
4    (a) At all times, the proceeds from the sale of Bonds
5issued pursuant to this Act are subject to appropriation by the
6General Assembly and, except as provided in Sections 7.2 and
77.6 Section 7.2, may be obligated or expended only with the
8written approval of the Governor, in such amounts, at such
9times, and for such purposes as the respective State agencies,
10as defined in Section 1-7 of the Illinois State Auditing Act,
11as amended, deem necessary or desirable for the specific
12purposes contemplated in Sections 2 through 8 of this Act.
13Notwithstanding any other provision of this Act, proceeds from
14the sale of Bonds issued pursuant to this Act appropriated by
15the General Assembly to the Architect of the Capitol may be
16obligated or expended by the Architect of the Capitol without
17the written approval of the Governor.
18    (b) Proceeds from the sale of Bonds for the purpose of
19development of coal and alternative forms of energy shall be
20expended in such amounts and at such times as the Department of
21Commerce and Economic Opportunity, with the advice and
22recommendation of the Illinois Coal Development Board for coal
23development projects, may deem necessary and desirable for the
24specific purpose contemplated by Section 7 of this Act. In
25considering the approval of projects to be funded, the

 

 

HB4055- 74 -LRB100 12851 RPS 26572 b

1Department of Commerce and Economic Opportunity shall give
2special consideration to projects designed to remove sulfur and
3other pollutants in the preparation and utilization of coal,
4and in the use and operation of electric utility generating
5plants and industrial facilities which utilize Illinois coal as
6their primary source of fuel.
7    (c) Except as directed in subsection (c-1) or (c-2), any
8monies received by any officer or employee of the state
9representing a reimbursement of expenditures previously paid
10from general obligation bond proceeds shall be deposited into
11the General Obligation Bond Retirement and Interest Fund
12authorized in Section 14 of this Act.
13    (c-1) Any money received by the Department of
14Transportation as reimbursement for expenditures for high
15speed rail purposes pursuant to appropriations from the
16Transportation Bond, Series B Fund for (i) CREATE (Chicago
17Region Environmental and Transportation Efficiency), (ii) High
18Speed Rail, or (iii) AMTRAK projects authorized by the federal
19government under the provisions of the American Recovery and
20Reinvestment Act of 2009 or the Safe Accountable Flexible
21Efficient Transportation Equity Act—A Legacy for Users
22(SAFETEA-LU), or any successor federal transportation
23authorization Act, shall be deposited into the Federal High
24Speed Rail Trust Fund.
25    (c-2) Any money received by the Department of
26Transportation as reimbursement for expenditures for transit

 

 

HB4055- 75 -LRB100 12851 RPS 26572 b

1capital purposes pursuant to appropriations from the
2Transportation Bond, Series B Fund for projects authorized by
3the federal government under the provisions of the American
4Recovery and Reinvestment Act of 2009 or the Safe Accountable
5Flexible Efficient Transportation Equity Act—A Legacy for
6Users (SAFETEA-LU), or any successor federal transportation
7authorization Act, shall be deposited into the Federal Mass
8Transit Trust Fund.
9(Source: P.A. 98-674, eff. 6-30-14.)
 
10    Section 30. The Illinois Pension Code is amended by
11changing Sections 1-160, 2-101, 2-105, 2-107, 2-124, 2-134,
122-154.2, 2-162, 14-131, 14-135.08, 14-152.1, 15-108.1,
1315-108.2, 15-155, 15-165, 15-198, 16-158, 16-203, 17-129,
1418-131, 18-140, 18-169, 20-121, 20-123, 20-124, and 20-125 and
15by adding Sections 1-161, 1-162, 2-105.3, 2-154.5, 2-165.1,
162-166.1, 14-103.41, 14-147.5, 14-155.1, 14-155.2, 14-156.1,
1715-185.5, 15-200.1, 15-201.1, 16-107.1, 16-190.5, 16-205.1,
1816-206.1, 17-106.05, 18-161.5, and 18-169 as follows:
 
19    (40 ILCS 5/1-160)
20    (Text of Section WITHOUT the changes made by P.A. 98-641,
21which has been held unconstitutional)
22    Sec. 1-160. Provisions applicable to new hires.
23    (a) The provisions of this Section apply to a person who,
24on or after January 1, 2011, first becomes a member or a

 

 

HB4055- 76 -LRB100 12851 RPS 26572 b

1participant under any reciprocal retirement system or pension
2fund established under this Code, other than a retirement
3system or pension fund established under Article 2, 3, 4, 5, 6,
415 or 18 of this Code, notwithstanding any other provision of
5this Code to the contrary, but do not apply to any self-managed
6plan established under this Code, to any person with respect to
7service as a sheriff's law enforcement employee under Article
87, or to any participant of the retirement plan established
9under Section 22-101. Notwithstanding anything to the contrary
10in this Section, for purposes of this Section, a person who
11participated in a retirement system under Article 15 prior to
12January 1, 2011 shall be deemed a person who first became a
13member or participant prior to January 1, 2011 under any
14retirement system or pension fund subject to this Section. The
15changes made to this Section by Public Act 98-596 this
16amendatory Act of the 98th General Assembly are a clarification
17of existing law and are intended to be retroactive to January
181, 2011 (the effective date of Public Act 96-889),
19notwithstanding the provisions of Section 1-103.1 of this Code.
20    This Section does not apply to a person who, on or after 6
21months after the effective date of this amendatory Act of the
22100th General Assembly, first becomes a member or participant
23under Article 14 or 16, unless that person (i) is a covered
24employee under Article 14 who has not elected to participate in
25the defined contribution plan under Section 14-155.2 or (ii)
26elects under subsection (b) of Section 1-161 to receive the

 

 

HB4055- 77 -LRB100 12851 RPS 26572 b

1benefits provided under this Section and the applicable
2provisions of the Article under which he or she is a member or
3participant. This Section also does not apply to a person who
4first becomes a member or participant of an affected pension
5fund on or after 6 months after the resolution or ordinance
6date, as defined in Section 1-162, unless that person elects
7under subsection (c) of Section 1-162 to receive the benefits
8provided under this Section and the applicable provisions of
9the Article under which he or she is a member or participant.
10    (b) "Final average salary" means the average monthly (or
11annual) salary obtained by dividing the total salary or
12earnings calculated under the Article applicable to the member
13or participant during the 96 consecutive months (or 8
14consecutive years) of service within the last 120 months (or 10
15years) of service in which the total salary or earnings
16calculated under the applicable Article was the highest by the
17number of months (or years) of service in that period. For the
18purposes of a person who first becomes a member or participant
19of any retirement system or pension fund to which this Section
20applies on or after January 1, 2011, in this Code, "final
21average salary" shall be substituted for the following:
22        (1) In Article 7 (except for service as sheriff's law
23    enforcement employees), "final rate of earnings".
24        (2) In Articles 8, 9, 10, 11, and 12, "highest average
25    annual salary for any 4 consecutive years within the last
26    10 years of service immediately preceding the date of

 

 

HB4055- 78 -LRB100 12851 RPS 26572 b

1    withdrawal".
2        (3) In Article 13, "average final salary".
3        (4) In Article 14, "final average compensation".
4        (5) In Article 17, "average salary".
5        (6) In Section 22-207, "wages or salary received by him
6    at the date of retirement or discharge".
7    (b-5) Beginning on January 1, 2011, for all purposes under
8this Code (including without limitation the calculation of
9benefits and employee contributions), the annual earnings,
10salary, or wages (based on the plan year) of a member or
11participant to whom this Section applies shall not exceed
12$106,800; however, that amount shall annually thereafter be
13increased by the lesser of (i) 3% of that amount, including all
14previous adjustments, or (ii) one-half the annual unadjusted
15percentage increase (but not less than zero) in the consumer
16price index-u for the 12 months ending with the September
17preceding each November 1, including all previous adjustments.
18    For the purposes of this Section, "consumer price index-u"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by all urban
22consumers, United States city average, all items, 1982-84 =
23100. The new amount resulting from each annual adjustment shall
24be determined by the Public Pension Division of the Department
25of Insurance and made available to the boards of the retirement
26systems and pension funds by November 1 of each year.

 

 

HB4055- 79 -LRB100 12851 RPS 26572 b

1    (c) A member or participant is entitled to a retirement
2annuity upon written application if he or she has attained age
367 (beginning January 1, 2015, age 65 with respect to service
4under Article 12 of this Code that is subject to this Section)
5and has at least 10 years of service credit and is otherwise
6eligible under the requirements of the applicable Article.
7    A member or participant who has attained age 62 (beginning
8January 1, 2015, age 60 with respect to service under Article
912 of this Code that is subject to this Section) and has at
10least 10 years of service credit and is otherwise eligible
11under the requirements of the applicable Article may elect to
12receive the lower retirement annuity provided in subsection (d)
13of this Section.
14    (d) The retirement annuity of a member or participant who
15is retiring after attaining age 62 (beginning January 1, 2015,
16age 60 with respect to service under Article 12 of this Code
17that is subject to this Section) with at least 10 years of
18service credit shall be reduced by one-half of 1% for each full
19month that the member's age is under age 67 (beginning January
201, 2015, age 65 with respect to service under Article 12 of
21this Code that is subject to this Section).
22    (e) Any retirement annuity or supplemental annuity shall be
23subject to annual increases on the January 1 occurring either
24on or after the attainment of age 67 (beginning January 1,
252015, age 65 with respect to service under Article 12 of this
26Code that is subject to this Section) or the first anniversary

 

 

HB4055- 80 -LRB100 12851 RPS 26572 b

1of the annuity start date, whichever is later. Each annual
2increase shall be calculated at 3% or one-half the annual
3unadjusted percentage increase (but not less than zero) in the
4consumer price index-u for the 12 months ending with the
5September preceding each November 1, whichever is less, of the
6originally granted retirement annuity. If the annual
7unadjusted percentage change in the consumer price index-u for
8the 12 months ending with the September preceding each November
91 is zero or there is a decrease, then the annuity shall not be
10increased.
11    (f) The initial survivor's or widow's annuity of an
12otherwise eligible survivor or widow of a retired member or
13participant who first became a member or participant on or
14after January 1, 2011 shall be in the amount of 66 2/3% of the
15retired member's or participant's retirement annuity at the
16date of death. In the case of the death of a member or
17participant who has not retired and who first became a member
18or participant on or after January 1, 2011, eligibility for a
19survivor's or widow's annuity shall be determined by the
20applicable Article of this Code. The initial benefit shall be
2166 2/3% of the earned annuity without a reduction due to age. A
22child's annuity of an otherwise eligible child shall be in the
23amount prescribed under each Article if applicable. Any
24survivor's or widow's annuity shall be increased (1) on each
25January 1 occurring on or after the commencement of the annuity
26if the deceased member died while receiving a retirement

 

 

HB4055- 81 -LRB100 12851 RPS 26572 b

1annuity or (2) in other cases, on each January 1 occurring
2after the first anniversary of the commencement of the annuity.
3Each annual increase shall be calculated at 3% or one-half the
4annual unadjusted percentage increase (but not less than zero)
5in the consumer price index-u for the 12 months ending with the
6September preceding each November 1, whichever is less, of the
7originally granted survivor's annuity. If the annual
8unadjusted percentage change in the consumer price index-u for
9the 12 months ending with the September preceding each November
101 is zero or there is a decrease, then the annuity shall not be
11increased.
12    (g) The benefits in Section 14-110 apply only if the person
13is a State policeman, a fire fighter in the fire protection
14service of a department, or a security employee of the
15Department of Corrections or the Department of Juvenile
16Justice, as those terms are defined in subsection (b) of
17Section 14-110. A person who meets the requirements of this
18Section is entitled to an annuity calculated under the
19provisions of Section 14-110, in lieu of the regular or minimum
20retirement annuity, only if the person has withdrawn from
21service with not less than 20 years of eligible creditable
22service and has attained age 60, regardless of whether the
23attainment of age 60 occurs while the person is still in
24service.
25    (h) If a person who first becomes a member or a participant
26of a retirement system or pension fund subject to this Section

 

 

HB4055- 82 -LRB100 12851 RPS 26572 b

1on or after January 1, 2011 is receiving a retirement annuity
2or retirement pension under that system or fund and becomes a
3member or participant under any other system or fund created by
4this Code and is employed on a full-time basis, except for
5those members or participants exempted from the provisions of
6this Section under subsection (a) of this Section, then the
7person's retirement annuity or retirement pension under that
8system or fund shall be suspended during that employment. Upon
9termination of that employment, the person's retirement
10annuity or retirement pension payments shall resume and be
11recalculated if recalculation is provided for under the
12applicable Article of this Code.
13    If a person who first becomes a member of a retirement
14system or pension fund subject to this Section on or after
15January 1, 2012 and is receiving a retirement annuity or
16retirement pension under that system or fund and accepts on a
17contractual basis a position to provide services to a
18governmental entity from which he or she has retired, then that
19person's annuity or retirement pension earned as an active
20employee of the employer shall be suspended during that
21contractual service. A person receiving an annuity or
22retirement pension under this Code shall notify the pension
23fund or retirement system from which he or she is receiving an
24annuity or retirement pension, as well as his or her
25contractual employer, of his or her retirement status before
26accepting contractual employment. A person who fails to submit

 

 

HB4055- 83 -LRB100 12851 RPS 26572 b

1such notification shall be guilty of a Class A misdemeanor and
2required to pay a fine of $1,000. Upon termination of that
3contractual employment, the person's retirement annuity or
4retirement pension payments shall resume and, if appropriate,
5be recalculated under the applicable provisions of this Code.
6    (i) (Blank).
7    (j) Except for Sections 1-161 and 1-162, in In the case of
8a conflict between the provisions of this Section and any other
9provision of this Code, the provisions of this Section shall
10control.
11(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
12eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
 
13    (40 ILCS 5/1-161 new)
14    Sec. 1-161. Optional benefits for certain Tier 2 members
15under Articles 14, 15, and 16.
16    (a) Notwithstanding any other provision of this Code to the
17contrary, the provisions of this Section apply to a person who,
18on or after 6 months after the effective date of this
19amendatory Act of the 100th General Assembly, first becomes a
20member or a participant under Article 14, 15, or 16 and who
21does not make the election under subsection (b) or (c),
22whichever is applicable. The provisions of this Section do not
23apply to any participant in a self-managed plan or to a covered
24employee under Article 14.
25    (b) In lieu of the benefits provided under this Section, a

 

 

HB4055- 84 -LRB100 12851 RPS 26572 b

1member or participant, except for a participant under Article
215, may irrevocably elect the benefits under Section 1-160 and
3the benefits otherwise applicable to that member or
4participant. The election must be made within 30 days after
5becoming a member or participant. Each retirement system shall
6establish procedures for making this election.
7    (c) A participant under Article 15 may irrevocably elect
8the benefits otherwise provided to a Tier 2 participant under
9Article 15. The election must be made within 30 days after
10becoming a participant. The retirement system under Article 15
11shall establish procedures for making this election.
12    (d) "Final average salary" means the average monthly (or
13annual) salary obtained by dividing the total salary or
14earnings calculated under the Article applicable to the member
15or participant during the last 120 months (or 10 years) of
16service in which the total salary or earnings calculated under
17the applicable Article was the highest by the number of months
18(or years) of service in that period. For the purposes of a
19person who first becomes a member or participant of any
20retirement system to which this Section applies on or after 6
21months after the effective date of this amendatory Act of the
22100th General Assembly, in this Code, "final average salary"
23shall be substituted for "final average compensation" in
24Article 14.
25    (e) Beginning 6 months after the effective date of this
26amendatory Act of the 100th General Assembly, for all purposes

 

 

HB4055- 85 -LRB100 12851 RPS 26572 b

1under this Code (including without limitation the calculation
2of benefits and employee contributions), the annual earnings,
3salary, or wages (based on the plan year) of a member or
4participant to whom this Section applies shall not at any time
5exceed the federal Social Security Wage Base then in effect.
6    (f) A member or participant is entitled to a retirement
7annuity upon written application if he or she has attained the
8normal retirement age determined by the Social Security
9Administration for that member or participant's year of birth,
10but no earlier than 67 years of age, and has at least 10 years
11of service credit and is otherwise eligible under the
12requirements of the applicable Article.
13    (g) The amount of the retirement annuity to which a member
14or participant is entitled shall be computed by multiplying
151.25% for each year of service credit by his or her final
16average salary.
17    (h) Any retirement annuity or supplemental annuity shall be
18subject to annual increases on the first anniversary of the
19annuity start date. Each annual increase shall be one-half the
20annual unadjusted percentage increase (but not less than zero)
21in the consumer price index-w for the 12 months ending with the
22September preceding each November 1 of the originally granted
23retirement annuity. If the annual unadjusted percentage change
24in the consumer price index-w for the 12 months ending with the
25September preceding each November 1 is zero or there is a
26decrease, then the annuity shall not be increased.

 

 

HB4055- 86 -LRB100 12851 RPS 26572 b

1    For the purposes of this Section, "consumer price index-w"
2means the index published by the Bureau of Labor Statistics of
3the United States Department of Labor that measures the average
4change in prices of goods and services purchased by Urban Wage
5Earners and Clerical Workers, United States city average, all
6items, 1982-84 = 100. The new amount resulting from each annual
7adjustment shall be determined by the Public Pension Division
8of the Department of Insurance and made available to the boards
9of the retirement systems and pension funds by November 1 of
10each year.
11    (i) The initial survivor's or widow's annuity of an
12otherwise eligible survivor or widow of a retired member or
13participant who first became a member or participant on or
14after 6 months after the effective date of this amendatory Act
15of the 100th General Assembly shall be in the amount of 66 2/3%
16of the retired member's or participant's retirement annuity at
17the date of death. In the case of the death of a member or
18participant who has not retired and who first became a member
19or participant on or after 6 months after the effective date of
20this amendatory Act of the 100th General Assembly, eligibility
21for a survivor's or widow's annuity shall be determined by the
22applicable Article of this Code. The benefit shall be 66 2/3%
23of the earned annuity without a reduction due to age. A child's
24annuity of an otherwise eligible child shall be in the amount
25prescribed under each Article if applicable.
26    (j) In lieu of any other employee contributions, except for

 

 

HB4055- 87 -LRB100 12851 RPS 26572 b

1the contribution to the defined contribution plan under
2subsection (k) of this Section, each employee shall contribute
36.2% of his her or salary to the retirement system. However,
4the employee contribution under this subsection shall not
5exceed the amount of the normal cost of the benefits under this
6Section (except for the defined contribution plan under
7subsection (k) of this Section), expressed as a percentage of
8payroll and determined on or before November 1 of each year by
9the board of trustees of the retirement system. If the board of
10trustees of the retirement system determines that the 6.2%
11employee contribution rate exceeds the normal cost of the
12benefits under this Section (except for the defined
13contribution plan under subsection (k) of this Section), then
14on or before December 1 of that year, the board of trustees
15shall certify the amount of the normal cost of the benefits
16under this Section (except for the defined contribution plan
17under subsection (k) of this Section), expressed as a
18percentage of payroll, to the State Actuary and the Commission
19on Government Forecasting and Accountability, and the employee
20contribution under this subsection shall be reduced to that
21amount beginning January 1 of the following year. Thereafter,
22if the normal cost of the benefits under this Section (except
23for the defined contribution plan under subsection (k) of this
24Section), expressed as a percentage of payroll and determined
25on or before November 1 of each year by the board of trustees
26of the retirement system, exceeds 6.2% of salary, then on or

 

 

HB4055- 88 -LRB100 12851 RPS 26572 b

1before December 1 of that year, the board of trustees shall
2certify the normal cost to the State Actuary and the Commission
3on Government Forecasting and Accountability, and the employee
4contributions shall revert back to 6.2% of salary beginning
5January 1 of the following year.
6    (k) No later than 5 months after the effective date of this
7amendatory Act of the 100th General Assembly, each retirement
8system under Article 14, 15, or 16 shall prepare and implement
9a defined contribution plan for members or participants who are
10subject to this Section. The defined contribution plan
11developed under this subsection shall be a plan that aggregates
12employer and employee contributions in individual participant
13accounts which, after meeting any other requirements, are used
14for payouts after retirement in accordance with this subsection
15and any other applicable laws.
16        (1) Each member or participant shall contribute a
17    minimum of 4% of his or her salary to the defined
18    contribution plan.
19        (2) For each participant in the defined contribution
20    plan who has been employed with the same employer for at
21    least one year, employer contributions shall be paid into
22    that participant's accounts at a rate expressed as a
23    percentage of salary. This rate may be set for individual
24    employees, but shall be no higher than 6% of salary and
25    shall be no lower than 2% of salary.
26        (3) Employer contributions shall vest when those

 

 

HB4055- 89 -LRB100 12851 RPS 26572 b

1    contributions are paid into a member's or participant's
2    account.
3        (4) The defined contribution plan shall provide a
4    variety of options for investments. These options shall
5    include investments handled by the Illinois State Board of
6    Investment as well as private sector investment options.
7        (5) The defined contribution plan shall provide a
8    variety of options for payouts to retirees and their
9    survivors.
10        (6) To the extent authorized under federal law and as
11    authorized by the retirement system, the defined
12    contribution plan shall allow former participants in the
13    plan to transfer or roll over employee and employer
14    contributions, and the earnings thereon, into other
15    qualified retirement plans.
16        (7) Each retirement system shall reduce the employee
17    contributions credited to the member's defined
18    contribution plan account by an amount determined by that
19    retirement system to cover the cost of offering the
20    benefits under this subsection and any applicable
21    administrative fees.
22        (8) No person shall begin participating in the defined
23    contribution plan until it has attained qualified plan
24    status and received all necessary approvals from the U.S.
25    Internal Revenue Service.
26    (l) By accepting the benefits under this Section, a member

 

 

HB4055- 90 -LRB100 12851 RPS 26572 b

1or participant acknowledges and consents that benefits once
2earned may not be diminished, but that future benefits may be
3modified, including, but not limited to, changes in the
4retirement age at which a member or participant becomes
5eligible to receive future benefits, changes in the amount of
6the automatic annual increase for those future benefits, or the
7amount of the retirement annuity. Any increase in benefits
8under this Section applicable to persons under Article 15 or 16
9does not apply unless it is approved by resolution or ordinance
10of the governing body of the unit of local government with
11regard to the members or participants under that unit of local
12government.
13    (m) In the case of a conflict between the provisions of
14this Section and any other provision of this Code, the
15provisions of this Section shall control.
 
16    (40 ILCS 5/1-162 new)
17    Sec. 1-162. Optional benefits for certain Tier 2 members of
18pension funds under Articles 7, 8, 9, 10, 11, 12, 13, and 17.
19    (a) As used in this Section:
20    "Affected pension fund" means a pension fund established
21under Article 7, 8, 9, 10, 11, 12, 13, or 17 that the governing
22body of the unit of local government has designated as an
23affected pension fund by adoption of a resolution or ordinance.
24    "Resolution or ordinance date" means the date on which the
25governing body of the unit of local government designates a

 

 

HB4055- 91 -LRB100 12851 RPS 26572 b

1pension fund under Article 7, 8, 9, 10, 11, 12, 13, or 17 as an
2affected pension fund by adoption of a resolution or ordinance.
3    (b) Notwithstanding any other provision of this Code to the
4contrary, the provisions of this Section apply to a person who
5first becomes a member or a participant in an affected pension
6fund on or after 6 months after the resolution or ordinance
7date and who does not make the election under subsection (c).
8The provisions of this Section do not apply to a sheriff's law
9enforcement employee under Article 7.
10    (c) In lieu of the benefits provided under this Section, a
11member or participant may irrevocably elect the benefits under
12Section 1-160 and the benefits otherwise applicable to that
13member or participant. The election must be made within 30 days
14after becoming a member or participant. Each affected pension
15fund shall establish procedures for making this election.
16    (d) "Final average salary" means the average monthly (or
17annual) salary obtained by dividing the total salary or
18earnings calculated under the Article applicable to the member
19or participant during the last 120 months (or 10 years) of
20service in which the total salary or earnings calculated under
21the applicable Article was the highest by the number of months
22(or years) of service in that period. For the purposes of a
23person who first becomes a member or participant of an affected
24pension fund on or after 6 months after the ordinance or
25resolution date, in this Code, "final average salary" shall be
26substituted for the following:

 

 

HB4055- 92 -LRB100 12851 RPS 26572 b

1        (1) In Article 7, (except for service as sheriff's law
2    enforcement employees), "final rate of earnings".
3        (2) In Articles 8, 9, 10, 11, and 12, "highest average
4    annual salary for any 4 consecutive years within the last
5    10 years of service immediately preceding the date of
6    withdrawal".
7        (3) In Article 13, "average final salary".
8        (4) In Article 17, "average salary".
9    (e) Beginning 6 months after the resolution or ordinance
10date, for all purposes under this Code (including without
11limitation the calculation of benefits and employee
12contributions), the annual earnings, salary, or wages (based on
13the plan year) of a member or participant to whom this Section
14applies shall not at any time exceed the federal Social
15Security Wage Base then in effect.
16    (f) A member or participant is entitled to a retirement
17annuity upon written application if he or she has attained the
18normal retirement age determined by the Social Security
19Administration for that member or participant's year of birth,
20but no earlier than 67 years of age, and has at least 10 years
21of service credit and is otherwise eligible under the
22requirements of the applicable Article.
23    (g) The amount of the retirement annuity to which a member
24or participant is entitled shall be computed by multiplying
251.25% for each year of service credit by his or her final
26average salary.

