SB0512ham002 97TH GENERAL ASSEMBLY

Rep. Tom Cross

Filed: 11/7/2011

09700SB0512ham002 LRB097 06621 JDS 59545 a

AMENDMENT TO SENATE BILL 512

AMENDMENT NO. ______. Amend Senate Bill 512, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Public Labor Relations Act is amended by changing Section 15 as follows:

(5 ILCS 315/15) (from Ch. 48, par. 1615)

Sec. 15. Act Takes Precedence.

(a) In case of any conflict between the provisions of this Act and any other law (other than Section 5 of the State Employees Group Insurance Act of 1971 and other than the changes made to the Illinois Pension Code by Public Act 96-889 or this amendatory Act of the 97th General Assembly this amendatory Act of the 96th General Assembly), executive order, or administrative regulation relating to wages, hours and conditions of employment and employment relations, the provisions of this Act or any collective bargaining agreement negotiated thereunder shall prevail and control. Nothing in this Act shall be construed to replace or diminish the rights of employees established by Sections 28 and 28a of the Metropolitan Transit Authority Act, Sections 2.15 through 2.19 of the Regional Transportation Authority Act. The provisions of this Act are subject to Section 5 of the State Employees Group Insurance Act of 1971. Nothing in this Act shall be construed to replace the necessity of complaints against a sworn peace officer, as defined in Section 2(a) of the Uniform Peace Officer Disciplinary Act, from having a complaint supported by a sworn affidavit.

(b) Except as provided in subsection (a) above, any collective bargaining contract between a public employer and a labor organization executed pursuant to this Act shall supersede any contrary statutes, charters, ordinances, rules or regulations relating to wages, hours and conditions of employment and employment relations adopted by the public employer or its agents. Any collective bargaining agreement entered into prior to the effective date of this Act shall remain in full force during its duration.

(c) It is the public policy of this State, pursuant to paragraphs (h) and (i) of Section 6 of Article VII of the Illinois Constitution, that the provisions of this Act are the exclusive exercise by the State of powers and functions which might otherwise be exercised by home rule units. Such powers and functions may not be exercised concurrently, either directly or indirectly, by any unit of local government, including any home rule unit, except as otherwise authorized by this Act.

(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)

Section 10. The Illinois Pension Code is amended by changing Sections 1-160, 2-108.1, 2-124, 2-126, 8-125, 8-173, 8-251, 9-128.1, 9-133, 9-160, 9-164, 9-170, 9-174, 9-176, 9-219, 9-220, 9-235, 10-103, 10-109, 11-124, 11-169, 11-170, 11-230, 12-116, 12-149, 12-150, 12-167, 12-168, 12-169, 12-183, 12-190.3, 14-103.10, 14-131, 14-133, 15-113.6, 15-134, 15-134.5, 15-136, 15-136.3, 15-136.4, 15-141, 15-146, 15-154, 15-155, 15-157, 15-158.2, 16-133, 16-136.2, 16-152, 16-158, 17-116, 17-130, 17-149.1, 20-121, 20-123, 20-124, 20-125, and 20-131 and by adding Sections 1-166, 1-167, 2-119.02, 2-119.03, 2-119.04, 2-124.1, 2-126.2, 2-163, 8-103.1, 8-103.2, 8-103.3, 8-174.2, 8-190.1, 8-190.2, 8-190.3, 8-190.4, 8-255, 9-103.1, 9-103.2, 9-103.3, 9-170.3, 9-170.4, 9-170.5, 9-170.6, 9-170.7, 9-240, 10-110, 10-111, 11-123.1, 11-123.2, 11-123.3, 11-131.1, 11-131.2, 11-131.3, 11-131.4, 11-235, 12-125.2, 12-125.3, 12-125.4, 12-128.1, 12-128.2, 12-128.3, 12-151.3, 12-193.5, 14-108.2d, 14-108.2e, 14-108.2f, 14-109.1, 14-131.1, 14-133.2, 14-202, 15-103.4, 15-134.6, 15-134.7, 15-136.5, 15-155.1, 15-157.2, 15-158.5, 15-199, 16-133.6, 16-133.7, 16-133.8, 16-152.2, 16-158.2, 16-204, 17-109.3, 17-109.4, 17-109.5, 17-130.4, 17-130.5, 17-130.6, 17-130.7, 17-160, and 17-165 as follows:

(40 ILCS 5/1-160)

Sec. 1-160. Provisions applicable to new hires.

(a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes a member or a participant under any reciprocal retirement system or pension fund established under this Code, other than a retirement system or pension fund established under Article 2, 3, 4, 5, 6, or 18 of this Code or, beginning on the effective date of this amendatory Act of the 97th General Assembly, a retirement system under Article 14, 15, or 16 of this Code, notwithstanding any other provision of this Code to the contrary, but do not apply to any self-managed plan established under this Code, to any person with respect to service as a sheriff's law enforcement employee under Article 7, or to any participant of the retirement plan established under Section 22-101.

(b) "Final average salary" means the average monthly (or annual) salary obtained by dividing the total salary or earnings calculated under the Article applicable to the member or participant during the 96 consecutive months (or 8 consecutive years) of service within the last 120 months (or 10 years) of service in which the total salary or earnings calculated under the applicable Article was the highest by the number of months (or years) of service in that period. For the purposes of a person who first becomes a member or participant of any retirement system or pension fund to which this Section applies on or after January 1, 2011, in this Code, "final average salary" shall be substituted for the following:

(1) In Article Articles 7 (except for service as sheriff's law enforcement employees) and 15, "final rate of earnings".

(2) In Articles 8, 9, 10, 11, and 12, "highest average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal".

(3) In Article 13, "average final salary".

(4) (Blank) In Article 14, "final average compensation".

(5) In Article 17, "average salary".

(6) In Section 22-207, "wages or salary received by him at the date of retirement or discharge".

(b-5) Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings, salary, or wages (based on the plan year) of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

(c) A member or participant is entitled to a retirement annuity upon written application if he or she has attained age 67 and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article.

A member or participant who has attained age 62 and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.

(d) The retirement annuity of a member or participant who is retiring after attaining age 62 with at least 10 years of service credit shall be reduced by one-half of 1% for each full month that the member's age is under age 67.

(e) Any retirement annuity or supplemental annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

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

(g) (Blank). The benefits in Section 14-110 apply only if the person is a State policeman, a fire fighter in the fire protection service of a department, or a security employee of the Department of Corrections or the Department of Juvenile Justice, as those terms are defined in subsection (b) of Section 14-110. A person who meets the requirements of this Section is entitled to an annuity calculated under the provisions of Section 14-110, in lieu of the regular or minimum retirement annuity, only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 60, regardless of whether the attainment of age 60 occurs while the person is still in service.

(h) If a person who first becomes a member or a participant of a retirement system or pension fund subject to this Section on or after January 1, 2011 is receiving a retirement annuity or retirement pension under that system or fund and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, except for those members or participants exempted from the provisions of this Section under subsection (a) of this Section, then the person's retirement annuity or retirement pension under that system or fund shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity or retirement pension payments shall resume and be recalculated if recalculation is provided for under the applicable Article of this Code.

If a person who first becomes a member of a retirement system or pension fund subject to this Section on or after January 1, 2012 and is receiving a retirement annuity or retirement pension under that system or fund and accepts on a contractual basis a position to provide services to a governmental entity from which he or she has retired, then that person's annuity or retirement pension earned as an active employee of the employer shall be suspended during that contractual service. A person receiving an annuity or retirement pension under this Code shall notify the pension fund or retirement system from which he or she is receiving an annuity or retirement pension, as well as his or her contractual employer, of his or her retirement status before accepting contractual employment. A person who fails to submit such notification shall be guilty of a Class A misdemeanor and required to pay a fine of $1,000. Upon termination of that contractual employment, the person's retirement annuity or retirement pension payments shall resume and, if appropriate, be recalculated under the applicable provisions of this Code.

(i) (Blank). Notwithstanding any other provision of this Section, a person who first becomes a participant of the retirement system established under Article 15 on or after January 1, 2011 shall have the option to enroll in the self-managed plan created under Section 15-158.2 of this Code.

(j) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.

(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11; 97-609, eff. 1-1-12.)

(40 ILCS 5/1-166 new)

Sec. 1-166. Actuarial review. The Commission on Government Forecasting and Accountability shall retain an independent actuarial firm that does not provide valuation services to any of the State-funded retirement systems, and that firm shall review and comment on the assumptions and methodologies used by those systems in determining liabilities and contributions. The actuarial firm shall report to the Commission before July 1, 2013 and every 3 years thereafter. The report shall include, but need not be limited to: an evaluation of the sustainability of long-term funding schedules as compared to anticipated State revenues over the same projection period; a comparison of expected rates of asset return among the various systems, including comments on the rationale for any differences in such rates of return; and an evaluation of long-term payroll projections compared with anticipated individual salary growth and the revenue sources supporting such payrolls.

(40 ILCS 5/1-167 new)

Sec. 1-167. Maximum benefit limitation. In no circumstance shall the changes made to this Code by this amendatory Act of the 97th General Assembly result in a defined benefit pension or annuity based on a combination of the traditional benefit package and the revised benefit package or reformed benefit package, as applicable, that would be greater than what the participant would have received by remaining in the traditional benefit package.

(40 ILCS 5/2-108.1) (from Ch. 108 1/2, par. 2-108.1)

Sec. 2-108.1. Highest salary for annuity purposes.

(a) "Highest salary for annuity purposes" means whichever of the following is applicable to the participant:

For a participant who first becomes a participant of this System before August 10, 2009 (the effective date of Public Act 96-207):

(1) For a participant who is a member of the General Assembly on his or her last day of service: the highest salary that is prescribed by law, on the participant's last day of service, for a member of the General Assembly who is not an officer; plus, if the participant was elected or appointed to serve as an officer of the General Assembly for 2 or more years and has made contributions as required under subsection (d) of Section 2-126, the highest additional amount of compensation prescribed by law, at the time of the participant's service as an officer, for members of the General Assembly who serve in that office.

(2) For a participant who holds one of the State executive offices specified in Section 2-105 on his or her last day of service: the highest salary prescribed by law for service in that office on the participant's last day of service.

(3) For a participant who is Clerk or Assistant Clerk of the House of Representatives or Secretary or Assistant Secretary of the Senate on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.

(4) For a participant who is a continuing participant under Section 2-117.1 on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.

For a participant who first becomes a participant of this System on or after August 10, 2009 (the effective date of Public Act 96-207) and before January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the period of: (1) the 48 consecutive months of service within the last 120 months of service in which the total compensation was the highest, or (2) the total period of service, if less than 48 months, by the number of months of service in that period.

For a participant who first becomes a participant of this System on or after January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the 96 consecutive months of service within the last 120 months of service in which the total compensation was the highest by the number of months of service in that period; however, beginning January 1, 2011, the highest salary for annuity purposes may not exceed $106,800, except that that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1. "Consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board by November 1 of each year.

On and after January 9, 2013, for a participant who first becomes a participant of this System on or after January 1, 2011 or elects the revised benefit package under subdivision (a)(2) of Section 2-119.02, the maximum highest annual salary amount shall be adjusted to $110,100, as adjusted for periods after 2012 based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program. Each year thereafter on January 1, this amount shall be adjusted based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program.

(b) The earnings limitations of subsection (a) apply to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating a proportional annuity under this Article, except in the case of a person who first became a member of this System before August 22, 1994.

(c) In calculating the subsection (a) earnings limitation to be applied to earnings under any other participating system under the Retirement Systems Reciprocal Act for the purpose of calculating a proportional annuity under this Article, the participant's last day of service shall be deemed to mean the last day of service in any participating system from which the person has applied for a proportional annuity under the Retirement Systems Reciprocal Act.

(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

(40 ILCS 5/2-119.02 new)

Sec. 2-119.02. Benefit accruals on and after January 9, 2013.

(a) Each participant under this Article, other than a person who first becomes a participant on or after January 1, 2011, shall elect which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after January 9, 2013. The retirement program election made by the participant must be made (i) by January 9, 2013, and (ii) if applicable, every 3 years thereafter. The participant shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the System prior to Public Act 96-889;

(2) the revised benefit package provided by the System to new participants under Public Act 96-889, Public Act 96-1490, and this amendatory Act of the 97th General Assembly; or

(3) the self-managed plan provided by the System under Section 2-119.03.

(b) A person who first becomes a participant of the System on or after January 1, 2011, shall elect which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after January 9, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make that election (i) by January 9, 2013 or within 6 months after the participant's first day of service, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The participant election authorized by this Section is an irrevocable election, except that an individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for the period of 3 years, and shall make subsequent elections during a 6-month period prescribed by the System. The election shall be made in the manner prescribed by the System. Any participant who fails to make the initial election shall, by default, participate in the revised benefit package provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the revised benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section;

(2) each participant in the revised benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the revised benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section; and

(3) the elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the System.

(e) If a participant with an accrued benefit under the traditional benefit package provided by the System prior to Public Act 96-889 elects the revised benefit package provided under paragraph (2) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals before the effective date of the election, based on the participant's highest salary for annuity purposes and service as of the effective date of the election and frozen on such date, and (ii) the participant's benefit accruals based on the participant's highest salary for annuity purposes and service on and after the effective date of the election, as modified by the Public Act 96-889, Public Act 96-1490, and this amendatory Act of the 97th General Assembly. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the revised benefit package. Furthermore, the participant shall be entitled to the benefit of the survivor's annuity provided under Public Act 96-889 and Public Act 96-1490. All service completed under the System shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the revised benefit package.

(f) If a participant with an accrued benefit under the traditional benefit package or the revised benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals before the effective date of the election, based on the participant's highest salary for annuity purposes and service as of the effective date of the election and frozen on such date. However, the participant shall also have an accrued self-managed plan benefit as specified in subsection (g) of Section 2-119.03, for periods of service on or after the effective date of the election. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the System shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package, the revised benefit package, and the self-managed plan.

(g) An individual who is a participant in the System, but is not a member of the General Assembly on January 9, 2013, shall elect, based on the eligibility criteria specified in this Article, one of the 3 retirement programs provided under paragraphs (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming a member of the General Assembly.

(40 ILCS 5/2-119.03 new)

Sec. 2-119.03. Self-managed plan.

(a) The Illinois State Board of Investment created under Article 22A of this Code shall establish and administer a self-managed plan on behalf of the retirement system established under this Article. The plan shall offer participants the opportunity to accumulate assets for retirement through a combination of participant and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts that are fixed, variable, or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986. The plan shall not include the retirement annuities, survivors annuities, death benefits, or refunds provided under this Article.

