95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB3651

 

Introduced 2/28/2007, by Rep. Roger L. Eddy

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-155   from Ch. 108 1/2, par. 15-155

    Amends the State Universities Article of the Illinois Pension Code. Provides that, if the final rate of earnings of an employee is $30,000 or below and the employee is not receiving benefits under any other Article of the Code, then any salary increase in excess of 6% for any academic year used to determine the final rate of earnings under the Article over his or her earnings with the same employer for the previous academic year is exempt from provisions requiring the participant's employer to pay the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of 6%. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Section 15-155 as follows:
 
6     (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
7     Sec. 15-155. Employer contributions.
8     (a) The State of Illinois shall make contributions by
9 appropriations of amounts which, together with the other
10 employer contributions from trust, federal, and other funds,
11 employee contributions, income from investments, and other
12 income of this System, will be sufficient to meet the cost of
13 maintaining and administering the System on a 90% funded basis
14 in accordance with actuarial recommendations.
15     The Board shall determine the amount of State contributions
16 required for each fiscal year on the basis of the actuarial
17 tables and other assumptions adopted by the Board and the
18 recommendations of the actuary, using the formula in subsection
19 (a-1).
20     (a-1) For State fiscal years 2011 through 2045, the minimum
21 contribution to the System to be made by the State for each
22 fiscal year shall be an amount determined by the System to be
23 sufficient to bring the total assets of the System up to 90% of

 

 

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1 the total actuarial liabilities of the System by the end of
2 State fiscal year 2045. In making these determinations, the
3 required State contribution shall be calculated each year as a
4 level percentage of payroll over the years remaining to and
5 including fiscal year 2045 and shall be determined under the
6 projected unit credit actuarial cost method.
7     For State fiscal years 1996 through 2005, the State
8 contribution to the System, as a percentage of the applicable
9 employee payroll, shall be increased in equal annual increments
10 so that by State fiscal year 2011, the State is contributing at
11 the rate required under this Section.
12     Notwithstanding any other provision of this Article, the
13 total required State contribution for State fiscal year 2006 is
14 $166,641,900.
15     Notwithstanding any other provision of this Article, the
16 total required State contribution for State fiscal year 2007 is
17 $252,064,100.
18     For each of State fiscal years 2008 through 2010, the State
19 contribution to the System, as a percentage of the applicable
20 employee payroll, shall be increased in equal annual increments
21 from the required State contribution for State fiscal year
22 2007, so that by State fiscal year 2011, the State is
23 contributing at the rate otherwise required under this Section.
24     Beginning in State fiscal year 2046, the minimum State
25 contribution for each fiscal year shall be the amount needed to
26 maintain the total assets of the System at 90% of the total

 

 

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1 actuarial liabilities of the System.
2     Amounts received by the System pursuant to Section 25 of
3 the Budget Stabilization Act in any fiscal year do not reduce
4 and do not constitute payment of any portion of the minimum
5 State contribution required under this Article in that fiscal
6 year. Such amounts shall not reduce, and shall not be included
7 in the calculation of, the required State contributions under
8 this Article in any future year until the System has reached a
9 funding ratio of at least 90%. A reference in this Article to
10 the "required State contribution" or any substantially similar
11 term does not include or apply to any amounts payable to the
12 System under Section 25 of the Budget Stabilization Act.
13     Notwithstanding any other provision of this Section, the
14 required State contribution for State fiscal year 2005 and for
15 fiscal year 2008 and each fiscal year thereafter, as calculated
16 under this Section and certified under Section 15-165, shall
17 not exceed an amount equal to (i) the amount of the required
18 State contribution that would have been calculated under this
19 Section for that fiscal year if the System had not received any
20 payments under subsection (d) of Section 7.2 of the General
21 Obligation Bond Act, minus (ii) the portion of the State's
22 total debt service payments for that fiscal year on the bonds
23 issued for the purposes of that Section 7.2, as determined and
24 certified by the Comptroller, that is the same as the System's
25 portion of the total moneys distributed under subsection (d) of
26 Section 7.2 of the General Obligation Bond Act. In determining

 

 

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1 this maximum for State fiscal years 2008 through 2010, however,
2 the amount referred to in item (i) shall be increased, as a
3 percentage of the applicable employee payroll, in equal
4 increments calculated from the sum of the required State
5 contribution for State fiscal year 2007 plus the applicable
6 portion of the State's total debt service payments for fiscal
7 year 2007 on the bonds issued for the purposes of Section 7.2
8 of the General Obligation Bond Act, so that, by State fiscal
9 year 2011, the State is contributing at the rate otherwise
10 required under this Section.
11     (b) If an employee is paid from trust or federal funds, the
12 employer shall pay to the Board contributions from those funds
13 which are sufficient to cover the accruing normal costs on
14 behalf of the employee. However, universities having employees
15 who are compensated out of local auxiliary funds, income funds,
16 or service enterprise funds are not required to pay such
17 contributions on behalf of those employees. The local auxiliary
18 funds, income funds, and service enterprise funds of
19 universities shall not be considered trust funds for the
20 purpose of this Article, but funds of alumni associations,
21 foundations, and athletic associations which are affiliated
22 with the universities included as employers under this Article
23 and other employers which do not receive State appropriations
24 are considered to be trust funds for the purpose of this
25 Article.
26     (b-1) The City of Urbana and the City of Champaign shall

