101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2902

 

Introduced , by Rep. Jay Hoffman

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/3-111.5 new
40 ILCS 5/15-135  from Ch. 108 1/2, par. 15-135
40 ILCS 5/15-136  from Ch. 108 1/2, par. 15-136
30 ILCS 805/8.43 new

    Amends the Downstate Police and State Universities Articles of the Illinois Pension Code. In the Downstate Police Article, provides that a police officer who previously participated in the Illinois Municipal Retirement Fund (IMRF) for service as a member of the police department of a municipality and was transferred to that municipality's police pension fund upon its creation under the Downstate Police Article shall, for the purposes of determining the applicable tier of benefits under that Article, be deemed to have become a police officer and member of that municipality's police pension fund on the date that he or she first participated in IMRF as a member of the police department of that municipality, notwithstanding whether that start date was before January 1, 2011. In the State Universities Article, provides that a Tier 2 member who has at least 20 years of service in the System as a police officer or firefighter is entitled to a retirement annuity on or after the attainment of age 60, if a specified rule applies to that participant. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB101 09760 RPS 54861 b

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

 

 

A BILL FOR

 

HB2902LRB101 09760 RPS 54861 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 15-135 and 15-136 and by adding Section 3-111.5 as
6follows:
 
7    (40 ILCS 5/3-111.5 new)
8    Sec. 3-111.5. Membership date; previous IMRF service with
9the same municipality. A police officer who previously
10participated in the Illinois Municipal Retirement Fund (IMRF)
11for service as a member of the police department of a
12municipality and was transferred to that municipality's police
13pension fund upon its creation under this Article shall, for
14the purposes of determining the applicable tier of benefits
15under this Article, be deemed to have become a police officer
16and member of that municipality's police pension fund on the
17date that he or she first participated in IMRF as a member of
18the police department of that municipality, notwithstanding
19whether that start date was before January 1, 2011.
 
20    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
21    Sec. 15-135. Retirement annuities - Conditions.
22    (a) This subsection (a) applies only to a Tier 1 member. A

 

 

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1participant who retires in one of the following specified years
2with the specified amount of service is entitled to a
3retirement annuity at any age under the retirement program
4applicable to the participant:
5        35 years if retirement is in 1997 or before;
6        34 years if retirement is in 1998;
7        33 years if retirement is in 1999;
8        32 years if retirement is in 2000;
9        31 years if retirement is in 2001;
10        30 years if retirement is in 2002 or later.
11    A participant with 8 or more years of service after
12September 1, 1941, is entitled to a retirement annuity on or
13after attainment of age 55.
14    A participant with at least 5 but less than 8 years of
15service after September 1, 1941, is entitled to a retirement
16annuity on or after attainment of age 62.
17    A participant who has at least 25 years of service in this
18system as a police officer or firefighter is entitled to a
19retirement annuity on or after the attainment of age 50, if
20Rule 4 of Section 15-136 is applicable to the participant.
21    (a-5) A Tier 2 member is entitled to a retirement annuity
22upon written application if he or she has attained age 67 and
23has at least 10 years of service credit and is otherwise
24eligible under the requirements of this Article. A Tier 2
25member who has attained age 62 and has at least 10 years of
26service credit and is otherwise eligible under the requirements

 

 

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1of this Article may elect to receive the lower retirement
2annuity provided in subsection (b-5) of Section 15-136 of this
3Article.
4    (a-10) A Tier 2 member who has at least 20 years of service
5in this system as a police officer or firefighter is entitled
6to a retirement annuity on or after the attainment of age 60,
7if Rule 4 of Section 15-136 is applicable to the participant.
8    (b) The annuity payment period shall begin on the date
9specified by the participant or the recipient of a disability
10retirement annuity submitting a written application. For a
11participant, the date on which the annuity payment period
12begins shall not be prior to termination of employment or more
13than one year before the application is received by the board;
14however, if the participant is not an employee of an employer
15participating in this System or in a participating system as
16defined in Article 20 of this Code on April 1 of the calendar
17year next following the calendar year in which the participant
18attains age 70 1/2, the annuity payment period shall begin on
19that date regardless of whether an application has been filed.
20For a recipient of a disability retirement annuity, the date on
21which the annuity payment period begins shall not be prior to
22the discontinuation of the disability retirement annuity under
23Section 15-153.2.
24    (c) An annuity is not payable if the amount provided under
25Section 15-136 is less than $10 per month.
26(Source: P.A. 100-556, eff. 12-8-17.)
 