(b) The Illinois State Board of Investment shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe the rules and procedures that are necessary or desirable for the administration of the self-managed plan.

(c) A member eligible to participate in the self-managed plan must make a written election in accordance with the provisions of Section 2-119.02 and the procedures established by the retirement system. Participation in the self-managed plan by an electing member shall begin on the first of the month following the date the member's election is filed with the retirement system, but in no case prior to January 9, 2013.

(d) Members who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The participant shall not be deemed a fiduciary by reason of providing investment direction. A person who is a fiduciary, including the plan sponsor, shall not be liable for any loss resulting from the investment direction of the participant and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. The System, the Illinois State Board of Investment, and the employer do not guarantee any of the investments in the participant's account balances.

(e) The self-managed plan shall be funded by contributions pursuant to salary reduction agreements for participants in the self-managed plan and employer contributions as provided in Section 2-124.1 of this Code. Participants may make additional contributions to the self-managed plan in accordance with the procedures prescribed by the plan sponsor, to the extent permitted under rules prescribed by the plan sponsor. Participant and employer contributions shall be paid into the participants' self-managed plan accounts in a manner to be prescribed by the plan sponsor.

(f) A participant in the self-managed plan becomes vested in the employer contributions credited to his or her accounts in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of service with the System or (2) if the participant has completed at least 1 1/2 years of service, the death of the participant.

(g) If a participant who is vested in employer contributions terminates employment, the participant shall be entitled to a benefit that is based on the account values attributable to both employer and participant contributions and any investment return on those contributions. If a participant who is not vested in employer contributions terminates employment, the participant shall be entitled to a benefit based solely on the account values attributable to the participant's contributions and any investment return on those contributions, and the employer contributions and any investment return on those contributions shall be forfeited. Any employer contributions that are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the System for future allocations of employer contributions.

The self-managed plan shall be funded by contributions pursuant to salary reduction agreements for participants in the self-managed plan and employer contributions as provided in this Section.

The participant contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a participant have an option of receiving these amounts in cash, and payment of the participant contribution shall be a condition of employment. The participant contribution shall be deducted from the participant's salary in the amount specified by Paragraph 3 of subsection (e) of Section 2-126, unless the employer agrees to pick up and pay the participant contribution in addition to the participant's salary, pursuant to Section 2-126.1.

The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participant's salary. The amounts so credited shall be paid into the participants' self-managed plan accounts in a manner to be prescribed by the System. The program shall also provide for employer contributions to be used by the System to provide disability benefits for the participant. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for participants in the self-managed plan.

The State of Illinois shall make contributions by appropriations to the System of the employer contributions required for members who participate in the self-managed plan under this Section. The amount required shall be certified by the Board of Trustees of the System and paid by the State in accordance with Section 2-124. The System shall not be obligated to remit the required State contributions to any person or entity until it has received the required contributions from the State.

A participant under this Section shall be entitled to the benefits of Article 20 of this Code.

(40 ILCS 5/2-119.04 new)

Sec. 2-119.04. Minimum benefit and allocation provisions. Each participant in the System shall receive a minimum benefit or allocation for service on and after January 9, 2013, determined as follows:

(1) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 2-119.02 of this Code or the revised benefit package provided under paragraph (2) of subsection (a) of Section 2-119.02 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) for the participant's period of service covered by each such defined benefit package that is equal to the annual primary insurance amount the participant would have under Social Security for such period of service. For the purposes of this item (1), the primary insurance amount a participant would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the participant is participating in the self-managed plan provided under Section 2-119.03 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's salary for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)

Sec. 2-124. Contributions by State.

(a) The State shall make contributions to the System by appropriations of amounts which, together with the contributions of participants, interest earned on investments, and other income will meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

(b) The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the prescribed rate of interest, using the formula in subsection (c).

(c) For State fiscal years 2014 2012 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount equal to the sum of (i) the contribution determined under Section 2-124.1, plus (ii) an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making the these determinations under item (ii) of this subsection (c), for State fiscal years 2017 through 2045, the required State contribution shall be calculated each year as a level percentage of revenue provided by the individual income tax, sales tax, and corporate income tax assuming a 2.3% average annual growth rate in these revenues based on the most recent fiscal year's actual revenues as reported by the Commission on Government Forecasting and Accountability payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

Notwithstanding any other provision of this Article, for For State fiscal years 2014 1996 through 2016 2005, the State contribution to the System under item (ii) of this subsection (c), as a percentage of State revenue from the individual income tax, sales tax, and corporate income tax the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2017 2011, the State is contributing at the rate required under this Section.

For State fiscal years 2014 through 2045, the total State contribution required in each fiscal year under this subsection (c) must not be less than 100% of the prior fiscal year's actual or required contribution, whichever is greater.

Notwithstanding any other provision of this Article, the total required State contribution for this System for State fiscal year 2013 shall be $14,466,286.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $4,157,000.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $5,220,300.

For each of State fiscal years 2008 through 2009, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $10,454,000 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is the amount recertified by the System on or before April 1, 2011 pursuant to Section 2-134 and shall be made from the proceeds of bonds sold in fiscal year 2011 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2011, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Beginning in State fiscal year 2046, the minimum State contribution shall be an amount equal to the contribution determined under Section 2-124.1, plus an amount sufficient for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter until fiscal year 2013, as calculated under this Section and certified under Section 2-134, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(d) For purposes of determining the required State contribution to the System, the value of the System's assets shall be equal to the actuarial value of the System's assets, which shall be calculated as follows:

As of June 30, 2008, the actuarial value of the System's assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System's assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(e) For purposes of determining the required State contribution to the system for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the system's actuarially assumed rate of return.

(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)

(40 ILCS 5/2-124.1 new)

Sec. 2-124.1. Additional State contribution. The following rules apply in determining the additional contribution by the State of Illinois in State fiscal year 2014 and each fiscal year thereafter.

(1) With respect to participants who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 2-119.02 of this Code, an amount equal to the 6% of the salary of the participant group.

(2) With respect to participants who elect the revised benefit package provided under paragraph (2) of subsection (a) of Section 2-119.02 of this Code, an amount equal to 6% of the pensionable salary of the participant group.

(3) With respect to participants who elect the self-managed plan provided under paragraph (3) of subsection (a) of Section 2-119.02 of this Code, an amount equal to (i) 6% of the salary of the participant group and (ii) an amount determined by the System that is necessary to finance the disability plan provided for that group under this Article.

(40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)

Sec. 2-126. Contributions by participants.

(a) Each participant shall contribute toward the cost of his or her retirement annuity a percentage of each payment of salary received by him or her for service as a member as follows: for service between October 31, 1947 and January 1, 1959, 5%; for service between January 1, 1959 and June 30, 1969, 6%; for service between July 1, 1969 and January 10, 1973, 6 1/2%; for service after January 10, 1973, 7%; for service after December 31, 1981, 8 1/2%.

(b) Beginning August 2, 1949, each male participant, and from July 1, 1971, each female participant shall contribute towards the cost of the survivor's annuity 2% of salary.

A participant who has no eligible survivor's annuity beneficiary may elect to cease making contributions for survivor's annuity under this subsection. A survivor's annuity shall not be payable upon the death of a person who has made this election, unless prior to that death the election has been revoked and the amount of the contributions that would have been paid under this subsection in the absence of the election is paid to the System, together with interest at the rate of 4% per year from the date the contributions would have been made to the date of payment.

(c) Beginning July 1, 1967, each participant shall contribute 1% of salary towards the cost of automatic increase in annuity provided in Section 2-119.1. These contributions shall be made concurrently with contributions for retirement annuity purposes.

(d) In addition, each participant serving as an officer of the General Assembly shall contribute, for the same purposes and at the same rates as are required of a regular participant, on each additional payment received as an officer. If the participant serves as an officer for at least 2 but less than 4 years, he or she shall contribute an amount equal to the amount that would have been contributed had the participant served as an officer for 4 years. Persons who serve as officers in the 87th General Assembly but cannot receive the additional payment to officers because of the ban on increases in salary during their terms may nonetheless make contributions based on those additional payments for the purpose of having the additional payments included in their highest salary for annuity purposes; however, persons electing to make these additional contributions must also pay an amount representing the corresponding employer contributions, as calculated by the System.

(e) Notwithstanding any other provision of this Article, the required contribution of a participant who first becomes a participant on or after January 1, 2011 shall not exceed the contribution that would be due under this Article if that participant's highest salary for annuity purposes were $106,800, plus any increases in that amount under Section 2-108.1.

(f) Notwithstanding anything in this Section to the contrary, beginning with terms of office that begin on and after January 9, 2013, all participants shall be required to make the following contributions:

(1) Participants who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 2-119.02 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 24.89% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus 6%, provided that no participant's contribution shall be less than 6% or more than 26.89% of salary. The System shall certify the actuarially determined fiscal year 2017 normal cost of the traditional benefit package and the amount of the required participant contribution.

(2) In fiscal year 2014 and in each fiscal year thereafter, participants who elect the revised benefit package provided under paragraph (2) of subsection (a) of Section 2-119.02 of this Code shall contribute an amount equal to the greater of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014 or 12%, minus contributions by the State of Illinois in fiscal year 2014 under paragraph (2) of subsection (a) of Section 2-124.1, provided that no participant's contribution shall be less than 6% of salary. The System shall certify the actuarially determined long term normal cost of such revised benefit package and the amount of the required participant contribution. For purposes of this paragraph (2), long term normal cost shall be defined as the normal cost of the revised benefit package assuming that all active participants are covered under the revised benefit package. Contributions under this paragraph (2) shall be based on pensionable salary.

(3) In fiscal year 2014 and in each fiscal year thereafter, participants who elect the self-managed plan provided under paragraph (3) of subsection (a) of Section 2-119.02 of this Code shall contribute a minimum amount equal to 6% of salary. Participants who elect the self-managed plan provided under paragraph (3) of subsection (a) of Section 2-119.02 of this Code may elect to increase the participant contribution in accordance with rules prescribed by the Board and the plan sponsor.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/2-126.2 new)

Sec. 2-126.2. Increases in participant contributions. If the participant contribution required under Section 2-126 increases for any participant pursuant to this amendatory Act of the 97th General Assembly, the additional participant contribution in excess of the prior participant contribution shall be deducted from the participant's salary unless the participant's employer agrees pursuant to Section 414(h) of the Internal Revenue Code to pick up and pay part or all of such increased contribution in addition to the participant's salary.

(40 ILCS 5/2-163 new)

Sec. 2-163. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the System to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/8-103.1 new)

Sec. 8-103.1. Reformed benefit package. "Reformed benefit package": The defined benefit retirement program maintained under the Fund for employees who first become participants in the Fund on or after January 1, 2011.

(40 ILCS 5/8-103.2 new)

Sec. 8-103.2. Self-managed plan. "Self-managed plan": The defined contribution retirement program maintained under the Fund as described in Section 8-190.2. The self-managed plan shall not include retirement annuities or survivor's, disability, or insurance benefits payable directly from the Fund as provided by this Article.

(40 ILCS 5/8-103.3 new)

Sec. 8-103.3. Traditional benefit package. "Traditional benefit package": The defined benefit retirement program maintained under the Fund for employees who first became participants in the Fund before January 1, 2011.

(40 ILCS 5/8-125) (from Ch. 108 1/2, par. 8-125)

Sec. 8-125. Annuity.

"Annuity": Equal monthly payments for life, unless otherwise specified.

For annuities taking effect before January 1, 1998, the first payment shall be due and payable one month after the occurrence of the event upon which payment of the annuity depends, and the last payment shall be due and payable as of the date of the annuitant's death and shall be prorated from the date of the last preceding payment to the date of death for deaths that occur on or before March 31, 2000. All payments made on or after April 1, 2000 shall be made on the first day of the calendar month and the last payment shall be made on the first day of the calendar month in which the annuity payment period ends. All payments for months beginning with April of 2000 shall be for the entire calendar month, without proration. A pro rata amount shall be paid for that part of the month from the March 2000 annuity payment date through March 31, 2000.

For annuities taking effect on or after January 1, 1998, payments shall be made as of the first day of the calendar month, with the first payment to be made as of the first day of the calendar month coincidental with or next following the first day of the annuity payment period, and the last payment to be made as of the first day of the calendar month in which the annuity payment period ends. For annuities taking effect on or after January 1, 1998, all payments shall be for the entire calendar month, without proration.

For the purposes of this Section, the "annuity payment period" means the period beginning on the day after the occurrence of the event upon which payment of the annuity depends, and ending on the day upon which the death of the annuitant or other event terminating the annuity occurs.

The provisions of this Section do not apply to participants who are participating in the self-managed plan.

(Source: P.A. 90-31, eff. 6-27-97; 91-887, eff. 7-6-00.)

(40 ILCS 5/8-173) (from Ch. 108 1/2, par. 8-173)

Sec. 8-173. Financing; tax levy.

(a) Except as provided in subsection (f) of this Section, the city council of the city shall levy a tax annually upon all taxable property in the city at a rate that will produce a sum which, when added to the amounts deducted from the salaries of the employees or otherwise contributed by them and the amounts deposited under subsection (f), will be sufficient for the requirements of this Article, but which when extended will produce an amount not to exceed the greater of the following: (a) the sum obtained by the levy of a tax of .1093% of the value, as equalized or assessed by the Department of Revenue, of all taxable property within such city, or (b) the sum of $12,000,000. However any city in which a Fund has been established and in operation under this Article for more than 3 years prior to 1970 shall levy for the year 1970 a tax at a rate on the dollar of assessed valuation of all taxable property that will produce, when extended, an amount not to exceed 1.2 times the total amount of contributions made by employees to the Fund for annuity purposes in the calendar year 1968, and, for the year 1971 and 1972 such levy that will produce, when extended, an amount not to exceed 1.3 times the total amount of contributions made by employees to the Fund for annuity purposes in the calendar years 1969 and 1970, respectively; and for the year 1973 an amount not to exceed 1.365 times such total amount of contributions made by employees for annuity purposes in the calendar year 1971; and for the year 1974 an amount not to exceed 1.430 times such total amount of contributions made by employees for annuity purposes in the calendar year 1972; and for the year 1975 an amount not to exceed 1.495 times such total amount of contributions made by employees for annuity purposes in the calendar year 1973; and for the year 1976 an amount not to exceed 1.560 times such total amount of contributions made by employees for annuity purposes in the calendar year 1974; and for the year 1977 an amount not to exceed 1.625 times such total amount of contributions made by employees for annuity purposes in the calendar year 1975; and for the year 1978 and each year thereafter, such levy as will produce, when extended, an amount not to exceed the total amount of contributions made by or on behalf of employees to the Fund for annuity purposes in the calendar year 2 years prior to the year for which the annual applicable tax is levied, multiplied by 1.690 for the years 1978 through 1998 and by 1.250 for the years year 1999 through 2012. For 2013 and for each year thereafter, the amount levied shall be equal to the amount levied in 2010.