 

 

HB4055- 93 -LRB100 12851 RPS 26572 b

1    (h) Any retirement annuity or supplemental annuity shall be
2subject to annual increases on the first anniversary of the
3annuity start date. Each annual increase shall be one-half the
4annual unadjusted percentage increase (but not less than zero)
5in the consumer price index-w for the 12 months ending with the
6September preceding each November 1 of the originally granted
7retirement annuity. If the annual unadjusted percentage change
8in the consumer price index-w for the 12 months ending with the
9September preceding each November 1 is zero or there is a
10decrease, then the annuity shall not be increased.
11    For the purposes of this Section, "consumer price index-w"
12means the index published by the Bureau of Labor Statistics of
13the United States Department of Labor that measures the average
14change in prices of goods and services purchased by Urban Wage
15Earners and Clerical Workers, United States city average, all
16items, 1982-84 = 100. The new amount resulting from each annual
17adjustment shall be determined by the Public Pension Division
18of the Department of Insurance and made available to the boards
19of the retirement systems and pension funds by November 1 of
20each year.
21    (i) The initial survivor's or widow's annuity of an
22otherwise eligible survivor or widow of a retired member or
23participant who first became a member or participant on or
24after 6 months after the resolution or ordinance date shall be
25in the amount of 66 2/3% of the retired member's or
26participant's retirement annuity at the date of death. In the

 

 

HB4055- 94 -LRB100 12851 RPS 26572 b

1case of the death of a member or participant who has not
2retired and who first became a member or participant on or
3after 6 months after the resolution or ordinance date,
4eligibility for a survivor's or widow's annuity shall be
5determined by the applicable Article of this Code. The benefit
6shall be 66 2/3% of the earned annuity without a reduction due
7to age. A child's annuity of an otherwise eligible child shall
8be in the amount prescribed under each Article if applicable.
9    (j) In lieu of any other employee contributions, except for
10the contribution to the defined contribution plan under
11subsection (k) of this Section, each employee shall contribute
126.2% of his her or salary to the affected pension fund.
13However, the employee contribution under this subsection shall
14not exceed the amount of the normal cost of the benefits under
15this Section (except for the defined contribution plan under
16subsection (k) of this Section), expressed as a percentage of
17payroll and determined on or before November 1 of each year by
18the board of trustees of the affected pension fund. If the
19board of trustees of the affected pension fund determines that
20the 6.2% employee contribution rate exceeds the normal cost of
21the benefits under this Section (except for the defined
22contribution plan under subsection (k) of this Section), then
23on or before December 1 of that year, the board of trustees
24shall certify the amount of the normal cost of the benefits
25under this Section (except for the defined contribution plan
26under subsection (k) of this Section), expressed as a

 

 

HB4055- 95 -LRB100 12851 RPS 26572 b

1percentage of payroll, to the State Actuary and the Commission
2on Government Forecasting and Accountability, and the employee
3contribution under this subsection shall be reduced to that
4amount beginning January 1 of the following year. Thereafter,
5if the normal cost of the benefits under this Section (except
6for the defined contribution plan under subsection (k) of this
7Section), expressed as a percentage of payroll and determined
8on or before November 1 of each year by the board of trustees
9of the affected pension fund, exceeds 6.2% of salary, then on
10or before December 1 of that year, the board of trustees shall
11certify the normal cost to the State Actuary and the Commission
12on Government Forecasting and Accountability, and the employee
13contributions shall revert back to 6.2% of salary beginning
14January 1 of the following year.
15    (k) No later than 5 months after the resolution or
16ordinance date, an affected pension fund shall prepare and
17implement a defined contribution plan for members or
18participants who are subject to this Section. The defined
19contribution plan developed under this subsection shall be a
20plan that aggregates employer and employee contributions in
21individual participant accounts which, after meeting any other
22requirements, are used for payouts after retirement in
23accordance with this subsection and any other applicable laws.
24        (1) Each member or participant shall contribute a
25    minimum of 4% of his or her salary to the defined
26    contribution plan.

 

 

HB4055- 96 -LRB100 12851 RPS 26572 b

1        (2) For each participant in the defined contribution
2    plan who has been employed with the same employer for at
3    least one year, employer contributions shall be paid into
4    that participant's accounts at a rate expressed as a
5    percentage of salary. This rate may be set for individual
6    employees, but shall be no higher than 6% of salary and
7    shall be no lower than 2% of salary.
8        (3) Employer contributions shall vest when those
9    contributions are paid into a member's or participant's
10    account.
11        (4) The defined contribution plan shall provide a
12    variety of options for investments. These options shall
13    include investments handled by the Illinois State Board of
14    Investment as well as private sector investment options.
15        (5) The defined contribution plan shall provide a
16    variety of options for payouts to retirees and their
17    survivors.
18        (6) To the extent authorized under federal law and as
19    authorized by the affected pension fund, the defined
20    contribution plan shall allow former participants in the
21    plan to transfer or roll over employee and employer
22    contributions, and the earnings thereon, into other
23    qualified retirement plans.
24        (7) Each affected pension fund shall reduce the
25    employee contributions credited to the member's defined
26    contribution plan account by an amount determined by that

 

 

HB4055- 97 -LRB100 12851 RPS 26572 b

1    affected pension fund to cover the cost of offering the
2    benefits under this subsection and any applicable
3    administrative fees.
4        (8) No person shall begin participating in the defined
5    contribution plan until it has attained qualified plan
6    status and received all necessary approvals from the U.S.
7    Internal Revenue Service.
8    (l) By accepting the benefits under this Section, a member
9or participant acknowledges and consents that benefits once
10earned may not be diminished, but that future benefits may be
11modified, including, but not limited to, changes in the
12retirement age at which a member or participant becomes
13eligible to receive future benefits, changes in the amount of
14the automatic annual increase for those future benefits, or the
15amount of the retirement annuity. Any increase in benefits
16under this Section does not apply unless it is approved by
17resolution or ordinance of the governing body of the unit of
18local government with regard to the members or participants
19under that unit of local government.
20    (m) In the case of a conflict between the provisions of
21this Section and any other provision of this Code, the
22provisions of this Section shall control.
 
23    (40 ILCS 5/2-101)  (from Ch. 108 1/2, par. 2-101)
24    Sec. 2-101. Creation of system. A retirement system is
25created to provide retirement annuities, survivor's annuities

 

 

HB4055- 98 -LRB100 12851 RPS 26572 b

1and other benefits for certain members of the General Assembly,
2certain elected state officials, and their beneficiaries.
3    The system shall be known as the "General Assembly
4Retirement System". All its funds and property shall be a trust
5separate from all other entities, maintained for the purpose of
6securing payment of annuities and benefits under this Article.
7    Participation in the retirement system created under this
8Article is restricted to persons who became participants before
9the effective date of this amendatory Act of the 100th General
10Assembly. Beginning on that date, the System shall not accept
11any new participants.
12(Source: P.A. 83-1440.)
 
13    (40 ILCS 5/2-105)  (from Ch. 108 1/2, par. 2-105)
14    Sec. 2-105. Member. "Member": Members of the General
15Assembly of this State, including persons who enter military
16service while a member of the General Assembly, and any person
17serving as Governor, Lieutenant Governor, Secretary of State,
18Treasurer, Comptroller, or Attorney General for the period of
19service in such office.
20    Any person who has served for 10 or more years as Clerk or
21Assistant Clerk of the House of Representatives, Secretary or
22Assistant Secretary of the Senate, or any combination thereof,
23may elect to become a member of this system while thenceforth
24engaged in such service by filing a written election with the
25board. Any person so electing shall be deemed an active member

 

 

HB4055- 99 -LRB100 12851 RPS 26572 b

1of the General Assembly for the purpose of validating and
2transferring any service credits earned under any of the funds
3and systems established under Articles 3 through 18 of this
4Code.
5    However, notwithstanding any other provision of this
6Article, a person shall not be deemed a member for the purposes
7of this Article unless he or she became a participant of the
8System before the effective date of this amendatory Act of the
9100th General Assembly.
10(Source: P.A. 85-1008.)
 
11    (40 ILCS 5/2-105.3 new)
12    Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
13participant who first became a participant before January 1,
142011.
 
15    (40 ILCS 5/2-107)  (from Ch. 108 1/2, par. 2-107)
16    Sec. 2-107. Participant. "Participant": Any member who
17elects to participate; and any former member who elects to
18continue participation under Section 2-117.1, for the duration
19of such continued participation. However, notwithstanding any
20other provision of this Article, a person shall not be deemed a
21participant for the purposes of this Article unless he or she
22became a participant of the System before the effective date of
23this amendatory Act of the 100th General Assembly.
24(Source: P.A. 86-1488.)
 

 

 

HB4055- 100 -LRB100 12851 RPS 26572 b

1    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 2-124. Contributions by State.
5    (a) The State shall make contributions to the System by
6appropriations of amounts which, together with the
7contributions of participants, interest earned on investments,
8and other income will meet the cost of maintaining and
9administering the System on a 90% funded basis in accordance
10with actuarial recommendations.
11    (b) The Board shall determine the amount of State
12contributions required for each fiscal year on the basis of the
13actuarial tables and other assumptions adopted by the Board and
14the prescribed rate of interest, using the formula in
15subsection (c).
16    (c) For State fiscal years 2018 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of total payroll, including payroll that is
24not deemed pensionable, but excluding payroll attributable to
25participants in the defined contribution plan under Section

 

 

HB4055- 101 -LRB100 12851 RPS 26572 b

12-165.1, over the years remaining to and including fiscal year
22045 and shall be determined under the projected unit credit
3actuarial cost method.
4    Beginning in State fiscal year 2018, any increase or
5decrease in State contribution over the prior fiscal year due
6exclusively to changes in actuarial or investment assumptions
7adopted by the Board shall be included in the State
8contribution to the System, as a percentage of the applicable
9employee payroll, and shall be increased in equal annual
10increments so that by the State fiscal year occurring 5 years
11after the adoption of the actuarial or investment assumptions,
12the State is contributing at the rate otherwise required under
13this Section.
14    For State fiscal years 2012 through 2017 2045, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17sufficient to bring the total assets of the System up to 90% of
18the total actuarial liabilities of the System by the end of
19State fiscal year 2045. In making these determinations, the
20required State contribution shall be calculated each year as a
21level percentage of payroll over the years remaining to and
22including fiscal year 2045 and shall be determined under the
23projected unit credit actuarial cost method.
24    For State fiscal years 1996 through 2005, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

HB4055- 102 -LRB100 12851 RPS 26572 b

1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2006 is
5$4,157,000.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2007 is
8$5,220,300.
9    For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2010 is
17$10,454,000 and shall be made from the proceeds of bonds sold
18in fiscal year 2010 pursuant to Section 7.2 of the General
19Obligation Bond Act, less (i) the pro rata share of bond sale
20expenses determined by the System's share of total bond
21proceeds, (ii) any amounts received from the General Revenue
22Fund in fiscal year 2010, and (iii) any reduction in bond
23proceeds due to the issuance of discounted bonds, if
24applicable.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2011 is

 

 

HB4055- 103 -LRB100 12851 RPS 26572 b

1the amount recertified by the System on or before April 1, 2011
2pursuant to Section 2-134 and shall be made from the proceeds
3of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
4the General Obligation Bond Act, less (i) the pro rata share of
5bond sale expenses determined by the System's share of total
6bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2011, and (iii) any reduction in
8bond proceeds due to the issuance of discounted bonds, if
9applicable.
10    Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

HB4055- 104 -LRB100 12851 RPS 26572 b

1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 2-134, shall not
4exceed an amount equal to (i) the amount of the required State
5contribution that would have been calculated under this Section
6for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (d) For purposes of determining the required State
26contribution to the System, the value of the System's assets

 

 

HB4055- 105 -LRB100 12851 RPS 26572 b

1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3    As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10    (e) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
167-13-12.)
 
17    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 2-134. To certify required State contributions and
21submit vouchers.
22    (a) The Board shall certify to the Governor on or before
23December 15 of each year until December 15, 2011 the amount of
24the required State contribution to the System for the next
25fiscal year and shall specifically identify the System's

 

 

HB4055- 106 -LRB100 12851 RPS 26572 b

1projected State normal cost for that fiscal year. The
2certification shall include a copy of the actuarial
3recommendations upon which it is based and shall specifically
4identify the System's projected State normal cost for that
5fiscal year.
6    On or before November 1 of each year, beginning November 1,
72012, the Board shall submit to the State Actuary, the
8Governor, and the General Assembly a proposed certification of
9the amount of the required State contribution to the System for
10the next fiscal year, along with all of the actuarial
11assumptions, calculations, and data upon which that proposed
12certification is based. On or before January 1 of each year
13beginning January 1, 2013, the State Actuary shall issue a
14preliminary report concerning the proposed certification and
15identifying, if necessary, recommended changes in actuarial
16assumptions that the Board must consider before finalizing its
17certification of the required State contributions. On or before
18January 15, 2013 and every January 15 thereafter, the Board
19shall certify to the Governor and the General Assembly the
20amount of the required State contribution for the next fiscal
21year. The Board's certification must note any deviations from
22the State Actuary's recommended changes, the reason or reasons
23for not following the State Actuary's recommended changes, and
24the fiscal impact of not following the State Actuary's
25recommended changes on the required State contribution.
26    On or before May 1, 2004, the Board shall recalculate and

 

 

HB4055- 107 -LRB100 12851 RPS 26572 b

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2005, taking
3into account the amounts appropriated to and received by the
4System under subsection (d) of Section 7.2 of the General
5Obligation Bond Act.
6    On or before July 1, 2005, the Board shall recalculate and
7recertify to the Governor the amount of the required State
8contribution to the System for State fiscal year 2006, taking
9into account the changes in required State contributions made
10by this amendatory Act of the 94th General Assembly.
11    On or before April 1, 2011, the Board shall recalculate and
12recertify to the Governor the amount of the required State
13contribution to the System for State fiscal year 2011, applying
14the changes made by Public Act 96-889 to the System's assets
15and liabilities as of June 30, 2009 as though Public Act 96-889
16was approved on that date.
17    As soon as practical after the effective date of this
18amendatory Act of the 100th General Assembly, the Board shall
19recalculate and recertify to the State Actuary, the Governor,
20and the General Assembly the amount of the State contribution
21to the System for State fiscal year 2018, taking into account
22the changes in required State contributions made by this
23amendatory Act of the 100th General Assembly. The State Actuary
24shall review the assumptions and valuations underlying the
25Board's revised certification and issue a preliminary report
26concerning the proposed recertification and identifying, if

 

 

HB4055- 108 -LRB100 12851 RPS 26572 b

1necessary, recommended changes in actuarial assumptions that
2the Board must consider before finalizing its certification of
3the required State contributions. The Board's final
4certification must note any deviations from the State Actuary's
5recommended changes, the reason or reasons for not following
6the State Actuary's recommended changes, and the fiscal impact
7of not following the State Actuary's recommended changes on the
8required State contribution.
9    (b) Beginning in State fiscal year 1996, on or as soon as
10possible after the 15th day of each month the Board shall
11submit vouchers for payment of State contributions to the
12System, in a total monthly amount of one-twelfth of the
13required annual State contribution certified under subsection
14(a). From the effective date of this amendatory Act of the 93rd
15General Assembly through June 30, 2004, the Board shall not
16submit vouchers for the remainder of fiscal year 2004 in excess
17of the fiscal year 2004 certified contribution amount
18determined under this Section after taking into consideration
19the transfer to the System under subsection (d) of Section
206z-61 of the State Finance Act. These vouchers shall be paid by
21the State Comptroller and Treasurer by warrants drawn on the
22funds appropriated to the System for that fiscal year. If in
23any month the amount remaining unexpended from all other
24appropriations to the System for the applicable fiscal year
25(including the appropriations to the System under Section 8.12
26of the State Finance Act and Section 1 of the State Pension

 

 

HB4055- 109 -LRB100 12851 RPS 26572 b

1Funds Continuing Appropriation Act) is less than the amount
2lawfully vouchered under this Section, the difference shall be
3paid from the General Revenue Fund under the continuing
4appropriation authority provided in Section 1.1 of the State
5Pension Funds Continuing Appropriation Act.
6    (c) The full amount of any annual appropriation for the
7System for State fiscal year 1995 shall be transferred and made
8available to the System at the beginning of that fiscal year at
9the request of the Board. Any excess funds remaining at the end
10of any fiscal year from appropriations shall be retained by the
11System as a general reserve to meet the System's accrued
12liabilities.
13(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1497-694, eff. 6-18-12.)
 
15    (40 ILCS 5/2-154.5 new)
16    Sec. 2-154.5. Accelerated pension benefit payment.
17    (a) As used in this Section:
18    "Eligible person" means a person who:
19        (1) has terminated service;
20        (2) has accrued sufficient service credit to be
21    eligible to receive a retirement annuity under this
22    Article;
23        (3) has not received any retirement annuity under this
24    Article; and
25        (4) does not have a QILDRO in effect against him or her

 

 

HB4055- 110 -LRB100 12851 RPS 26572 b

1    under this Article.
2    "Pension benefit" means the benefits under this Article, or
3Article 1 as it relates to those benefits, including any
4anticipated annual increases, that an eligible person is
5entitled to upon attainment of the applicable retirement age.
6"Pension benefit" also includes applicable survivor's or
7disability benefits.
8    (b) Before January 1, 2018, the System shall calculate,
9using actuarial tables and other assumptions adopted by the
10Board, the net present value of pension benefits for each
11eligible person and shall offer each eligible person the
12opportunity to irrevocably elect to receive an amount
13determined by the System to be equal to 70% of the net present
14value of his or her pension benefits in lieu of receiving any
15pension benefit. The offer shall specify the dollar amount that
16the eligible person will receive if he or she so elects and
17shall expire when a subsequent offer is made to an eligible
18person. The System shall make a good faith effort to contact
19every eligible person to notify him or her of the election and
20of the amount of the accelerated pension benefit payment.
21    Beginning January 1, 2018 and until July 1, 2018, an
22eligible person may irrevocably elect to receive an accelerated
23pension benefit payment in the amount that the System offers
24under this subsection in lieu of receiving any pension benefit.
25A person who elects to receive an accelerated pension benefit
26payment under this Section may not elect to proceed under the

 

 

HB4055- 111 -LRB100 12851 RPS 26572 b

1Retirement Systems Reciprocal Act with respect to service under
2this Article.
3    (c) A person's credits and creditable service under this
4Article shall be terminated upon the person's receipt of an
5accelerated pension benefit payment under this Section, and no
6other benefit shall be paid under this Article based on those
7terminated credits and creditable service, including any
8retirement, survivor, or other benefit; except that to the
9extent that participation, benefits, or premiums under the
10State Employees Group Insurance Act of 1971 are based on the
11amount of service credit, the terminated service credit shall
12be used for that purpose.
13    (d) If a person who has received an accelerated pension
14benefit payment under this Section returns to active service
15under this Article, then:
16        (1) Any benefits under the System earned as a result of
17    that return to active service shall be based solely on the
18    person's credits and creditable service arising from the
19    return to active service.
20        (2) The accelerated pension benefit payment may not be
21    repaid to the System, and the terminated credits and
22    creditable service may not under any circumstances be
23    reinstated.
24    (e) As a condition of receiving an accelerated pension
25benefit payment, an eligible person must have another
26retirement plan or account qualified under the Internal Revenue

 

 

HB4055- 112 -LRB100 12851 RPS 26572 b

1Code of 1986, as amended, for the accelerated pension benefit
2payment to be rolled into. The accelerated pension benefit
3payment under this Section may be subject to withholding or
4payment of applicable taxes, but to the extent permitted by
5federal law, a person who receives an accelerated pension
6benefit payment under this Section must direct the System to
7pay all of that payment as a rollover into another retirement
8plan or account qualified under the Internal Revenue Code of
91986, as amended.
10    (f) Before January 1, 2019, the Board shall certify to the
11Illinois Finance Authority and the General Assembly the amount
12by which the total amount of accelerated pension benefit
13payments made under this Section exceed the amount appropriated
14to the System for the purpose of making those payments.
15    (g) The Board shall adopt any rules necessary to implement
16this Section.
17    (h) No provision of this Section shall be interpreted in a
18way that would cause the applicable System to cease to be a
19qualified plan under the Internal Revenue Code of 1986.
 
20    (40 ILCS 5/2-162)
21    (Text of Section WITHOUT the changes made by P.A. 98-599,
22which has been held unconstitutional)
23    Sec. 2-162. Application and expiration of new benefit
24increases.
25    (a) As used in this Section, "new benefit increase" means

 

 

HB4055- 113 -LRB100 12851 RPS 26572 b

1an increase in the amount of any benefit provided under this
2Article, or an expansion of the conditions of eligibility for
3any benefit under this Article, that results from an amendment
4to this Code that takes effect after the effective date of this
5amendatory Act of the 94th General Assembly. "New benefit
6increase", however, does not include any benefit increase
7resulting from the changes made to this Article by this
8amendatory Act of the 100th General Assembly.
9    (b) Notwithstanding any other provision of this Code or any
10subsequent amendment to this Code, every new benefit increase
11is subject to this Section and shall be deemed to be granted
12only in conformance with and contingent upon compliance with
13the provisions of this Section.
14    (c) The Public Act enacting a new benefit increase must
15identify and provide for payment to the System of additional
16funding at least sufficient to fund the resulting annual
17increase in cost to the System as it accrues.
18    Every new benefit increase is contingent upon the General
19Assembly providing the additional funding required under this
20subsection. The Commission on Government Forecasting and
21Accountability shall analyze whether adequate additional
22funding has been provided for the new benefit increase and
23shall report its analysis to the Public Pension Division of the
24Department of Insurance Financial and Professional Regulation.
25A new benefit increase created by a Public Act that does not
26include the additional funding required under this subsection

 

 

HB4055- 114 -LRB100 12851 RPS 26572 b

1is null and void. If the Public Pension Division determines
2that the additional funding provided for a new benefit increase
3under this subsection is or has become inadequate, it may so
4certify to the Governor and the State Comptroller and, in the
5absence of corrective action by the General Assembly, the new
6benefit increase shall expire at the end of the fiscal year in
7which the certification is made.
8    (d) Every new benefit increase shall expire 5 years after
9its effective date or on such earlier date as may be specified
10in the language enacting the new benefit increase or provided
11under subsection (c). This does not prevent the General
12Assembly from extending or re-creating a new benefit increase
13by law.
14    (e) Except as otherwise provided in the language creating
15the new benefit increase, a new benefit increase that expires
16under this Section continues to apply to persons who applied
17and qualified for the affected benefit while the new benefit
18increase was in effect and to the affected beneficiaries and
19alternate payees of such persons, but does not apply to any
20other person, including without limitation a person who
21continues in service after the expiration date and did not
22apply and qualify for the affected benefit while the new
23benefit increase was in effect.
24(Source: P.A. 94-4, eff. 6-1-05.)
 
25    (40 ILCS 5/2-165.1 new)

 

 

HB4055- 115 -LRB100 12851 RPS 26572 b

1    Sec. 2-165.1. Defined contribution plan.
2    (a) By July 1, 2018, the System shall prepare and implement
3a voluntary defined contribution plan for up to 5% of eligible
4active Tier 1 employees. The System shall determine the 5% cap
5by the number of active Tier 1 employees on the effective date
6of this Section. The defined contribution plan developed under
7this Section shall be a plan that aggregates employer and
8employee contributions in individual participant accounts
9which, after meeting any other requirements, are used for
10payouts after retirement in accordance with this Section and
11any other applicable laws.
12    As used in this Section, "defined benefit plan" means the
13retirement plan available under this Article to Tier 1
14employees who have not made the election authorized under this
15Section.
16        (1) Under the defined contribution plan, an active Tier
17    1 employee of this System could elect to cease accruing
18    benefits in the defined benefit plan under this Article and
19    begin accruing benefits for future service in the defined
20    contribution plan. Service credit under the defined
21    contribution plan may be used for determining retirement
22    eligibility under the defined benefit plan.
23        (2) Participants in the defined contribution plan
24    shall pay employee contributions at the same rate as Tier 1
25    employees in this System who do not participate in the
26    defined contribution plan.