 

 

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1    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 15-136. Retirement annuities - Amount. The provisions
5of this Section 15-136 apply only to those participants who are
6participating in the traditional benefit package or the
7portable benefit package and do not apply to participants who
8are participating in the self-managed plan.
9    (a) The amount of a participant's retirement annuity,
10expressed in the form of a single-life annuity, shall be
11determined by whichever of the following rules is applicable
12and provides the largest annuity:
13    Rule 1: The retirement annuity shall be 1.67% of final rate
14of earnings for each of the first 10 years of service, 1.90%
15for each of the next 10 years of service, 2.10% for each year
16of service in excess of 20 but not exceeding 30, and 2.30% for
17each year in excess of 30; or for persons who retire on or
18after January 1, 1998, 2.2% of the final rate of earnings for
19each year of service.
20    Rule 2: The retirement annuity shall be the sum of the
21following, determined from amounts credited to the participant
22in accordance with the actuarial tables and the effective rate
23of interest in effect at the time the retirement annuity
24begins:
25        (i) the normal annuity which can be provided on an

 

 

HB2902- 5 -LRB101 09760 RPS 54861 b

1    actuarially equivalent basis, by the accumulated normal
2    contributions as of the date the annuity begins;
3        (ii) an annuity from employer contributions of an
4    amount equal to that which can be provided on an
5    actuarially equivalent basis from the accumulated normal
6    contributions made by the participant under Section
7    15-113.6 and Section 15-113.7 plus 1.4 times all other
8    accumulated normal contributions made by the participant;
9    and
10        (iii) the annuity that can be provided on an
11    actuarially equivalent basis from the entire contribution
12    made by the participant under Section 15-113.3.
13    With respect to a police officer or firefighter who retires
14on or after August 14, 1998, the accumulated normal
15contributions taken into account under clauses (i) and (ii) of
16this Rule 2 shall include the additional normal contributions
17made by the police officer or firefighter under Section
1815-157(a).
19    The amount of a retirement annuity calculated under this
20Rule 2 shall be computed solely on the basis of the
21participant's accumulated normal contributions, as specified
22in this Rule and defined in Section 15-116. Neither an employee
23or employer contribution for early retirement under Section
2415-136.2 nor any other employer contribution shall be used in
25the calculation of the amount of a retirement annuity under
26this Rule 2.

 

 

HB2902- 6 -LRB101 09760 RPS 54861 b

1    This amendatory Act of the 91st General Assembly is a
2clarification of existing law and applies to every participant
3and annuitant without regard to whether status as an employee
4terminates before the effective date of this amendatory Act.
5    This Rule 2 does not apply to a person who first becomes an
6employee under this Article on or after July 1, 2005.
7    Rule 3: The retirement annuity of a participant who is
8employed at least one-half time during the period on which his
9or her final rate of earnings is based, shall be equal to the
10participant's years of service not to exceed 30, multiplied by
11(1) $96 if the participant's final rate of earnings is less
12than $3,500, (2) $108 if the final rate of earnings is at least
13$3,500 but less than $4,500, (3) $120 if the final rate of
14earnings is at least $4,500 but less than $5,500, (4) $132 if
15the final rate of earnings is at least $5,500 but less than
16$6,500, (5) $144 if the final rate of earnings is at least
17$6,500 but less than $7,500, (6) $156 if the final rate of
18earnings is at least $7,500 but less than $8,500, (7) $168 if
19the final rate of earnings is at least $8,500 but less than
20$9,500, and (8) $180 if the final rate of earnings is $9,500 or
21more, except that the annuity for those persons having made an
22election under Section 15-154(a-1) shall be calculated and
23payable under the portable retirement benefit program pursuant
24to the provisions of Section 15-136.4.
25    Rule 4: A participant who is at least age 50 and has 25 or
26more years of service as a police officer or firefighter, and a