The tax shall be levied and collected in like manner with the general taxes of the city, and shall be exclusive of and in addition to the amount of tax the city is now or may hereafter be authorized to levy for general purposes under any laws which may limit the amount of tax which the city may levy for general purposes. The county clerk of the county in which the city is located, in reducing tax levies under the provisions of any Act concerning the levy and extension of taxes, shall not consider the tax herein provided for as a part of the general tax levy for city purposes, and shall not include the same within any limitation of the percent of the assessed valuation upon which taxes are required to be extended for such city.

Revenues derived from such tax shall be paid to the city treasurer of the city as collected and held by him for the benefit of the fund.

If the payments on account of taxes are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants against the current tax levy.

(b) On or before January 10, annually, the board shall notify the city council of the requirements of this Article that the tax herein provided shall be levied for that current year. The board shall compute the amounts necessary to be credited to the reserves established and maintained as herein provided, and shall make an annual determination of the amount of the required city contributions, and certify the results thereof to the city council.

(c) In respect to employees of the city who are transferred to the employment of a park district by virtue of the "Exchange of Functions Act of 1957", the corporate authorities of the park district shall annually levy a tax upon all the taxable property in the park district at such rate per cent of the value of such property, as equalized or assessed by the Department of Revenue, as shall be sufficient, when added to the amounts deducted from their salaries and otherwise contributed by them to provide the benefits to which they and their dependents and beneficiaries are entitled under this Article. The city shall not levy a tax hereunder in respect to such employees.

The tax so levied by the park district shall be in addition to and exclusive of all other taxes authorized to be levied by the park district for corporate, annuity fund, or other purposes. The county clerk of the county in which the park district is located, in reducing any tax levied under the provisions of any act concerning the levy and extension of taxes shall not consider such tax as part of the general tax levy for park purposes, and shall not include the same in any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for the park district. The proceeds of the tax levied by the park district, upon receipt by the district, shall be immediately paid over to the city treasurer of the city for the uses and purposes of the fund.

The various sums to be contributed by the city and park district and allocated for the purposes of this Article, and any interest to be contributed by the city, shall be derived from the revenue from the taxes authorized in this Section or otherwise as expressly provided in this Section.

If it is not possible or practicable for the city to make contributions for age and service annuity and widow's annuity at the same time that employee contributions are made for such purposes, such city contributions shall be construed to be due and payable as of the end of the fiscal year for which the tax is levied and shall accrue thereafter with interest at the effective rate until paid.

(d) With respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L. 93-567, 88 Stat. 1845), hereinafter referred to as CETA, subsequent to October 1, 1978, and in instances where the board has elected to establish a manpower program reserve, the board shall compute the amounts necessary to be credited to the manpower program reserves established and maintained as herein provided, and shall make a periodic determination of the amount of required contributions from the City to the reserve to be reimbursed by the federal government in accordance with rules and regulations established by the Secretary of the United States Department of Labor or his designee, and certify the results thereof to the City Council. Any such amounts shall become a credit to the City and will be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(e) In lieu of establishing a manpower program reserve with respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as authorized by subsection (d), the board may elect to establish a special municipality contribution rate for all such employees. If this option is elected, the City shall contribute to the Fund from federal funds provided under the Comprehensive Employment and Training Act program at the special rate so established and such contributions shall become a credit to the City and be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(f) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the tax levied by the city under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of that tax.

(Source: P.A. 90-31, eff. 6-27-97; 90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)

(40 ILCS 5/8-174.2 new)

Sec. 8-174.2. Employee contributions beginning July 1, 2013. Notwithstanding any other provision of this Article, beginning July 1, 2013, all participants shall be required to make the following contributions:

(1) Participants who elect the traditional benefit package under paragraph (1) of subsection (a) of Section 8-190.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 12.75% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the traditional benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the traditional benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(2) Participants who elect the reformed benefit package under paragraph (2) of subsection (a) of Section 8-190.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 7% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the reformed benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the reformed benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(3) Participants who elect the self-managed plan under paragraph (3) of subsection (a) of Section 8-190.1 of this Code shall contribute a minimum of 6% of salary. Participants who elect the self-managed plan provided under Section 8-190.2 of this Code may elect to increase their employee contributions in accordance with rules prescribed by the Board.

No prior contribution increases or other additional contributions specified by this Section shall apply to any participant for service on or after July 1, 2013.

(40 ILCS 5/8-190.1 new)

Sec. 8-190.1. Benefit accruals on and after July 1, 2013.

(a) Each participant under this Article, other than a person who first becomes an employee and a participant on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013, except that such participants with more than 5 years of creditable service at the time of such election shall only be eligible to elect one of the retirement programs in paragraphs (1) or (2) of this subsection (a). The retirement program election made by the participating employee must be made no later than January 1, 2013. The participant shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the Fund;

(2) the reformed benefit package provided by the Fund; or

(3) the self-managed plan provided by the Fund.

(b) A person who first becomes an employee and a participant in the Fund on or after January 1, 2011 shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of covered employment occurring on and after July 1, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make the election (i) by January 1, 2013 or within 6 months after the participant's first day of covered employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The member election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years, and shall make subsequent elections every 3 years during a 6-month period prescribed by the Fund. The election shall be made in the manner prescribed by the Fund. Any member who fails to make the election shall, by default, participate in the benefit program provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) Each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the reformed benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section. However, such a participant with more than 5 years of creditable service shall be prohibited from electing the self-managed plan.

(2) Each participant that has less than 5 years of creditable service and participates in the reformed benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the reformed benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(3) The elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the Fund.

(e) If a participant with an accrued benefit under the traditional benefit package elects the reformed benefit package, the participant's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals under the traditional benefit package, based on the participant's pay and service under the traditional benefit package, and frozen with respect to pay for service earned subsequent to participation under the traditional benefit package and (ii) the participant's benefit accruals based on pay and service under the reformed benefit package. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the reformed benefit package. All service completed under the Fund shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the reformed benefit package, provided that the vesting requirements of the traditional benefit package shall continue to govern vesting for participants in the reformed benefit package.

(f) If a participant with an accrued benefit under the traditional benefit package or the reformed benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals prior to participation in the self-managed plan, based on the participant's pay and service, and fixed with respect to pay for service earned subsequent to participation in the traditional or reformed benefit package. However, the participant shall also have an accrued self-managed plan balance as specified in subsection (h) of Section 8-190.2, for periods of covered employment on or after participation in the self-managed plan. All rights and features provided under the traditional or reformed benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the traditional or reformed benefit package and the self-managed plan shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package and the self-managed plan.

(g) An individual with less than 5 years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

An individual with 5 or more years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1) or (2) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

(40 ILCS 5/8-190.2 new)

Sec. 8-190.2. Self-managed plan.

(a) Purpose. The Municipal Employees', Officers', and Officials' Annuity and Benefit Fund shall establish and administer a self-managed plan, which shall offer participants the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) The Municipal Employees', Officers', and Officials' Annuity and Benefit Fund shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the Fund may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The Fund may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The Fund shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Employee direction. Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The employee shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the Fund nor the employer guarantees any of the investments in the employee's account balances.

(e) Participation. An employee eligible to participate in the self-managed plan must make a written election under Section 8-190.1 and the procedures established by the Fund. Participation in the self-managed plan by an electing employee shall begin on the first day of the first pay period following the later of (i) the date the employee's election is filed with the Fund or (ii) July 1, 2013.

An employee who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position. Participation in the self-managed plan under this Section shall constitute membership in the Municipal Employees', Officers', and Officials' Annuity and Benefit Fund.

An employee under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions from employees participating in the self-managed plan and employer contributions as provided in this Section.

This required contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a employee have an option of receiving these amounts in cash. The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participant's salary. The amounts so credited shall be paid into the employee's self-managed plan account in a manner to be prescribed by the Fund.

The employer shall make contributions by appropriations to the Fund of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board of Trustees of the Fund and paid by the employer in accordance with this Article. The Fund shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the employer.

(g) Vesting; withdrawal; return to service. A participant in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the participant while in active service, if the participant has completed at least 1 1/2 years of service; or (3) the participant's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) Benefit amounts. If a participant who is vested in employer contributions terminates employment, the participant shall be entitled to a benefit which is based on the account values attributable to employer and participant contributions and any investment return thereon.

If a participant who is not vested in employer contributions terminates employment, the participant shall be entitled to a benefit based solely on the account values attributable to the participant's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall become part of the trust.

(40 ILCS 5/8-190.3 new)

Sec. 8-190.3. Minimum benefit and allocation provisions. Each participant in the Fund shall receive a minimum benefit or allocation determined as follows:

(1) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 8-103.3 of this Code or the revised defined benefit package provided under paragraph (2) of subsection (a) of Section 8-103.3 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) that is equal to the annual primary insurance amount the participant would have under Social Security. For the purposes of this item (1), the primary insurance amount a participant would have under Social Security shall be calculated so that the Fund meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the participant is participating in the self-managed plan provided under Section 8-103.2 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the Fund meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/8-190.4 new)

Sec. 8-190.4. Employer contributions to the self-managed plan. For members electing benefits under paragraph (3) of subsection (a) of Section 8-190.1, an employer contribution equal to 6% of total pension payroll for the respective employee group.

(40 ILCS 5/8-251) (from Ch. 108 1/2, par. 8-251)

Sec. 8-251. Felony conviction.

None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a municipal employee.

This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

All future entrants entering service subsequent to July 11, 1955 shall be deemed to have consented to the provisions of this section as a condition of coverage.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as an employee shall include employer contributions or interest or, in the case of the self-managed plan authorized under Section 8-190.2, any employer contributions or investment return on employer contributions.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/8-255 new)

Sec. 8-255. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the Fund to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/9-103.1 new)

Sec. 9-103.1. Reformed benefit package. "Reformed benefit package": The defined benefit retirement program maintained under the Fund for employees who first become participants in the Fund on or after January 1, 2011. The reformed benefit package includes benefits as modified by the provisions of Section 1-160.

(40 ILCS 5/9-103.2 new)

Sec. 9-103.2. Self-managed plan. "Self-managed plan": The defined contribution retirement program maintained under the Fund as described in Section 9-170.5. The self-managed plan shall not include any of the following: retirement annuities payable directly from the Fund as provided under Sections 9-121.6, 9-121.7, 9-125, 9-126, 9-127, 9-128, 9-128.1, 9-132, 9-134, and 9-160; automatic increase in annuities payable directly from the Fund as provided under Sections 9-133 and 9-133.1; reversionary annuities payable directly from the Fund as provided under Section 9-135; death benefits payable directly from the Fund as provided under Section 9-135.1; widow's and survivor's annuities payable directly from the Fund as provided under Sections 9-137, 9-138, 9-139, 9-140, 9-141, 9-142, 9-143, 9-144, 9-145, 9-146.1, 9-146.2, 9-147, 9-148, 9-148.1, 9-150, 9-150.1, and 9-153; child's annuities payable directly from the Fund as provided under Sections 9-154 and 9-155, refunds as provided under Sections 9-164 and 9-167; and annuities to disabled employees whose ordinary disability benefits have expired as provided under Section 9-174.

(40 ILCS 5/9-103.3 new)

Sec. 9-103.3. Traditional benefit package. "Traditional benefit package": The defined benefit retirement program maintained under the Fund for employees who first became participants in the Fund before January 1, 2011.

(40 ILCS 5/9-128.1) (from Ch. 108 1/2, par. 9-128.1)

Sec. 9-128.1. Annuities for members of the County Police Department.

(a) In lieu of the regular or minimum annuity or annuities for any deputy sheriff who is a member of a County Police Department, he may, upon withdrawal from service after not less than 20 years of service in the position of deputy sheriff as defined below, upon or after attainment of age 55, receive a total annuity equal to 2% for each year of service based upon his highest average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal from service, subject to a maximum annuity equal to 75% of such average annual salary.

(b) Any deputy sheriff who withdraws from the service after July 1, 1979, after having attained age 53 in the service with 23 or more years of service credit shall be entitled to an annuity computed as follows if such annuity is greater than that provided in the foregoing paragraphs of this Section 9-128.1: An annuity equal to 50% of the average salary for the 4 highest consecutive years of the last 10 years of service plus additional annuity equal to 2% of such average salary for each completed year of service or fraction thereof rendered after his attainment of age 53 and the completion of 23 years of service, plus an additional annuity equal to 1% of such average salary for each completed year of service or fraction thereof in excess of 23 years up to age 53.

(c) Any deputy sheriff who withdraws from the service after December 31, 1987 with 20 or more years of service credit, shall be entitled, upon attainment of age 50, to an annuity computed as follows if such annuity is greater than that provided in the foregoing paragraphs of this Section 9-128.1: An annuity equal to 50% of the average salary for the 4 highest consecutive years of the last 10 years of service, plus additional annuity equal to 2% of such average salary for each completed year of service or fraction thereof in excess of 20 years.

(d) A deputy sheriff who reaches compulsory retirement age and who has less than 23 years of service shall be entitled to a minimum annuity equal to an amount determined by the product of (1) his years of service and (2) 2% of his average salary for the 4 consecutive highest years of salary within the last 10 years of service immediately prior to his reaching compulsory retirement age.

(e) Any deputy sheriff who retires after January 1, 1984 and elects to receive an annuity under this Section, and who has credits under this Article for service not as a deputy sheriff, shall be entitled to receive, in addition to the amount of annuity otherwise provided under this Section, an additional amount of annuity provided from the totals accumulated to his credit for prior service and age and service annuities for such service not as a deputy sheriff.

(f) The term "deputy sheriff" means an employee charged with the duty of law enforcement as a deputy sheriff as specified in Section 1 of "An Act in relation to County Police Departments in certain Counties, creating a County Police Department Merit Board and defining its powers and duties", approved August 5, 1963, who rendered service in such position before and after such date.

The terms "deputy sheriff" and "member of a County Police Department" shall also include an elected sheriff of the county who has elected to become a contributor and who has submitted to the board his written election to be included within the provisions of this Section. With respect to any such sheriff, service as the elected sheriff of the county shall be deemed to be service in the position of deputy sheriff for the purposes of this Section provided that the employee contributions therefor are made at the rate prescribed for members of the County Police Department. A sheriff electing to be included under this Section may also elect to have his service as sheriff of the county before the date of such election included as service as a deputy sheriff for the purposes of this Section, by making an additional contribution for each year of such service, equal to the difference between the amount he would have contributed to the Fund during such year had he been contributing at the rate then in effect for members of the County Police Department and the amount actually contributed, plus interest thereon at the rate of 6% per annum from the end of such year to the date of payment.