 

 

HB4055- 116 -LRB100 12851 RPS 26572 b

1        (3) State contributions shall be paid into the accounts
2    of all participants in the defined contribution plan at a
3    uniform rate, expressed as a percentage of compensation and
4    determined for each year. This rate shall be no higher than
5    the employer's normal cost for Tier 1 employees in the
6    defined benefit plan for that year, as determined by the
7    System and expressed as a percentage of compensation, and
8    shall be no lower than 3% of compensation. The State shall
9    adjust this rate annually.
10        (4) The defined contribution plan shall require 5 years
11    of participation in the defined contribution plan before
12    vesting in State contributions. If the participant fails to
13    vest in them, the State contributions, and the earnings
14    thereon, shall be forfeited.
15        (5) The defined contribution plan may provide for
16    participants in the plan to be eligible for defined
17    disability benefits. If it does, the System shall reduce
18    the employee contributions credited to the participant's
19    defined contribution plan account by an amount determined
20    by the System to cover the cost of offering such benefits.
21        (6) The defined contribution plan shall provide a
22    variety of options for investments. These options shall
23    include investments handled by the Illinois State Board of
24    Investment as well as private sector investment options.
25        (7) The defined contribution plan shall provide a
26    variety of options for payouts to retirees and their

 

 

HB4055- 117 -LRB100 12851 RPS 26572 b

1    survivors.
2        (8) To the extent authorized under federal law and as
3    authorized by the System, the plan shall allow former
4    participants in the plan to transfer or roll over employee
5    and vested State contributions, and the earnings thereon,
6    into other qualified retirement plans.
7        (9) The System shall reduce the employee contributions
8    credited to the participant's defined contribution plan
9    account by an amount determined by the System to cover the
10    cost of offering these benefits and any applicable
11    administrative fees.
12    (b) Only persons who are active Tier 1 employees of the
13System on the effective date of this Section are eligible to
14participate in the defined contribution plan. Participation in
15the defined contribution plan shall be limited to the first 5%
16of eligible persons who elect to participate. The election to
17participate in the defined contribution plan is voluntary and
18irrevocable.
19    (c) An eligible active Tier 1 employee may irrevocably
20elect to participate in the defined contribution plan by filing
21with the System a written application to participate that is
22received by the System prior to its determination that 5% of
23eligible persons have elected to participate in the defined
24contribution plan.
25    When the System first determines that 5% of eligible
26persons have elected to participate in the defined contribution

 

 

HB4055- 118 -LRB100 12851 RPS 26572 b

1plan, the System shall provide notice to previously eligible
2employees that the plan is no longer available and shall cease
3accepting applications to participate.
4    (d) The System shall make a good faith effort to contact
5each active Tier 1 employee who is eligible to participate in
6the defined contribution plan. The System shall mail
7information describing the option to join the defined
8contribution plan to each of these employees to his or her last
9known address on file with the System. If the employee is not
10responsive to other means of contact, it is sufficient for the
11System to publish the details of the option on its website.
12    Upon request for further information describing the
13option, the System shall provide employees with information
14from the System before exercising the option to join the plan,
15including information on the impact to their vested benefits or
16non-vested service. The individual consultation shall include
17projections of the participant's defined benefits at
18retirement or earlier termination of service and the value of
19the participant's account at retirement or earlier termination
20of service. The System shall not provide advice or counseling
21with respect to whether the employee should exercise the
22option. The System shall inform Tier 1 employees who are
23eligible to participate in the defined contribution plan that
24they may also wish to obtain information and counsel relating
25to their option from any other available source, including but
26not limited to labor organizations, private counsel, and

 

 

HB4055- 119 -LRB100 12851 RPS 26572 b

1financial advisors.
2    (e) In no event shall the System, its staff, its authorized
3representatives, or the Board be liable for any information
4given to an employee under this Section. The System may
5coordinate with the Illinois Department of Central Management
6Services and other retirement systems administering a defined
7contribution plan in accordance with this amendatory Act of the
8100th General Assembly to provide information concerning the
9impact of the option set forth in this Section.
10    (f) Notwithstanding any other provision of this Section, no
11person shall begin participating in the defined contribution
12plan until it has attained qualified plan status and received
13all necessary approvals from the U.S. Internal Revenue Service.
14    (g) The System shall report on its progress under this
15Section, including the available details of the defined
16contribution plan and the System's plans for informing eligible
17Tier 1 employees about the plan, to the Governor and the
18General Assembly on or before January 15, 2018.
19    (h) The Illinois State Board of Investments shall be the
20plan sponsor for the defined contribution plan established
21under this Section.
22    (i) The intent of this amendatory Act of the 100th General
23Assembly is to ensure that the State's normal cost of
24participation in the defined contribution plan is similar, and
25if possible equal, to the State's normal cost of participation
26in the defined benefit plan, unless a lower State's normal cost

 

 

HB4055- 120 -LRB100 12851 RPS 26572 b

1is necessary to ensure cost neutrality.
 
2    (40 ILCS 5/2-166.1 new)
3    Sec. 2-166.1. Defined contribution plan; termination. If
4the defined contribution plan under Section 2-165.1 is
5terminated or becomes inoperative pursuant to law, then each
6participant in the plan shall automatically be deemed to have
7been a contributing Tier 1 employee in the System's defined
8benefit plan during the time in which he or she participated in
9the defined contribution plan, and for that purpose the System
10shall be entitled to recover the amounts in the participant's
11defined contribution accounts.
 
12    (40 ILCS 5/14-103.41 new)
13    Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
14employee under this Article who first became a member or
15participant before January 1, 2011 under any reciprocal
16retirement system or pension fund established under this Code
17other than a retirement system or pension fund established
18under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
19    (40 ILCS 5/14-131)
20    Sec. 14-131. Contributions by State.
21    (a) The State shall make contributions to the System by
22appropriations of amounts which, together with other employer
23contributions from trust, federal, and other funds, employee

 

 

HB4055- 121 -LRB100 12851 RPS 26572 b

1contributions, investment income, and other income, will be
2sufficient to meet the cost of maintaining and administering
3the System on a 90% funded basis in accordance with actuarial
4recommendations.
5    For the purposes of this Section and Section 14-135.08,
6references to State contributions refer only to employer
7contributions and do not include employee contributions that
8are picked up or otherwise paid by the State or a department on
9behalf of the employee.
10    (b) The Board shall determine the total amount of State
11contributions required for each fiscal year on the basis of the
12actuarial tables and other assumptions adopted by the Board,
13using the formula in subsection (e).
14    The Board shall also determine a State contribution rate
15for each fiscal year, expressed as a percentage of payroll,
16based on the total required State contribution for that fiscal
17year (less the amount received by the System from
18appropriations under Section 8.12 of the State Finance Act and
19Section 1 of the State Pension Funds Continuing Appropriation
20Act, if any, for the fiscal year ending on the June 30
21immediately preceding the applicable November 15 certification
22deadline), the estimated payroll (including all forms of
23compensation) for personal services rendered by eligible
24employees, and the recommendations of the actuary.
25    For the purposes of this Section and Section 14.1 of the
26State Finance Act, the term "eligible employees" includes

 

 

HB4055- 122 -LRB100 12851 RPS 26572 b

1employees who participate in the System, persons who may elect
2to participate in the System but have not so elected, persons
3who are serving a qualifying period that is required for
4participation, and annuitants employed by a department as
5described in subdivision (a)(1) or (a)(2) of Section 14-111.
6    (c) Contributions shall be made by the several departments
7for each pay period by warrants drawn by the State Comptroller
8against their respective funds or appropriations based upon
9vouchers stating the amount to be so contributed. These amounts
10shall be based on the full rate certified by the Board under
11Section 14-135.08 for that fiscal year. From the effective date
12of this amendatory Act of the 93rd General Assembly through the
13payment of the final payroll from fiscal year 2004
14appropriations, the several departments shall not make
15contributions for the remainder of fiscal year 2004 but shall
16instead make payments as required under subsection (a-1) of
17Section 14.1 of the State Finance Act. The several departments
18shall resume those contributions at the commencement of fiscal
19year 2005.
20    (c-1) Notwithstanding subsection (c) of this Section, for
21fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
22contributions by the several departments are not required to be
23made for General Revenue Funds payrolls processed by the
24Comptroller. Payrolls paid by the several departments from all
25other State funds must continue to be processed pursuant to
26subsection (c) of this Section.

 

 

HB4055- 123 -LRB100 12851 RPS 26572 b

1    (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,
22016, and 2017 only, on or as soon as possible after the 15th
3day of each month, the Board shall submit vouchers for payment
4of State contributions to the System, in a total monthly amount
5of one-twelfth of the fiscal year General Revenue Fund
6contribution as certified by the System pursuant to Section
714-135.08 of the Illinois Pension Code.
8    (d) If an employee is paid from trust funds or federal
9funds, the department or other employer shall pay employer
10contributions from those funds to the System at the certified
11rate, unless the terms of the trust or the federal-State
12agreement preclude the use of the funds for that purpose, in
13which case the required employer contributions shall be paid by
14the State. From the effective date of this amendatory Act of
15the 93rd General Assembly through the payment of the final
16payroll from fiscal year 2004 appropriations, the department or
17other employer shall not pay contributions for the remainder of
18fiscal year 2004 but shall instead make payments as required
19under subsection (a-1) of Section 14.1 of the State Finance
20Act. The department or other employer shall resume payment of
21contributions at the commencement of fiscal year 2005.
22    (e) For State fiscal years 2018 through 2045, the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 90% of
26the total actuarial liabilities of the System by the end of

 

 

HB4055- 124 -LRB100 12851 RPS 26572 b

1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of total payroll, including payroll that is
4not deemed pensionable, over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7    Beginning in State fiscal year 2018, any increase or
8decrease in State contribution over the prior fiscal year due
9exclusively to changes in actuarial or investment assumptions
10adopted by the Board shall be included in the State
11contribution to the System, as a percentage of the applicable
12employee payroll, and shall be increased in equal annual
13increments so that by the State fiscal year occurring 5 years
14after the adoption of the actuarial or investment assumptions,
15the State is contributing at the rate otherwise required under
16this Section.
17    For State fiscal years 2012 through 2017 2045, the minimum
18contribution to the System to be made by the State for each
19fiscal year shall be an amount determined by the System to be
20sufficient to bring the total assets of the System up to 90% of
21the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the
26projected unit credit actuarial cost method.

 

 

HB4055- 125 -LRB100 12851 RPS 26572 b

1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section; except that (i) for State
6fiscal year 1998, for all purposes of this Code and any other
7law of this State, the certified percentage of the applicable
8employee payroll shall be 5.052% for employees earning eligible
9creditable service under Section 14-110 and 6.500% for all
10other employees, notwithstanding any contrary certification
11made under Section 14-135.08 before the effective date of this
12amendatory Act of 1997, and (ii) in the following specified
13State fiscal years, the State contribution to the System shall
14not be less than the following indicated percentages of the
15applicable employee payroll, even if the indicated percentage
16will produce a State contribution in excess of the amount
17otherwise required under this subsection and subsection (a):
189.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
192002; 10.6% in FY 2003; and 10.8% in FY 2004.
20    Notwithstanding any other provision of this Article, the
21total required State contribution to the System for State
22fiscal year 2006 is $203,783,900.
23    Notwithstanding any other provision of this Article, the
24total required State contribution to the System for State
25fiscal year 2007 is $344,164,400.
26    For each of State fiscal years 2008 through 2009, the State

 

 

HB4055- 126 -LRB100 12851 RPS 26572 b

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3from the required State contribution for State fiscal year
42007, so that by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State General Revenue Fund contribution for
8State fiscal year 2010 is $723,703,100 and shall be made from
9the proceeds of bonds sold in fiscal year 2010 pursuant to
10Section 7.2 of the General Obligation Bond Act, less (i) the
11pro rata share of bond sale expenses determined by the System's
12share of total bond proceeds, (ii) any amounts received from
13the General Revenue Fund in fiscal year 2010, and (iii) any
14reduction in bond proceeds due to the issuance of discounted
15bonds, if applicable.
16    Notwithstanding any other provision of this Article, the
17total required State General Revenue Fund contribution for
18State fiscal year 2011 is the amount recertified by the System
19on or before April 1, 2011 pursuant to Section 14-135.08 and
20shall be made from the proceeds of bonds sold in fiscal year
212011 pursuant to Section 7.2 of the General Obligation Bond
22Act, less (i) the pro rata share of bond sale expenses
23determined by the System's share of total bond proceeds, (ii)
24any amounts received from the General Revenue Fund in fiscal
25year 2011, and (iii) any reduction in bond proceeds due to the
26issuance of discounted bonds, if applicable.

 

 

HB4055- 127 -LRB100 12851 RPS 26572 b

1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 90%. A reference in this Article to
14the "required State contribution" or any substantially similar
15term does not include or apply to any amounts payable to the
16System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 and each fiscal year thereafter, as calculated
20under this Section and certified under Section 14-135.08, shall
21not exceed an amount equal to (i) the amount of the required
22State contribution that would have been calculated under this
23Section for that fiscal year if the System had not received any
24payments under subsection (d) of Section 7.2 of the General
25Obligation Bond Act, minus (ii) the portion of the State's
26total debt service payments for that fiscal year on the bonds

 

 

HB4055- 128 -LRB100 12851 RPS 26572 b

1issued in fiscal year 2003 for the purposes of that Section
27.2, as determined and certified by the Comptroller, that is
3the same as the System's portion of the total moneys
4distributed under subsection (d) of Section 7.2 of the General
5Obligation Bond Act. In determining this maximum for State
6fiscal years 2008 through 2010, however, the amount referred to
7in item (i) shall be increased, as a percentage of the
8applicable employee payroll, in equal increments calculated
9from the sum of the required State contribution for State
10fiscal year 2007 plus the applicable portion of the State's
11total debt service payments for fiscal year 2007 on the bonds
12issued in fiscal year 2003 for the purposes of Section 7.2 of
13the General Obligation Bond Act, so that, by State fiscal year
142011, the State is contributing at the rate otherwise required
15under this Section.
16    (f) After the submission of all payments for eligible
17employees from personal services line items in fiscal year 2004
18have been made, the Comptroller shall provide to the System a
19certification of the sum of all fiscal year 2004 expenditures
20for personal services that would have been covered by payments
21to the System under this Section if the provisions of this
22amendatory Act of the 93rd General Assembly had not been
23enacted. Upon receipt of the certification, the System shall
24determine the amount due to the System based on the full rate
25certified by the Board under Section 14-135.08 for fiscal year
262004 in order to meet the State's obligation under this

 

 

HB4055- 129 -LRB100 12851 RPS 26572 b

1Section. The System shall compare this amount due to the amount
2received by the System in fiscal year 2004 through payments
3under this Section and under Section 6z-61 of the State Finance
4Act. If the amount due is more than the amount received, the
5difference shall be termed the "Fiscal Year 2004 Shortfall" for
6purposes of this Section, and the Fiscal Year 2004 Shortfall
7shall be satisfied under Section 1.2 of the State Pension Funds
8Continuing Appropriation Act. If the amount due is less than
9the amount received, the difference shall be termed the "Fiscal
10Year 2004 Overpayment" for purposes of this Section, and the
11Fiscal Year 2004 Overpayment shall be repaid by the System to
12the Pension Contribution Fund as soon as practicable after the
13certification.
14    (g) For purposes of determining the required State
15contribution to the System, the value of the System's assets
16shall be equal to the actuarial value of the System's assets,
17which shall be calculated as follows:
18    As of June 30, 2008, the actuarial value of the System's
19assets shall be equal to the market value of the assets as of
20that date. In determining the actuarial value of the System's
21assets for fiscal years after June 30, 2008, any actuarial
22gains or losses from investment return incurred in a fiscal
23year shall be recognized in equal annual amounts over the
245-year period following that fiscal year.
25    (h) For purposes of determining the required State
26contribution to the System for a particular year, the actuarial

 

 

HB4055- 130 -LRB100 12851 RPS 26572 b

1value of assets shall be assumed to earn a rate of return equal
2to the System's actuarially assumed rate of return.
3    (i) After the submission of all payments for eligible
4employees from personal services line items paid from the
5General Revenue Fund in fiscal year 2010 have been made, the
6Comptroller shall provide to the System a certification of the
7sum of all fiscal year 2010 expenditures for personal services
8that would have been covered by payments to the System under
9this Section if the provisions of this amendatory Act of the
1096th General Assembly had not been enacted. Upon receipt of the
11certification, the System shall determine the amount due to the
12System based on the full rate certified by the Board under
13Section 14-135.08 for fiscal year 2010 in order to meet the
14State's obligation under this Section. The System shall compare
15this amount due to the amount received by the System in fiscal
16year 2010 through payments under this Section. If the amount
17due is more than the amount received, the difference shall be
18termed the "Fiscal Year 2010 Shortfall" for purposes of this
19Section, and the Fiscal Year 2010 Shortfall shall be satisfied
20under Section 1.2 of the State Pension Funds Continuing
21Appropriation Act. If the amount due is less than the amount
22received, the difference shall be termed the "Fiscal Year 2010
23Overpayment" for purposes of this Section, and the Fiscal Year
242010 Overpayment shall be repaid by the System to the General
25Revenue Fund as soon as practicable after the certification.
26    (j) After the submission of all payments for eligible

 

 

HB4055- 131 -LRB100 12851 RPS 26572 b

1employees from personal services line items paid from the
2General Revenue Fund in fiscal year 2011 have been made, the
3Comptroller shall provide to the System a certification of the
4sum of all fiscal year 2011 expenditures for personal services
5that would have been covered by payments to the System under
6this Section if the provisions of this amendatory Act of the
796th General Assembly had not been enacted. Upon receipt of the
8certification, the System shall determine the amount due to the
9System based on the full rate certified by the Board under
10Section 14-135.08 for fiscal year 2011 in order to meet the
11State's obligation under this Section. The System shall compare
12this amount due to the amount received by the System in fiscal
13year 2011 through payments under this Section. If the amount
14due is more than the amount received, the difference shall be
15termed the "Fiscal Year 2011 Shortfall" for purposes of this
16Section, and the Fiscal Year 2011 Shortfall shall be satisfied
17under Section 1.2 of the State Pension Funds Continuing
18Appropriation Act. If the amount due is less than the amount
19received, the difference shall be termed the "Fiscal Year 2011
20Overpayment" for purposes of this Section, and the Fiscal Year
212011 Overpayment shall be repaid by the System to the General
22Revenue Fund as soon as practicable after the certification.
23    (k) For fiscal years 2012 through 2017 only, after the
24submission of all payments for eligible employees from personal
25services line items paid from the General Revenue Fund in the
26fiscal year have been made, the Comptroller shall provide to

 

 

HB4055- 132 -LRB100 12851 RPS 26572 b

1the System a certification of the sum of all expenditures in
2the fiscal year for personal services. Upon receipt of the
3certification, the System shall determine the amount due to the
4System based on the full rate certified by the Board under
5Section 14-135.08 for the fiscal year in order to meet the
6State's obligation under this Section. The System shall compare
7this amount due to the amount received by the System for the
8fiscal year. If the amount due is more than the amount
9received, the difference shall be termed the "Prior Fiscal Year
10Shortfall" for purposes of this Section, and the Prior Fiscal
11Year Shortfall shall be satisfied under Section 1.2 of the
12State Pension Funds Continuing Appropriation Act. If the amount
13due is less than the amount received, the difference shall be
14termed the "Prior Fiscal Year Overpayment" for purposes of this
15Section, and the Prior Fiscal Year Overpayment shall be repaid
16by the System to the General Revenue Fund as soon as
17practicable after the certification.
18(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
19eff. 7-9-15; 99-523, eff. 6-30-16.)
 
20    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
21    (Text of Section WITHOUT the changes made by P.A. 98-599,
22which has been held unconstitutional)
23    Sec. 14-135.08. To certify required State contributions.
24    (a) To certify to the Governor and to each department, on
25or before November 15 of each year until November 15, 2011, the

 

 

HB4055- 133 -LRB100 12851 RPS 26572 b

1required rate for State contributions to the System for the
2next State fiscal year, as determined under subsection (b) of
3Section 14-131. The certification to the Governor under this
4subsection (a) shall include a copy of the actuarial
5recommendations upon which the rate is based and shall
6specifically identify the System's projected State normal cost
7for that fiscal year.
8    (a-5) On or before November 1 of each year, beginning
9November 1, 2012, the Board shall submit to the State Actuary,
10the Governor, and the General Assembly a proposed certification
11of the amount of the required State contribution to the System
12for the next fiscal year, along with all of the actuarial
13assumptions, calculations, and data upon which that proposed
14certification is based. On or before January 1 of each year
15beginning January 1, 2013, the State Actuary shall issue a
16preliminary report concerning the proposed certification and
17identifying, if necessary, recommended changes in actuarial
18assumptions that the Board must consider before finalizing its
19certification of the required State contributions. On or before
20January 15, 2013 and each January 15 thereafter, the Board
21shall certify to the Governor and the General Assembly the
22amount of the required State contribution for the next fiscal
23year. The Board's certification must note any deviations from
24the State Actuary's recommended changes, the reason or reasons
25for not following the State Actuary's recommended changes, and
26the fiscal impact of not following the State Actuary's

 

 

HB4055- 134 -LRB100 12851 RPS 26572 b

1recommended changes on the required State contribution.
2    (a-10) For purposes of subsection (c-5) of Section 20 of
3the Budget Stabilization Act, on or before November 1 of each
4year beginning November 1, 2019, the Board shall determine the
5amount of the State contribution to the System that would have
6been required for the next fiscal year if Section 1-161,
7Section 14-155.2, and the changes made to Section 1-160 by this
8amendatory Act of the 100th General Assembly had not taken
9effect, using the best and most recent available data but based
10on the law in effect on May 31, 2019. The Board shall submit to
11the State Actuary, the Governor, and the General Assembly a
12proposed certification, along with the relevant law, actuarial
13assumptions, calculations, and data upon which that
14certification is based. On or before January 1, 2020 and every
15January 1 thereafter, the State Actuary shall issue a
16preliminary report concerning the proposed certification and
17identifying, if necessary, recommended changes in actuarial
18assumptions that the Board must consider before finalizing its
19certification. On or before January 15, 2020 and every January
201 thereafter, the Board shall certify to the Governor and the
21General Assembly the amount of the State contribution to the
22System that would have been required for the next fiscal year
23if Section 1-161, Section 14-155.2, and the changes made to
24Section 1-160 by this amendatory Act of the 100th General
25Assembly had not taken effect, using the best and most recent
26available data but based on the law in effect on May 31, 2019.

 

 

HB4055- 135 -LRB100 12851 RPS 26572 b

1The Board's certification must note any deviations from the
2State Actuary's recommended changes, the reason or reasons for
3not following the State Actuary's recommended changes, and the
4impact of not following the State Actuary's recommended
5changes.
6    (b) The certifications under subsections (a) and (a-5)
7shall include an additional amount necessary to pay all
8principal of and interest on those general obligation bonds due
9the next fiscal year authorized by Section 7.2(a) of the
10General Obligation Bond Act and issued to provide the proceeds
11deposited by the State with the System in July 2003,
12representing deposits other than amounts reserved under
13Section 7.2(c) of the General Obligation Bond Act. For State
14fiscal year 2005, the Board shall make a supplemental
15certification of the additional amount necessary to pay all
16principal of and interest on those general obligation bonds due
17in State fiscal years 2004 and 2005 authorized by Section
187.2(a) of the General Obligation Bond Act and issued to provide
19the proceeds deposited by the State with the System in July
202003, representing deposits other than amounts reserved under
21Section 7.2(c) of the General Obligation Bond Act, as soon as
22practical after the effective date of this amendatory Act of
23the 93rd General Assembly.
24    On or before May 1, 2004, the Board shall recalculate and
25recertify to the Governor and to each department the amount of
26the required State contribution to the System and the required

 

 

HB4055- 136 -LRB100 12851 RPS 26572 b

1rates for State contributions to the System for State fiscal
2year 2005, taking into account the amounts appropriated to and
3received by the System under subsection (d) of Section 7.2 of
4the General Obligation Bond Act.
5    On or before July 1, 2005, the Board shall recalculate and
6recertify to the Governor and to each department the amount of
7the required State contribution to the System and the required
8rates for State contributions to the System for State fiscal
9year 2006, taking into account the changes in required State
10contributions made by this amendatory Act of the 94th General
11Assembly.
12    On or before April 1, 2011, the Board shall recalculate and
13recertify to the Governor and to each department the amount of
14the required State contribution to the System for State fiscal
15year 2011, applying the changes made by Public Act 96-889 to
16the System's assets and liabilities as of June 30, 2009 as
17though Public Act 96-889 was approved on that date.
18    As soon as practical after the effective date of this
19amendatory Act of the 100th General Assembly, the Board shall
20recalculate and recertify to the State Actuary, the Governor,
21and the General Assembly the amount of the State contribution
22to the System for State fiscal year 2018, taking into account
23the changes in required State contributions made by this
24amendatory Act of the 100th General Assembly. The State Actuary
25shall review the assumptions and valuations underlying the
26Board's revised certification and issue a preliminary report

 

 

HB4055- 137 -LRB100 12851 RPS 26572 b

1concerning the proposed recertification and identifying, if
2necessary, recommended changes in actuarial assumptions that
3the Board must consider before finalizing its certification of
4the required State contributions. The Board's final
5certification must note any deviations from the State Actuary's
6recommended changes, the reason or reasons for not following
7the State Actuary's recommended changes, and the fiscal impact
8of not following the State Actuary's recommended changes on the
9required State contribution.
10(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1197-694, eff. 6-18-12.)
 