 

 

HB2902- 7 -LRB101 09760 RPS 54861 b

1participant who is age 55 or over and has at least 20 but less
2than 25 years of service as a police officer or firefighter,
3shall be entitled to a retirement annuity of 2 1/4% of the
4final rate of earnings for each of the first 10 years of
5service as a police officer or firefighter, 2 1/2% for each of
6the next 10 years of service as a police officer or
7firefighter, and 2 3/4% for each year of service as a police
8officer or firefighter in excess of 20. The retirement annuity
9for all other service shall be computed under Rule 1. A Tier 2
10member is eligible for a retirement annuity calculated under
11Rule 4 only if that Tier 2 member meets the service
12requirements for that benefit calculation as prescribed under
13this Rule 4 in addition to the applicable age requirement under
14subsection (a-10) (a-5) of Section 15-135.
15    For purposes of this Rule 4, a participant's service as a
16firefighter shall also include the following:
17        (i) service that is performed while the person is an
18    employee under subsection (h) of Section 15-107; and
19        (ii) in the case of an individual who was a
20    participating employee employed in the fire department of
21    the University of Illinois's Champaign-Urbana campus
22    immediately prior to the elimination of that fire
23    department and who immediately after the elimination of
24    that fire department transferred to another job with the
25    University of Illinois, service performed as an employee of
26    the University of Illinois in a position other than police

 

 

HB2902- 8 -LRB101 09760 RPS 54861 b

1    officer or firefighter, from the date of that transfer
2    until the employee's next termination of service with the
3    University of Illinois.
4    (b) For a Tier 1 member, the retirement annuity provided
5under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
6month the participant is under age 60 at the time of
7retirement. However, this reduction shall not apply in the
8following cases:
9        (1) For a disabled participant whose disability
10    benefits have been discontinued because he or she has
11    exhausted eligibility for disability benefits under clause
12    (6) of Section 15-152;
13        (2) For a participant who has at least the number of
14    years of service required to retire at any age under
15    subsection (a) of Section 15-135; or
16        (3) For that portion of a retirement annuity which has
17    been provided on account of service of the participant
18    during periods when he or she performed the duties of a
19    police officer or firefighter, if these duties were
20    performed for at least 5 years immediately preceding the
21    date the retirement annuity is to begin.
22    (b-5) The retirement annuity of a Tier 2 member who is
23retiring after attaining age 62 with at least 10 years of
24service credit shall be reduced by 1/2 of 1% for each full
25month that the member's age is under age 67.
26    (c) The maximum retirement annuity provided under Rules 1,

 

 

HB2902- 9 -LRB101 09760 RPS 54861 b

12, 4, and 5 shall be the lesser of (1) the annual limit of
2benefits as specified in Section 415 of the Internal Revenue
3Code of 1986, as such Section may be amended from time to time
4and as such benefit limits shall be adjusted by the
5Commissioner of Internal Revenue, and (2) 80% of final rate of
6earnings.
7    (d) A Tier 1 member whose status as an employee terminates
8after August 14, 1969 shall receive automatic increases in his
9or her retirement annuity as follows:
10    Effective January 1 immediately following the date the
11retirement annuity begins, the annuitant shall receive an
12increase in his or her monthly retirement annuity of 0.125% of
13the monthly retirement annuity provided under Rule 1, Rule 2,
14Rule 3, or Rule 4 contained in this Section, multiplied by the
15number of full months which elapsed from the date the
16retirement annuity payments began to January 1, 1972, plus
170.1667% of such annuity, multiplied by the number of full
18months which elapsed from January 1, 1972, or the date the
19retirement annuity payments began, whichever is later, to
20January 1, 1978, plus 0.25% of such annuity multiplied by the
21number of full months which elapsed from January 1, 1978, or
22the date the retirement annuity payments began, whichever is
23later, to the effective date of the increase.
24    The annuitant shall receive an increase in his or her
25monthly retirement annuity on each January 1 thereafter during
26the annuitant's life of 3% of the monthly annuity provided

 

 