(g) In no case shall an annual annuity provided in this Section 9-128.1 exceed 80% of the average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal from service.

A deputy sheriff may in addition, be entitled to the benefits provided by Section 9-133 or 9-133.1 if he so qualifies under such Sections.

(h) A deputy sheriff may elect, between January 1 and January 15, 1983, to transfer his creditable service as a member of the State Employees' Retirement System of Illinois to any Fund established under this Article of which he is a member, and such transferred creditable service shall be included as service for the purpose of calculating his benefits under this Article to the extent that the payment specified in Section 14-105.3 has been received by such Fund.

(i) An active deputy sheriff who has at least 15 years of service credit in that capacity may elect to have any or all of his credits under this Article for service not as a deputy sheriff deemed to be credits for service as a deputy sheriff, by filing a written election with the Board, accompanied by payment of an amount to be determined by the Board, equal to (1) the difference between the amount of employee contributions actually contributed by the applicant for such service not as a deputy sheriff, and the amounts that would have been contributed had such contributions been made at the rates applicable to service as a deputy sheriff, plus (2) interest thereon at the rate of 3% per annum, compounded annually, from the date of service to the date of payment.

(j) Beginning on the effective date of this amendatory Act of 1996, the terms "deputy sheriff" and "member of a County Police Department" shall also include any chief of the County Police Department or undersheriff of the County Sheriff's Department who has submitted to the board his or her written election to be included within the provisions of this Section. With respect to any such police chief or undersheriff, service as a chief of the County Police Department or an undersheriff of the County Sheriff's Department shall be deemed to be service in the position of deputy sheriff for the purposes of this Section, provided that the employee contributions therefor are made at the rate prescribed for members of the County Police Department.

A chief of the County Police Department or undersheriff of the County Sheriff's Department electing to be included under this Section may also elect to have his or her service as chief of the County Police Department or undersheriff of the County Sheriff's Department before the date of the election included as service as a deputy sheriff for the purposes of this Section, by making an additional contribution for each year of such service, equal to the difference between the amount that he or she would have contributed to the Fund during that year at the rate then in effect for members of the County Police Department and the amount actually contributed, plus interest thereon at the rate of 6% per year, compounded annually, from the end of that year to the date of payment.

A chief of the County Police Department or undersheriff of the County Sheriff's Department who has elected to be included within the provisions of this Section may transfer to this Fund credits and creditable service accumulated under any pension fund or retirement system established under Article 3, 7, 8, 14, or 15, upon payment to the Fund of (1) the amount by which the employee contributions that would have been required if he or she had participated in this Fund during the period for which credit is being transferred, plus interest, plus an equal amount for employer contributions, exceeds the amounts actually transferred from that other fund or system to this Fund, plus (2) interest thereon at 6% per year, compounded annually, from the date of transfer to the date of payment.

A chief of the County Police Department or undersheriff of the County Sheriff's Department may purchase credits and creditable service for up to 2 years of public employment rendered to an out-of-state public agency. Payment for that service shall be at the applicable rates in effect for employee and employer contributions during the period for which credit is being purchased, plus interest at the rate of 6% per year, compounded annually, from the date of service until the date of payment.

(k) The benefits of this Section do not apply to employees that first become participants on or after July 1, 2013.

(Source: P.A. 89-643, eff. 8-9-96.)

(40 ILCS 5/9-133) (from Ch. 108 1/2, par. 9-133)

Sec. 9-133. Automatic increase in annuity.

(a) An employee who retired or retires from service after December 31, 1959, having attained age 60 or more or, beginning January 1, 1991, having attained 30 or more years of creditable service, shall, in the month of January of the year following the year in which the first anniversary of retirement occurs, have his then fixed and payable monthly annuity increased by 1 1/2%, and such first fixed annuity as granted at retirement increased by a further 1 1/2% in January of each year thereafter. Beginning with January of the year 1972, such increases shall be at the rate of 2% in lieu of the aforesaid specified 1 1/2%. Beginning with January of the year 1982, such increases shall be at the rate of 3% in lieu of the aforesaid specified 2%. Beginning January 1, 1998, these increases shall be at the rate of 3% of the current amount of the annuity, including any previous increases received under this Article, without regard to whether the annuitant is in service on or after the effective date of this amendatory Act of 1997.

An employee who retires on annuity before age 60 and, beginning January 1, 1991, with less than 30 years of creditable service shall receive such increases beginning with January of the year immediately following the year in which he attains the age of 60 years. An employee who retires on annuity before age 60 and before January 1, 1991, with at least 30 years of creditable service, shall be entitled to receive the first increase under this subsection no later than January 1, 1993.

For an employee who, in accordance with the provisions of Section 9-108.1 of this Act, shall have become a member of the State System established under Article 14 on February 1, 1974, the first such automatic increase shall begin in January of 1975.

(b) Subsection (a) is not applicable to an employee retiring and receiving a term annuity, as defined in this Act, nor to any otherwise qualified employee who retires before he makes employee contributions (at the 1/2 of 1% rate as provided in this Section) for this additional annuity for not less than the equivalent of one full year. Such employee, however, shall make arrangement to pay to the fund a balance of such contributions, based on his final salary, as will bring such 1/2 of 1% contributions, computed without interest, to the equivalent of one year's contributions.

Beginning with the month of January, 1960, each employee shall contribute by means of salary deductions 1/2 of 1% of each salary payment, concurrently with and in addition to the employee contributions otherwise provided for annuity purposes.

Beginning July 1, 2013, contributions will no longer be allocated for the automatic increase.

Each such additional contribution shall be used, together with county contributions, to defray the cost of the specified annuity increments.

Such additional employee contributions are not refundable, except to an employee who withdraws and applies for refund under this Article, or applies for annuity, and also in cases where a term annuity becomes payable. In such cases his contributions shall be refunded, without interest.

(Source: P.A. 95-369, eff. 8-23-07.)

(40 ILCS 5/9-160) (from Ch. 108 1/2, par. 9-160)

Sec. 9-160. Annuity after withdrawal while disabled. An employee whose disability continues after he has received ordinary disability benefit for the maximum period of time prescribed by this Article, and who withdraws before age 60 while still so disabled, is entitled to receive the annuity provided from the total sum accumulated to his credit from employee contributions and county contributions to be computed as of his age on the date of withdrawal.

The annuity to which his wife shall be entitled upon his death, shall be fixed on the date of his withdrawal. It shall be provided on a reversionary annuity basis from the total sum accumulated to his credit for widow's annuity on the date of such withdrawal.

Upon the death of any such employee while on annuity, if his service was at least 4 years after the date of his original entry, and at least 2 years after the date of his latest re-entry, his unmarried child or children under age 18 shall be entitled to annuity specified in this Article for children of an employee who retires after age 50 (age 55 for withdrawal before January 1, 1988), subject to prescribed limitations on total payments to a family of an employee.

(Source: P.A. 85-964.)

(40 ILCS 5/9-164) (from Ch. 108 1/2, par. 9-164)

Sec. 9-164. Refunds - Withdrawal before age 55 or with less than 10 years of service.

(1) An employee, without regard to length of service, who withdraws before age 55 (age 62 for an employee that was participating in the reformed benefit package who first becomes a member on or after January 1, 2011), and any employee with less than 10 years of service who withdraws before age 60, and any employee that was participating in the reformed benefit package who first becomes a member on or after January 1, 2011 who withdraws with less than 10 years of service, shall be entitled to a refund of the total sums accumulated to his credit as of date of withdrawal for age and service annuity and widow's annuity resulting from amounts contributed by him or by the county in lieu of employee contributions during duty disability. If he is a present employee he shall also be entitled to a refund of the total sum accumulated from any sums contributed by him and applied to any county pension fund superseded by this fund. An employee withdrawing on or after January 1, 1984 may receive a refund only after he has been off the payroll for at least 30 days during which time he has received no salary.

(2) Upon receipt of the refund, the employee surrenders and forfeits all rights to any annuity or other benefits for himself and for any other persons who might have benefited through him; provided that he may have any such period of service counted in computing the term of his service - for age and service annuity purposes only - if he becomes an employee before age 65, excepting as limited by the provisions of this Article relating to the basis of computing the term of service.

(3) An employee who does not receive a refund shall have all amounts to his credit for annuity purposes on the date of his withdrawal improved by interest only until he becomes 65 while out of service at the effective rate for his benefit and the benefit of any person who may have any right to annuity through him if he re-enters service and attains a right to annuity.

(4) Any such employee shall retain such right to a refund of such amounts when he shall apply for same until he re-enters the service or until the amount of annuity shall have been fixed as provided in this Article. Thereafter, no such right shall exist in the case of any such employee.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/9-170) (from Ch. 108 1/2, par. 9-170)

Sec. 9-170. Contributions for age and service annuities for present employees, future entrants and re-entrants.

(a) Beginning on the effective date as to a present employee in paragraph (a) or (c) of Section 9-109, or as to a future entrant in paragraph (a) of Section 9-110, and beginning on September 1, 1935 as to a present employee in paragraph (b) (1) of Section 9-109 or as to a future entrant in paragraph (b) or (d) of Section 9-110, and beginning from the date of becoming a contributor as to any present employee in paragraph (b)(2) or (d) of Section 9-109, or any future entrant in paragraph (c) or (e) of Section 9-110, there shall be deducted and contributed to this fund 3 1/4% of each payment of salary for age and service annuity until July 1, 1947. Beginning July 1, 1947 and prior to July 1, 1953, 5% and beginning July 1, 1953, and prior to September 1, 1971, 6%; and beginning September 1, 1971, 6 1/2% of each payment of salary of such employees shall be deducted and contributed for such purpose.

From and after January 1, 1966, each deputy sheriff as defined in Section 9-128.1 who is a member of the County Police Department and a participant of this fund shall contribute 7% of salary for age and service annuity. At the time of retirement on annuity, a deputy sheriff who is a member of the County Police Department, who chooses to retire under provisions of this Article other than Section 9-128.1, may receive a refund of the difference between the contributions made as a deputy sheriff who is a member of the County Police Department and the contributions that would have been made for such service not as a deputy sheriff who is a member of the County Police Department, including interest earned.

Such deductions beginning on the effective date and prior to July 1, 1947 shall be made and continued for a future entrant while he is in the service until he attains age 65, and beginning on the effective date and prior to July 1, 1953 for a present employee while he is in the service until the amount so deducted from his salary or paid by him according to law to any county pension fund in force on the effective date, with interest on both such amounts at 4% per annum, equals the sum that would have been to his credit from sums deducted from his salary if deductions at the rate herein stated had been made during his entire service until he attained age 65, with interest at 4% per annum for the period subsequent to his attainment of age 65. Such deductions beginning July 1, 1947 for future entrants and beginning July 1, 1953 for present employees shall be made and continued while such future entrant or present employee is in the service.

(b) Concurrently with each employee contribution, the county shall contribute beginning on the effective date and prior to July 1, 1947, 5 3/4%, and beginning on July 1, 1947 and prior to July 1, 1953, 7%; and beginning on July 1, 1953, 6% of each payment of such salary until the employee attains age 65.

(c) Each present employee contribution made prior to the date the age and service annuity for such employee is fixed, each future entrant contribution, and each corresponding county contribution shall be allocated to the account of and credited to the employee for whose benefit it is made.

(d) Notwithstanding any other provision of this Article, beginning July 1, 2013, all participants shall be required to make the following contributions:

(1) Participants who elect the traditional benefit package under paragraph (1) of subsection (a) of Section 9-170.3 of this Code shall contribute a percentage of salary equal to the sum of subparagraphs (A) and (B) of this paragraph (1) as follows:

(A) An amount equal to the greater of (i) 6% of salary or (ii) one-half of the actuarially determined normal cost of the reformed benefit package.

(B) An additional percentage of salary that is actuarially determined to equal the difference between the normal cost of the traditional benefit package and the normal cost of the reformed benefit package. That additional percentage shall be based on the fiscal year 2011 contribution and updated every 3 years thereafter. The employer shall contribute 13.09% of employee salary.

(2) Participants who elect the reformed benefit package under paragraph (2) of subsection (a) of Section 9-170.3 of this Code shall contribute an amount equal to the greater of (i) 7% of salary or (ii) one-half of the actuarially determined normal cost of the reformed benefit package, including the cost of retiree health benefits as determined by the fund's actuary. The actuarially determined normal cost of the reformed benefit package shall be based on the fiscal year 2011 contribution and updated every 3 years thereafter. The employer contribution amount shall be calculated as the employee contribution multiplied by 1.54.

(3) Participants who elect the self-managed plan under paragraph (3) of subsection (a) of Section 9-170.3 of this Code shall contribute a minimum of 6% of salary. Participants who elect the self-managed plan provided under Section 9-170.3 of this Code may elect to increase their employee contributions in accordance with rules prescribed by the board.

No prior contribution increases or other additional contributions specified by this Section shall apply to any participant for service on or after January 1, 2013.

(Source: P.A. 86-1488.)

(40 ILCS 5/9-170.3 new)

Sec. 9-170.3. Benefit accruals on and after July 1, 2013.

(a) Each participating employee under this Article, other than a person who first becomes an employee and a participant on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013, except that such participants with more than 5 years of creditable service at the time of election shall only be eligible to elect one of the retirement programs in paragraphs (1) or (2) of this subsection (a). The retirement program election made by the participating employee must be made no later than January 1, 2013. The participating employee shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the Fund;

(2) the reformed benefit package provided by the Fund; or

(3) the self-managed plan provided by the Fund.

(b) A person who first becomes an employee and a participant in the Fund on or after January 1, 2011 shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make the election (i) by January 1, 2013 or within 6 months after the participant's first day of employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The participant election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make subsequent elections every 3 years during a 6-month period prescribed by the Fund. The election shall be made in writing, in the manner prescribed by the Fund. Any participant who fails to make the election shall, by default, participate in the benefit program provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) shall be given the opportunity to make a new election as follows:

(1) Each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under the reformed benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan under paragraph (3) of subsection (a) of this Section.

(2) Each participant in the reformed benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the reformed benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(3) The elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the Fund.

(e) If a participant under the traditional benefit package elects the reformed benefit package, the participant's total salary and service credit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals under the traditional benefit package, based on the participant's salary and service under the traditional benefit package and frozen with respect to salary for service earned subsequent to participation under the traditional benefit package and (ii) the participant's benefit accruals based on salary and service under the reformed benefit package. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package completed prior to the election to participate in the reformed benefit package. All credited service under the Fund shall count for purposes of determining retirement eligibility and vesting under the both traditional benefit package and the reformed benefit package, provided that the vesting requirements of the traditional benefit package shall continue to govern vesting for participants in the reformed benefit package.

