101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2033

 

Introduced 2/15/2019, by Sen. Jason Plummer

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/7-139  from Ch. 108 1/2, par. 7-139

    Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that a current or former elected or appointed official of a participating municipality who first becomes a participating employee on or after the effective date of the amendatory Act may establish credit for no more than 30 days of service as an official of that municipality under a provision concerning retroactive service. Effective immediately.


LRB101 10352 RPS 55458 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2033LRB101 10352 RPS 55458 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
5Section 7-139 as follows:
 
6    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
7    Sec. 7-139. Credits and creditable service to employees.
8    (a) Each participating employee shall be granted credits
9and creditable service, for purposes of determining the amount
10of any annuity or benefit to which he or a beneficiary is
11entitled, as follows:
12        1. For prior service: Each participating employee who
13    is an employee of a participating municipality or
14    participating instrumentality on the effective date shall
15    be granted creditable service, but no credits under
16    paragraph 2 of this subsection (a), for periods of prior
17    service for which credit has not been received under any
18    other pension fund or retirement system established under
19    this Code, as follows:
20        If the effective date of participation for the
21    participating municipality or participating
22    instrumentality is on or before January 1, 1998, creditable
23    service shall be granted for the entire period of prior

 

 

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1    service with that employer without any employee
2    contribution.
3        If the effective date of participation for the
4    participating municipality or participating
5    instrumentality is after January 1, 1998, creditable
6    service shall be granted for the last 20% of the period of
7    prior service with that employer, but no more than 5 years,
8    without any employee contribution. A participating
9    employee may establish creditable service for the
10    remainder of the period of prior service with that employer
11    by making an application in writing, accompanied by payment
12    of an employee contribution in an amount determined by the
13    Fund, based on the employee contribution rates in effect at
14    the time of application for the creditable service and the
15    employee's salary rate on the effective date of
16    participation for that employer, plus interest at the
17    effective rate from the date of the prior service to the
18    date of payment. Application for this creditable service
19    may be made at any time while the employee is still in
20    service.
21        A municipality that (i) has at least 35 employees; (ii)
22    is located in a county with at least 2,000,000 inhabitants;
23    and (iii) maintains an independent defined benefit pension
24    plan for the benefit of its eligible employees may restrict
25    creditable service in whole or in part for periods of prior
26    service with the employer if the governing body of the

 

 

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1    municipality adopts an irrevocable resolution to restrict
2    that creditable service and files the resolution with the
3    board before the municipality's effective date of
4    participation.
5        Any person who has withdrawn from the service of a
6    participating municipality or participating
7    instrumentality prior to the effective date, who reenters
8    the service of the same municipality or participating
9    instrumentality after the effective date and becomes a
10    participating employee is entitled to creditable service
11    for prior service as otherwise provided in this subdivision
12    (a)(1) only if he or she renders 2 years of service as a
13    participating employee after the effective date.
14    Application for such service must be made while in a
15    participating status. The salary rate to be used in the
16    calculation of the required employee contribution, if any,
17    shall be the employee's salary rate at the time of first
18    reentering service with the employer after the employer's
19    effective date of participation.
20        2. For current service, each participating employee
21    shall be credited with:
22            a. Additional credits of amounts equal to each
23        payment of additional contributions received from him
24        under Section 7-173, as of the date the corresponding
25        payment of earnings is payable to him.
26            b. Normal credits of amounts equal to each payment

 

 

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1        of normal contributions received from him, as of the
2        date the corresponding payment of earnings is payable
3        to him, and normal contributions made for the purpose
4        of establishing out-of-state service credits as
5        permitted under the conditions set forth in paragraph 6
6        of this subsection (a).
7            c. Municipality credits in an amount equal to 1.4
8        times the normal credits, except those established by
9        out-of-state service credits, as of the date of
10        computation of any benefit if these credits would
11        increase the benefit.
12            d. Survivor credits equal to each payment of
13        survivor contributions received from the participating
14        employee as of the date the corresponding payment of
15        earnings is payable, and survivor contributions made
16        for the purpose of establishing out-of-state service
17        credits.
18        3. For periods of temporary and total and permanent
19    disability benefits, each employee receiving disability
20    benefits shall be granted creditable service for the period
21    during which disability benefits are payable. Normal and
22    survivor credits, based upon the rate of earnings applied
23    for disability benefits, shall also be granted if such
24    credits would result in a higher benefit to any such
25    employee or his beneficiary.
26        4. For authorized leave of absence without pay: A

 

 