HB2902- 10 -LRB101 09760 RPS 54861 b

1under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
2Section. The change made under this subsection by P.A. 81-970
3is effective January 1, 1980 and applies to each annuitant
4whose status as an employee terminates before or after that
5date.
6    Beginning January 1, 1990, all automatic annual increases
7payable under this Section shall be calculated as a percentage
8of the total annuity payable at the time of the increase,
9including all increases previously granted under this Article.
10    The change made in this subsection by P.A. 85-1008 is
11effective January 26, 1988, and is applicable without regard to
12whether status as an employee terminated before that date.
13    (d-5) A retirement annuity of a Tier 2 member shall receive
14annual increases on the January 1 occurring either on or after
15the attainment of age 67 or the first anniversary of the
16annuity start date, whichever is later. Each annual increase
17shall be calculated at 3% or one half the annual unadjusted
18percentage increase (but not less than zero) in the consumer
19price index-u for the 12 months ending with the September
20preceding each November 1, whichever is less, of the originally
21granted retirement annuity. If the annual unadjusted
22percentage change in the consumer price index-u for the 12
23months ending with the September preceding each November 1 is
24zero or there is a decrease, then the annuity shall not be
25increased.
26    (e) If, on January 1, 1987, or the date the retirement

 

 

HB2902- 11 -LRB101 09760 RPS 54861 b

1annuity payment period begins, whichever is later, the sum of
2the retirement annuity provided under Rule 1 or Rule 2 of this
3Section and the automatic annual increases provided under the
4preceding subsection or Section 15-136.1, amounts to less than
5the retirement annuity which would be provided by Rule 3, the
6retirement annuity shall be increased as of January 1, 1987, or
7the date the retirement annuity payment period begins,
8whichever is later, to the amount which would be provided by
9Rule 3 of this Section. Such increased amount shall be
10considered as the retirement annuity in determining benefits
11provided under other Sections of this Article. This paragraph
12applies without regard to whether status as an employee
13terminated before the effective date of this amendatory Act of
141987, provided that the annuitant was employed at least
15one-half time during the period on which the final rate of
16earnings was based.
17    (f) A participant is entitled to such additional annuity as
18may be provided on an actuarially equivalent basis, by any
19accumulated additional contributions to his or her credit.
20However, the additional contributions made by the participant
21toward the automatic increases in annuity provided under this
22Section shall not be taken into account in determining the
23amount of such additional annuity.
24    (g) If, (1) by law, a function of a governmental unit, as
25defined by Section 20-107 of this Code, is transferred in whole
26or in part to an employer, and (2) a participant transfers

 

 

HB2902- 12 -LRB101 09760 RPS 54861 b

1employment from such governmental unit to such employer within
26 months after the transfer of the function, and (3) the sum of
3(A) the annuity payable to the participant under Rule 1, 2, or
43 of this Section (B) all proportional annuities payable to the
5participant by all other retirement systems covered by Article
620, and (C) the initial primary insurance amount to which the
7participant is entitled under the Social Security Act, is less
8than the retirement annuity which would have been payable if
9all of the participant's pension credits validated under
10Section 20-109 had been validated under this system, a
11supplemental annuity equal to the difference in such amounts
12shall be payable to the participant.
13    (h) On January 1, 1981, an annuitant who was receiving a
14retirement annuity on or before January 1, 1971 shall have his
15or her retirement annuity then being paid increased $1 per
16month for each year of creditable service. On January 1, 1982,
17an annuitant whose retirement annuity began on or before
18January 1, 1977, shall have his or her retirement annuity then
19being paid increased $1 per month for each year of creditable
20service.
21    (i) On January 1, 1987, any annuitant whose retirement
22annuity began on or before January 1, 1977, shall have the
23monthly retirement annuity increased by an amount equal to 8¢
24per year of creditable service times the number of years that
25have elapsed since the annuity began.
26(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;

 

 

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198-92, eff. 7-16-13.)
 
2    Section 90. The State Mandates Act is amended by adding
3Section 8.43 as follows:
 
4    (30 ILCS 805/8.43 new)
5    Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
6of this Act, no reimbursement by the State is required for the
7implementation of any mandate created by this amendatory Act of
8the 101st General Assembly.
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.