12    (40 ILCS 5/14-147.5 new)
13    Sec. 14-147.5. Accelerated pension benefit payment.
14    (a) As used in this Section:
15    "Eligible person" means a person who:
16        (1) has terminated service;
17        (2) has accrued sufficient service credit to be
18    eligible to receive a retirement annuity under this
19    Article;
20        (3) has not received any retirement annuity under this
21    Article; and
22        (4) does not have a QILDRO in effect against him or her
23    under this Article.
24    "Pension benefit" means the benefits under this Article, or
25Article 1 as it relates to those benefits, including any

 

 

HB4055- 138 -LRB100 12851 RPS 26572 b

1anticipated annual increases, that an eligible person is
2entitled to upon attainment of the applicable retirement age.
3"Pension benefit" also includes applicable survivor's or
4disability benefits.
5    (b) Before January 1, 2018, the System shall calculate,
6using actuarial tables and other assumptions adopted by the
7Board, the net present value of pension benefits for each
8eligible person and shall offer each eligible person the
9opportunity to irrevocably elect to receive an amount
10determined by the System to be equal to 70% of the net present
11value of his or her pension benefits in lieu of receiving any
12pension benefit. The offer shall specify the dollar amount that
13the eligible person will receive if he or she so elects and
14shall expire when a subsequent offer is made to an eligible
15person. The System shall make a good faith effort to contact
16every eligible person to notify him or her of the election and
17of the amount of the accelerated pension benefit payment.
18    Beginning January 1, 2018 and until July 1, 2018, an
19eligible person may irrevocably elect to receive an accelerated
20pension benefit payment in the amount that the System offers
21under this subsection in lieu of receiving any pension benefit.
22A person who elects to receive an accelerated pension benefit
23payment under this Section may not elect to proceed under the
24Retirement Systems Reciprocal Act with respect to service under
25this Article.
26    (c) A person's credits and creditable service under this

 

 

HB4055- 139 -LRB100 12851 RPS 26572 b

1Article shall be terminated upon the person's receipt of an
2accelerated pension benefit payment under this Section, and no
3other benefit shall be paid under this Article based on those
4terminated credits and creditable service, including any
5retirement, survivor, or other benefit; except that to the
6extent that participation, benefits, or premiums under the
7State Employees Group Insurance Act of 1971 are based on the
8amount of service credit, the terminated service credit shall
9be used for that purpose.
10    (d) If a person who has received an accelerated pension
11benefit payment under this Section returns to active service
12under this Article, then:
13        (1) Any benefits under the System earned as a result of
14    that return to active service shall be based solely on the
15    person's credits and creditable service arising from the
16    return to active service.
17        (2) The accelerated pension benefit payment may not be
18    repaid to the System, and the terminated credits and
19    creditable service may not under any circumstances be
20    reinstated.
21    (e) As a condition of receiving an accelerated pension
22benefit payment, an eligible person must have another
23retirement plan or account qualified under the Internal Revenue
24Code of 1986, as amended, for the accelerated pension benefit
25payment to be rolled into. The accelerated pension benefit
26payment under this Section may be subject to withholding or

 

 

HB4055- 140 -LRB100 12851 RPS 26572 b

1payment of applicable taxes, but to the extent permitted by
2federal law, a person who receives an accelerated pension
3benefit payment under this Section must direct the System to
4pay all of that payment as a rollover into another retirement
5plan or account qualified under the Internal Revenue Code of
61986, as amended.
7    (f) Before January 1, 2019, the Board shall certify to the
8Illinois Finance Authority and the General Assembly the amount
9by which the total amount of accelerated pension benefit
10payments made under this Section exceed the amount appropriated
11to the System for the purpose of making those payments.
12    (g) The Board shall adopt any rules necessary to implement
13this Section.
14    (h) No provision of this Section shall be interpreted in a
15way that would cause the applicable System to cease to be a
16qualified plan under the Internal Revenue Code of 1986.
 
17    (40 ILCS 5/14-152.1)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 14-152.1. Application and expiration of new benefit
21increases.
22    (a) As used in this Section, "new benefit increase" means
23an increase in the amount of any benefit provided under this
24Article, or an expansion of the conditions of eligibility for
25any benefit under this Article, that results from an amendment

 

 

HB4055- 141 -LRB100 12851 RPS 26572 b

1to this Code that takes effect after June 1, 2005 (the
2effective date of Public Act 94-4). "New benefit increase",
3however, does not include any benefit increase resulting from
4the changes made to this Article by Public Act 96-37 or by this
5amendatory Act of the 100th General Assembly this amendatory
6Act of the 96th General Assembly.
7    (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12    (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16    Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Insurance Financial and Professional Regulation.
23A new benefit increase created by a Public Act that does not
24include the additional funding required under this subsection
25is null and void. If the Public Pension Division determines
26that the additional funding provided for a new benefit increase

 

 

HB4055- 142 -LRB100 12851 RPS 26572 b

1under this subsection is or has become inadequate, it may so
2certify to the Governor and the State Comptroller and, in the
3absence of corrective action by the General Assembly, the new
4benefit increase shall expire at the end of the fiscal year in
5which the certification is made.
6    (d) Every new benefit increase shall expire 5 years after
7its effective date or on such earlier date as may be specified
8in the language enacting the new benefit increase or provided
9under subsection (c). This does not prevent the General
10Assembly from extending or re-creating a new benefit increase
11by law.
12    (e) Except as otherwise provided in the language creating
13the new benefit increase, a new benefit increase that expires
14under this Section continues to apply to persons who applied
15and qualified for the affected benefit while the new benefit
16increase was in effect and to the affected beneficiaries and
17alternate payees of such persons, but does not apply to any
18other person, including without limitation a person who
19continues in service after the expiration date and did not
20apply and qualify for the affected benefit while the new
21benefit increase was in effect.
22(Source: P.A. 96-37, eff. 7-13-09.)
 
23    (40 ILCS 5/14-155.1 new)
24    Sec. 14-155.1. Defined contribution plan.
25    (a) By July 1, 2019, the System shall prepare and implement

 

 

HB4055- 143 -LRB100 12851 RPS 26572 b

1a voluntary defined contribution plan for up to 5% of eligible
2active Tier 1 employees. The System shall determine the 5% cap
3by the number of active Tier 1 employees on the effective date
4of this Section. The defined contribution plan developed under
5this Section shall be a plan that aggregates employer and
6employee contributions in individual participant accounts
7which, after meeting any other requirements, are used for
8payouts after retirement in accordance with this Section and
9any other applicable laws.
10    As used in this Section, "defined benefit plan" means the
11retirement plan available under this Article to Tier 1
12employees who have not made the election authorized under this
13Section.
14        (1) Under the defined contribution plan, an active Tier
15    1 employee of this System could elect to cease accruing
16    benefits in the defined benefit plan under this Article and
17    begin accruing benefits for future service in the defined
18    contribution plan. Service credit under the defined
19    contribution plan may be used for determining retirement
20    eligibility under the defined benefit plan.
21        (2) Participants in the defined contribution plan
22    shall pay employee contributions at the same rate as Tier 1
23    employees in this System who do not participate in the
24    defined contribution plan.
25        (3) State contributions shall be paid into the accounts
26    of all participants in the defined contribution plan at a

 

 

HB4055- 144 -LRB100 12851 RPS 26572 b

1    uniform rate, expressed as a percentage of compensation and
2    determined for each year. This rate shall be no higher than
3    the employer's normal cost for Tier 1 employees in the
4    defined benefit plan for that year, as determined by the
5    System and expressed as a percentage of compensation, and
6    shall be no lower than 3% of compensation. The State shall
7    adjust this rate annually.
8        (4) The defined contribution plan shall require 5 years
9    of participation in the defined contribution plan before
10    vesting in State contributions. If the participant fails to
11    vest in them, the State contributions, and the earnings
12    thereon, shall be forfeited.
13        (5) The defined contribution plan may provide for
14    participants in the plan to be eligible for the defined
15    disability benefits available to other participants under
16    this Article. If it does, the System shall reduce the
17    employee contributions credited to the member's defined
18    contribution plan account by an amount determined by the
19    System to cover the cost of offering such benefits.
20        (6) The defined contribution plan shall provide a
21    variety of options for investments. These options shall
22    include investments handled by the Illinois State Board of
23    Investment as well as private sector investment options.
24        (7) The defined contribution plan shall provide a
25    variety of options for payouts to retirees and their
26    survivors.

 

 

HB4055- 145 -LRB100 12851 RPS 26572 b

1        (8) To the extent authorized under federal law and as
2    authorized by the System, the plan shall allow former
3    participants in the plan to transfer or roll over employee
4    and vested State contributions, and the earnings thereon,
5    into other qualified retirement plans.
6        (9) The System shall reduce the employee contributions
7    credited to the member's defined contribution plan account
8    by an amount determined by the System to cover the cost of
9    offering these benefits and any applicable administrative
10    fees.
11    (b) Only persons who are active Tier 1 employees of the
12System on the effective date of this Section are eligible to
13participate in the defined contribution plan. Participation in
14the defined contribution plan shall be limited to the first 5%
15of eligible persons who elect to participate. The election to
16participate in the defined contribution plan is voluntary and
17irrevocable.
18    (c) An eligible Tier 1 employee may irrevocably elect to
19participate in the defined contribution plan by filing with the
20System a written application to participate that is received by
21the System prior to its determination that 5% of eligible
22persons have elected to participate in the defined contribution
23plan.
24    When the System first determines that 5% of eligible
25persons have elected to participate in the defined contribution
26plan, the System shall provide notice to previously eligible

 

 

HB4055- 146 -LRB100 12851 RPS 26572 b

1employees that the plan is no longer available and shall cease
2accepting applications to participate.
3    (d) The System shall make a good faith effort to contact
4each active Tier 1 employee who is eligible to participate in
5the defined contribution plan. The System shall mail
6information describing the option to join the defined
7contribution plan to each of these employees to his or her last
8known address on file with the System. If the employee is not
9responsive to other means of contact, it is sufficient for the
10System to publish the details of the option on its website.
11    Upon request for further information describing the
12option, the System shall provide employees with information
13from the System before exercising the option to join the plan,
14including information on the impact to their vested benefits or
15non-vested service. The individual consultation shall include
16projections of the member's defined benefits at retirement or
17earlier termination of service and the value of the member's
18account at retirement or earlier termination of service. The
19System shall not provide advice or counseling with respect to
20whether the employee should exercise the option. The System
21shall inform Tier 1 employees who are eligible to participate
22in the defined contribution plan that they may also wish to
23obtain information and counsel relating to their option from
24any other available source, including, but not limited to,
25labor organizations, private counsel, and financial advisors.
26    (e) In no event shall the System, its staff, its authorized

 

 

HB4055- 147 -LRB100 12851 RPS 26572 b

1representatives, or the Board be liable for any information
2given to an employee under this Section. The System may
3coordinate with the Illinois Department of Central Management
4Services and other retirement systems administering a defined
5contribution plan in accordance with this amendatory Act of the
6100th General Assembly to provide information concerning the
7impact of the option set forth in this Section.
8    (f) Notwithstanding any other provision of this Section, no
9person shall begin participating in the defined contribution
10plan until it has attained qualified plan status and received
11all necessary approvals from the U.S. Internal Revenue Service.
12    (g) The System shall report on its progress under this
13Section, including the available details of the defined
14contribution plan and the System's plans for informing eligible
15Tier 1 employees about the plan, to the Governor and the
16General Assembly on or before January 15, 2019.
17    (h) The Illinois State Board of Investment shall be the
18plan sponsor for the defined contribution plan established
19under this Section.
20    (i) The intent of this amendatory Act of the 100th General
21Assembly is to ensure that the State's normal cost of
22participation in the defined contribution plan is similar, and
23if possible equal, to the State's normal cost of participation
24in the defined benefit plan, unless a lower State's normal cost
25is necessary to ensure cost neutrality.
 

 

 

HB4055- 148 -LRB100 12851 RPS 26572 b

1    (40 ILCS 5/14-155.2 new)
2    Sec. 14-155.2. Defined contribution plan for certain
3covered employees.
4    (a) As used in this Section:
5    "Defined benefit plan" means the retirement plan available
6under this Article and Section 1-160 to eligible covered
7employees who do not make the election authorized under this
8Section.
9    "Eligible covered employee" means a covered employee who
10first becomes a participant under this Article on or after 6
11months after the effective date of this amendatory Act of the
12100th General Assembly.
13    (b) In lieu of the defined benefit plan, an eligible
14covered employee may irrevocably elect to participate in the
15defined contribution plan under this Section. The election to
16participate in the defined contribution plan must be made
17within 30 days after becoming an eligible covered employee. The
18election to participate in the defined contribution plan under
19this Section is voluntary and irrevocable.
20    (c) No later than 5 months after the effective date of this
21amendatory Act of the 100th General Assembly, the System shall
22prepare and implement a voluntary defined contribution plan for
23eligible covered employees. The defined contribution plan
24developed under this Section shall be a plan that aggregates
25employer and employee contributions in individual participant
26accounts which, after meeting any other requirements, are used

 

 

HB4055- 149 -LRB100 12851 RPS 26572 b

1for payouts after retirement in accordance with this Section
2and any other applicable laws.
3        (1) A participant in the defined contribution plan
4    shall contribute a minimum of 3% of his or her compensation
5    to the defined contribution plan.
6        (2) For persons who participate in the defined
7    contribution plan for at least one year, employer
8    contributions shall be paid into the accounts of those
9    participants at a rate of 3% of compensation.
10        (3) Employer contributions shall vest when those
11    contributions are paid into a participant's account.
12        (4) The defined contribution plan shall provide a
13    variety of options for investments. These options shall
14    include investments handled by the Illinois State Board of
15    Investment as well as private sector investment options.
16        (5) The defined contribution plan shall provide a
17    variety of options for payouts to retirees and their
18    survivors.
19        (6) To the extent authorized under federal law and as
20    authorized by the System, the defined contribution plan
21    shall allow former participants in the plan to transfer or
22    roll over employee and employer contributions, and the
23    earnings thereon, into other qualified retirement plans.
24        (7) The System shall reduce the employee contributions
25    credited to the participant's defined contribution plan
26    account by an amount determined by the System to cover the

 

 

HB4055- 150 -LRB100 12851 RPS 26572 b

1    cost of offering the benefits under this Section and any
2    applicable administrative fees.
 
3    (40 ILCS 5/14-156.1 new)
4    Sec. 14-156.1. Defined contribution plan; termination. If
5the defined contribution plan under Section 14-155.1 is
6terminated or becomes inoperative pursuant to law, then each
7participant in the plan shall automatically be deemed to have
8been a contributing Tier 1 employee in the System's defined
9benefit plan during the time in which he or she participated in
10the defined contribution plan, and for that purpose the System
11shall be entitled to recover the amounts in the participant's
12defined contribution accounts.
 
13    (40 ILCS 5/15-108.1)
14    Sec. 15-108.1. Tier 1 member; Tier 1 employee.
15    "Tier 1 member": A participant or an annuitant of a
16retirement annuity under this Article, other than a participant
17in the self-managed plan under Section 15-158.2, who first
18became a participant or member before January 1, 2011 under any
19reciprocal retirement system or pension fund established under
20this Code, other than a retirement system or pension fund
21established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
22"Tier 1 member" includes a person who first became a
23participant under this System before January 1, 2011 and who
24accepts a refund and is subsequently reemployed by an employer

 

 

HB4055- 151 -LRB100 12851 RPS 26572 b

1on or after January 1, 2011.
2    "Tier 1 employee": A Tier 1 member who is a participating
3employee, unless he or she is a disability benefit recipient
4under Section 15-150.
5(Source: P.A. 98-92, eff. 7-16-13.)
 
6    (40 ILCS 5/15-108.2)
7    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
8first becomes a participant under this Article on or after
9January 1, 2011 and before 6 months after the effective date of
10this amendatory Act of the 100th General Assembly, other than a
11person in the self-managed plan established under Section
1215-158.2 or a person who makes the election under subsection
13(c) of Section 1-161, unless the person is otherwise a Tier 1
14member. The changes made to this Section by this amendatory Act
15of the 98th General Assembly are a correction of existing law
16and are intended to be retroactive to the effective date of
17Public Act 96-889, notwithstanding the provisions of Section
181-103.1 of this Code.
19(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 
20    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
21    Sec. 15-155. Employer contributions.
22    (a) The State of Illinois shall make contributions by
23appropriations of amounts which, together with the other
24employer contributions from trust, federal, and other funds,

 

 

HB4055- 152 -LRB100 12851 RPS 26572 b

1employee contributions, income from investments, and other
2income of this System, will be sufficient to meet the cost of
3maintaining and administering the System on a 90% funded basis
4in accordance with actuarial recommendations.
5    The Board shall determine the amount of State contributions
6required for each fiscal year on the basis of the actuarial
7tables and other assumptions adopted by the Board and the
8recommendations of the actuary, using the formula in subsection
9(a-1).
10    (a-1) For State fiscal years 2018 through 2045, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 90% of
14the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of total payroll, including payroll that is
18not deemed pensionable, but excluding payroll attributable to
19participants in the defined contribution plan under Section
2015-200.1, over the years remaining to and including fiscal year
212045 and shall be determined under the projected unit credit
22actuarial cost method.
23    Beginning in State fiscal year 2018, any increase or
24decrease in State contribution over the prior fiscal year due
25exclusively to changes in actuarial or investment assumptions
26adopted by the Board shall be included in the State

 

 

HB4055- 153 -LRB100 12851 RPS 26572 b

1contribution to the System, as a percentage of the applicable
2employee payroll, and shall be increased in equal annual
3increments so that by the State fiscal year occurring 5 years
4after the adoption of the actuarial or investment assumptions,
5the State is contributing at the rate otherwise required under
6this Section.
7    For State fiscal years 2012 through 2017 2045, the minimum
8contribution to the System to be made by the State for each
9fiscal year shall be an amount determined by the System to be
10sufficient to bring the total assets of the System up to 90% of
11the total actuarial liabilities of the System by the end of
12State fiscal year 2045. In making these determinations, the
13required State contribution shall be calculated each year as a
14level percentage of payroll over the years remaining to and
15including fiscal year 2045 and shall be determined under the
16projected unit credit actuarial cost method.
17    For State fiscal years 1996 through 2005, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20so that by State fiscal year 2011, the State is contributing at
21the rate required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2006 is
24$166,641,900.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2007 is

 

 

HB4055- 154 -LRB100 12851 RPS 26572 b

1$252,064,100.
2    For each of State fiscal years 2008 through 2009, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5from the required State contribution for State fiscal year
62007, so that by State fiscal year 2011, the State is
7contributing at the rate otherwise required under this Section.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2010 is
10$702,514,000 and shall be made from the State Pensions Fund and
11proceeds of bonds sold in fiscal year 2010 pursuant to Section
127.2 of the General Obligation Bond Act, less (i) the pro rata
13share of bond sale expenses determined by the System's share of
14total bond proceeds, (ii) any amounts received from the General
15Revenue Fund in fiscal year 2010, (iii) any reduction in bond
16proceeds due to the issuance of discounted bonds, if
17applicable.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2011 is
20the amount recertified by the System on or before April 1, 2011
21pursuant to Section 15-165 and shall be made from the State
22Pensions Fund and proceeds of bonds sold in fiscal year 2011
23pursuant to Section 7.2 of the General Obligation Bond Act,
24less (i) the pro rata share of bond sale expenses determined by
25the System's share of total bond proceeds, (ii) any amounts
26received from the General Revenue Fund in fiscal year 2011, and

 

 

HB4055- 155 -LRB100 12851 RPS 26572 b

1(iii) any reduction in bond proceeds due to the issuance of
2discounted bonds, if applicable.
3    Beginning in State fiscal year 2046, the minimum State
4contribution for each fiscal year shall be the amount needed to
5maintain the total assets of the System at 90% of the total
6actuarial liabilities of the System.
7    Amounts received by the System pursuant to Section 25 of
8the Budget Stabilization Act or Section 8.12 of the State
9Finance Act in any fiscal year do not reduce and do not
10constitute payment of any portion of the minimum State
11contribution required under this Article in that fiscal year.
12Such amounts shall not reduce, and shall not be included in the
13calculation of, the required State contributions under this
14Article in any future year until the System has reached a
15funding ratio of at least 90%. A reference in this Article to
16the "required State contribution" or any substantially similar
17term does not include or apply to any amounts payable to the
18System under Section 25 of the Budget Stabilization Act.
19    Notwithstanding any other provision of this Section, the
20required State contribution for State fiscal year 2005 and for
21fiscal year 2008 and each fiscal year thereafter, as calculated
22under this Section and certified under Section 15-165, shall
23not exceed an amount equal to (i) the amount of the required
24State contribution that would have been calculated under this
25Section for that fiscal year if the System had not received any
26payments under subsection (d) of Section 7.2 of the General

 

 

HB4055- 156 -LRB100 12851 RPS 26572 b

1Obligation Bond Act, minus (ii) the portion of the State's
2total debt service payments for that fiscal year on the bonds
3issued in fiscal year 2003 for the purposes of that Section
47.2, as determined and certified by the Comptroller, that is
5the same as the System's portion of the total moneys
6distributed under subsection (d) of Section 7.2 of the General
7Obligation Bond Act. In determining this maximum for State
8fiscal years 2008 through 2010, however, the amount referred to
9in item (i) shall be increased, as a percentage of the
10applicable employee payroll, in equal increments calculated
11from the sum of the required State contribution for State
12fiscal year 2007 plus the applicable portion of the State's
13total debt service payments for fiscal year 2007 on the bonds
14issued in fiscal year 2003 for the purposes of Section 7.2 of
15the General Obligation Bond Act, so that, by State fiscal year
162011, the State is contributing at the rate otherwise required
17under this Section.
18     (a-2) For employees first hired on or after 6 months after
19the effective date of this amendatory Act of the 100th General
20Assembly who have elected the benefits under Section 1-161 of
21this Code, the employer shall annually contribute an amount,
22expressed as a percentage of payroll, equal to the defined
23benefit normal cost of the defined benefit plan, less the
24employee contribution, plus 2%. On an annual basis, the System
25shall certify to each employer the amount of unfunded liability
26accrued in the employer's account to be paid by the employer so

 

 

HB4055- 157 -LRB100 12851 RPS 26572 b

1that the System is 90% funded by the end of State fiscal year
22045. The contributions shall be divided equally over a
312-month period and made monthly. The employer shall also
4contribute an amount equal to the employer defined
5contribution, as set on an individual employee basis, under
6paragraph (2) of subsection (k) of Section 1-161 during each
7pay period. The System shall have the authority to adopt rules
8regarding implementation of employer contributions.
9    (b) If an employee is paid from trust or federal funds, the
10employer shall pay to the Board contributions from those funds
11which are sufficient to cover the accruing normal costs on
12behalf of the employee. However, universities having employees
13who are compensated out of local auxiliary funds, income funds,
14or service enterprise funds are not required to pay such
15contributions on behalf of those employees. The local auxiliary
16funds, income funds, and service enterprise funds of
17universities shall not be considered trust funds for the
18purpose of this Article, but funds of alumni associations,
19foundations, and athletic associations which are affiliated
20with the universities included as employers under this Article
21and other employers which do not receive State appropriations
22are considered to be trust funds for the purpose of this
23Article.
24    (b-1) The City of Urbana and the City of Champaign shall
25each make employer contributions to this System for their
26respective firefighter employees who participate in this

 

 

HB4055- 158 -LRB100 12851 RPS 26572 b

1System pursuant to subsection (h) of Section 15-107. The rate
2of contributions to be made by those municipalities shall be
3determined annually by the Board on the basis of the actuarial
4assumptions adopted by the Board and the recommendations of the
5actuary, and shall be expressed as a percentage of salary for
6each such employee. The Board shall certify the rate to the
7affected municipalities as soon as may be practical. The
8employer contributions required under this subsection shall be
9remitted by the municipality to the System at the same time and
10in the same manner as employee contributions.
11    (c) Through State fiscal year 1995: The total employer
12contribution shall be apportioned among the various funds of
13the State and other employers, whether trust, federal, or other
14funds, in accordance with actuarial procedures approved by the
15Board. State of Illinois contributions for employers receiving
16State appropriations for personal services shall be payable
17from appropriations made to the employers or to the System. The
18contributions for Class I community colleges covering earnings
19other than those paid from trust and federal funds, shall be
20payable solely from appropriations to the Illinois Community
21College Board or the System for employer contributions.
22    (d) Beginning in State fiscal year 1996, the required State
23contributions to the System shall be appropriated directly to
24the System and shall be payable through vouchers issued in
25accordance with subsection (c) of Section 15-165, except as
26provided in subsection (g).