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1    participating employee shall be granted credits and
2    creditable service for periods of authorized leave of
3    absence without pay under the following conditions:
4            a. An application for credits and creditable
5        service is submitted to the board while the employee is
6        in a status of active employment.
7            b. Not more than 12 complete months of creditable
8        service for authorized leave of absence without pay
9        shall be counted for purposes of determining any
10        benefits payable under this Article.
11            c. Credits and creditable service shall be granted
12        for leave of absence only if such leave is approved by
13        the governing body of the municipality, including
14        approval of the estimated cost thereof to the
15        municipality as determined by the fund, and employee
16        contributions, plus interest at the effective rate
17        applicable for each year from the end of the period of
18        leave to date of payment, have been paid to the fund in
19        accordance with Section 7-173. The contributions shall
20        be computed upon the assumption earnings continued
21        during the period of leave at the rate in effect when
22        the leave began.
23            d. Benefits under the provisions of Sections
24        7-141, 7-146, 7-150 and 7-163 shall become payable to
25        employees on authorized leave of absence, or their
26        designated beneficiary, only if such leave of absence

 

 

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1        is creditable hereunder, and if the employee has at
2        least one year of creditable service other than the
3        service granted for leave of absence. Any employee
4        contributions due may be deducted from any benefits
5        payable.
6            e. No credits or creditable service shall be
7        allowed for leave of absence without pay during any
8        period of prior service.
9        5. For military service: The governing body of a
10    municipality or participating instrumentality may elect to
11    allow creditable service to participating employees who
12    leave their employment to serve in the armed forces of the
13    United States for all periods of such service, provided
14    that the person returns to active employment within 90 days
15    after completion of full time active duty, but no
16    creditable service shall be allowed such person for any
17    period that can be used in the computation of a pension or
18    any other pay or benefit, other than pay for active duty,
19    for service in any branch of the armed forces of the United
20    States. If necessary to the computation of any benefit, the
21    board shall establish municipality credits for
22    participating employees under this paragraph on the
23    assumption that the employee received earnings at the rate
24    received at the time he left the employment to enter the
25    armed forces. A participating employee in the armed forces
26    shall not be considered an employee during such period of

 

 

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1    service and no additional death and no disability benefits
2    are payable for death or disability during such period.
3        Any participating employee who left his employment
4    with a municipality or participating instrumentality to
5    serve in the armed forces of the United States and who
6    again became a participating employee within 90 days after
7    completion of full time active duty by entering the service
8    of a different municipality or participating
9    instrumentality, which has elected to allow creditable
10    service for periods of military service under the preceding
11    paragraph, shall also be allowed creditable service for his
12    period of military service on the same terms that would
13    apply if he had been employed, before entering military
14    service, by the municipality or instrumentality which
15    employed him after he left the military service and the
16    employer costs arising in relation to such grant of
17    creditable service shall be charged to and paid by that
18    municipality or instrumentality.
19        Notwithstanding the foregoing, any participating
20    employee shall be entitled to creditable service as
21    required by any federal law relating to re-employment
22    rights of persons who served in the United States Armed
23    Services. Such creditable service shall be granted upon
24    payment by the member of an amount equal to the employee
25    contributions which would have been required had the
26    employee continued in service at the same rate of earnings

 

 

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1    during the military leave period, plus interest at the
2    effective rate.
3        5.1. In addition to any creditable service established
4    under paragraph 5 of this subsection (a), creditable
5    service may be granted for up to 48 months of service in
6    the armed forces of the United States.
7        In order to receive creditable service for military
8    service under this paragraph 5.1, a participating employee
9    must (1) apply to the Fund in writing and provide evidence
10    of the military service that is satisfactory to the Board;
11    (2) obtain the written approval of the current employer;
12    and (3) make contributions to the Fund equal to (i) the
13    employee contributions that would have been required had
14    the service been rendered as a member, plus (ii) an amount
15    determined by the board to be equal to the employer's
16    normal cost of the benefits accrued for that military
17    service, plus (iii) interest on items (i) and (ii) from the
18    date of first membership in the Fund to the date of
19    payment. The required interest shall be calculated at the
20    regular interest rate.
21        The changes made to this paragraph 5.1 by Public Acts
22    95-483 and 95-486 apply only to participating employees in
23    service on or after August 28, 2007 (the effective date of
24    those Public Acts).
25        6. For out-of-state service: Creditable service shall
26    be granted for service rendered to an out-of-state local

 

 

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1    governmental body under the following conditions: The
2    employee had participated and has irrevocably forfeited
3    all rights to benefits in the out-of-state public employees
4    pension system; the governing body of his participating
5    municipality or instrumentality authorizes the employee to
6    establish such service; the employee has 2 years current
7    service with this municipality or participating
8    instrumentality; the employee makes a payment of
9    contributions, which shall be computed at 8% (normal) plus
10    2% (survivor) times length of service purchased times the
11    average rate of earnings for the first 2 years of service
12    with the municipality or participating instrumentality
13    whose governing body authorizes the service established
14    plus interest at the effective rate on the date such
15    credits are established, payable from the date the employee
16    completes the required 2 years of current service to date
17    of payment. In no case shall more than 120 months of
18    creditable service be granted under this provision.
19        7. For retroactive service: Any employee who could have
20    but did not elect to become a participating employee, or
21    who should have been a participant in the Municipal Public
22    Utilities Annuity and Benefit Fund before that fund was
23    superseded, may receive creditable service for the period
24    of service not to exceed 50 months; however, a current or
25    former elected or appointed official of a participating
26    municipality may establish credit under this paragraph 7