For a participant under the traditional benefit package who elects the reformed benefit package, the combined maximum benefit of the traditional benefit package plus the reformed benefit package as determined in this subsection shall not exceed the greater of 80% of the final average salary used to calculate the reformed benefit annuity or 80% of the final average salary used to calculate the traditional benefit annuity.

(f) If a participant with an accrued benefit under the traditional benefit package or the reformed benefit package provided under paragraph (2) of subsection (a) of this Section elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals prior to participation in the self-managed plan, based on the participant's salary and service and fixed with respect to salary for service earned subsequent to participation in the traditional or reformed benefit package. However, the participant shall also have an accrued self-managed plan balance, as specified in subsection (i) of Section 9-170.5, for periods of employment on or after participation in the self-managed plan. A11 rights and features provided under the traditional or reformed benefit package will be preserved with respect to benefits earned under that package with respect to service completed prior to the election to participate in the self-managed plan. All credited service under the Fund shall count for purposes of determining retirement eligibility and vesting under the reformed benefit package and the self-managed plan.

(g) An individual with less than 5 years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

An individual with 5 or more years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1) or (2) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

(40 ILCS 5/9-170.4 new)

Sec. 9-170.4. Minimum benefit and allocation provisions.

(a) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 9-170.3 of this Code or the revised defined benefit package provided under paragraph (2) of subsection (a) of Section 9-170.3 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) that is equal to the annual primary insurance amount the participant would have under Social Security. For the purposes of this Section, the primary insurance amount a participant would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a "retirement system" under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(b) If the participant is participating in the self-managed plan provided under Section 9-170.5 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the Fund meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/9-170.5 new)

Sec. 9-170.5. Self-managed plan.

(a) Purpose. The Fund shall establish and administer a self-managed plan, which shall offer participants the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) The Fund shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the Fund may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The Fund may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The Fund shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Participant direction. Participants in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The participants shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the Fund nor the employer guarantees any of the investments in the employee's account balances.

(e) Participation. A participant eligible to participate in the self-managed plan must make a written election under Section 9-170.3 and the procedures established by the Fund. Participation in the self-managed plan by an electing employee shall begin by the first day of the second pay period following the later of (i) the date the participant's election is filed with the Fund or (ii) July 1, 2013.

A participant who has elected to participate in the self-managed plan under this Section must continue participation while employed in a participating employment position. Participation in the self-managed plan under this Section shall constitute membership in the Fund.

A participant under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions from participants participating in the self-managed plan and employer contributions as provided in this Section.

This required contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a participant have an option of receiving these amounts in cash. The self-managed plan shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participant's salary. The amounts so credited shall be paid into the employee's self-managed plan account in a manner to be prescribed by the Fund. The employer shall contribute 6% to the self-managed plan regardless of the existence of the current funding mechanism.

Under the self-managed plan, an amount of employer contributions, not exceeding 1% of the participating employees' salary, shall be used for the purpose of providing disability benefits of the Fund to employees. Prior to the beginning of each calendar year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for employees in the self-managed plan.

The employer shall make contributions to the Fund of the employer contributions required for participants who participate in the self-managed plan under this Section. The employer amount required shall be certified by the Board of Trustees of the Fund and provided to the employer on or before March 1st of each year and paid by the employer on or before June 1st of that year for participants in the self-managed plan in accordance with this Article. The Fund shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the employer. The Fund shall not be liable to any member participating in the self-managed plan for any damages resulting from any delay in remitting employee or employer contributions.

(g) Vesting; withdrawal; return to service. A participant in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the participant while in active service, if the participant has completed at least 1 1/2 years of service; or (3) the participant's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) Benefit amounts. If a participant who is vested in employer contributions terminates employment, the participant shall be entitled to a benefit which is based on the account values attributable to employer and participant contributions and any investment return thereon.

(i) No duplication of service credit. Notwithstanding any other provision of this Article, an employee may not purchase or receive service or service credit applicable to any other retirement program administered by the Fund under this Article for any period during which the employee was a participant in the self-managed plan established under this Section.

If a member who is not vested in employer contributions terminates employment, the member shall be entitled to a benefit based solely on the account values attributable to the member's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions that are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the Fund.

A participant in the self-managed plan who receives a distribution of his or her vested amounts from the self-managed plan while not yet eligible for retirement under this Article (and Article 20, if applicable) shall forfeit all service credit and accrued rights in the Fund.

(40 ILCS 5/9-170.6 new)

Sec. 9-170.6. Employer contributions to the self-managed plan. Beginning in fiscal year 2014, for members electing benefits under paragraph (3) of subsection (a) of Section 9-170.5, an employer contribution shall be made each fiscal year in an amount equal to 6% of total pensionable payroll for the respective employee group.

(40 ILCS 5/9-170.7 new)

Sec. 9-170.7. Maximum self-managed plan participation. By January 1, 2013, the Fund shall certify its total active participant population. When the number of participants that elect the self-managed plan is equal to 20% of the total active participant population, then no participant may elect the self-managed plan. Beginning in 2016 and every 3 years thereafter, the Fund shall recertify its total active participant population and the number of participants in the self-managed plan. If the number of participants in the self-managed plan is less than 20% of the recertified total active participant population, then eligible participants may elect to participate in the self-managed plan. However, participants shall be prohibited from electing to participate once the Fund determines that the number of participants in the self-managed plan is equal to 20% of the number of total active participants in the Fund.

(40 ILCS 5/9-174) (from Ch. 108 1/2, par. 9-174)

Sec. 9-174. Contributions by disabled employee whose ordinary disability benefit has expired.

In the case of any disabled employee whose credit for ordinary disability benefit purposes has expired and who continues to be disabled such employee shall have the right to contribute to the fund at the current contribution rate for the member's applicable benefit package for a period not to exceed a total of 12 months during his entire period of service and to receive credit for all annuity purposes for any such periods paid for. Such payment shall not affect the employee's resignation date for purposes of annuity.

(Source: P.A. 86-1488.)

(40 ILCS 5/9-176) (from Ch. 108 1/2, par. 9-176)

Sec. 9-176. Contributions for widow's annuity for widows of present employees, future entrants and re-entrants.

(a) Beginning on the effective date as to a present employee in paragraph (a) or (c) of Section 9--109, or as to a future entrant in paragraph (a) of Section 9--110, and beginning on September 1, 1935, as to a present employee in paragraph (b) (1) of section 9--109 or as to a future entrant in paragraph (b) or (d) of Section 9--110, and beginning from the date of becoming a contributor as to any present employee in paragraph (b) (2) or (d) of Section 9--109, or any future entrant in paragraph (c) or (e) of Section 9--110, there shall be deducted and contributed by each male employee 1%, and from and after January 1, 1966, and until July 1, 2013, 1 1/2%, of each payment of salary for widow's annuity. Deductions shall be continued during service until the employee attains age 65.

(b) Concurrently with each employee contribution, the county shall contribute beginning on the effective date and prior to July 1, 1947, 1 3/4%, and beginning on July 1, 1947, 2% of salary.

(c) Each employee contribution made prior to the date when the amount of widow's annuity for an employee is fixed and each concurrent County Contribution Credit shall be allocated to the account of and credited to the employee for whose benefit it is made.

(d) Beginning July 1, 2013, contributions will no longer be allocated for widow's annuity.

(Source: Laws 1965, p. 1254.)

(40 ILCS 5/9-219) (from Ch. 108 1/2, par. 9-219)

Sec. 9-219. Computation of service.

(1) In computing the term of service of an employee prior to the effective date, the entire period beginning on the date he was first appointed and ending on the day before the effective date, except any intervening period during which he was separated by withdrawal from service, shall be counted for all purposes of this Article.

(2) In computing the term of service of any employee on or after the effective date, the following periods of time shall be counted as periods of service for age and service, widow's and child's annuity purposes:

(a) The time during which he performed the duties of his position.

(b) Vacations, leaves of absence with whole or part pay, and leaves of absence without pay not longer than 90 days.

(c) For an employee who is a member of a county police department or a correctional officer with the county department of corrections, approved leaves of absence without pay during which the employee serves as a full-time officer or employee of an employee association, the membership of which consists of other participants in the Fund, provided that the employee contributes to the Fund (1) the amount that he would have contributed had he remained an active employee in the position he occupied at the time the leave of absence was granted, (2) an amount calculated by the Board representing employer contributions, and (3) regular interest thereon from the date of service to the date of payment. However, if the employee's application to establish credit under this subsection is received by the Fund on or after July 1, 2002 and before July 1, 2003, the amount representing employer contributions specified in item (2) shall be waived.

For a former member of a county police department who has received a refund under Section 9-164, periods during which the employee serves as head of an employee association, the membership of which consists of other police officers, provided that the employee contributes to the Fund (1) the amount that he would have contributed had he remained an active member of the county police department in the position he occupied at the time he left service, (2) an amount calculated by the Board representing employer contributions, and (3) regular interest thereon from the date of service to the date of payment. However, if the former member of the county police department retires on or after January 1, 1993 but no later than March 1, 1993, the amount representing employer contributions specified in item (2) shall be waived.

(d) Any period of disability for which he received disability benefit or whole or part pay.

(e) Accumulated vacation or other time for which an employee who retires on or after November 1, 1990 receives a lump sum payment at the time of retirement, provided that contributions were made to the fund at the time such lump sum payment was received. The service granted for the lump sum payment shall not change the employee's date of withdrawal for computing the effective date of the annuity.

(f) An employee may receive service credit for annuity purposes for accumulated sick leave as of the date of the employee's withdrawal from service, not to exceed a total of 180 days, provided that the amount of such accumulated sick leave is certified by the County Comptroller to the Board and the employee pays an amount equal to the current contribution rate for the member's applicable benefit package 8.5% (9% for members of the County Police Department who are eligible to receive an annuity under Section 9-128.1) of the amount that would have been paid had such accumulated sick leave been paid at the employee's final rate of salary. Such payment shall be made within 30 days after the date of withdrawal and prior to receipt of the first annuity check. The service credit granted for such accumulated sick leave shall not change the employee's date of withdrawal for the purpose of computing the effective date of the annuity.

(3) In computing the term of service of an employee on or after the effective date for ordinary disability benefit purposes, the following periods of time shall be counted as periods of service:

(a) Unless otherwise specified in Section 9-157, the time during which he performed the duties of his position.

(b) Paid vacations and leaves of absence with whole or part pay.

(c) Any period for which he received duty disability benefit.

(d) Any period of disability for which he received whole or part pay.

(4) For an employee who on January 1, 1958, was transferred by Act of the 70th General Assembly from his position in a department of welfare of any city located in the county in which this Article is in force and effect to a similar position in a department of such county, service shall also be credited for ordinary disability benefit and child's annuity for such period of department of welfare service during which period he was a contributor to a statutory annuity and benefit fund in such city and for which purposes service credit would otherwise not be credited by virtue of such involuntary transfer.

(5) An employee described in subsection (e) of Section 9-108 shall receive credit for child's annuity and ordinary disability benefit for the period of time for which he was credited with service in the fund from which he was involuntarily separated through class or group transfer; provided, that no such credit shall be allowed to the extent that it results in a duplication of credits or benefits, and neither shall such credit be allowed to the extent that it was or may be forfeited by the application for and acceptance of a refund from the fund from which the employee was transferred.

(6) Overtime or extra service shall not be included in computing service. Not more than 1 year of service shall be allowed for service rendered during any calendar year.

(Source: P.A. 92-599, eff. 6-28-02.)

(40 ILCS 5/9-220) (from Ch. 108 1/2, par. 9-220)

Sec. 9-220. Basis of service credit.

(a) In computing the period of service of any employee for annuity purposes under Section 9-134, the following provisions shall govern:

(1) All periods prior to the effective date shall be computed in accordance with the provisions governing the computation of such service.

(2) Service on or after the effective date shall include:

(i) The actual period of time the employee contributes or has contributed to the fund for service rendered to age 65 plus the actual period of time after age 65 for which the employee performs the duties of his position or performs such duties and is given a county contribution for age and service annuity or minimum annuity purposes.

(ii) Leaves of absence from duty, or vacation, for which an employee receives all or part of his salary.

(iii) Accumulated vacation or other time for which an employee who retires on or after November 1, 1990 receives a lump sum payment at the time of retirement, provided that contributions were made to the fund at the time such lump sum payment was received. The service granted for the lump sum payment shall not change the employee's date of withdrawal for computing the effective date of the annuity.

(iv) Accumulated sick leave as of the date of the employee's withdrawal from service, not to exceed a total of 180 days, provided that the amount of such accumulated sick leave is certified by the County Comptroller to the Board and the employee pays an amount equal to the current contribution rate for the member's applicable benefit package 8.5% (9% for members of the County Police Department who are eligible to receive an annuity under Section 9-128.1) of the amount that would have been paid had such accumulated sick leave been paid at the employee's final rate of salary. Such payment shall be made within 30 days after the date of withdrawal and prior to receipt of the first annuity check. The service credit granted for such accumulated sick leave shall not change the employee's date of withdrawal for the purpose of computing the effective date of the annuity.

(v) Periods during which the employee has had contributions for annuity purposes made for him in accordance with law while on military leave of absence during World War II.

(vi) Periods during which the employee receives a disability benefit under this Article.

(vii) For any person who first becomes a member on or after January 1, 2011, the actual period of time the employee contributes or has contributed to the fund for service rendered up to the limitation on salary in subsection (b-5) of Section 1-160 plus the actual period of time thereafter for which the employee performs the duties of his position and ceased contributing due to the salary limitation in subsection (b-5) of Section 1-160.

(3) The right to have certain periods of time considered as service as stated in paragraph (2) of Section 9-164 shall not apply for annuity purposes unless the refunds shall have been repaid in accordance with this Article.

(4) All service shall be computed in whole calendar months, and at least 15 days of service in any one calendar month shall constitute one calendar month of service, and 1 year of service shall be equal to the number of months, days or hours for which an appropriation was made in the annual appropriation ordinance for the position held by the employee.

(b) For all other annuity purposes of this Article the following schedule shall govern the computation of a year of service of an employee whose salary or wages is on the basis stated, and any fractional part of a year of service shall be determined according to said schedule:

Annual or Monthly Basis: Service during 4 months in any 1 calendar year;

Weekly Basis: Service during any 17 weeks of any 1 calendar year, and service during any week shall constitute a week of service;

Daily Basis: Service during 100 days in any 1 calendar year, and service during any day shall constitute a day of service;

Hourly Basis: Service during 800 hours in any 1 calendar year, and service during any hour shall constitute an hour of service.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/9-235) (from Ch. 108 1/2, par. 9-235)

Sec. 9-235. Felony conviction.