 

 

HB4055- 159 -LRB100 12851 RPS 26572 b

1    (e) The State Comptroller shall draw warrants payable to
2the System upon proper certification by the System or by the
3employer in accordance with the appropriation laws and this
4Code.
5    (f) Normal costs under this Section means liability for
6pensions and other benefits which accrues to the System because
7of the credits earned for service rendered by the participants
8during the fiscal year and expenses of administering the
9System, but shall not include the principal of or any
10redemption premium or interest on any bonds issued by the Board
11or any expenses incurred or deposits required in connection
12therewith.
13    (g) For academic years beginning on or after June 1, 2005
14and before July 1, 2018, if If the amount of a participant's
15earnings for any academic year used to determine the final rate
16of earnings, determined on a full-time equivalent basis,
17exceeds the amount of his or her earnings with the same
18employer for the previous academic year, determined on a
19full-time equivalent basis, by more than 6%, the participant's
20employer shall pay to the System, in addition to all other
21payments required under this Section and in accordance with
22guidelines established by the System, the present value of the
23increase in benefits resulting from the portion of the increase
24in earnings that is in excess of 6%. This present value shall
25be computed by the System on the basis of the actuarial
26assumptions and tables used in the most recent actuarial

 

 

HB4055- 160 -LRB100 12851 RPS 26572 b

1valuation of the System that is available at the time of the
2computation. The System may require the employer to provide any
3pertinent information or documentation.
4    Whenever it determines that a payment is or may be required
5under this subsection (g), the System shall calculate the
6amount of the payment and bill the employer for that amount.
7The bill shall specify the calculations used to determine the
8amount due. If the employer disputes the amount of the bill, it
9may, within 30 days after receipt of the bill, apply to the
10System in writing for a recalculation. The application must
11specify in detail the grounds of the dispute and, if the
12employer asserts that the calculation is subject to subsection
13(h) or (i) of this Section, must include an affidavit setting
14forth and attesting to all facts within the employer's
15knowledge that are pertinent to the applicability of subsection
16(h) or (i). Upon receiving a timely application for
17recalculation, the System shall review the application and, if
18appropriate, recalculate the amount due.
19    The employer contributions required under this subsection
20(g) may be paid in the form of a lump sum within 90 days after
21receipt of the bill. If the employer contributions are not paid
22within 90 days after receipt of the bill, then interest will be
23charged at a rate equal to the System's annual actuarially
24assumed rate of return on investment compounded annually from
25the 91st day after receipt of the bill. Payments must be
26concluded within 3 years after the employer's receipt of the

 

 

HB4055- 161 -LRB100 12851 RPS 26572 b

1bill.
2    When assessing payment for any amount due under this
3subsection (g), the System shall include earnings, to the
4extent not established by a participant under Section 15-113.11
5or 15-113.12, that would have been paid to the participant had
6the participant not taken (i) periods of voluntary or
7involuntary furlough occurring on or after July 1, 2015 and on
8or before June 30, 2017 or (ii) periods of voluntary pay
9reduction in lieu of furlough occurring on or after July 1,
102015 and on or before June 30, 2017. Determining earnings that
11would have been paid to a participant had the participant not
12taken periods of voluntary or involuntary furlough or periods
13of voluntary pay reduction shall be the responsibility of the
14employer, and shall be reported in a manner prescribed by the
15System.
16    (g-1) Beginning in fiscal year 2019, if a contract or
17collective bargaining agreement entered into, amended, or
18renewed on or after the effective date of this amendatory Act
19of the 100th General Assembly provides for earnings to exceed
20the salaries provided under the preceding contract or
21collective bargaining agreement, then the employer shall pay to
22the System, in addition to all other payments required under
23this Section and in accordance with guidelines established by
24the System, the current value of the projected amount of the
25increase in benefits, as determined by the System and
26reflecting whether the participants covered under the contract

 

 

HB4055- 162 -LRB100 12851 RPS 26572 b

1or collective bargaining agreement are Tier 1 members or Tier 2
2members, resulting from the portion of the earnings that exceed
3the amount of the earnings provided under the preceding
4contract or collective bargaining agreement. The System may
5require the employer to provide any pertinent information or
6documentation.
7    Whenever it determines that a payment is or may be required
8under this subsection (g-1), the System shall calculate the
9amount of the payment and bill the employer for that amount.
10The bill shall specify the calculations used to determine the
11amount due. If the employer disputes the amount of the bill, it
12may, within 30 days after receipt of the bill, apply to the
13System in writing for a recalculation. The application must
14specify in detail the grounds of the dispute. Upon receiving a
15timely application for recalculation, the System shall review
16the application and, if appropriate, recalculate the amount
17due.
18    The employer contributions required under this subsection
19(g-1) may be paid in the form of a lump sum within 90 days after
20receipt of the bill. If the employer contributions are not paid
21within 90 days after receipt of the bill, then interest shall
22be charged at a rate equal to the System's annual actuarially
23assumed rate of return on investment compounded annually from
24the 91st day after receipt of the bill. Payments must be
25concluded within 3 years after the employer's receipt of the
26bill.

 

 

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1    (h) This subsection (h) applies only to payments made or
2salary increases given on or after June 1, 2005 but before July
31, 2011. The changes made by Public Act 94-1057 shall not
4require the System to refund any payments received before July
531, 2006 (the effective date of Public Act 94-1057).
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude earnings increases paid to
8participants under contracts or collective bargaining
9agreements entered into, amended, or renewed before June 1,
102005.
11    When assessing payment for any amount due under subsection
12(g), the System shall exclude earnings increases paid to a
13participant at a time when the participant is 10 or more years
14from retirement eligibility under Section 15-135.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases resulting from
17overload work, including a contract for summer teaching, or
18overtime when the employer has certified to the System, and the
19System has approved the certification, that: (i) in the case of
20overloads (A) the overload work is for the sole purpose of
21academic instruction in excess of the standard number of
22instruction hours for a full-time employee occurring during the
23academic year that the overload is paid and (B) the earnings
24increases are equal to or less than the rate of pay for
25academic instruction computed using the participant's current
26salary rate and work schedule; and (ii) in the case of

 

 

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1overtime, the overtime was necessary for the educational
2mission.
3    When assessing payment for any amount due under subsection
4(g), the System shall exclude any earnings increase resulting
5from (i) a promotion for which the employee moves from one
6classification to a higher classification under the State
7Universities Civil Service System, (ii) a promotion in academic
8rank for a tenured or tenure-track faculty position, or (iii) a
9promotion that the Illinois Community College Board has
10recommended in accordance with subsection (k) of this Section.
11These earnings increases shall be excluded only if the
12promotion is to a position that has existed and been filled by
13a member for no less than one complete academic year and the
14earnings increase as a result of the promotion is an increase
15that results in an amount no greater than the average salary
16paid for other similar positions.
17    (i) When assessing payment for any amount due under
18subsection (g), the System shall exclude any salary increase
19described in subsection (h) of this Section given on or after
20July 1, 2011 but before July 1, 2014 under a contract or
21collective bargaining agreement entered into, amended, or
22renewed on or after June 1, 2005 but before July 1, 2011.
23Notwithstanding any other provision of this Section, any
24payments made or salary increases given after June 30, 2014
25shall be used in assessing payment for any amount due under
26subsection (g) of this Section.

 

 

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1    (j) The System shall prepare a report and file copies of
2the report with the Governor and the General Assembly by
3January 1, 2007 that contains all of the following information:
4        (1) The number of recalculations required by the
5    changes made to this Section by Public Act 94-1057 for each
6    employer.
7        (2) The dollar amount by which each employer's
8    contribution to the System was changed due to
9    recalculations required by Public Act 94-1057.
10        (3) The total amount the System received from each
11    employer as a result of the changes made to this Section by
12    Public Act 94-4.
13        (4) The increase in the required State contribution
14    resulting from the changes made to this Section by Public
15    Act 94-1057.
16    (k) The Illinois Community College Board shall adopt rules
17for recommending lists of promotional positions submitted to
18the Board by community colleges and for reviewing the
19promotional lists on an annual basis. When recommending
20promotional lists, the Board shall consider the similarity of
21the positions submitted to those positions recognized for State
22universities by the State Universities Civil Service System.
23The Illinois Community College Board shall file a copy of its
24findings with the System. The System shall consider the
25findings of the Illinois Community College Board when making
26determinations under this Section. The System shall not exclude

 

 

HB4055- 166 -LRB100 12851 RPS 26572 b

1any earnings increases resulting from a promotion when the
2promotion was not submitted by a community college. Nothing in
3this subsection (k) shall require any community college to
4submit any information to the Community College Board.
5    (l) For purposes of determining the required State
6contribution to the System, the value of the System's assets
7shall be equal to the actuarial value of the System's assets,
8which shall be calculated as follows:
9    As of June 30, 2008, the actuarial value of the System's
10assets shall be equal to the market value of the assets as of
11that date. In determining the actuarial value of the System's
12assets for fiscal years after June 30, 2008, any actuarial
13gains or losses from investment return incurred in a fiscal
14year shall be recognized in equal annual amounts over the
155-year period following that fiscal year.
16    (m) For purposes of determining the required State
17contribution to the system for a particular year, the actuarial
18value of assets shall be assumed to earn a rate of return equal
19to the system's actuarially assumed rate of return.
20(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
2199-897, eff. 1-1-17.)
 
22    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25    Sec. 15-165. To certify amounts and submit vouchers.

 

 

HB4055- 167 -LRB100 12851 RPS 26572 b

1    (a) The Board shall certify to the Governor on or before
2November 15 of each year until November 15, 2011 the
3appropriation required from State funds for the purposes of
4this System for the following fiscal year. The certification
5under this subsection (a) shall include a copy of the actuarial
6recommendations upon which it is based and shall specifically
7identify the System's projected State normal cost for that
8fiscal year and the projected State cost for the self-managed
9plan for that fiscal year.
10    On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2005, taking
13into account the amounts appropriated to and received by the
14System under subsection (d) of Section 7.2 of the General
15Obligation Bond Act.
16    On or before July 1, 2005, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2006, taking
19into account the changes in required State contributions made
20by this amendatory Act of the 94th General Assembly.
21    On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2011, applying
24the changes made by Public Act 96-889 to the System's assets
25and liabilities as of June 30, 2009 as though Public Act 96-889
26was approved on that date.

 

 

HB4055- 168 -LRB100 12851 RPS 26572 b

1    (a-5) On or before November 1 of each year, beginning
2November 1, 2012, the Board shall submit to the State Actuary,
3the Governor, and the General Assembly a proposed certification
4of the amount of the required State contribution to the System
5for the next fiscal year, along with all of the actuarial
6assumptions, calculations, and data upon which that proposed
7certification is based. On or before January 1 of each year,
8beginning January 1, 2013, the State Actuary shall issue a
9preliminary report concerning the proposed certification and
10identifying, if necessary, recommended changes in actuarial
11assumptions that the Board must consider before finalizing its
12certification of the required State contributions. On or before
13January 15, 2013 and each January 15 thereafter, the Board
14shall certify to the Governor and the General Assembly the
15amount of the required State contribution for the next fiscal
16year. The Board's certification must note, in a written
17response to the State Actuary, any deviations from the State
18Actuary's recommended changes, the reason or reasons for not
19following the State Actuary's recommended changes, and the
20fiscal impact of not following the State Actuary's recommended
21changes on the required State contribution.
22    (a-10) For purposes of subsection (c-5) of Section 20 of
23the Budget Stabilization Act, on or before November 1 of each
24year beginning November 1, 2019, the Board shall determine the
25amount of the State contribution to the System that would have
26been required for the next fiscal year if Section 1-161,

 

 

HB4055- 169 -LRB100 12851 RPS 26572 b

1subsection (a-2) of Section 15-155, and the changes made to
2Section 1-160 by this amendatory Act of the 100th General
3Assembly had not taken effect, using the best and most recent
4available data but based on the law in effect on May 31, 2019.
5The Board shall submit to the State Actuary, the Governor, and
6the General Assembly a proposed certification, along with the
7relevant law, actuarial assumptions, calculations, and data
8upon which that certification is based. On or before January 1,
92020 and every January 1 thereafter, the State Actuary shall
10issue a preliminary report concerning the proposed
11certification and identifying, if necessary, recommended
12changes in actuarial assumptions that the Board must consider
13before finalizing its certification. On or before January 15,
142020 and every January 1 thereafter, the Board shall certify to
15the Governor and the General Assembly the amount of the State
16contribution to the System that would have been required for
17the next fiscal year if Section 1-161, subsection (a-2) of
18Section 15-155, and the changes made to Section 1-160 by this
19amendatory Act of the 100th General Assembly had not taken
20effect, using the best and most recent available data but based
21on the law in effect on May 31, 2019. The Board's certification
22must note any deviations from the State Actuary's recommended
23changes, the reason or reasons for not following the State
24Actuary's recommended changes, and the impact of not following
25the State Actuary's recommended changes.
26    (a-15) As soon as practical after the effective date of

 

 

HB4055- 170 -LRB100 12851 RPS 26572 b

1this amendatory Act of the 100th General Assembly, the Board
2shall recalculate and recertify to the State Actuary, the
3Governor, and the General Assembly the amount of the State
4contribution to the System for State fiscal year 2018, taking
5into account the changes in required State contributions made
6by this amendatory Act of the 100th General Assembly. The State
7Actuary shall review the assumptions and valuations underlying
8the Board's revised certification and issue a preliminary
9report concerning the proposed recertification and
10identifying, if necessary, recommended changes in actuarial
11assumptions that the Board must consider before finalizing its
12certification of the required State contributions. The Board's
13final certification must note any deviations from the State
14Actuary's recommended changes, the reason or reasons for not
15following the State Actuary's recommended changes, and the
16fiscal impact of not following the State Actuary's recommended
17changes on the required State contribution.
18    (b) The Board shall certify to the State Comptroller or
19employer, as the case may be, from time to time, by its
20chairperson and secretary, with its seal attached, the amounts
21payable to the System from the various funds.
22    (c) Beginning in State fiscal year 1996, on or as soon as
23possible after the 15th day of each month the Board shall
24submit vouchers for payment of State contributions to the
25System, in a total monthly amount of one-twelfth of the
26required annual State contribution certified under subsection

 

 

HB4055- 171 -LRB100 12851 RPS 26572 b

1(a). From the effective date of this amendatory Act of the 93rd
2General Assembly through June 30, 2004, the Board shall not
3submit vouchers for the remainder of fiscal year 2004 in excess
4of the fiscal year 2004 certified contribution amount
5determined under this Section after taking into consideration
6the transfer to the System under subsection (b) of Section
76z-61 of the State Finance Act. These vouchers shall be paid by
8the State Comptroller and Treasurer by warrants drawn on the
9funds appropriated to the System for that fiscal year.
10    If in any month the amount remaining unexpended from all
11other appropriations to the System for the applicable fiscal
12year (including the appropriations to the System under Section
138.12 of the State Finance Act and Section 1 of the State
14Pension Funds Continuing Appropriation Act) is less than the
15amount lawfully vouchered under this Section, the difference
16shall be paid from the General Revenue Fund under the
17continuing appropriation authority provided in Section 1.1 of
18the State Pension Funds Continuing Appropriation Act.
19    (d) So long as the payments received are the full amount
20lawfully vouchered under this Section, payments received by the
21System under this Section shall be applied first toward the
22employer contribution to the self-managed plan established
23under Section 15-158.2. Payments shall be applied second toward
24the employer's portion of the normal costs of the System, as
25defined in subsection (f) of Section 15-155. The balance shall
26be applied toward the unfunded actuarial liabilities of the

 

 

HB4055- 172 -LRB100 12851 RPS 26572 b

1System.
2    (e) In the event that the System does not receive, as a
3result of legislative enactment or otherwise, payments
4sufficient to fully fund the employer contribution to the
5self-managed plan established under Section 15-158.2 and to
6fully fund that portion of the employer's portion of the normal
7costs of the System, as calculated in accordance with Section
815-155(a-1), then any payments received shall be applied
9proportionately to the optional retirement program established
10under Section 15-158.2 and to the employer's portion of the
11normal costs of the System, as calculated in accordance with
12Section 15-155(a-1).
13(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
 
14    (40 ILCS 5/15-185.5 new)
15    Sec. 15-185.5. Accelerated pension benefit payment.
16    (a) As used in this Section:
17    "Eligible person" means a person who:
18        (1) has terminated service;
19        (2) has accrued sufficient service credit to be
20    eligible to receive a retirement annuity under this
21    Article;
22        (3) has not received any retirement annuity under this
23    Article;
24        (4) does not have a QILDRO in effect against him or her
25    under this Article; and

 

 

HB4055- 173 -LRB100 12851 RPS 26572 b

1        (5) is not a participant in the self-managed plan under
2    Section 15-158.2.
3    "Pension benefit" means the benefits under this Article, or
4Article 1 as it relates to those benefits, including any
5anticipated annual increases, that an eligible person is
6entitled to upon attainment of the applicable retirement age.
7"Pension benefit" also includes applicable survivor's or
8disability benefits.
9    (b) Before January 1, 2018, the System shall calculate,
10using actuarial tables and other assumptions adopted by the
11Board, the net present value of pension benefits for each
12eligible person and shall offer each eligible person the
13opportunity to irrevocably elect to receive an amount
14determined by the System to be equal to 70% of the net present
15value of his or her pension benefits in lieu of receiving any
16pension benefit. The offer shall specify the dollar amount that
17the eligible person will receive if he or she so elects and
18shall expire when a subsequent offer is made to an eligible
19person. The System shall make a good faith effort to contact
20every eligible person to notify him or her of the election and
21of the amount of the accelerated pension benefit payment.
22    Beginning January 1, 2018 and until July 1, 2018, an
23eligible person may irrevocably elect to receive an accelerated
24pension benefit payment in the amount that the System offers
25under this subsection in lieu of receiving any pension benefit.
26A person who elects to receive an accelerated pension benefit

 

 

HB4055- 174 -LRB100 12851 RPS 26572 b

1payment under this Section may not elect to proceed under the
2Retirement Systems Reciprocal Act with respect to service under
3this Article.
4    (c) A person's credits and creditable service under this
5Article shall be terminated upon the person's receipt of an
6accelerated pension benefit payment under this Section, and no
7other benefit shall be paid under this Article based on those
8terminated credits and creditable service, including any
9retirement, survivor, or other benefit; except that to the
10extent that participation, benefits, or premiums under the
11State Employees Group Insurance Act of 1971 are based on the
12amount of service credit, the terminated service credit shall
13be used for that purpose.
14    (d) If a person who has received an accelerated pension
15benefit payment under this Section returns to active service
16under this Article, then:
17        (1) Any benefits under the System earned as a result of
18    that return to active service shall be based solely on the
19    person's credits and creditable service arising from the
20    return to active service.
21        (2) The accelerated pension benefit payment may not be
22    repaid to the System, and the terminated credits and
23    creditable service may not under any circumstances be
24    reinstated.
25    (e) As a condition of receiving an accelerated pension
26benefit payment, an eligible person must have another

 

 

HB4055- 175 -LRB100 12851 RPS 26572 b

1retirement plan or account qualified under the Internal Revenue
2Code of 1986, as amended, for the accelerated pension benefit
3payment to be rolled into. The accelerated pension benefit
4payment under this Section may be subject to withholding or
5payment of applicable taxes, but to the extent permitted by
6federal law, a person who receives an accelerated pension
7benefit payment under this Section must direct the System to
8pay all of that payment as a rollover into another retirement
9plan or account qualified under the Internal Revenue Code of
101986, as amended.
11    (f) Before January 1, 2019, the Board shall certify to the
12Illinois Finance Authority and the General Assembly the amount
13by which the total amount of accelerated pension benefit
14payments made under this Section exceed the amount appropriated
15to the System for the purpose of making those payments.
16    (g) The Board shall adopt any rules necessary to implement
17this Section.
18    (h) No provision of this Section shall be interpreted in a
19way that would cause the applicable System to cease to be a
20qualified plan under the Internal Revenue Code of 1986.
 
21    (40 ILCS 5/15-198)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 15-198. Application and expiration of new benefit
25increases.

 

 

HB4055- 176 -LRB100 12851 RPS 26572 b

1    (a) As used in this Section, "new benefit increase" means
2an increase in the amount of any benefit provided under this
3Article, or an expansion of the conditions of eligibility for
4any benefit under this Article, that results from an amendment
5to this Code that takes effect after the effective date of this
6amendatory Act of the 94th General Assembly. "New benefit
7increase", however, does not include any benefit increase
8resulting from the changes made to this Article by this
9amendatory Act of the 100th General Assembly.
10    (b) Notwithstanding any other provision of this Code or any
11subsequent amendment to this Code, every new benefit increase
12is subject to this Section and shall be deemed to be granted
13only in conformance with and contingent upon compliance with
14the provisions of this Section.
15    (c) The Public Act enacting a new benefit increase must
16identify and provide for payment to the System of additional
17funding at least sufficient to fund the resulting annual
18increase in cost to the System as it accrues.
19    Every new benefit increase is contingent upon the General
20Assembly providing the additional funding required under this
21subsection. The Commission on Government Forecasting and
22Accountability shall analyze whether adequate additional
23funding has been provided for the new benefit increase and
24shall report its analysis to the Public Pension Division of the
25Department of Insurance Financial and Professional Regulation.
26A new benefit increase created by a Public Act that does not

 

 

HB4055- 177 -LRB100 12851 RPS 26572 b

1include the additional funding required under this subsection
2is null and void. If the Public Pension Division determines
3that the additional funding provided for a new benefit increase
4under this subsection is or has become inadequate, it may so
5certify to the Governor and the State Comptroller and, in the
6absence of corrective action by the General Assembly, the new
7benefit increase shall expire at the end of the fiscal year in
8which the certification is made.
9    (d) Every new benefit increase shall expire 5 years after
10its effective date or on such earlier date as may be specified
11in the language enacting the new benefit increase or provided
12under subsection (c). This does not prevent the General
13Assembly from extending or re-creating a new benefit increase
14by law.
15    (e) Except as otherwise provided in the language creating
16the new benefit increase, a new benefit increase that expires
17under this Section continues to apply to persons who applied
18and qualified for the affected benefit while the new benefit
19increase was in effect and to the affected beneficiaries and
20alternate payees of such persons, but does not apply to any
21other person, including without limitation a person who
22continues in service after the expiration date and did not
23apply and qualify for the affected benefit while the new
24benefit increase was in effect.
25(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

HB4055- 178 -LRB100 12851 RPS 26572 b

1    (40 ILCS 5/15-200.1 new)
2    Sec. 15-200.1. Defined contribution plan.
3    (a) By July 1, 2018, the System shall prepare and implement
4a voluntary defined contribution plan for up to 5% of eligible
5Tier 1 employees. The System shall determine the 5% cap by the
6number of Tier 1 employees on the effective date of this
7Section. The defined contribution plan developed under this
8Section shall be a plan that aggregates employer and employee
9contributions in individual participant accounts which, after
10meeting any other requirements, are used for payouts after
11retirement in accordance with this Section and any other
12applicable laws.
13    As used in this Section, "defined benefit plan" means the
14retirement plan available under this Article to Tier 1
15employees who have not made the election authorized under this
16Section.
17        (1) Under the defined contribution plan, a Tier 1
18    employee of this System could elect to cease accruing
19    benefits in the defined benefit plan under this Article and
20    begin accruing benefits for future service in the defined
21    contribution plan. Service credit under the defined
22    contribution plan may be used for determining retirement
23    eligibility under the defined benefit plan. A Tier 1
24    employee who elects to cease accruing benefits in his or
25    her defined benefit plan shall be prohibited from
26    purchasing service credit on or after the date of his or

 

 

HB4055- 179 -LRB100 12851 RPS 26572 b

1    her election. A Tier 1 employee making the irrevocable
2    election provided under this Section shall not receive
3    interest accruals to his or her Rule 2 benefit on or after
4    the date of his or her election.
5        (2) Participants in the defined contribution plan
6    shall pay employee contributions at the same rate as other
7    participants under this Article as determined by the
8    System.
9        (3) State contributions shall be paid into the accounts
10    of all participants in the defined contribution plan at a
11    uniform rate, expressed as a percentage of earnings and
12    determined for each year. This rate shall be no higher than
13    the employer's normal cost for Tier 1 employees in the
14    defined benefit plan for that year, as determined by the
15    System and expressed as a percentage of earnings, and shall
16    be no lower than 3% of earnings. The State shall adjust
17    this rate annually.
18        (4) The defined contribution plan shall require 5 years
19    of participation in the defined contribution plan before
20    vesting in State contributions. If the participant fails to
21    vest in them, the State contributions, and the earnings
22    thereon, shall be forfeited.
23        (5) The defined contribution plan may provide for
24    participants in the plan to be eligible for the defined
25    disability benefits available to other participants under
26    this Article. If it does, the System shall reduce the

 

 

HB4055- 180 -LRB100 12851 RPS 26572 b

1    employee contributions credited to the member's defined
2    contribution plan account by an amount determined by the
3    System to cover the cost of offering such benefits.
4        (6) The defined contribution plan shall provide a
5    variety of options for investments. These options shall
6    include investments handled by the System as well as
7    private sector investment options.
8        (7) The defined contribution plan shall provide a
9    variety of options for payouts to retirees and their
10    survivors.
11        (8) To the extent authorized under federal law and as
12    authorized by the System, the plan shall allow former
13    participants in the plan to transfer or roll over employee
14    and vested State contributions, and the earnings thereon,
15    into other qualified retirement plans.
16        (9) The System shall reduce the employee contributions
17    credited to the member's defined contribution plan account
18    by an amount determined by the System to cover the cost of
19    offering these benefits and any applicable administrative
20    fees.
21    (b) Only persons who are Tier 1 employees of the System on
22the effective date of this Section are eligible to participate
23in the defined contribution plan. Participation in the defined
24contribution plan shall be limited to the first 5% of eligible
25persons who elect to participate. The election to participate
26in the defined contribution plan is voluntary and irrevocable.