 

 

SB2033- 10 -LRB101 10352 RPS 55458 b

1    for more than 50 months of service as an official of that
2    municipality, if the excess over 50 months is approved by
3    resolution of the governing body of the affected
4    municipality filed with the Fund before January 1, 2002.
5        A current or former elected or appointed official of a
6    participating municipality who first becomes a
7    participating employee under this Article on or after the
8    effective date of this amendatory Act of the 101st General
9    Assembly may establish credit under this paragraph 7 for no
10    more than 30 days of service as an official of that
11    municipality.
12        Any employee who is a participating employee on or
13    after September 24, 1981 and who was excluded from
14    participation by the age restrictions removed by Public Act
15    82-596 may receive creditable service for the period, on or
16    after January 1, 1979, excluded by the age restriction and,
17    in addition, if the governing body of the participating
18    municipality or participating instrumentality elects to
19    allow creditable service for all employees excluded by the
20    age restriction prior to January 1, 1979, for service
21    during the period prior to that date excluded by the age
22    restriction. Any employee who was excluded from
23    participation by the age restriction removed by Public Act
24    82-596 and who is not a participating employee on or after
25    September 24, 1981 may receive creditable service for
26    service after January 1, 1979. Creditable service under

 

 

SB2033- 11 -LRB101 10352 RPS 55458 b

1    this paragraph shall be granted upon payment of the
2    employee contributions which would have been required had
3    he participated, with interest at the effective rate for
4    each year from the end of the period of service established
5    to date of payment.
6        8. For accumulated unused sick leave: A participating
7    employee who is applying for a retirement annuity shall be
8    entitled to creditable service for that portion of the
9    employee's accumulated unused sick leave for which payment
10    is not received, as follows:
11            a. Sick leave days shall be limited to those
12        accumulated under a sick leave plan established by a
13        participating municipality or participating
14        instrumentality which is available to all employees or
15        a class of employees.
16            b. Except as provided in item b-1, only sick leave
17        days accumulated with a participating municipality or
18        participating instrumentality with which the employee
19        was in service within 60 days of the effective date of
20        his retirement annuity shall be credited; If the
21        employee was in service with more than one employer
22        during this period only the sick leave days with the
23        employer with which the employee has the greatest
24        number of unpaid sick leave days shall be considered.
25            b-1. If the employee was in the service of more
26        than one employer as defined in item (2) of paragraph

 

 

SB2033- 12 -LRB101 10352 RPS 55458 b

1        (a) of subsection (A) of Section 7-132, then the sick
2        leave days from all such employers shall be credited,
3        as long as the creditable service attributed to those
4        sick leave days does not exceed the limitation in item
5        f of this paragraph 8. In calculating the creditable
6        service under this item b-1, the sick leave days from
7        the last employer shall be considered first, then the
8        remaining sick leave days shall be considered until
9        there are no more days or the maximum creditable sick
10        leave threshold under item f of this paragraph 8 has
11        been reached.
12            c. The creditable service granted shall be
13        considered solely for the purpose of computing the
14        amount of the retirement annuity and shall not be used
15        to establish any minimum service period required by any
16        provision of the Illinois Pension Code, the effective
17        date of the retirement annuity, or the final rate of
18        earnings.
19            d. The creditable service shall be at the rate of
20        1/20 of a month for each full sick day, provided that
21        no more than 12 months may be credited under this
22        subdivision 8.
23            e. Employee contributions shall not be required
24        for creditable service under this subdivision 8.
25            f. Each participating municipality and
26        participating instrumentality with which an employee

 

 

SB2033- 13 -LRB101 10352 RPS 55458 b

1        has service within 60 days of the effective date of his
2        retirement annuity shall certify to the board the
3        number of accumulated unpaid sick leave days credited
4        to the employee at the time of termination of service.
5        9. For service transferred from another system:
6    Credits and creditable service shall be granted for service
7    under Article 4, 5, 8, 14, or 16 of this Act, to any active
8    member of this Fund, and to any inactive member who has
9    been a county sheriff, upon transfer of such credits
10    pursuant to Section 4-108.3, 5-235, 8-226.7, 14-105.6, or
11    16-131.4, and payment by the member of the amount by which
12    (1) the employer and employee contributions that would have
13    been required if he had participated in this Fund as a
14    sheriff's law enforcement employee during the period for
15    which credit is being transferred, plus interest thereon at
16    the effective rate for each year, compounded annually, from
17    the date of termination of the service for which credit is
18    being transferred to the date of payment, exceeds (2) the
19    amount actually transferred to the Fund. Such transferred
20    service shall be deemed to be service as a sheriff's law
21    enforcement employee for the purposes of Section 7-142.1.
22        10. (Blank).
23        11. For service transferred from an Article 3 system
24    under Section 3-110.3: Credits and creditable service
25    shall be granted for service under Article 3 of this Act as
26    provided in Section 3-110.3, to any active member of this