None of the benefits provided in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as an employee.

This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

All future entrants entering service after July 11, 1955, shall be deemed to have consented to the provisions of this section as a condition of coverage.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as a member shall include employer contributions or interest or, in the case of the self-managed plan authorized under Section 9-170.5, any employer contributions or investment return on employer contributions.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/9-240 new)

Sec. 9-240. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the Fund to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/10-103) (from Ch. 108 1/2, par. 10-103)

Sec. 10-103. Members, contributions and benefits. The board shall cause the same deductions to be made from salaries and, subject to Section 10-109, allow the same annuities, refunds, and benefits, including, but not limited to, self-managed plan benefits, for employees of the district as are made and allowed for employees of the county.

(Source: P.A. 95-1036, eff. 2-17-09.)

(40 ILCS 5/10-109)

Sec. 10-109. Felony conviction. None of the benefits provided in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as an employee.

This Section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

All future entrants entering service after the effective date of this amendatory Act of the 95th General Assembly shall be deemed to have consented to the provisions of this Section as a condition of coverage.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as a member shall include employer contributions or interest or, in the case of the self-managed plan, any employer contributions or investment return on employer contributions.

(Source: P.A. 95-1036, eff. 2-17-09.)

(40 ILCS 5/10-110 new)

Sec. 10-110. Maximum self-managed plan participation. By January 1, 2013, the Fund shall certify the total active participant population. When the number of participants that elect the self-managed plan is equal to 20% of the total active participant population, then no participant may elect the self-managed plan. Beginning in 2016 and every 3 years thereafter, the Fund shall recertify the total active participant population and the number of participants in the self-managed plan. If the number of participants in the self-managed plan is less than 20% of the recertified total active participant population, then eligible participants may elect to participate in the self-managed plan. However, participants shall be prohibited from electing to participate once the Fund determines that the number of participants in the self-managed plan is equal to 20% of the number of total active participants in the Fund.

(40 ILCS 5/10-111 new)

Sec. 10-111. Employer contributions to the self-managed plan. Beginning in fiscal year 2014, for participants electing benefits under the self-managed plan, an employer contribution shall be made each fiscal year in an amount equal to 6% of total pensionable payroll for the respective employee group.

(40 ILCS 5/11-123.1 new)

Sec. 11-123.1. Reformed benefit package. "Reformed benefit package": The defined benefit retirement program maintained under the Fund for employees who first become participants in the Fund on or after January 1, 2011.

(40 ILCS 5/11-123.2 new)

Sec. 11-123.2. Self-managed plan. "Self-managed plan": The defined contribution retirement program maintained under the Fund as described in Section 11-131.2. The self-managed plan shall not include retirement annuities or death, survivor, disability, or insurance benefits that are payable directly from the Fund as provided under this Article.

(40 ILCS 5/11-123.3 new)

Sec. 11-123.3. Traditional benefit package. "Traditional benefit package": The defined benefit retirement program maintained under the Fund for employees who first became participants in the Fund before January 1, 2011.

(40 ILCS 5/11-124) (from Ch. 108 1/2, par. 11-124)

Sec. 11-124. Annuity.

"Annuity": Equal monthly payments for life, unless terminated earlier under Section 11-148, 11-152, 11-153, or 11-230.

For annuities taking effect before January 1, 1998, the first payment shall be due and payable one month after the occurrence of the event upon which payment of the annuity depends. Until August 1, 1999, payment shall be made for any part of a monthly period in which death of the annuitant occurs. Beginning August 1, 1999, all payments shall be made on the first day of the calendar month and shall be for the entire calendar month, without proration. The last payment shall be made on the first day of the calendar month in which the annuity payment period ends. A pro rata amount shall be paid for that part of the month from the July 1999 annuity payment date through July 31, 1999.

For annuities taking effect on or after January 1, 1998, payments shall be made as of the first day of the calendar month, with the first payment to be made as of the first day of the calendar month coincidental with or next following the first day of the annuity payment period, and the last payment to be made as of the first day of the calendar month in which the annuity payment period ends. For annuities taking effect on or after January 1, 1998, all payments shall be for the entire calendar month, without proration.

For the purposes of this Section, the "annuity payment period" means the period beginning on the day after the occurrence of the event upon which payment of the annuity depends, and ending on the day upon which the death of the annuitant or other event terminating the annuity occurs.

The provisions of this Section do not apply to participants who are participating in the self-managed plan.

(Source: P.A. 90-31, eff. 6-27-97; 91-887, eff. 7-6-00.)

(40 ILCS 5/11-131.1 new)

Sec. 11-131.1. Benefit accruals on and after July 1, 2013.

(a) Each participating employee under this Article, other than a person who first becomes an employee and a participant on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013, except that such participants with more than 5 years of creditable service at the time of such election shall only be eligible to elect one of the retirement programs in paragraphs (1) or (2) of this subsection (a). The retirement program election made by the participating employee must be made no later than January 1, 2013. The participating employee shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the Fund;

(2) the reformed benefit package provided by the Fund; or

(3) the self-managed plan provided by the Fund.

(b) A person who first becomes an employee and a participant in the Fund on or after January 1, 2011 shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of covered employment occurring on and after July 1, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make the election (i) by January 1, 2013 or within 6 months after the participant's first day of employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The participant election authorized by this Section is a one-time, irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make subsequent elections every 3 years during a 6-month period prescribed by the Fund. The election shall be made in writing, in the manner prescribed by the Fund. Any participant who fails to make the election shall, by default, participate in the benefit program provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) Each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the reformed benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section. However, such participants with more than 5 years of creditable service shall be prohibited from electing paragraph (3) of subsection (a) of this Section.

(2) Each participant that has less than 5 years of creditable service and participates in the reformed benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the reformed benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(3) The elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the Fund.

(e) If a participant with an accrued benefit under the traditional benefit package elects the reformed benefit package, the participant's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals under the traditional benefit package, based on the participant's pay and service under the traditional benefit package and frozen with respect to pay for service earned subsequent to participation under the traditional benefit package and (ii) the participant's benefit accruals based on pay and service under the reformed benefit package. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the reformed benefit package. All service completed under the Fund shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the reformed benefit package, provided that the vesting requirements of the traditional benefit package shall continue to govern vesting for participants in the reformed benefit package.

(f) If a participant with an accrued benefit under the traditional benefit package or the reformed benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals prior to participation in the self-managed plan, based on the participant's pay and service and frozen with respect to pay for service earned subsequent to participation in the traditional or reformed benefit package. However, the participant shall also have an accrued self-managed plan balance as specified in subsection (h) of Section 11-131.2, for periods of covered employment on or after participation in the self-managed plan. All rights and features provided under the traditional or reformed benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the traditional or reformed benefit package and the self-managed plan shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package and the self-managed plan.

(g) An individual with less than 5 years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming a participating employee, based on eligibility.

An individual with 5 or more years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1) or (2) of subsection (a) of this Section within 6 months after becoming a participating employee, based on eligibility.

(40 ILCS 5/11-131.2 new)

Sec. 11-131.2. Self-managed plan.

(a) Purpose. The Laborers' and Retirement Board Employees' Annuity and Benefit Fund shall establish and administer a self-managed plan, which shall offer members the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) The Laborers' and Retirement Board Employees' Annuity and Benefit Fund shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The Fund may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The Fund shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Employee direction. Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The employee shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the Fund nor the employer guarantees any of the investments in the employee's account balances.

(e) Participation. An employee eligible to participate in the self-managed plan must make a written election under Section 11-131.1 and the procedures established by the Fund. Participation in the self-managed plan by an electing employee shall begin on the first day of the first pay period following the later of (i) the date the employee's election is filed with the Fund or (ii) July 1, 2013.

An employee who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position. Participation in the self-managed plan under this Section shall constitute membership in the Laborers' and Retirement Board Employees' Annuity and Benefit Fund.

An employee under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions from employees participating in the self-managed plan and employer contributions as provided in this Section.

This required contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall an employee have an option of receiving these amounts in cash. The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participating member's salary. The amounts so credited shall be paid into the employee's self-managed plan account in a manner to be prescribed by the Fund.

The employer shall make contributions by the appropriations to the Fund of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board and paid by the employer in accordance with this Article. The Fund shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the employer.

(g) Vesting; withdrawal; return to service. A participant in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the participant while in active service, if the participant has completed at least 1 1/2 years of service; or (3) the participant's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) Benefit amounts. If a participant who is vested in employer contributions terminates employment, the employee shall be entitled to a benefit which is based on the account values attributable to the employer and member contributions and any investment return thereon.

If a participant who is not vested in employer contributions terminates employment, the participant shall be entitled to a benefit based solely on the account values attributable to the participant's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall become part of the trust.

(40 ILCS 5/11-131.3 new)

Sec. 11-131.3. Minimum benefit and allocation provisions. Each participant in the System shall receive a minimum benefit or allocation determined as follows:

(1) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 11-131.1 of this Code or the revised defined benefit package provided under paragraph (2) of subsection (a) of Section 11-131.1 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) that is equal to the annual primary insurance amount the participant would have under Social Security. For the purposes of this item (1), the primary insurance amount a participant would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the participant is participating in the self-managed plan provided under Section 11-131.2 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/11-131.4 new)

Sec. 11-131.4. Employer contributions to the self-managed plan. Beginning in fiscal year 2013, for members electing benefits under paragraph (3) of subsection (a) of Section 11-131.1, an employer contribution shall be made each fiscal year in an amount equal to 6% of total pensionable payroll for the respective employee group.

(40 ILCS 5/11-169) (from Ch. 108 1/2, par. 11-169)

Sec. 11-169. Financing; tax levy.

(a) Except as provided in subsection (f) of this Section, the city council of the city shall levy a tax annually upon all taxable property in the city at the rate that will produce a sum which, when added to the amounts deducted from the salaries of the employees or otherwise contributed by them and the amounts deposited under subsection (f), will be sufficient for the requirements of this Article. For the years prior to the year 1950 the tax rate shall be as provided for under "The 1935 Act". Beginning with the year 1950 to and including the year 1969 such tax shall be not more than .036% annually of the value, as equalized or assessed by the Department of Revenue, of all taxable property within such city. Beginning with the year 1970 and each year thereafter the city shall levy a tax annually at a rate on the dollar of the value, as equalized or assessed by the Department of Revenue of all taxable property within such city that will produce, when extended, not to exceed an amount equal to the total amount of contributions by the employees to the fund made in the calendar year 2 years prior to the year for which the annual applicable tax is levied, multiplied by 1.1 for the years 1970, 1971 and 1972; 1.145 for the year 1973; 1.19 for the year 1974; 1.235 for the year 1975; 1.280 for the year 1976; 1.325 for the year 1977; 1.370 for the years 1978 through 1998; and 1.000 for the years year 1999 through 2012. For 2013 and for each year thereafter, the amount levied shall be equal to the amount levied in 2010.

The tax shall be levied and collected in like manner with the general taxes of the city, and shall be exclusive of and in addition to the amount of tax the city is now or may hereafter be authorized to levy for general purposes under any laws which may limit the amount of tax which the city may levy for general purposes. The county clerk of the county in which the city is located, in reducing tax levies under the provisions of any Act concerning the levy and extension of taxes, shall not consider the tax herein provided for as a part of the general tax levy for city purposes, and shall not include the same within any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for such city.

Revenues derived from such tax shall be paid to the city treasurer of the city as collected and held by him for the benefit of the fund.

If the payments on account of taxes are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants against the current tax levy.

(b) On or before January 10, annually, the board shall notify the city council of the requirement of this Article that the tax herein provided shall be levied for that current year. The board shall compute the amounts necessary for the purposes of this fund to be credited to the reserves established and maintained as herein provided, and shall make an annual determination of the amount of the required city contributions; and certify the results thereof to the city council.

(c) In respect to employees of the city who are transferred to the employment of a park district by virtue of "Exchange of Functions Act of 1957" the corporate authorities of the park district shall annually levy a tax upon all the taxable property in the park district at such rate per cent of the value of such property, as equalized or assessed by the Department of Revenue, as shall be sufficient, when added to the amounts deducted from their salaries and otherwise contributed by them, to provide the benefits to which they and their dependents and beneficiaries are entitled under this Article. The city shall not levy a tax hereunder in respect to such employees.

The tax so levied by the park district shall be in addition to and exclusive of all other taxes authorized to be levied by the park district for corporate, annuity fund, or other purposes. The county clerk of the county in which the park district is located, in reducing any tax levied under the provisions of any Act concerning the levy and extension of taxes shall not consider such tax as part of the general tax levy for park purposes, and shall not include the same in any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for the park district. The proceeds of the tax levied by the park district, upon receipt by the district, shall be immediately paid over to the city treasurer of the city for the uses and purposes of the fund.

The various sums to be contributed by the city and allocated for the purposes of this Article, and any interest to be contributed by the city, shall be taken from the revenue derived from the taxes authorized in this Section, and no money of such city derived from any source other than the levy and collection of those taxes or the sale of tax anticipation warrants in accordance with the provisions of this Article shall be used to provide revenue for this Article, except as expressly provided in this Section.

If it is not possible for the city to make contributions for age and service annuity and widow's annuity concurrently with the employee's contributions made for such purposes, such city shall make such contributions as soon as possible and practicable thereafter with interest thereon at the effective rate to the time they shall be made.

(d) With respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L. 93-567, 88 Stat. 1845), hereinafter referred to as CETA, subsequent to October 1, 1978, and in instances where the board has elected to establish a manpower program reserve, the board shall compute the amounts necessary to be credited to the manpower program reserves established and maintained as herein provided, and shall make a periodic determination of the amount of required contributions from the City to the reserve to be reimbursed by the federal government in accordance with rules and regulations established by the Secretary of the United States Department of Labor or his designee, and certify the results thereof to the City Council. Any such amounts shall become a credit to the City and will be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(e) In lieu of establishing a manpower program reserve with respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as authorized by subsection (d), the board may elect to establish a special municipality contribution rate for all such employees. If this option is elected, the City shall contribute to the Fund from federal funds provided under the Comprehensive Employment and Training Act program at the special rate so established and such contributions shall become a credit to the City and be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(f) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the tax levied by the city under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of that tax.

(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.)

(40 ILCS 5/11-170) (from Ch. 108 1/2, par. 11-170)

Sec. 11-170. Contributions for age and service annuities for present employees, future entrants and re-entrants.