 

 

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1    (c) An eligible Tier 1 employee may irrevocably elect to
2participate in the defined contribution plan by filing with the
3System a written application to participate that is received by
4the System prior to its determination that 5% of eligible
5persons have elected to participate in the defined contribution
6plan.
7    When the System first determines that 5% of eligible
8persons have elected to participate in the defined contribution
9plan, the System shall provide notice to previously eligible
10employees that the plan is no longer available and shall cease
11accepting applications to participate.
12    (d) The System shall make a good faith effort to contact
13each Tier 1 employee who is eligible to participate in the
14defined contribution plan. The System shall mail information
15describing the option to join the defined contribution plan to
16each of these employees to his or her last known address on
17file with the System. If the employee is not responsive to
18other means of contact, it is sufficient for the System to
19publish the details of the option on its website.
20    Upon request for further information describing the
21option, the System shall provide employees with information
22from the System before exercising the option to join the plan,
23including information on the impact to their vested benefits or
24non-vested service. The individual consultation shall include
25projections of the member's defined benefits at retirement or
26earlier termination of service and the value of the member's

 

 

HB4055- 182 -LRB100 12851 RPS 26572 b

1account at retirement or earlier termination of service. The
2System shall not provide advice or counseling with respect to
3whether the employee should exercise the option. The System
4shall inform Tier 1 employees who are eligible to participate
5in the defined contribution plan that they may also wish to
6obtain information and counsel relating to their option from
7any other available source, including but not limited to labor
8organizations, private counsel, and financial advisors.
9    (e) In no event shall the System, its staff, its authorized
10representatives, or the Board be liable for any information
11given to an employee under this Section. The System may
12coordinate with the Illinois Department of Central Management
13Services and other retirement systems administering a defined
14contribution plan in accordance with this amendatory Act of the
15100th General Assembly to provide information concerning the
16impact of the option set forth in this Section.
17    (f) Notwithstanding any other provision of this Section, no
18person shall begin participating in the defined contribution
19plan until it has attained qualified plan status and received
20all necessary approvals from the U.S. Internal Revenue Service.
21    (g) The System shall report on its progress under this
22Section, including the available details of the defined
23contribution plan and the System's plans for informing eligible
24Tier 1 employees about the plan, to the Governor and the
25General Assembly on or before January 15, 2018.
26    (h) If a Tier 1 employee has not made an election under

 

 

HB4055- 183 -LRB100 12851 RPS 26572 b

1Section 15-134.5 of this Code, then the plan prescribed under
2this Section shall not apply to that Tier 1 employee and that
3Tier 1 employee shall remain eligible to make the election
4prescribed under Section 15-134.5.
5    (i) The intent of this amendatory Act of the 100th General
6Assembly is to ensure that the State's normal cost of
7participation in the defined contribution plan is similar, and
8if possible equal, to the State's normal cost of participation
9in the defined benefit plan, unless a lower State's normal cost
10is necessary to ensure cost neutrality.
 
11    (40 ILCS 5/15-201.1 new)
12    Sec. 15-201.1. Defined contribution plan; termination. If
13the defined contribution plan under Section 15-200.1 is
14terminated or becomes inoperative pursuant to law, then each
15participant in the plan shall automatically be deemed to have
16been a contributing Tier 1 employee participating in the
17System's defined benefit plan during the time in which he or
18she participated in the defined contribution plan, and for that
19purpose the System shall be entitled to recover the amounts in
20the participant's defined contribution accounts.
 
21    (40 ILCS 5/16-107.1 new)
22    Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
23teacher under this Article who first became a member or
24participant before January 1, 2011 under any reciprocal

 

 

HB4055- 184 -LRB100 12851 RPS 26572 b

1retirement system or pension fund established under this Code
2other than a retirement system or pension fund established
3under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
4    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 16-158. Contributions by State and other employing
8units.
9    (a) The State shall make contributions to the System by
10means of appropriations from the Common School Fund and other
11State funds of amounts which, together with other employer
12contributions, employee contributions, investment income, and
13other income, will be sufficient to meet the cost of
14maintaining and administering the System on a 90% funded basis
15in accordance with actuarial recommendations.
16    The Board shall determine the amount of State contributions
17required for each fiscal year on the basis of the actuarial
18tables and other assumptions adopted by the Board and the
19recommendations of the actuary, using the formula in subsection
20(b-3).
21    (a-1) Annually, on or before November 15 until November 15,
222011, the Board shall certify to the Governor the amount of the
23required State contribution for the coming fiscal year. The
24certification under this subsection (a-1) shall include a copy
25of the actuarial recommendations upon which it is based and

 

 

HB4055- 185 -LRB100 12851 RPS 26572 b

1shall specifically identify the System's projected State
2normal cost for that fiscal year.
3    On or before May 1, 2004, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2005, taking
6into account the amounts appropriated to and received by the
7System under subsection (d) of Section 7.2 of the General
8Obligation Bond Act.
9    On or before July 1, 2005, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2006, taking
12into account the changes in required State contributions made
13by this amendatory Act of the 94th General Assembly.
14    On or before April 1, 2011, the Board shall recalculate and
15recertify to the Governor the amount of the required State
16contribution to the System for State fiscal year 2011, applying
17the changes made by Public Act 96-889 to the System's assets
18and liabilities as of June 30, 2009 as though Public Act 96-889
19was approved on that date.
20    (a-5) On or before November 1 of each year, beginning
21November 1, 2012, the Board shall submit to the State Actuary,
22the Governor, and the General Assembly a proposed certification
23of the amount of the required State contribution to the System
24for the next fiscal year, along with all of the actuarial
25assumptions, calculations, and data upon which that proposed
26certification is based. On or before January 1 of each year,

 

 

HB4055- 186 -LRB100 12851 RPS 26572 b

1beginning January 1, 2013, the State Actuary shall issue a
2preliminary report concerning the proposed certification and
3identifying, if necessary, recommended changes in actuarial
4assumptions that the Board must consider before finalizing its
5certification of the required State contributions. On or before
6January 15, 2013 and each January 15 thereafter, the Board
7shall certify to the Governor and the General Assembly the
8amount of the required State contribution for the next fiscal
9year. The Board's certification must note any deviations from
10the State Actuary's recommended changes, the reason or reasons
11for not following the State Actuary's recommended changes, and
12the fiscal impact of not following the State Actuary's
13recommended changes on the required State contribution.
14    (a-10) For purposes of subsection (c-5) of Section 20 of
15the Budget Stabilization Act, on or before November 1 of each
16year beginning November 1, 2019, the Board shall determine the
17amount of the State contribution to the System that would have
18been required for the next fiscal year if Section 1-161,
19subsection (b-4) of Section 16-158, and the changes made to
20Section 1-160 by this amendatory Act of the 100th General
21Assembly had not taken effect, using the best and most recent
22available data but based on the law in effect on May 31, 2019.
23The Board shall submit to the State Actuary, the Governor, and
24the General Assembly a proposed certification, along with the
25relevant law, actuarial assumptions, calculations, and data
26upon which that certification is based. On or before January 1,

 

 

HB4055- 187 -LRB100 12851 RPS 26572 b

12020 and every January 1 thereafter, the State Actuary shall
2issue a preliminary report concerning the proposed
3certification and identifying, if necessary, recommended
4changes in actuarial assumptions that the Board must consider
5before finalizing its certification. On or before January 15,
62020 and every January 1 thereafter, the Board shall certify to
7the Governor and the General Assembly the amount of the State
8contribution to the System that would have been required for
9the next fiscal year if if Section 1-161, subsection (b-4) of
10Section 16-158, and the changes made to Section 1-160 by this
11amendatory Act of the 100th General Assembly had not taken
12effect, using the best and most recent available data but based
13on the law in effect on May 31, 2019. The Board's certification
14must note any deviations from the State Actuary's recommended
15changes, the reason or reasons for not following the State
16Actuary's recommended changes, and the impact of not following
17the State Actuary's recommended changes.
18    (a-15) As soon as practical after the effective date of
19this amendatory Act of the 100th General Assembly, the Board
20shall recalculate and recertify to the State Actuary, the
21Governor, and the General Assembly the amount of the State
22contribution to the System for State fiscal year 2018, taking
23into account the changes in required State contributions made
24by this amendatory Act of the 100th General Assembly. The State
25Actuary shall review the assumptions and valuations underlying
26the Board's revised certification and issue a preliminary

 

 

HB4055- 188 -LRB100 12851 RPS 26572 b

1report concerning the proposed recertification and
2identifying, if necessary, recommended changes in actuarial
3assumptions that the Board must consider before finalizing its
4certification of the required State contributions. The Board's
5final certification must note any deviations from the State
6Actuary's recommended changes, the reason or reasons for not
7following the State Actuary's recommended changes, and the
8fiscal impact of not following the State Actuary's recommended
9changes on the required State contribution.
10    (b) Through State fiscal year 1995, the State contributions
11shall be paid to the System in accordance with Section 18-7 of
12the School Code.
13    (b-1) Beginning in State fiscal year 1996, on the 15th day
14of each month, or as soon thereafter as may be practicable, the
15Board shall submit vouchers for payment of State contributions
16to the System, in a total monthly amount of one-twelfth of the
17required annual State contribution certified under subsection
18(a-1). From the effective date of this amendatory Act of the
1993rd General Assembly through June 30, 2004, the Board shall
20not submit vouchers for the remainder of fiscal year 2004 in
21excess of the fiscal year 2004 certified contribution amount
22determined under this Section after taking into consideration
23the transfer to the System under subsection (a) of Section
246z-61 of the State Finance Act. These vouchers shall be paid by
25the State Comptroller and Treasurer by warrants drawn on the
26funds appropriated to the System for that fiscal year.

 

 

HB4055- 189 -LRB100 12851 RPS 26572 b

1    If in any month the amount remaining unexpended from all
2other appropriations to the System for the applicable fiscal
3year (including the appropriations to the System under Section
48.12 of the State Finance Act and Section 1 of the State
5Pension Funds Continuing Appropriation Act) is less than the
6amount lawfully vouchered under this subsection, the
7difference shall be paid from the Common School Fund under the
8continuing appropriation authority provided in Section 1.1 of
9the State Pension Funds Continuing Appropriation Act.
10    (b-2) Allocations from the Common School Fund apportioned
11to school districts not coming under this System shall not be
12diminished or affected by the provisions of this Article.
13    (b-3) For State fiscal years 2018 through 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 90% of
17the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of total payroll, including payroll that is
21not deemed pensionable, but excluding payroll attributable to
22participants in the defined contribution plan under Section
2316-205.1, over the years remaining to and including fiscal year
242045 and shall be determined under the projected unit credit
25actuarial cost method.
26    Beginning in State fiscal year 2018, any increase or

 

 

HB4055- 190 -LRB100 12851 RPS 26572 b

1decrease in State contribution over the prior fiscal year due
2exclusively to changes in actuarial or investment assumptions
3adopted by the Board shall be included in the State
4contribution to the System, as a percentage of the applicable
5employee payroll, and shall be increased in equal annual
6increments so that by the State fiscal year occurring 5 years
7after the adoption of the actuarial or investment assumptions,
8the State is contributing at the rate otherwise required under
9this Section.
10    For State fiscal years 2012 through 2017 2045, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 90% of
14the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of payroll over the years remaining to and
18including fiscal year 2045 and shall be determined under the
19projected unit credit actuarial cost method.
20    For State fiscal years 1996 through 2005, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23so that by State fiscal year 2011, the State is contributing at
24the rate required under this Section; except that in the
25following specified State fiscal years, the State contribution
26to the System shall not be less than the following indicated

 

 

HB4055- 191 -LRB100 12851 RPS 26572 b

1percentages of the applicable employee payroll, even if the
2indicated percentage will produce a State contribution in
3excess of the amount otherwise required under this subsection
4and subsection (a), and notwithstanding any contrary
5certification made under subsection (a-1) before the effective
6date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
7in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
82003; and 13.56% in FY 2004.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2006 is
11$534,627,700.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2007 is
14$738,014,500.
15    For each of State fiscal years 2008 through 2009, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18from the required State contribution for State fiscal year
192007, so that by State fiscal year 2011, the State is
20contributing at the rate otherwise required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2010 is
23$2,089,268,000 and shall be made from the proceeds of bonds
24sold in fiscal year 2010 pursuant to Section 7.2 of the General
25Obligation Bond Act, less (i) the pro rata share of bond sale
26expenses determined by the System's share of total bond

 

 

HB4055- 192 -LRB100 12851 RPS 26572 b

1proceeds, (ii) any amounts received from the Common School Fund
2in fiscal year 2010, and (iii) any reduction in bond proceeds
3due to the issuance of discounted bonds, if applicable.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2011 is
6the amount recertified by the System on or before April 1, 2011
7pursuant to subsection (a-1) of this Section and shall be made
8from the proceeds of bonds sold in fiscal year 2011 pursuant to
9Section 7.2 of the General Obligation Bond Act, less (i) the
10pro rata share of bond sale expenses determined by the System's
11share of total bond proceeds, (ii) any amounts received from
12the Common School Fund in fiscal year 2011, and (iii) any
13reduction in bond proceeds due to the issuance of discounted
14bonds, if applicable. This amount shall include, in addition to
15the amount certified by the System, an amount necessary to meet
16employer contributions required by the State as an employer
17under paragraph (e) of this Section, which may also be used by
18the System for contributions required by paragraph (a) of
19Section 16-127.
20    Beginning in State fiscal year 2046, the minimum State
21contribution for each fiscal year shall be the amount needed to
22maintain the total assets of the System at 90% of the total
23actuarial liabilities of the System.
24    Amounts received by the System pursuant to Section 25 of
25the Budget Stabilization Act or Section 8.12 of the State
26Finance Act in any fiscal year do not reduce and do not

 

 

HB4055- 193 -LRB100 12851 RPS 26572 b

1constitute payment of any portion of the minimum State
2contribution required under this Article in that fiscal year.
3Such amounts shall not reduce, and shall not be included in the
4calculation of, the required State contributions under this
5Article in any future year until the System has reached a
6funding ratio of at least 90%. A reference in this Article to
7the "required State contribution" or any substantially similar
8term does not include or apply to any amounts payable to the
9System under Section 25 of the Budget Stabilization Act.
10    Notwithstanding any other provision of this Section, the
11required State contribution for State fiscal year 2005 and for
12fiscal year 2008 and each fiscal year thereafter, as calculated
13under this Section and certified under subsection (a-1), shall
14not exceed an amount equal to (i) the amount of the required
15State contribution that would have been calculated under this
16Section for that fiscal year if the System had not received any
17payments under subsection (d) of Section 7.2 of the General
18Obligation Bond Act, minus (ii) the portion of the State's
19total debt service payments for that fiscal year on the bonds
20issued in fiscal year 2003 for the purposes of that Section
217.2, as determined and certified by the Comptroller, that is
22the same as the System's portion of the total moneys
23distributed under subsection (d) of Section 7.2 of the General
24Obligation Bond Act. In determining this maximum for State
25fiscal years 2008 through 2010, however, the amount referred to
26in item (i) shall be increased, as a percentage of the

 

 

HB4055- 194 -LRB100 12851 RPS 26572 b

1applicable employee payroll, in equal increments calculated
2from the sum of the required State contribution for State
3fiscal year 2007 plus the applicable portion of the State's
4total debt service payments for fiscal year 2007 on the bonds
5issued in fiscal year 2003 for the purposes of Section 7.2 of
6the General Obligation Bond Act, so that, by State fiscal year
72011, the State is contributing at the rate otherwise required
8under this Section.
9    (b-4) For employees first hired on or after 6 months after
10the effective date of this amendatory Act of the 100th General
11Assembly who have elected the benefits under Section 1-161 of
12this Code, the employer shall annually contribute an amount,
13expressed as a percentage of payroll, equal to the defined
14benefit normal cost of the defined benefit plan, less the
15employee contribution, plus 2%. On an annual basis, the System
16shall certify to each employer the amount of unfunded liability
17accrued in the employer's account to be paid by the employer so
18that the System is 90% funded by the end of State fiscal year
192045. The contributions shall be divided equally over a
2012-month period and made monthly. The employer shall also
21contribute an amount equal to the employer defined
22contribution, as set on an individual employee basis, under
23paragraph (2) of subsection (k) of Section 1-161 during each
24pay period. The System shall have the authority to adopt rules
25regarding implementation of employer contributions.
26    (c) Payment of the required State contributions and of all

 

 

HB4055- 195 -LRB100 12851 RPS 26572 b

1pensions, retirement annuities, death benefits, refunds, and
2other benefits granted under or assumed by this System, and all
3expenses in connection with the administration and operation
4thereof, are obligations of the State.
5    If members are paid from special trust or federal funds
6which are administered by the employing unit, whether school
7district or other unit, the employing unit shall pay to the
8System from such funds the full accruing retirement costs based
9upon that service, which, beginning July 1, 2014, shall be at a
10rate, expressed as a percentage of salary, equal to the total
11minimum contribution to the System to be made by the State for
12that fiscal year, including both normal cost and unfunded
13liability components, expressed as a percentage of payroll, as
14determined by the System under subsection (b-3) of this
15Section. Employer contributions, based on salary paid to
16members from federal funds, may be forwarded by the
17distributing agency of the State of Illinois to the System
18prior to allocation, in an amount determined in accordance with
19guidelines established by such agency and the System. Any
20contribution for fiscal year 2015 collected as a result of the
21change made by this amendatory Act of the 98th General Assembly
22shall be considered a State contribution under subsection (b-3)
23of this Section.
24    (d) Effective July 1, 1986, any employer of a teacher as
25defined in paragraph (8) of Section 16-106 shall pay the
26employer's normal cost of benefits based upon the teacher's

 

 

HB4055- 196 -LRB100 12851 RPS 26572 b

1service, in addition to employee contributions, as determined
2by the System. Such employer contributions shall be forwarded
3monthly in accordance with guidelines established by the
4System.
5    However, with respect to benefits granted under Section
616-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
7of Section 16-106, the employer's contribution shall be 12%
8(rather than 20%) of the member's highest annual salary rate
9for each year of creditable service granted, and the employer
10shall also pay the required employee contribution on behalf of
11the teacher. For the purposes of Sections 16-133.4 and
1216-133.5, a teacher as defined in paragraph (8) of Section
1316-106 who is serving in that capacity while on leave of
14absence from another employer under this Article shall not be
15considered an employee of the employer from which the teacher
16is on leave.
17    (e) Beginning July 1, 1998, every employer of a teacher
18shall pay to the System an employer contribution computed as
19follows:
20        (1) Beginning July 1, 1998 through June 30, 1999, the
21    employer contribution shall be equal to 0.3% of each
22    teacher's salary.
23        (2) Beginning July 1, 1999 and thereafter, the employer
24    contribution shall be equal to 0.58% of each teacher's
25    salary.
26The school district or other employing unit may pay these

 

 

HB4055- 197 -LRB100 12851 RPS 26572 b

1employer contributions out of any source of funding available
2for that purpose and shall forward the contributions to the
3System on the schedule established for the payment of member
4contributions.
5    These employer contributions are intended to offset a
6portion of the cost to the System of the increases in
7retirement benefits resulting from this amendatory Act of 1998.
8    Each employer of teachers is entitled to a credit against
9the contributions required under this subsection (e) with
10respect to salaries paid to teachers for the period January 1,
112002 through June 30, 2003, equal to the amount paid by that
12employer under subsection (a-5) of Section 6.6 of the State
13Employees Group Insurance Act of 1971 with respect to salaries
14paid to teachers for that period.
15    The additional 1% employee contribution required under
16Section 16-152 by this amendatory Act of 1998 is the
17responsibility of the teacher and not the teacher's employer,
18unless the employer agrees, through collective bargaining or
19otherwise, to make the contribution on behalf of the teacher.
20    If an employer is required by a contract in effect on May
211, 1998 between the employer and an employee organization to
22pay, on behalf of all its full-time employees covered by this
23Article, all mandatory employee contributions required under
24this Article, then the employer shall be excused from paying
25the employer contribution required under this subsection (e)
26for the balance of the term of that contract. The employer and

 

 

HB4055- 198 -LRB100 12851 RPS 26572 b

1the employee organization shall jointly certify to the System
2the existence of the contractual requirement, in such form as
3the System may prescribe. This exclusion shall cease upon the
4termination, extension, or renewal of the contract at any time
5after May 1, 1998.
6    (f) For school years beginning on or after June 1, 2005 and
7before July 1, 2018, if If the amount of a teacher's salary for
8any school year used to determine final average salary exceeds
9the member's annual full-time salary rate with the same
10employer for the previous school year by more than 6%, the
11teacher's employer shall pay to the System, in addition to all
12other payments required under this Section and in accordance
13with guidelines established by the System, the present value of
14the increase in benefits resulting from the portion of the
15increase in salary that is in excess of 6%. This present value
16shall be computed by the System on the basis of the actuarial
17assumptions and tables used in the most recent actuarial
18valuation of the System that is available at the time of the
19computation. If a teacher's salary for the 2005-2006 school
20year is used to determine final average salary under this
21subsection (f), then the changes made to this subsection (f) by
22Public Act 94-1057 shall apply in calculating whether the
23increase in his or her salary is in excess of 6%. For the
24purposes of this Section, change in employment under Section
2510-21.12 of the School Code on or after June 1, 2005 shall
26constitute a change in employer. The System may require the

 

 

HB4055- 199 -LRB100 12851 RPS 26572 b

1employer to provide any pertinent information or
2documentation. The changes made to this subsection (f) by this
3amendatory Act of the 94th General Assembly apply without
4regard to whether the teacher was in service on or after its
5effective date.
6    Whenever it determines that a payment is or may be required
7under this subsection, the System shall calculate the amount of
8the payment and bill the employer for that amount. The bill
9shall specify the calculations used to determine the amount
10due. If the employer disputes the amount of the bill, it may,
11within 30 days after receipt of the bill, apply to the System
12in writing for a recalculation. The application must specify in
13detail the grounds of the dispute and, if the employer asserts
14that the calculation is subject to subsection (g) or (h) of
15this Section, must include an affidavit setting forth and
16attesting to all facts within the employer's knowledge that are
17pertinent to the applicability of that subsection. Upon
18receiving a timely application for recalculation, the System
19shall review the application and, if appropriate, recalculate
20the amount due.
21    The employer contributions required under this subsection
22(f) may be paid in the form of a lump sum within 90 days after
23receipt of the bill. If the employer contributions are not paid
24within 90 days after receipt of the bill, then interest will be
25charged at a rate equal to the System's annual actuarially
26assumed rate of return on investment compounded annually from

 

 

HB4055- 200 -LRB100 12851 RPS 26572 b

1the 91st day after receipt of the bill. Payments must be
2concluded within 3 years after the employer's receipt of the
3bill.
4    (f-1) Beginning in fiscal year 2019, if a contract or
5collective bargaining agreement entered into, amended, or
6renewed on or after the effective date of this amendatory Act
7of the 100th General Assembly provides for salaries to exceed
8the salaries provided under the preceding contract or
9collective bargaining agreement, then the employer shall pay to
10the System, in addition to all other payments required under
11this Section and in accordance with guidelines established by
12the System, the current value of the projected amount of the
13increase in benefits, as determined by the System and
14reflecting whether the teachers covered under the contract or
15collective bargaining agreement are Tier 1 members or Tier 2
16members, resulting from the portion of the salaries that exceed
17the amount of the salaries provided under the preceding
18contract or collective bargaining agreement. The System may
19require the employer to provide any pertinent information or
20documentation.
21    Whenever it determines that a payment is or may be required
22under this subsection (f-1), the System shall calculate the
23amount of the payment and bill the employer for that amount.
24The bill shall specify the calculations used to determine the
25amount due. If the employer disputes the amount of the bill, it
26may, within 30 days after receipt of the bill, apply to the