 

 

SB2033- 14 -LRB101 10352 RPS 55458 b

1    Fund, upon transfer of such credits pursuant to Section
2    3-110.3. If the board determines that the amount
3    transferred is less than the true cost to the Fund of
4    allowing that creditable service to be established, then in
5    order to establish that creditable service, the member must
6    pay to the Fund an additional contribution equal to the
7    difference, as determined by the board in accordance with
8    the rules and procedures adopted under this paragraph. If
9    the member does not make the full additional payment as
10    required by this paragraph prior to termination of his
11    participation with that employer, then his or her
12    creditable service shall be reduced by an amount equal to
13    the difference between the amount transferred under
14    Section 3-110.3, including any payments made by the member
15    under this paragraph prior to termination, and the true
16    cost to the Fund of allowing that creditable service to be
17    established, as determined by the board in accordance with
18    the rules and procedures adopted under this paragraph.
19        The board shall establish by rule the manner of making
20    the calculation required under this paragraph 11, taking
21    into account the appropriate actuarial assumptions; the
22    member's service, age, and salary history, and any other
23    factors that the board determines to be relevant.
24        12. For omitted service: Any employee who was employed
25    by a participating employer in a position that required
26    participation, but who was not enrolled in the Fund, may

 

 

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1    establish such credits under the following conditions:
2            a. Application for such credits is received by the
3        Board while the employee is an active participant of
4        the Fund or a reciprocal retirement system.
5            b. Eligibility for participation and earnings are
6        verified by the Authorized Agent of the participating
7        employer for which the service was rendered.
8        Creditable service under this paragraph shall be
9    granted upon payment of the employee contributions that
10    would have been required had he participated, which shall
11    be calculated by the Fund using the member contribution
12    rate in effect during the period that the service was
13    rendered.
14    (b) Creditable service - amount:
15        1. One month of creditable service shall be allowed for
16    each month for which a participating employee made
17    contributions as required under Section 7-173, or for which
18    creditable service is otherwise granted hereunder. Not
19    more than 1 month of service shall be credited and counted
20    for 1 calendar month, and not more than 1 year of service
21    shall be credited and counted for any calendar year. A
22    calendar month means a nominal month beginning on the first
23    day thereof, and a calendar year means a year beginning
24    January 1 and ending December 31.
25        2. A seasonal employee shall be given 12 months of
26    creditable service if he renders the number of months of

 

 

SB2033- 16 -LRB101 10352 RPS 55458 b

1    service normally required by the position in a 12-month
2    period and he remains in service for the entire 12-month
3    period. Otherwise a fractional year of service in the
4    number of months of service rendered shall be credited.
5        3. An intermittent employee shall be given creditable
6    service for only those months in which a contribution is
7    made under Section 7-173.
8    (c) No application for correction of credits or creditable
9service shall be considered unless the board receives an
10application for correction while (1) the applicant is a
11participating employee and in active employment with a
12participating municipality or instrumentality, or (2) while
13the applicant is actively participating in a pension fund or
14retirement system which is a participating system under the
15Retirement Systems Reciprocal Act. A participating employee or
16other applicant shall not be entitled to credits or creditable
17service unless the required employee contributions are made in
18a lump sum or in installments made in accordance with board
19rule. Payments made to establish service credit under paragraph
201, 4, 5, 5.1, 6, 7, or 12 of subsection (a) of this Section must
21be received by the Board while the applicant is an active
22participant in the Fund or a reciprocal retirement system,
23except that an applicant may make one payment after termination
24of active participation in the Fund or a reciprocal retirement
25system.
26    (d) Upon the granting of a retirement, surviving spouse or

 

 

SB2033- 17 -LRB101 10352 RPS 55458 b

1child annuity, a death benefit or a separation benefit, on
2account of any employee, all individual accumulated credits
3shall thereupon terminate. Upon the withdrawal of additional
4contributions, the credits applicable thereto shall thereupon
5terminate. Terminated credits shall not be applied to increase
6the benefits any remaining employee would otherwise receive
7under this Article.
8(Source: P.A. 100-148, eff. 8-18-17.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.