(a) Beginning on the effective date and prior to July 1, 1947, 3 1/4%; and beginning on July 1, 1947 and prior to July 1, 1953, 5%; and beginning July 1, 1953 and prior to January 1, 1972, 6%; and beginning January 1, 1972, 6 1/2% of each payment of the salary of each present employee, future entrant and re-entrant shall be contributed to the fund as a deduction from salary for age and service annuity. Such deductions beginning on the effective date and prior to June 30, 1947, inclusive shall be made for a future entrant while he is in service until he attains age 65, and for a present employee while he is in service until the amount so deducted from his salary with interest at the rate of 4% per annum shall be equal to the sum which would have accumulated to his credit from sums deducted from his salary if deductions at the rate herein stated had been made during his entire service until he attained age 65 with interest at 4% per annum for the period subsequent to his attainment of age 65. Such deductions beginning July 1, 1947 shall be made and continued for employees while in the service.

(b) Concurrently with each employee contribution, the city shall contribute beginning on the effective date and prior to July 1, 1947, 5 3/4%; and beginning July 1, 1947 and prior to July 1, 1953, 7%; and beginning July 1, 1953, 6% of each payment of such salary until the employee attains age 65.

(c) Each employee contribution made prior to the date age and service annuity for an employee is fixed and each corresponding city contribution shall be allocated to the account of and credited to the employee for whose benefit it is made.

(d) Notwithstanding any other provision of this Article, beginning July 1, 2013, all participants shall be required to make the following contributions:

(1) Participants who elect the traditional benefit package under paragraph (1) of subsection (a) of Section 11-131.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 12.75% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the traditional benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the traditional benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(2) Participants who elect the reformed benefit package under paragraph (2) of subsection (a) of Section 11-131.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 7% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the reformed benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the reformed benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(3) Participants who elect the self-managed plan under paragraph (3) of subsection (a) of Section 11-131.1 of this Code shall contribute a minimum of 6% of salary. Participants who elect the self-managed plan provided under Section 11-131.2 of this Code may elect to increase their employee contributions in accordance with rules prescribed by the Board.

No prior contribution increases or other additional contributions specified by this Section shall apply to any participant for service on or after July 1, 2013.

(Source: P.A. 81-1536.)

(40 ILCS 5/11-230) (from Ch. 108 1/2, par. 11-230)

Sec. 11-230. Felony conviction.

None of the benefits provided in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as employee.

This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

All future entrants entering service after July 11, 1955, shall be deemed to have consented to the provisions of this section as a condition of coverage.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as an employee shall include employer contributions or interest or, in the case of the self-managed plan authorized under Section 11-131.2, any employer contributions or investment return on employer contributions.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/11-235 new)

Sec. 11-235. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the Fund to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/12-116) (from Ch. 108 1/2, par. 12-116)

Sec. 12-116. Fiscal year.

"Fiscal year": For periods prior to July 1, 2011, the The year commencing with July 1st and ending with June 30th next following. Beginning January 1, 2013, the year commencing January 1 and ending December 31. The fiscal year which begins July 1, 2012 shall end December 31, 2012.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/12-125.2 new)

Sec. 12-125.2. Reformed benefit package. "Reformed benefit package": The defined benefit retirement program maintained under the Fund for employees who first become employees in the Fund on or after January 1, 2011.

(40 ILCS 5/12-125.3 new)

Sec. 12-125.3. Self-managed plan. "Self-managed plan": The defined contribution retirement program maintained under the Fund as described in Section 12-128.2.

(40 ILCS 5/12-125.4 new)

Sec. 12-125.4. Traditional benefit package. "Traditional benefit package": The defined benefit retirement program maintained under the Fund for employees who first became employees in the Fund before January 1, 2011.

(40 ILCS 5/12-128.1 new)

Sec. 12-128.1. Benefit accruals on and after July 1, 2013.

(a) Each employee under this Article, other than a person who first becomes an employee on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of covered employment occurring on and after July 1, 2013, except that such employees with more than 5 years of creditable service at the time of such election shall only be eligible to elect one of the of the retirement programs in paragraphs (1) or (2) of this subsection (a). The retirement program election made by the employee must be made no later than January 1, 2013. The employee shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the Fund;

(2) the reformed benefit package provided by the Fund; or

(3) the self-managed plan provided by the Fund.

(b) A person who first becomes an employee in the Fund on or after January 1, 2011 shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013. The employee shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make the election (i) by January 1, 2013 or within 6 months after the employee's first day of covered employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The employee election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make subsequent elections every 3 years during a 6-month period prescribed by the Fund. The election shall be made in writing, in the manner prescribed by the Fund. Any participant who fails to make the election shall, by default, participate in the benefit program provided under paragraph (2) of subsection (a) of this Section.

(d) Employees who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) Each employee in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the reformed benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section. However, such participants with more than 5 years of creditable service shall be prohibited from electing paragraph (3) of subsection (a) of this Section.

(2) Each employee that has less than 5 years of creditable service and participates in the reformed benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the reformed benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(3) The elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the Fund.

(e) If an employee with an accrued benefit under the traditional benefit package elects the reformed benefit package, the employee's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the employee's benefit accruals under the traditional benefit package, based on the employee's pay and service under the traditional benefit package and frozen with respect to pay for service earned subsequent to participation under the traditional benefit package and (ii) the employee's benefit accruals based on pay and service under the reformed benefit package. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the reformed benefit package. All service completed under the Fund shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the reformed benefit package, provided that the vesting requirements of the traditional benefit package shall continue to govern vesting for employees in the reformed benefit package.

(f) If an employee with an accrued benefit under the traditional benefit package or the reformed benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the employee's total accrued benefit for purposes of determining an annuity shall be the employee's benefit accruals prior to participation in the self-managed plan, based on the employee's pay and service and frozen with respect to pay for service earned subsequent to participation in the traditional or reformed benefit package. However, the employee shall also have an accrued self-managed plan balance as specified in subsection (h) of Section 12-128.2, for periods of covered employment on or after participation in the self-managed plan. All rights and features provided under the traditional benefit package must be preserved with respect to benefits earned under that package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the traditional benefit package and the self-managed plan shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package and the self-managed plan.

(g) An individual with less than 5 years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

An individual with 5 or more years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1) or (2) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

(40 ILCS 5/12-128.2 new)

Sec. 12-128.2. Self-managed plan.

(a) Purpose. The Park Employees' and Retirement Board Employees' Annuity and Benefit Fund shall establish and administer a self-managed plan, which shall offer employees the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) The Park Employees' and Retirement Board Employees' Annuity and Benefit Fund shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the Fund may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The Fund may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The Fund shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Employee direction. Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The employee shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the Fund nor the employer guarantees any of the investments in the employee's account balances.

(e) Participation. An employee eligible to participate in the self-managed plan must make a written election under Section 12-128.1 and the procedures established by the Fund. Participation in the self-managed plan by an electing employee shall begin on the first day of the first pay period following the date the employee's election is filed with the Fund.

An employee who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position. Participation in the self-managed plan under this Section shall constitute membership in the Park Employees' and Retirement Board Employees' Annuity and Benefit Fund.

An employee under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions from employees participating in the self-managed plan and employer contributions as provided in this Section.

This required contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a employee have an option of receiving these amounts in cash. The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participating employee's salary, less the amount used by the Fund to provide disability benefits for the employee. The amounts so credited shall be paid into the employee's self-managed plan account in a manner to be prescribed by the Fund.

The required amount of employer contributions shall be used for the purpose of providing the disability benefits of the Fund to the employee. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for employees in the self-managed plan.

The employer shall make contributions to the Fund of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board and paid by the employer in accordance with this Article. The Fund shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the employer.

(g) Vesting; withdrawal; return to service. An employee in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the employee while in active service, if the employee has completed at least 1 1/2 years of service; or (3) the employee's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) Benefit amounts. If an employee who is vested in employer contributions terminates employment, the employee shall be entitled to a benefit which is based on the account values attributable to employer and employee contributions and any investment return thereon.

If an employee who is not vested in employer contributions terminates employment, the employee shall be entitled to a benefit based solely on the account values attributable to the employee's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall become part of the trust.

(40 ILCS 5/12-128.3 new)

Sec. 12-128.3. Employer contributions to the self-managed plan. Beginning in fiscal year 2014, for members electing benefits under paragraph (3) of subsection (a) of Section 12-128.1, an employer contribution shall be made each fiscal year in an amount equal to (i) 6% of total pension payroll for the respective employee group and (ii) an amount determined by the Fund to be sufficient to fund the disability plan provided in this Article.

(40 ILCS 5/12-149) (from Ch. 108 1/2, par. 12-149)

Sec. 12-149. Financing. The board of park commissioners of any such park district shall annually levy a tax (in addition to the taxes now authorized by law) upon all taxable property embraced in the district, at the rate which, when added to the employee contributions under this Article and applied to the fund created hereunder, shall be sufficient to provide for the purposes of this Article in accordance with the provisions thereof. Such tax shall be levied and collected with and in like manner as the general taxes of such district, and shall not in any event be included within any limitations of rate for general park purposes as now or hereafter provided by law, but shall be excluded therefrom and be in addition thereto. The amount of such annual tax to and including the year 1977 shall not exceed .0275% of the value, as equalized or assessed by the Department of Revenue, of all taxable property embraced within the park district, provided that for the year 1978, and for each year thereafter, the amount of such annual tax shall be at a rate on the dollar of assessed valuation of all taxable property that will produce, when extended, for the year 1978 the following sum: 0.825 times the amount of employee contributions during the fiscal year 1976; for the year 1979, 0.85 times the amount of employee contributions during the fiscal year 1977; for the year 1980, 0.90 times the amount of employee contributions during the fiscal year 1978; for the year 1981, 0.95 times the amount of employee contributions during the fiscal year 1979; for the year 1982, 1.00 times the amount of employee contributions during the fiscal year 1980; for the year 1983, 1.05 times the amount of contributions made on behalf of employees during the fiscal year 1981; and for the years year 1984 through 2012 and each year thereafter, an amount equal to 1.10 times the employee contributions during the fiscal year 2-years prior to the year for which the applicable tax is levied. Beginning in 2012 and in each fiscal year thereafter, the amount levied shall be equal to the amount levied in 2010. As used in this Section, the term "employee contributions" means contributions by employees for retirement annuity, spouse's annuity, automatic increase in retirement annuity, and death benefit.

In respect to park district employees, other than policemen, who are transferred to the employment of a city by virtue of the "Exchange of Functions Act of 1957", the corporate authorities of the city shall annually levy a tax upon all taxable property embraced in the city, as equalized or assessed by the Department of Revenue, at such rate per cent of the value of such property as shall be sufficient, when added to the amounts deducted from the salary or wages of such employees, to provide the benefits to which such employees, their dependents and beneficiaries are entitled under the provisions of this Article. The park district shall not levy a tax hereunder in respect to such employees. The tax levied by the city under authority of this Article shall be in addition to and exclusive of all other taxes authorized by law to be levied by the city for corporate, annuity fund or other purposes.

All moneys accruing from the levy and collection of taxes, pursuant to this section, shall be remitted to the board by the employers as soon as they are received. Where a city has levied a tax pursuant to this Section in respect to park district employees transferred to the employment of a city, the treasurer of such city or other authorized officer shall remit the moneys accruing from the levy and collection of such tax as soon as they are received. Such remittances shall be made upon a pro rata share basis, whereby each employer shall pay to the board such employer's proportionate percentage of each payment of taxes received by it, according to the ratio which its tax levy for this fund bears to the total tax levy of such employer.

Should any board of park commissioners included under the provisions of this Article be without authority to levy the tax provided in this Section the corporation authorities (meaning the supervisor, clerk and assessor) of the town or towns for which such board shall be the board of park commissioners shall levy such tax.

Employer contributions to the Fund may be reduced by $5,000,000 for calendar years 2004 and 2005.

(Source: P.A. 93-654, eff. 1-16-04.)

(40 ILCS 5/12-150) (from Ch. 108 1/2, par. 12-150)

Sec. 12-150. Contributions by employees for service annuity.

(a) From each payment of salary to a present employee beginning August 4, 1961, and prior to September 1, 1971, there shall be deducted as contributions for service annuity 6% of such payment. Beginning September 1, 1971, the deduction shall be 6 1/2% of salary. These contributions shall continue until the amounts thus deducted will provide an accumulation, at regular interest, at least equal to the amount that would be provided on such date from employee contributions, assuming regular interest to such date, if such employee had been contributing in accordance with the provisions of "The 1919 Act" and this Article from the beginning of his service and the salary of the employee during his prior service was the same as it was on July 1, 1919, or on July 1, 1937 in the case of an employee of the board.

(b) From each payment of salary to a future entrant beginning August 4, 1961, and prior to September 1, 1971, there shall be deducted as contributions for service annuity 6% of such payment. Beginning September 1, 1971, the deduction shall be 6 1/2% of salary. Beginning January 1, 1990, the deduction shall be 7% of salary.

(c) For service rendered prior to August 4, 1961, the rates of contribution by employees for service annuity shall be as follows: July 1, 1919 to July 20, 1947, inclusive, 4% of salary; July 21, 1947 to August 3, 1961, inclusive, 5% of salary.

For the period from July 1, 1919, to August 4, 1961 such deductions for a present employee shall continue until such date as the amounts deducted will provide an accumulation at least equal to that which would be provided on such date, assuming regular interest to such date, from deductions from salary of such employee if such employee had been under the provisions of "The 1919 Act" and this Article from the beginning of his service and the salary of such employee during his period of prior service was the same as it was on July 1, 1919 or on July 1, 1937 in the case of an employee of the board.

(d) Any employee shall have the option to contribute for service annuity an amount, together with regular interest, equal to the difference between the amount he had accumulated in the fund on June 30, 1947, from contributions at the rate of 4% of salary, together with regular interest, and the amount he would have accumulated, together with regular interest, if he had made contributions at the rate of 5% of salary. All such contributions shall be subject to salary limitations and other conditions in effect prior to July 1, 1947. Upon making such contribution the employer of such employee shall contribute in the ratio of 2 to 1 with such employee.

(e) Notwithstanding any other provision of this Article, beginning July 1, 2013, all employees shall be required to make the following contributions:

(1) Employees who elect the traditional benefit package under paragraph (1) of subsection (a) of Section 12-128.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 12.75% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the traditional benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the traditional benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(2) Employees who elect the reformed benefit package under paragraph (2) of subsection (a) of Section 12-128.1 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 7% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the reformed benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the reformed benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(3) Employees who elect the self-managed plan under paragraph (3) of subsection (a) of Section 12-128.1 of this Code shall contribute a minimum of 6% of salary. Participants who elect the self-managed plan provided under Section 12-128.2 of this Code may elect to increase their employee contributions in accordance with rules prescribed by the Board.