 

 

HB4055- 201 -LRB100 12851 RPS 26572 b

1System in writing for a recalculation. The application must
2specify in detail the grounds of the dispute. Upon receiving a
3timely application for recalculation, the System shall review
4the application and, if appropriate, recalculate the amount
5due.
6    The employer contributions required under this subsection
7(f-1) may be paid in the form of a lump sum within 90 days after
8receipt of the bill. If the employer contributions are not paid
9within 90 days after receipt of the bill, then interest shall
10be charged at a rate equal to the System's annual actuarially
11assumed rate of return on investment compounded annually from
12the 91st day after receipt of the bill. Payments must be
13concluded within 3 years after the employer's receipt of the
14bill.
15    (g) This subsection (g) applies only to payments made or
16salary increases given on or after June 1, 2005 but before July
171, 2011. The changes made by Public Act 94-1057 shall not
18require the System to refund any payments received before July
1931, 2006 (the effective date of Public Act 94-1057).
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases paid to teachers
22under contracts or collective bargaining agreements entered
23into, amended, or renewed before June 1, 2005.
24    When assessing payment for any amount due under subsection
25(f), the System shall exclude salary increases paid to a
26teacher at a time when the teacher is 10 or more years from

 

 

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1retirement eligibility under Section 16-132 or 16-133.2.
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases resulting from
4overload work, including summer school, when the school
5district has certified to the System, and the System has
6approved the certification, that (i) the overload work is for
7the sole purpose of classroom instruction in excess of the
8standard number of classes for a full-time teacher in a school
9district during a school year and (ii) the salary increases are
10equal to or less than the rate of pay for classroom instruction
11computed on the teacher's current salary and work schedule.
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude a salary increase resulting from
14a promotion (i) for which the employee is required to hold a
15certificate or supervisory endorsement issued by the State
16Teacher Certification Board that is a different certification
17or supervisory endorsement than is required for the teacher's
18previous position and (ii) to a position that has existed and
19been filled by a member for no less than one complete academic
20year and the salary increase from the promotion is an increase
21that results in an amount no greater than the lesser of the
22average salary paid for other similar positions in the district
23requiring the same certification or the amount stipulated in
24the collective bargaining agreement for a similar position
25requiring the same certification.
26    When assessing payment for any amount due under subsection

 

 

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1(f), the System shall exclude any payment to the teacher from
2the State of Illinois or the State Board of Education over
3which the employer does not have discretion, notwithstanding
4that the payment is included in the computation of final
5average salary.
6    (h) When assessing payment for any amount due under
7subsection (f), the System shall exclude any salary increase
8described in subsection (g) of this Section given on or after
9July 1, 2011 but before July 1, 2014 under a contract or
10collective bargaining agreement entered into, amended, or
11renewed on or after June 1, 2005 but before July 1, 2011.
12Notwithstanding any other provision of this Section, any
13payments made or salary increases given after June 30, 2014
14shall be used in assessing payment for any amount due under
15subsection (f) of this Section.
16    (i) The System shall prepare a report and file copies of
17the report with the Governor and the General Assembly by
18January 1, 2007 that contains all of the following information:
19        (1) The number of recalculations required by the
20    changes made to this Section by Public Act 94-1057 for each
21    employer.
22        (2) The dollar amount by which each employer's
23    contribution to the System was changed due to
24    recalculations required by Public Act 94-1057.
25        (3) The total amount the System received from each
26    employer as a result of the changes made to this Section by

 

 

HB4055- 204 -LRB100 12851 RPS 26572 b

1    Public Act 94-4.
2        (4) The increase in the required State contribution
3    resulting from the changes made to this Section by Public
4    Act 94-1057.
5    (j) For purposes of determining the required State
6contribution to the System, the value of the System's assets
7shall be equal to the actuarial value of the System's assets,
8which shall be calculated as follows:
9    As of June 30, 2008, the actuarial value of the System's
10assets shall be equal to the market value of the assets as of
11that date. In determining the actuarial value of the System's
12assets for fiscal years after June 30, 2008, any actuarial
13gains or losses from investment return incurred in a fiscal
14year shall be recognized in equal annual amounts over the
155-year period following that fiscal year.
16    (k) For purposes of determining the required State
17contribution to the system for a particular year, the actuarial
18value of assets shall be assumed to earn a rate of return equal
19to the system's actuarially assumed rate of return.
20(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
226-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
 
23    (40 ILCS 5/16-190.5 new)
24    Sec. 16-190.5. Accelerated pension benefit payment.
25    (a) As used in this Section:

 

 

HB4055- 205 -LRB100 12851 RPS 26572 b

1    "Eligible person" means a person who:
2        (1) has terminated service;
3        (2) has accrued sufficient service credit to be
4    eligible to receive a retirement annuity under this
5    Article;
6        (3) has not received any retirement annuity under this
7    Article; and
8        (4) does not have a QILDRO in effect against him or her
9    under this Article.
10    "Pension benefit" means the benefits under this Article, or
11Article 1 as it relates to those benefits, including any
12anticipated annual increases, that an eligible person is
13entitled to upon attainment of the applicable retirement age.
14"Pension benefit" also includes applicable survivor's or
15disability benefits.
16    (b) Before January 1, 2018, the System shall calculate,
17using actuarial tables and other assumptions adopted by the
18Board, the net present value of pension benefits for each
19eligible person and shall offer each eligible person the
20opportunity to irrevocably elect to receive an amount
21determined by the System to be equal to 70% of the net present
22value of his or her pension benefits in lieu of receiving any
23pension benefit. The offer shall specify the dollar amount that
24the eligible person will receive if he or she so elects and
25shall expire when a subsequent offer is made to an eligible
26person. The System shall make a good faith effort to contact

 

 

HB4055- 206 -LRB100 12851 RPS 26572 b

1every eligible person to notify him or her of the election and
2of the amount of the accelerated pension benefit payment.
3    Beginning January 1, 2018 and until July 1, 2018, an
4eligible person may irrevocably elect to receive an accelerated
5pension benefit payment in the amount that the System offers
6under this subsection in lieu of receiving any pension benefit.
7A person who elects to receive an accelerated pension benefit
8payment under this Section may not elect to proceed under the
9Retirement Systems Reciprocal Act with respect to service under
10this Article.
11    (c) A person's credits and creditable service under this
12Article shall be terminated upon the person's receipt of an
13accelerated pension benefit payment under this Section, and no
14other benefit shall be paid under this Article based on those
15terminated credits and creditable service, including any
16retirement, survivor, or other benefit; except that to the
17extent that participation, benefits, or premiums under the
18State Employees Group Insurance Act of 1971 are based on the
19amount of service credit, the terminated service credit shall
20be used for that purpose.
21    (d) If a person who has received an accelerated pension
22benefit payment under this Section returns to active service
23under this Article, then:
24        (1) Any benefits under the System earned as a result of
25    that return to active service shall be based solely on the
26    person's credits and creditable service arising from the

 

 

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1    return to active service.
2        (2) The accelerated pension benefit payment may not be
3    repaid to the System, and the terminated credits and
4    creditable service may not under any circumstances be
5    reinstated.
6    (e) As a condition of receiving an accelerated pension
7benefit payment, an eligible person must have another
8retirement plan or account qualified under the Internal Revenue
9Code of 1986, as amended, for the accelerated pension benefit
10payment to be rolled into. The accelerated pension benefit
11payment under this Section may be subject to withholding or
12payment of applicable taxes, but to the extent permitted by
13federal law, a person who receives an accelerated pension
14benefit payment under this Section must direct the System to
15pay all of that payment as a rollover into another retirement
16plan or account qualified under the Internal Revenue Code of
171986, as amended.
18    (f) Before January 1, 2019, the Board shall certify to the
19Illinois Finance Authority and the General Assembly the amount
20by which the total amount of accelerated pension benefit
21payments made under this Section exceed the amount appropriated
22to the System for the purpose of making those payments.
23    (g) The Board shall adopt any rules necessary to implement
24this Section.
25    (h) No provision of this Section shall be interpreted in a
26way that would cause the applicable System to cease to be a

 

 

HB4055- 208 -LRB100 12851 RPS 26572 b

1qualified plan under the Internal Revenue Code of 1986.
 
2    (40 ILCS 5/16-203)
3    (Text of Section WITHOUT the changes made by P.A. 98-599,
4which has been held unconstitutional)
5    Sec. 16-203. Application and expiration of new benefit
6increases.
7    (a) As used in this Section, "new benefit increase" means
8an increase in the amount of any benefit provided under this
9Article, or an expansion of the conditions of eligibility for
10any benefit under this Article, that results from an amendment
11to this Code that takes effect after June 1, 2005 (the
12effective date of Public Act 94-4). "New benefit increase",
13however, does not include any benefit increase resulting from
14the changes made to this Article by Public Act 95-910 or this
15amendatory Act of the 100th General Assembly this amendatory
16Act of the 95th General Assembly.
17    (b) Notwithstanding any other provision of this Code or any
18subsequent amendment to this Code, every new benefit increase
19is subject to this Section and shall be deemed to be granted
20only in conformance with and contingent upon compliance with
21the provisions of this Section.
22    (c) The Public Act enacting a new benefit increase must
23identify and provide for payment to the System of additional
24funding at least sufficient to fund the resulting annual
25increase in cost to the System as it accrues.

 

 

HB4055- 209 -LRB100 12851 RPS 26572 b

1    Every new benefit increase is contingent upon the General
2Assembly providing the additional funding required under this
3subsection. The Commission on Government Forecasting and
4Accountability shall analyze whether adequate additional
5funding has been provided for the new benefit increase and
6shall report its analysis to the Public Pension Division of the
7Department of Insurance Financial and Professional Regulation.
8A new benefit increase created by a Public Act that does not
9include the additional funding required under this subsection
10is null and void. If the Public Pension Division determines
11that the additional funding provided for a new benefit increase
12under this subsection is or has become inadequate, it may so
13certify to the Governor and the State Comptroller and, in the
14absence of corrective action by the General Assembly, the new
15benefit increase shall expire at the end of the fiscal year in
16which the certification is made.
17    (d) Every new benefit increase shall expire 5 years after
18its effective date or on such earlier date as may be specified
19in the language enacting the new benefit increase or provided
20under subsection (c). This does not prevent the General
21Assembly from extending or re-creating a new benefit increase
22by law.
23    (e) Except as otherwise provided in the language creating
24the new benefit increase, a new benefit increase that expires
25under this Section continues to apply to persons who applied
26and qualified for the affected benefit while the new benefit

 

 

HB4055- 210 -LRB100 12851 RPS 26572 b

1increase was in effect and to the affected beneficiaries and
2alternate payees of such persons, but does not apply to any
3other person, including without limitation a person who
4continues in service after the expiration date and did not
5apply and qualify for the affected benefit while the new
6benefit increase was in effect.
7(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
8    (40 ILCS 5/16-205.1 new)
9    Sec. 16-205.1. Defined contribution plan.
10    (a) By July 1, 2018, the System shall prepare and implement
11a voluntary defined contribution plan for up to 5% of eligible
12active Tier 1 employees. The System shall determine the 5% cap
13by the number of active Tier 1 employees on the effective date
14of this Section. The defined contribution plan developed under
15this Section shall be a plan that aggregates employer and
16employee contributions in individual participant accounts
17which, after meeting any other requirements, are used for
18payouts after retirement in accordance with this Section and
19any other applicable laws.
20    As used in this Section, "defined benefit plan" means the
21retirement plan available under this Article to Tier 1
22employees who have not made the election authorized under this
23Section.
24        (1) Under the defined contribution plan, an active Tier
25    1 employee of this System could elect to cease accruing

 

 

HB4055- 211 -LRB100 12851 RPS 26572 b

1    benefits in the defined benefit plan under this Article and
2    begin accruing benefits for future service in the defined
3    contribution plan. Service credit under the defined
4    contribution plan may be used for determining retirement
5    eligibility under the defined benefit plan. An active Tier
6    1 employee who elects to cease accruing benefits in his or
7    her defined benefit plan shall be prohibited from
8    purchasing service credit on or after the date of his or
9    her election. A Tier 1 employee making the irrevocable
10    election provided under this Section shall not receive
11    interest accruals to his or her benefit under paragraph (A)
12    of subsection (a) of Section 16-133 on or after the date of
13    his or her election.
14        (2) Participants in the defined contribution plan
15    shall pay employee contributions at the same rate as Tier 1
16    employees in this System who do not participate in the
17    defined contribution plan.
18        (3) State contributions shall be paid into the accounts
19    of all participants in the defined contribution plan at a
20    uniform rate, expressed as a percentage of salary and
21    determined for each year. This rate shall be no higher than
22    the employer's normal cost for Tier 1 employees in the
23    defined benefit plan for that year, as determined by the
24    System and expressed as a percentage of salary, and shall
25    be no lower than 0% of salary. The State shall adjust this
26    rate annually.

 

 

HB4055- 212 -LRB100 12851 RPS 26572 b

1        (4) The defined contribution plan shall require 5 years
2    of participation in the defined contribution plan before
3    vesting in State contributions. If the participant fails to
4    vest in them, the State contributions, and the earnings
5    thereon, shall be forfeited.
6        (5) The defined contribution plan may provide for
7    participants in the plan to be eligible for the defined
8    disability benefits available to other participants under
9    this Article. If it does, the System shall reduce the
10    employee contributions credited to the member's defined
11    contribution plan account by an amount determined by the
12    System to cover the cost of offering such benefits.
13        (6) The defined contribution plan shall provide a
14    variety of options for investments. These options shall
15    include investments in a fund created by the System and
16    managed in accordance with legal and fiduciary standards,
17    as well as investment options otherwise available.
18        (7) The defined contribution plan shall provide a
19    variety of options for payouts to retirees and their
20    survivors.
21        (8) To the extent authorized under federal law and as
22    authorized by the System, the plan shall allow former
23    participants in the plan to transfer or roll over employee
24    and vested State contributions, and the earnings thereon,
25    into other qualified retirement plans.
26        (9) The System shall reduce the employee contributions

 

 

HB4055- 213 -LRB100 12851 RPS 26572 b

1    credited to the member's defined contribution plan account
2    by an amount determined by the System to cover the cost of
3    offering these benefits and any applicable administrative
4    fees.
5    (b) Only persons who are active Tier 1 employees of the
6System on the effective date of this Section are eligible to
7participate in the defined contribution plan. Participation in
8the defined contribution plan shall be limited to the first 5%
9of eligible persons who elect to participate. The election to
10participate in the defined contribution plan is voluntary and
11irrevocable.
12    (c) An eligible Tier 1 employee may irrevocably elect to
13participate in the defined contribution plan by filing with the
14System a written application to participate that is received by
15the System prior to its determination that 5% of eligible
16persons have elected to participate in the defined contribution
17plan.
18    When the System first determines that 5% of eligible
19persons have elected to participate in the defined contribution
20plan, the System shall provide notice to previously eligible
21employees that the plan is no longer available and shall cease
22accepting applications to participate.
23    (d) The System shall make a good faith effort to contact
24each active Tier 1 employee who is eligible to participate in
25the defined contribution plan. The System shall mail
26information describing the option to join the defined

 

 

HB4055- 214 -LRB100 12851 RPS 26572 b

1contribution plan to each of these employees to his or her last
2known address on file with the System. If the employee is not
3responsive to other means of contact, it is sufficient for the
4System to publish the details of the option on its website.
5    Upon request for further information describing the
6option, the System shall provide employees with information
7from the System before exercising the option to join the plan,
8including information on the impact to their vested benefits or
9non-vested service. The individual consultation shall include
10projections of the member's defined benefits at retirement or
11earlier termination of service and the value of the member's
12account at retirement or earlier termination of service. The
13System shall not provide advice or counseling with respect to
14whether the employee should exercise the option. The System
15shall inform Tier 1 employees who are eligible to participate
16in the defined contribution plan that they may also wish to
17obtain information and counsel relating to their option from
18any other available source, including but not limited to labor
19organizations, private counsel, and financial advisors.
20    (e) In no event shall the System, its staff, its authorized
21representatives, or the Board be liable for any information
22given to an employee under this Section. The System may
23coordinate with the Illinois Department of Central Management
24Services and other retirement systems administering a defined
25contribution plan in accordance with this amendatory Act of the
26100th General Assembly to provide information concerning the

 

 

HB4055- 215 -LRB100 12851 RPS 26572 b

1impact of the option set forth in this Section.
2    (f) Notwithstanding any other provision of this Section, no
3person shall begin participating in the defined contribution
4plan until it has attained qualified plan status and received
5all necessary approvals from the U.S. Internal Revenue Service.
6    (g) The System shall report on its progress under this
7Section, including the available details of the defined
8contribution plan and the System's plans for informing eligible
9Tier 1 employees about the plan, to the Governor and the
10General Assembly on or before January 15, 2018.
11    (h) The intent of this amendatory Act of the 100th General
12Assembly is to ensure that the State's normal cost of
13participation in the defined contribution plan is similar, and
14if possible equal, to the State's normal cost of participation
15in the defined benefit plan, unless a lower State's normal cost
16is necessary to ensure cost neutrality.
 
17    (40 ILCS 5/16-206.1 new)
18    Sec. 16-206.1. Defined contribution plan; termination. If
19the defined contribution plan under Section 16-205.1 is
20terminated or becomes inoperative pursuant to law, then each
21participant in the plan shall automatically be deemed to have
22been a contributing Tier 1 employee in the System's defined
23benefit plan during the time in which he or she participated in
24the defined contribution plan, and for that purpose the System
25shall be entitled to recover the amounts in the participant's

 

 

HB4055- 216 -LRB100 12851 RPS 26572 b

1defined contribution accounts.
 
2    (40 ILCS 5/17-106.05 new)
3    Sec. 17-106.05. Tier 1 employee. "Tier 1 employee": A
4teacher under this Article who first became a member or
5participant before January 1, 2011 under any reciprocal
6retirement system or pension fund established under this Code
7other than a retirement system or pension fund established
8under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
9    (40 ILCS 5/17-129)  (from Ch. 108 1/2, par. 17-129)
10    Sec. 17-129. Employer contributions; deficiency in Fund.
11    (a) If in any fiscal year of the Board of Education ending
12prior to 1997 the total amounts paid to the Fund from the Board
13of Education (other than under this subsection, and other than
14amounts used for making or "picking up" contributions on behalf
15of teachers) and from the State do not equal the total
16contributions made by or on behalf of the teachers for such
17year, or if the total income of the Fund in any such fiscal
18year of the Board of Education from all sources is less than
19the total such expenditures by the Fund for such year, the
20Board of Education shall, in the next succeeding year, in
21addition to any other payment to the Fund set apart and
22appropriate from moneys from its tax levy for educational
23purposes, a sum sufficient to remove such deficiency or
24deficiencies, and promptly pay such sum into the Fund in order

 

 

HB4055- 217 -LRB100 12851 RPS 26572 b

1to restore any of the reserves of the Fund that may have been
2so temporarily applied. Any amounts received by the Fund after
3December 4, 1997 from State appropriations, including under
4Section 17-127, shall be a credit against and shall fully
5satisfy any obligation that may have arisen, or be claimed to
6have arisen, under this subsection (a) as a result of any
7deficiency or deficiencies in the fiscal year of the Board of
8Education ending in calendar year 1997.
9    (b) (i) Notwithstanding any other provision of this
10Section, and notwithstanding any prior certification by the
11Board under subsection (c) for fiscal year 2011, the Board of
12Education's total required contribution to the Fund for fiscal
13year 2011 under this Section is $187,000,000.
14    (ii) Notwithstanding any other provision of this Section,
15the Board of Education's total required contribution to the
16Fund for fiscal year 2012 under this Section is $192,000,000.
17    (iii) Notwithstanding any other provision of this Section,
18the Board of Education's total required contribution to the
19Fund for fiscal year 2013 under this Section is $196,000,000.
20    (iv) For fiscal years 2014 through 2059, the minimum
21contribution to the Fund to be made by the Board of Education
22in each fiscal year shall be an amount determined by the Fund
23to be sufficient to bring the total assets of the Fund up to
2490% of the total actuarial liabilities of the Fund by the end
25of fiscal year 2059. In making these determinations, the
26required Board of Education contribution shall be calculated

 

 

HB4055- 218 -LRB100 12851 RPS 26572 b

1each year as a level percentage of the applicable employee
2payrolls over the years remaining to and including fiscal year
32059 and shall be determined under the projected unit credit
4actuarial cost method.
5    (v) Beginning in fiscal year 2060, the minimum Board of
6Education contribution for each fiscal year shall be the amount
7needed to maintain the total assets of the Fund at 90% of the
8total actuarial liabilities of the Fund.
9    (vi) Notwithstanding any other provision of this
10subsection (b), for any fiscal year, the contribution to the
11Fund from the Board of Education shall not be required to be in
12excess of the amount calculated as needed to maintain the
13assets (or cause the assets to be) at the 90% level by the end
14of the fiscal year.
15    (vii) Any contribution by the State to or for the benefit
16of the Fund, including, without limitation, as referred to
17under Section 17-127, shall be a credit against any
18contribution required to be made by the Board of Education
19under this subsection (b).
20    (c) The Board shall determine the amount of Board of
21Education contributions required for each fiscal year on the
22basis of the actuarial tables and other assumptions adopted by
23the Board and the recommendations of the actuary, in order to
24meet the minimum contribution requirements of subsections (a)
25and (b). Annually, on or before February 28, the Board shall
26certify to the Board of Education the amount of the required

 

 

HB4055- 219 -LRB100 12851 RPS 26572 b

1Board of Education contribution for the coming fiscal year. The
2certification shall include a copy of the actuarial
3recommendations upon which it is based.
4    Beginning in fiscal year 2018, any increase or decrease in
5the Board of Education's contribution over the prior fiscal
6year due exclusively to changes in actuarial or investment
7assumptions adopted by the Board shall be included in the Board
8of Education's contribution to the Fund, as a percentage of the
9applicable employee payroll, and shall be increased in equal
10annual increments so that by the fiscal year occurring 5 years
11after the adoption of the actuarial or investment assumptions,
12the Board of Education is contributing at the rate otherwise
13required under this Section.
14    (d) As soon as practical after the effective date of this
15amendatory Act of the 100th General Assembly, the Board shall
16recalculate and recertify to the Board of Education the amount
17of the required Board of Education contribution to the Fund for
18fiscal year 2018, as necessary to take into account the changes
19in required Board of Education contributions made by this
20amendatory Act of the 100th General Assembly.
21(Source: P.A. 96-889, eff. 4-14-10.)
 
22    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
23    Sec. 18-131. Financing; employer contributions.
24    (a) The State of Illinois shall make contributions to this
25System by appropriations of the amounts which, together with

 

 

HB4055- 220 -LRB100 12851 RPS 26572 b

1the contributions of participants, net earnings on
2investments, and other income, will meet the costs of
3maintaining and administering this System on a 90% funded basis
4in accordance with actuarial recommendations.
5    (b) The Board shall determine the amount of State
6contributions required for each fiscal year on the basis of the
7actuarial tables and other assumptions adopted by the Board and
8the prescribed rate of interest, using the formula in
9subsection (c).
10    (c) For State fiscal years 2018 through 2045, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 90% of
14the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of total payroll, including payroll that is
18not deemed pensionable, over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit credit actuarial cost method.
21    Beginning in State fiscal year 2018, any increase or
22decrease in State contribution over the prior fiscal year due
23exclusively to changes in actuarial or investment assumptions
24adopted by the Board shall be included in the State
25contribution to the System, as a percentage of the applicable
26employee payroll, and shall be increased in equal annual

 

 

HB4055- 221 -LRB100 12851 RPS 26572 b

1increments so that by the State fiscal year occurring 5 years
2after the adoption of the actuarial or investment assumptions,
3the State is contributing at the rate otherwise required under
4this Section.
5    For State fiscal years 2012 through 2017 2045, the minimum
6contribution to the System to be made by the State for each
7fiscal year shall be an amount determined by the System to be
8sufficient to bring the total assets of the System up to 90% of
9the total actuarial liabilities of the System by the end of
10State fiscal year 2045. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of payroll over the years remaining to and
13including fiscal year 2045 and shall be determined under the
14projected unit credit actuarial cost method.
15    For State fiscal years 1996 through 2005, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18so that by State fiscal year 2011, the State is contributing at
19the rate required under this Section.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2006 is
22$29,189,400.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2007 is
25$35,236,800.
26    For each of State fiscal years 2008 through 2009, the State

 

 

HB4055- 222 -LRB100 12851 RPS 26572 b

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3from the required State contribution for State fiscal year
42007, so that by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2010 is
8$78,832,000 and shall be made from the proceeds of bonds sold
9in fiscal year 2010 pursuant to Section 7.2 of the General
10Obligation Bond Act, less (i) the pro rata share of bond sale
11expenses determined by the System's share of total bond
12proceeds, (ii) any amounts received from the General Revenue
13Fund in fiscal year 2010, and (iii) any reduction in bond
14proceeds due to the issuance of discounted bonds, if
15applicable.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2011 is
18the amount recertified by the System on or before April 1, 2011
19pursuant to Section 18-140 and shall be made from the proceeds
20of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
21the General Obligation Bond Act, less (i) the pro rata share of
22bond sale expenses determined by the System's share of total
23bond proceeds, (ii) any amounts received from the General
24Revenue Fund in fiscal year 2011, and (iii) any reduction in
25bond proceeds due to the issuance of discounted bonds, if
26applicable.