 

 

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

 

 

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1 accordance with subsection (c) of Section 15-165, except as
2 provided in subsection (g).
3     (e) The State Comptroller shall draw warrants payable to
4 the System upon proper certification by the System or by the
5 employer in accordance with the appropriation laws and this
6 Code.
7     (f) Normal costs under this Section means liability for
8 pensions and other benefits which accrues to the System because
9 of the credits earned for service rendered by the participants
10 during the fiscal year and expenses of administering the
11 System, but shall not include the principal of or any
12 redemption premium or interest on any bonds issued by the Board
13 or any expenses incurred or deposits required in connection
14 therewith.
15     (g) If the amount of a participant's earnings for any
16 academic year used to determine the final rate of earnings,
17 determined on a full-time equivalent basis, exceeds the amount
18 of his or her earnings with the same employer for the previous
19 academic year, determined on a full-time equivalent basis, by
20 more than 6%, the participant's employer shall pay to the
21 System, in addition to all other payments required under this
22 Section and in accordance with guidelines established by the
23 System, the present value of the increase in benefits resulting
24 from the portion of the increase in earnings that is in excess
25 of 6%. This present value shall be computed by the System on
26 the basis of the actuarial assumptions and tables used in the

 

 

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

 

 

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1 concluded within 3 years after the employer's receipt of the
2 bill.
3     (h) This subsection (h) applies only to payments made or
4 salary increases given on or after June 1, 2005 but before July
5 1, 2011. The changes made by Public Act 94-1057 this amendatory
6 Act of the 94th General Assembly shall not require the System
7 to refund any payments received before July 31, 2006 (the
8 effective date of Public Act 94-1057) this amendatory Act.
9     When assessing payment for any amount due under subsection
10 (g), the System shall exclude earnings increases paid to
11 participants under contracts or collective bargaining
12 agreements entered into, amended, or renewed before June 1,
13 2005.
14     When assessing payment for any amount due under subsection
15 (g), the System shall exclude earnings increases paid to a
16 participant at a time when the participant is 10 or more years
17 from retirement eligibility under Section 15-135.
18     When assessing payment for any amount due under subsection
19 (g), the System shall exclude earnings increases resulting from
20 overload work, including a contract for summer teaching, or
21 overtime when the employer has certified to the System, and the
22 System has approved the certification, that: (i) in the case of
23 overloads (A) the overload work is for the sole purpose of
24 academic instruction in excess of the standard number of
25 instruction hours for a full-time employee occurring during the
26 academic year that the overload is paid and (B) the earnings

 

 

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

 

 

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1 payments made or salary increases given after June 30, 2014
2 shall be used in assessing payment for any amount due under
3 subsection (g) of this Section.
4     (i-5) If (A) the final rate of earnings of an employee is
5 $30,000 or below and (B) the employee is not receiving benefits
6 under any other Article of this Code, then any salary increase
7 in excess of 6% for any academic year used to determine the
8 final rate of earnings under this Article over his or her
9 earnings with the same employer for the previous academic year
10 is exempt from the provisions of subsection (g) of this
11 Section.
12     (j) The System shall prepare a report and file copies of
13 the report with the Governor and the General Assembly by
14 January 1, 2007 that contains all of the following information:
15         (1) The number of recalculations required by the
16     changes made to this Section by Public Act 94-1057 this
17     amendatory Act of the 94th General Assembly for each
18     employer.
19         (2) The dollar amount by which each employer's
20     contribution to the System was changed due to
21     recalculations required by Public Act 94-1057 this
22     amendatory Act of the 94th General Assembly.
23         (3) The total amount the System received from each
24     employer as a result of the changes made to this Section by
25     Public Act 94-4.
26         (4) The increase in the required State contribution

 

 

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1     resulting from the changes made to this Section by Public
2     Act 94-1057 this amendatory Act of the 94th General
3     Assembly.
4     (k) The Illinois Community College Board shall adopt rules
5 for recommending lists of promotional positions submitted to
6 the Board by community colleges and for reviewing the
7 promotional lists on an annual basis. When recommending
8 promotional lists, the Board shall consider the similarity of
9 the positions submitted to those positions recognized for State
10 universities by the State Universities Civil Service System.
11 The Illinois Community College Board shall file a copy of its
12 findings with the System. The System shall consider the
13 findings of the Illinois Community College Board when making
14 determinations under this Section. The System shall not exclude
15 any earnings increases resulting from a promotion when the
16 promotion was not submitted by a community college. Nothing in
17 this subsection (k) shall require any community college to
18 submit any information to the Community College Board.
19 (Source: P.A. 93-2, eff. 4-7-03; 94-4, eff. 6-1-05; 94-839,
20 eff. 6-6-06; 94-1057, eff. 7-31-06; revised 8-3-06.)
 
21     Section 99. Effective date. This Act takes effect upon
22 becoming law.