 

 

HB4055- 223 -LRB100 12851 RPS 26572 b

1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 90%. A reference in this Article to
14the "required State contribution" or any substantially similar
15term does not include or apply to any amounts payable to the
16System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 and each fiscal year thereafter, as calculated
20under this Section and certified under Section 18-140, shall
21not exceed an amount equal to (i) the amount of the required
22State contribution that would have been calculated under this
23Section for that fiscal year if the System had not received any
24payments under subsection (d) of Section 7.2 of the General
25Obligation Bond Act, minus (ii) the portion of the State's
26total debt service payments for that fiscal year on the bonds

 

 

HB4055- 224 -LRB100 12851 RPS 26572 b

1issued in fiscal year 2003 for the purposes of that Section
27.2, as determined and certified by the Comptroller, that is
3the same as the System's portion of the total moneys
4distributed under subsection (d) of Section 7.2 of the General
5Obligation Bond Act. In determining this maximum for State
6fiscal years 2008 through 2010, however, the amount referred to
7in item (i) shall be increased, as a percentage of the
8applicable employee payroll, in equal increments calculated
9from the sum of the required State contribution for State
10fiscal year 2007 plus the applicable portion of the State's
11total debt service payments for fiscal year 2007 on the bonds
12issued in fiscal year 2003 for the purposes of Section 7.2 of
13the General Obligation Bond Act, so that, by State fiscal year
142011, the State is contributing at the rate otherwise required
15under this Section.
16    (d) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

HB4055- 225 -LRB100 12851 RPS 26572 b

1    (e) For purposes of determining the required State
2contribution to the system for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the system's actuarially assumed rate of return.
5(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
77-13-12.)
 
8    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
9    Sec. 18-140. To certify required State contributions and
10submit vouchers.
11    (a) The Board shall certify to the Governor, on or before
12November 15 of each year until November 15, 2011, the amount of
13the required State contribution to the System for the following
14fiscal year and shall specifically identify the System's
15projected State normal cost for that fiscal year. The
16certification shall include a copy of the actuarial
17recommendations upon which it is based and shall specifically
18identify the System's projected State normal cost for that
19fiscal year.
20    On or before November 1 of each year, beginning November 1,
212012, the Board shall submit to the State Actuary, the
22Governor, and the General Assembly a proposed certification of
23the amount of the required State contribution to the System for
24the next fiscal year, along with all of the actuarial
25assumptions, calculations, and data upon which that proposed

 

 

HB4055- 226 -LRB100 12851 RPS 26572 b

1certification is based. On or before January 1 of each year
2beginning January 1, 2013, the State Actuary shall issue a
3preliminary report concerning the proposed certification and
4identifying, if necessary, recommended changes in actuarial
5assumptions that the Board must consider before finalizing its
6certification of the required State contributions. On or before
7January 15, 2013 and every January 15 thereafter, the Board
8shall certify to the Governor and the General Assembly the
9amount of the required State contribution for the next fiscal
10year. The Board's certification must note any deviations from
11the State Actuary's recommended changes, the reason or reasons
12for not following the State Actuary's recommended changes, and
13the fiscal impact of not following the State Actuary's
14recommended changes on the required State contribution.
15    On or before May 1, 2004, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2005, taking
18into account the amounts appropriated to and received by the
19System under subsection (d) of Section 7.2 of the General
20Obligation Bond Act.
21    On or before July 1, 2005, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2006, taking
24into account the changes in required State contributions made
25by this amendatory Act of the 94th General Assembly.
26    On or before April 1, 2011, the Board shall recalculate and

 

 

HB4055- 227 -LRB100 12851 RPS 26572 b

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2011, applying
3the changes made by Public Act 96-889 to the System's assets
4and liabilities as of June 30, 2009 as though Public Act 96-889
5was approved on that date.
6    As soon as practical after the effective date of this
7amendatory Act of the 100th General Assembly, the Board shall
8recalculate and recertify to the State Actuary, the Governor,
9and the General Assembly the amount of the State contribution
10to the System for State fiscal year 2018, taking into account
11the changes in required State contributions made by this
12amendatory Act of the 100th General Assembly. The State Actuary
13shall review the assumptions and valuations underlying the
14Board's revised certification and issue a preliminary report
15concerning the proposed recertification and identifying, if
16necessary, recommended changes in actuarial assumptions that
17the Board must consider before finalizing its certification of
18the required State contributions. The Board's final
19certification must note any deviations from the State Actuary's
20recommended changes, the reason or reasons for not following
21the State Actuary's recommended changes, and the fiscal impact
22of not following the State Actuary's recommended changes on the
23required State contribution.
24    (b) Beginning in State fiscal year 1996, on or as soon as
25possible after the 15th day of each month the Board shall
26submit vouchers for payment of State contributions to the

 

 

HB4055- 228 -LRB100 12851 RPS 26572 b

1System, in a total monthly amount of one-twelfth of the
2required annual State contribution certified under subsection
3(a). From the effective date of this amendatory Act of the 93rd
4General Assembly through June 30, 2004, the Board shall not
5submit vouchers for the remainder of fiscal year 2004 in excess
6of the fiscal year 2004 certified contribution amount
7determined under this Section after taking into consideration
8the transfer to the System under subsection (c) of Section
96z-61 of the State Finance Act. These vouchers shall be paid by
10the State Comptroller and Treasurer by warrants drawn on the
11funds appropriated to the System for that fiscal year.
12    If in any month the amount remaining unexpended from all
13other appropriations to the System for the applicable fiscal
14year (including the appropriations to the System under Section
158.12 of the State Finance Act and Section 1 of the State
16Pension Funds Continuing Appropriation Act) is less than the
17amount lawfully vouchered under this Section, the difference
18shall be paid from the General Revenue Fund under the
19continuing appropriation authority provided in Section 1.1 of
20the State Pension Funds Continuing Appropriation Act.
21(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2297-694, eff. 6-18-12.)
 
23    (40 ILCS 5/18-161.5 new)
24    Sec. 18-161.5. Accelerated pension benefit payment.
25    (a) As used in this Section:

 

 

HB4055- 229 -LRB100 12851 RPS 26572 b

1    "Eligible person" means a person who:
2        (1) has terminated service;
3        (2) has accrued sufficient service credit to be
4    eligible to receive a retirement annuity under this
5    Article;
6        (3) has not received any retirement annuity under this
7    Article; and
8        (4) does not have a QILDRO in effect against him or her
9    under this Article.
10    "Pension benefit" means the benefits under this Article, or
11Article 1 as it relates to those benefits, including any
12anticipated annual increases, that an eligible person is
13entitled to upon attainment of the applicable retirement age.
14"Pension benefit" also includes applicable survivor's or
15disability benefits.
16    (b) Before January 1, 2018, the System shall calculate,
17using actuarial tables and other assumptions adopted by the
18Board, the net present value of pension benefits for each
19eligible person and shall offer each eligible person the
20opportunity to irrevocably elect to receive an amount
21determined by the System to be equal to 70% of the net present
22value of his or her pension benefits in lieu of receiving any
23pension benefit. The offer shall specify the dollar amount that
24the eligible person will receive if he or she so elects and
25shall expire when a subsequent offer is made to an eligible
26person. The System shall make a good faith effort to contact

 

 

HB4055- 230 -LRB100 12851 RPS 26572 b

1every eligible person to notify him or her of the election and
2of the amount of the accelerated pension benefit payment.
3    Beginning January 1, 2018 and until July 1, 2018, an
4eligible person may irrevocably elect to receive an accelerated
5pension benefit payment in the amount that the System offers
6under this subsection in lieu of receiving any pension benefit.
7A person who elects to receive an accelerated pension benefit
8payment under this Section may not elect to proceed under the
9Retirement Systems Reciprocal Act with respect to service under
10this Article.
11    (c) A person's credits and creditable service under this
12Article shall be terminated upon the person's receipt of an
13accelerated pension benefit payment under this Section, and no
14other benefit shall be paid under this Article based on those
15terminated credits and creditable service, including any
16retirement, survivor, or other benefit; except that to the
17extent that participation, benefits, or premiums under the
18State Employees Group Insurance Act of 1971 are based on the
19amount of service credit, the terminated service credit shall
20be used for that purpose.
21    (d) If a person who has received an accelerated pension
22benefit payment under this Section returns to active service
23under this Article, then:
24        (1) Any benefits under the System earned as a result of
25    that return to active service shall be based solely on the
26    person's credits and creditable service arising from the

 

 

HB4055- 231 -LRB100 12851 RPS 26572 b

1    return to active service.
2        (2) The accelerated pension benefit payment may not be
3    repaid to the System, and the terminated credits and
4    creditable service may not under any circumstances be
5    reinstated.
6    (e) As a condition of receiving an accelerated pension
7benefit payment, an eligible person must have another
8retirement plan or account qualified under the Internal Revenue
9Code of 1986, as amended, for the accelerated pension benefit
10payment to be rolled into. The accelerated pension benefit
11payment under this Section may be subject to withholding or
12payment of applicable taxes, but to the extent permitted by
13federal law, a person who receives an accelerated pension
14benefit payment under this Section must direct the System to
15pay all of that payment as a rollover into another retirement
16plan or account qualified under the Internal Revenue Code of
171986, as amended.
18    (f) Before January 1, 2019, the Board shall certify to the
19Illinois Finance Authority and the General Assembly the amount
20by which the total amount of accelerated pension benefit
21payments made under this Section exceed the amount appropriated
22to the System for the purpose of making those payments.
23    (g) The Board shall adopt any rules necessary to implement
24this Section.
25    (h) No provision of this Section shall be interpreted in a
26way that would cause the applicable System to cease to be a

 

 

HB4055- 232 -LRB100 12851 RPS 26572 b

1qualified plan under the Internal Revenue Code of 1986.
 
2    (40 ILCS 5/18-169)
3    Sec. 18-169. Application and expiration of new benefit
4increases.
5    (a) As used in this Section, "new benefit increase" means
6an increase in the amount of any benefit provided under this
7Article, or an expansion of the conditions of eligibility for
8any benefit under this Article, that results from an amendment
9to this Code that takes effect after June 1, 2005 (the
10effective date of Public Act 94-4). "New benefit increase",
11however, does not include any benefit increase resulting from
12the changes made to this Article by this amendatory Act of the
13100th General Assembly the effective date of this amendatory
14Act of the 94th General Assembly.
15    (b) Notwithstanding any other provision of this Code or any
16subsequent amendment to this Code, every new benefit increase
17is subject to this Section and shall be deemed to be granted
18only in conformance with and contingent upon compliance with
19the provisions of this Section.
20    (c) The Public Act enacting a new benefit increase must
21identify and provide for payment to the System of additional
22funding at least sufficient to fund the resulting annual
23increase in cost to the System as it accrues.
24    Every new benefit increase is contingent upon the General
25Assembly providing the additional funding required under this

 

 

HB4055- 233 -LRB100 12851 RPS 26572 b

1subsection. The Commission on Government Forecasting and
2Accountability shall analyze whether adequate additional
3funding has been provided for the new benefit increase and
4shall report its analysis to the Public Pension Division of the
5Department of Financial and Professional Regulation. A new
6benefit increase created by a Public Act that does not include
7the additional funding required under this subsection is null
8and void. If the Public Pension Division determines that the
9additional funding provided for a new benefit increase under
10this subsection is or has become inadequate, it may so certify
11to the Governor and the State Comptroller and, in the absence
12of corrective action by the General Assembly, the new benefit
13increase shall expire at the end of the fiscal year in which
14the certification is made.
15    (d) Every new benefit increase shall expire 5 years after
16its effective date or on such earlier date as may be specified
17in the language enacting the new benefit increase or provided
18under subsection (c). This does not prevent the General
19Assembly from extending or re-creating a new benefit increase
20by law.
21    (e) Except as otherwise provided in the language creating
22the new benefit increase, a new benefit increase that expires
23under this Section continues to apply to persons who applied
24and qualified for the affected benefit while the new benefit
25increase was in effect and to the affected beneficiaries and
26alternate payees of such persons, but does not apply to any

 

 

HB4055- 234 -LRB100 12851 RPS 26572 b

1other person, including without limitation a person who
2continues in service after the expiration date and did not
3apply and qualify for the affected benefit while the new
4benefit increase was in effect.
5(Source: P.A. 94-4, eff. 6-1-05.)
 
6    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 20-121. Calculation of proportional retirement
10annuities.
11    (a) Upon retirement of the employee, a proportional
12retirement annuity shall be computed by each participating
13system in which pension credit has been established on the
14basis of pension credits under each system. The computation
15shall be in accordance with the formula or method prescribed by
16each participating system which is in effect at the date of the
17employee's latest withdrawal from service covered by any of the
18systems in which he has pension credits which he elects to have
19considered under this Article. However, the amount of any
20retirement annuity payable under the self-managed plan
21established under Section 15-158.2 of this Code or under the
22defined contribution plan established under Article 2, 14, 15,
23or 16 of this Code depends solely on the value of the
24participant's vested account balances and is not subject to any
25proportional adjustment under this Section.

 

 

HB4055- 235 -LRB100 12851 RPS 26572 b

1    (a-5) For persons who participate in a defined contribution
2plan established under Article 2, 14, 15, or 16 of this Code to
3whom the provisions of this Article apply, the pension credits
4established under the defined contribution plan may be
5considered in determining eligibility for or the amount of the
6defined benefit retirement annuity that is payable by any other
7participating system.
8    (b) Combined pension credit under all retirement systems
9subject to this Article shall be considered in determining
10whether the minimum qualification has been met and the formula
11or method of computation which shall be applied, except as may
12be otherwise provided with respect to vesting in State or
13employer contributions in a defined contribution plan. If a
14system has a step-rate formula for calculation of the
15retirement annuity, pension credits covering previous service
16which have been established under another system shall be
17considered in determining which range or ranges of the
18step-rate formula are to be applicable to the employee.
19    (c) Interest on pension credit shall continue to accumulate
20in accordance with the provisions of the law governing the
21retirement system in which the same has been established during
22the time an employee is in the service of another employer, on
23the assumption such employee, for interest purposes for pension
24credit, is continuing in the service covered by such retirement
25system.
26(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

HB4055- 236 -LRB100 12851 RPS 26572 b

1    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 20-123. Survivor's annuity. The provisions governing
5a retirement annuity shall be applicable to a survivor's
6annuity. Appropriate credits shall be established for
7survivor's annuity purposes in those participating systems
8which provide survivor's annuities, according to the same
9conditions and subject to the same limitations and restrictions
10herein prescribed for a retirement annuity. If a participating
11system has no survivor's annuity benefit, or if the survivor's
12annuity benefit under that system is waived, pension credit
13established in that system shall not be considered in
14determining eligibility for or the amount of the survivor's
15annuity which may be payable by any other participating system.
16    For persons who participate in the self-managed plan
17established under Section 15-158.2 or the portable benefit
18package established under Section 15-136.4, pension credit
19established under Article 15 may be considered in determining
20eligibility for or the amount of the survivor's annuity that is
21payable by any other participating system, but pension credit
22established in any other system shall not result in any right
23to a survivor's annuity under the Article 15 system.
24    For persons who participate in a defined contribution plan
25established under Article 2, 14, 15, or 16 of this Code to whom

 

 

HB4055- 237 -LRB100 12851 RPS 26572 b

1the provisions of this Article apply, the pension credits
2established under the defined contribution plan may be
3considered in determining eligibility for or the amount of the
4defined benefit survivor's annuity that is payable by any other
5participating system, but pension credits established in any
6other system shall not result in any right to or increase in
7the value of a survivor's annuity under the defined
8contribution plan, which depends solely on the options chosen
9and the value of the participant's vested account balances and
10is not subject to any proportional adjustment under this
11Section.
12(Source: P.A. 91-887, eff. 7-6-00.)
 
13    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
14    (Text of Section WITHOUT the changes made by P.A. 98-599,
15which has been held unconstitutional)
16    Sec. 20-124. Maximum benefits.
17    (a) In no event shall the combined retirement or survivors
18annuities exceed the highest annuity which would have been
19payable by any participating system in which the employee has
20pension credits, if all of his pension credits had been
21validated in that system.
22    If the combined annuities should exceed the highest maximum
23as determined in accordance with this Section, the respective
24annuities shall be reduced proportionately according to the
25ratio which the amount of each proportional annuity bears to

 

 

HB4055- 238 -LRB100 12851 RPS 26572 b

1the aggregate of all such annuities.
2    (b) In the case of a participant in the self-managed plan
3established under Section 15-158.2 of this Code to whom the
4provisions of this Article apply:
5        (i) For purposes of calculating the combined
6    retirement annuity and the proportionate reduction, if
7    any, in a retirement annuity other than one payable under
8    the self-managed plan, the amount of the Article 15
9    retirement annuity shall be deemed to be the highest
10    annuity to which the annuitant would have been entitled if
11    he or she had participated in the traditional benefit
12    package as defined in Section 15-103.1 rather than the
13    self-managed plan.
14        (ii) For purposes of calculating the combined
15    survivor's annuity and the proportionate reduction, if
16    any, in a survivor's annuity other than one payable under
17    the self-managed plan, the amount of the Article 15
18    survivor's annuity shall be deemed to be the highest
19    survivor's annuity to which the survivor would have been
20    entitled if the deceased employee had participated in the
21    traditional benefit package as defined in Section 15-103.1
22    rather than the self-managed plan.
23        (iii) Benefits payable under the self-managed plan are
24    not subject to proportionate reduction under this Section.
25    (c) In the case of a participant in a defined contribution
26plan established under Article 2, 14, 15, or 16 of this Code to

 

 

HB4055- 239 -LRB100 12851 RPS 26572 b

1whom the provisions of this Article apply:
2        (i) For purposes of calculating the combined
3    retirement annuity and the proportionate reduction, if
4    any, in a defined benefit retirement annuity, any benefit
5    payable under the defined contribution plan shall not be
6    considered.
7        (ii) For purposes of calculating the combined
8    survivor's annuity and the proportionate reduction, if
9    any, in a defined benefit survivor's annuity, any benefit
10    payable under the defined contribution plan shall not be
11    considered.
12        (iii) Benefits payable under a defined contribution
13    plan established under Article 2, 14, 15, or 16 of this
14    Code are not subject to proportionate reduction under this
15    Section.
16(Source: P.A. 91-887, eff. 7-6-00.)
 
17    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 20-125. Return to employment - suspension of benefits.
21If a retired employee returns to employment which is covered by
22a system from which he is receiving a proportional annuity
23under this Article, his proportional annuity from all
24participating systems shall be suspended during the period of
25re-employment, except that this suspension does not apply to

 

 

HB4055- 240 -LRB100 12851 RPS 26572 b

1any distributions payable under the self-managed plan
2established under Section 15-158.2 or under a defined
3contribution plan established under Article 2, 14, 15, or 16 of
4this Code.
5    The provisions of the Article under which such employment
6would be covered shall govern the determination of whether the
7employee has returned to employment, and if applicable the
8exemption of temporary employment or employment not exceeding a
9specified duration or frequency, for all participating systems
10from which the retired employee is receiving a proportional
11annuity under this Article, notwithstanding any contrary
12provisions in the other Articles governing such systems.
13(Source: P.A. 91-887, eff. 7-6-00.)
 
14    (40 ILCS 5/2-165 rep.)
15    (40 ILCS 5/2-166 rep.)
16    (40 ILCS 5/14-155 rep.)
17    (40 ILCS 5/14-156 rep.)
18    (40 ILCS 5/15-200 rep.)
19    (40 ILCS 5/15-201 rep.)
20    (40 ILCS 5/16-205 rep.)
21    (40 ILCS 5/16-206 rep.)
22    Section 35. The Illinois Pension Code is amended by
23repealing Sections 2-165, 2-166, 14-155, 14-156, 15-200,
2415-201, 16-205, and 16-206.
 

 

 

HB4055- 241 -LRB100 12851 RPS 26572 b

1    Section 40. The State Pension Funds Continuing
2Appropriation Act is amended by adding Section 1.9 as follows:
 
3    (40 ILCS 15/1.9 new)
4    Sec. 1.9. Appropriations for State Pension Obligation
5Acceleration Bonds. If for any reason the aggregate
6appropriations made available are insufficient to meet the
7levels required for the payment of principal and interest due
8on State Pension Obligation Acceleration Bonds under Section
97.6 of the General Obligation Bond Act, this Section shall
10constitute a continuing appropriation of all amounts necessary
11for those purposes.
 
12    Section 900. The State Mandates Act is amended by adding
13Section 8.41 as follows:
 
14    (30 ILCS 805/8.41 new)
15    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
16of this Act, no reimbursement by the State is required for the
17implementation of any mandate created by this amendatory Act of
18the 100th General Assembly.
 
19    Section 970. Severability. The provisions of this Act are
20severable under Section 1.31 of the Statute on Statutes.
 
21    Section 999. Effective date. This Act takes effect upon
22becoming law.

 

 

HB4055- 242 -LRB100 12851 RPS 26572 b

1 INDEX
2 Statutes amended in order of appearance
3    5 ILCS 375/3from Ch. 127, par. 523
4    5 ILCS 375/10from Ch. 127, par. 530
5    20 ILCS 3501/801-40
6    30 ILCS 105/5.878 new
7    30 ILCS 122/20
8    30 ILCS 330/2from Ch. 127, par. 652
9    30 ILCS 330/2.5
10    30 ILCS 330/7.6 new
11    30 ILCS 330/9from Ch. 127, par. 659
12    30 ILCS 330/11from Ch. 127, par. 661
13    30 ILCS 330/12from Ch. 127, par. 662
14    30 ILCS 330/13from Ch. 127, par. 663
15    40 ILCS 5/1-160
16    40 ILCS 5/1-161 new
17    40 ILCS 5/1-162 new
18    40 ILCS 5/2-101from Ch. 108 1/2, par. 2-101
19    40 ILCS 5/2-105from Ch. 108 1/2, par. 2-105
20    40 ILCS 5/2-105.3 new
21    40 ILCS 5/2-107from Ch. 108 1/2, par. 2-107
22    40 ILCS 5/2-124from Ch. 108 1/2, par. 2-124
23    40 ILCS 5/2-134from Ch. 108 1/2, par. 2-134
24    40 ILCS 5/2-154.5 new
25    40 ILCS 5/2-162

 

 

HB4055- 243 -LRB100 12851 RPS 26572 b

1    40 ILCS 5/2-165.1 new
2    40 ILCS 5/2-166.1 new
3    40 ILCS 5/14-103.41 new
4    40 ILCS 5/14-131
5    40 ILCS 5/14-135.08from Ch. 108 1/2, par. 14-135.08
6    40 ILCS 5/14-147.5 new
7    40 ILCS 5/14-152.1
8    40 ILCS 5/14-155.1 new
9    40 ILCS 5/14-155.2 new
10    40 ILCS 5/14-156.1 new
11    40 ILCS 5/15-108.1
12    40 ILCS 5/15-108.2
13    40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
14    40 ILCS 5/15-165from Ch. 108 1/2, par. 15-165
15    40 ILCS 5/15-185.5 new
16    40 ILCS 5/15-198
17    40 ILCS 5/15-200.1 new
18    40 ILCS 5/15-201.1 new
19    40 ILCS 5/16-107.1 new
20    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
21    40 ILCS 5/16-190.5 new
22    40 ILCS 5/16-203
23    40 ILCS 5/16-205.1 new
24    40 ILCS 5/16-206.1 new
25    40 ILCS 5/17-106.05 new
26    40 ILCS 5/17-129from Ch. 108 1/2, par. 17-129

 

 

HB4055- 244 -LRB100 12851 RPS 26572 b

1    40 ILCS 5/18-131from Ch. 108 1/2, par. 18-131
2    40 ILCS 5/18-140from Ch. 108 1/2, par. 18-140
3    40 ILCS 5/18-161.5 new
4    40 ILCS 5/18-169
5    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
6    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
7    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
8    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125
9    40 ILCS 5/2-165 rep.
10    40 ILCS 5/2-166 rep.
11    40 ILCS 5/14-155 rep.
12    40 ILCS 5/14-156 rep.
13    40 ILCS 5/15-200 rep.
14    40 ILCS 5/15-201 rep.
15    40 ILCS 5/16-205 rep.
16    40 ILCS 5/16-206 rep.
17    40 ILCS 15/1.9 new
18    30 ILCS 805/8.41 new