No prior contribution increases or other additional contributions specified by this Section shall apply to any employee for service on or after July 1, 2013.

(Source: P.A. 86-272.)

(40 ILCS 5/12-151.3 new)

Sec. 12-151.3. Minimum benefit and allocation provisions. Each participant in the System shall receive a minimum benefit or allocation determined as follows:

(1) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 12-128.1 of this Code or the revised defined benefit package provided under paragraph (2) of subsection (a) of Section 12-128.1 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) that is equal to the annual primary insurance amount the participant would have under Social Security. For the purposes of this item (1), the primary insurance amount a participant would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the participant is participating in the self-managed plan provided under Section 12-128.2 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/12-167) (from Ch. 108 1/2, par. 12-167)

Sec. 12-167. To keep records, books and prepare reports.

To keep a record of all its proceedings which shall be open to inspection by the public; to keep such books and records as are necessary for the transaction of its business; and to prepare a report, as of the last day June 30 of each fiscal year, setting forth the income and disbursements of the fund for the year, and the amount of its assets and liabilities at the close of the year. Such statement shall include, among other things, the following information:

(a) the total of the reserves on all annuities being paid and to be paid from the fund to employees and widows whose annuities are determined but not entered upon, calculating such reserves as if the annuities were actually entered upon;

(b) the total of the liabilities of the employer for prior service annuities and widow's prior service annuities, including the present values of such annuities that are entered upon.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/12-168) (from Ch. 108 1/2, par. 12-168)

Sec. 12-168. To have an audit.

To have an annual audit of the books, records and reserves of the fund as of the last day of each fiscal June 30th, in each year, by a certified public accountant. A copy of the report of such audit shall be filed with the board of park commissioners, and a synopsis thereof shall be prepared for public distribution.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/12-169) (from Ch. 108 1/2, par. 12-169)

Sec. 12-169. To appoint employees.

To appoint such actuarial, legal, medical, clerical and other employees as may be necessary in the administration of the fund and fix their compensation.

One or more actuaries shall be employed with duty to determine the amount of money necessary to be provided under this Article, and to assist the board in preparing the annual statement as of the last day June 30 of each fiscal year, and to certify to the correctness thereof.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/12-183) (from Ch. 108 1/2, par. 12-183)

Sec. 12-183. Annual actuarial valuation.

An actuarial valuation shall be made annually of the liabilities and reserves for present and prospective annuities and benefits, and beginning January 1, 2013 July 1, 1973 a general investigation shall be made and shall be completed every 5 years thereafter of the operating experience of the fund as to mortality, disability, retirement, marital status of employees, withdrawal from service without right to annuity, investment earnings and other factors of actuarial criteria.

Upon the basis of the annual actuarial valuation and quinquennial actuarial investigations, the actuary shall recommend the tables to be used in the annual valuations and in current operations including the prescribed rate of interest, and shall advise the board on any matters of actuarial character affecting the financial condition of the fund and its operations.

(Source: P.A. 78-266.)

(40 ILCS 5/12-190.3) (from Ch. 108 1/2, par. 12-190.3)

Sec. 12-190.3. Fraud. Any person who knowingly makes any false statement or falsifies or permits to be falsified any record of this Fund in any attempt to defraud the Fund is guilty of a Class A misdemeanor.

None of the benefits provided for in this Article shall be paid to any person who is convicted of any misdemeanor or felony relating to or arising out of or in connection with any attempt to defraud the Fund.

This Section shall not operate to impair any contract or vested right previously acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as an employee shall include employer contributions or interest or, in the case of the self-managed plan authorized under Section 12-128.2, any employer contributions or investment return on employer contributions.

(Source: P.A. 96-1466, eff. 8-20-10.)

(40 ILCS 5/12-193.5 new)

Sec. 12-193.5. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the Fund to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)

Sec. 14-103.10. Compensation.

(a) For periods of service prior to January 1, 1978, the full rate of salary or wages payable to an employee for personal services performed if he worked the full normal working period for his position, subject to the following maximum amounts: (1) prior to July 1, 1951, $400 per month or $4,800 per year; (2) between July 1, 1951 and June 30, 1957 inclusive, $625 per month or $7,500 per year; (3) beginning July 1, 1957, no limitation.

In the case of service of an employee in a position involving part-time employment, compensation shall be determined according to the employees' earnings record.

(b) For periods of service on and after January 1, 1978, all remuneration for personal services performed defined as "wages" under the Social Security Enabling Act, including that part of such remuneration which is in excess of any maximum limitation provided in such Act, and including any benefits received by an employee under a sick pay plan in effect before January 1, 1981, but excluding lump sum salary payments:

(1) for vacation,

(2) for accumulated unused sick leave,

(3) upon discharge or dismissal,

(4) for approved holidays.

(c) For periods of service on or after December 16, 1978, compensation also includes any benefits, other than lump sum salary payments made at termination of employment, which an employee receives or is eligible to receive under a sick pay plan authorized by law.

(d) For periods of service after September 30, 1985, compensation also includes any remuneration for personal services not included as "wages" under the Social Security Enabling Act, which is deducted for purposes of participation in a program established pursuant to Section 125 of the Internal Revenue Code or its successor laws.

(e) For members for which Section 14-108.2f 1-160 applies for periods of service on and after January 1, 2011, all remuneration for personal services performed defined as "wages" under the Social Security Enabling Act, excluding remuneration that is in excess of the annual earnings, salary, or wages of a member or participant, as provided in subsection (b-5) of Section 1-160, but including any benefits received by an employee under a sick pay plan in effect before January 1, 1981. Compensation shall exclude lump sum salary payments:

(1) for vacation;

(2) for accumulated unused sick leave;

(3) upon discharge or dismissal; and

(4) for approved holidays.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/14-108.2d new)

Sec. 14-108.2d. Benefit accruals on and after July 1, 2013.

(a) Except for members covered under paragraphs (1), (2), (6), (9), and (16) of subsection (b) of Section 14-110 and members covered under paragraph (5) of Section 14-110 who are sworn police officers, each member under this Article, other than a person who first becomes an employee and a member on or after January 1, 2011, shall elect which retirement program he or she wishes to participate in with respect to all periods of membership service occurring on and after July 1, 2013. The retirement program election made by the member must be made (i) no later than July 1, 2013 in accordance with rules prescribed by the Board, and (ii) if applicable, every 3 years thereafter. The member shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the System prior to Public Act 96-889;

(2) the revised benefit package provided by the System under Section 14-108.2f; or

(3) the self-managed plan provided by the System under Section 14-108.2e.

(b) A person who first becomes a member of the System on or after January 1, 2011 shall elect which retirement program he or she wishes to participate in with respect to all periods of membership service occurring on and after July 1, 2013. The member shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The member must make that election (i) by July 1, 2013 or within 6 months after the member's first day of employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The member election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make subsequent elections during a 6-month period prescribed by the System. The election shall be made in the manner prescribed by the System. Any member who fails to make the initial election shall, by default, participate in the revised benefit package provided under paragraph (2) of subsection (a) of this Section.

(d) Members who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) each member in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the revised benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section;

(2) each member in the revised benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the revised benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section; and

(3) the elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the system.

(e) If a member with an accrued benefit under the traditional benefit package provided by the System prior to Public Act 96-889 elects the revised benefit package provided under paragraph (2) of subsection (a) of this Section, the member's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the member's benefit accruals before the effective date of the election, based on the member's final average compensation and service as of the effective date of the election and frozen on such date, and (ii) the member's benefit accruals based on final average compensation and service on or after the effective date of the election, as modified by the rules provided in Section 14-108.2f. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the revised benefit package. Furthermore, the member shall be entitled to the benefit of the survivor's annuity provided under Section 14-108.2f. All service completed under the System shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the revised benefit package.

(f) If a member with an accrued benefit under the traditional benefit package or revised benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the member's total accrued benefit for purposes of determining an annuity shall be the member's benefit accruals before the effective date of the election, based on the member's final average compensation and service as of the effective date of the election and frozen on such date. However, the member shall also have an accrued self-managed plan benefit as specified in subsection (g) of Section 14-108.2e, for periods of service on or after the effective date of the election. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the System shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package, the revised benefit package, and the self-managed plan.

(g) An individual who is a member in the System, but is not an employee as of July 1, 2013, shall elect, based on the eligibility criteria specified in this Article, one of the 3 retirement programs provided under paragraphs (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming an employee.

(40 ILCS 5/14-108.2e new)

Sec. 14-108.2e. Self-managed plan.

(a) The Illinois State Board of Investment created under Article 22A of this Code shall establish and administer a self-managed plan on behalf of the retirement system established under this Article. The plan shall offer participating employees the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and may be used to purchase annuity contracts that are fixed, variable, or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986. The plan shall not include the retirement annuities, widows annuities, survivors annuities, death benefits, or refunds provided under this Article.

(b) The Illinois State Board of Investment shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe the rules and procedures that are necessary or desirable for the administration of the self-managed plan.

(c) An employee eligible to participate in the self-managed plan must make a written election in accordance with the by the retirement system. Participation in the self-managed plan by an electing employee shall begin on the beginning of the month following the date the employee's election is filed with the retirement system, but in no case prior to July 1, 2013.

(d) Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The participant shall not be deemed a fiduciary by reason of providing investment direction. A person who is a fiduciary, including the plan sponsor, shall not be liable for any loss resulting from the investment direction of the employee and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. The retirement system, the Illinois State Board of Investment, and the employer do not guarantee any of the investments in the employee's account balances.

(e) The self-managed plan shall be funded by contributions pursuant to salary reduction agreements for employees participating in the self-managed plan and employer contributions as provided in Section 14-131.1 of this Code. Employees may make additional contributions to the self-managed plan in accordance with the procedures prescribed by the plan sponsor, to the extent permitted under rules prescribed by the plan sponsor. Employee and employer contributions shall be paid into the participants' self-managed plan accounts in a manner to be prescribed by the plan sponsor.

(f) A participant in the self-managed plan becomes vested in the employer contributions credited to his or her accounts in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of service with an employer covered by Article 14 of this Code or (2) if the participant has completed at least 1 1/2 years of service, the death of the participating employee while employed by an employer covered by Article 14 of this Code.

(g) If an employee who is vested in employer contributions terminates employment, the employee shall be entitled to a benefit that is based on the account values attributable to both employer and employee contributions and any investment return on those contributions. If an employee who is not vested in employer contributions terminates employment, the employee shall be entitled to a benefit based solely on the account values attributable to the employee's contributions and any investment return on those contributions, and the employer contributions and any investment return on those contributions shall be forfeited. Any employer contributions that are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the System for future allocations of employer contributions.

The employee contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall an employee have an option of receiving these amounts in cash, and payment of the employee contribution shall be a condition of employment. The employee contribution shall be deducted from the employee's compensation in the amount specified by subparagraph (F) of paragraph (7) of subsection (a) of Section 14-133, unless the employer agrees to pick up and pay the employee contribution in addition to the employee's compensation, pursuant to Section 14-133.1.

The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participating member's compensation. The amounts so credited shall be paid into the member's self-managed plan account in a manner to be prescribed by the System. The program shall also provide for employer contributions to be used by the System to provide disability benefits for the participant. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of compensation, the amount of employer contributions to be allocated during that plan year for providing disability benefits for members in the self-managed plan.

The State of Illinois shall make contributions by appropriations to the System of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board of Trustees of the System and paid by the State in accordance with Section 14-131. The System shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the State.

A member under this Section shall be entitled to the benefits of Article 20 of this Code.

(40 ILCS 5/14-108.2f new)

Sec. 14-108.2f. Revised benefit package.

(a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes an employee under this Article, and any member who elects this benefit package pursuant to Section 14-108.2d, but do not apply to the self-managed plan established under this Article.

(b) "Final average compensation" means the average annual compensation obtained by dividing the total compensation calculated under the Article applicable to the member during the 8 consecutive years of service within the last 10 years of service in which the total compensation calculated under this Article was the highest by the number of years of service in that period.

(b-5) For all purposes under this Article (including without limitation the calculation of benefits and employee contributions and contributions by the State of Illinois under subsection (a) of Section 14-131.1 with respect to the revised benefit package), the annual compensation of a member shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 =100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

Beginning on July 1, 2013, the maximum annual compensation amount shall be adjusted to $110,100, as adjusted for periods after 2012 based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program. Each year thereafter on January 1, this amount shall be adjusted based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program.

(c) A member is entitled to a retirement annuity upon written application if he or she has attained age 67 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article. A member who has attained age 62 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.

(d) The retirement annuity of a member who is retiring after attaining age 62 with at least 10 years of service credit shall be reduced by one-half of 1% for each full month that the member's age is under age 67.

(e) Any retirement annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(f) The initial survivor's annuity of an otherwise eligible survivor of a retired member shall be in the amount of 66 2/3% of the retired member's retirement annuity at the date of death. In the case of the death of a member who has not retired and, eligibility for a survivor's or widow's annuity shall be determined by this Article. The initial benefit shall be 66 2/3% of the earned annuity without a reduction due to age. Any survivor's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(g) If a person who first becomes an employee on or after January 1, 2011 is receiving a retirement annuity and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, then the person's retirement annuity shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity payments shall resume and be recalculated.

(h) The benefits in Section 14-110 apply only if the person is a State policeman, a fire fighter in the fire protection service of a department, or a security employee of the Department of Corrections or the Department of Juvenile Justice, as those terms are defined in subsection (b) of Section 14-110. A person who meets the requirements of this Section is entitled to an annuity calculated under the provisions of Section 14-110, in lieu of the regular or minimum retirement annuity, only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 60, regardless of whether the attainment of age 60 occurs while the person is still in service.

(i) Notwithstanding any other provision of this Section, a participant in the revised benefit package provided by this Section shall have the option to enroll in the self-managed plan created under Section 14-108.2e.

(40 ILCS 5/14-109.1 new)

Sec. 14-109.1. Minimum benefit and allocation provisions. Each noncovered member participating in the System shall receive a minimum benefit or allocation for service on or after July 1, 2013 determined as follows:

(1) If the noncovered member is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 14-108.2d of this Code or the revised benefit package provided under paragraph (2) of subsection (a) of Section 14-108.2d of this Code, the employee shall receive a minimum benefit (commencing on his or her Social Security retirement age) for the employee's period of service covered by each such defined benefit package that is equal to the annual primary insurance amount the employee would have under Social Security for such period of service. For the purposes of this item (1), the primary insurance amount an individual would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the noncovered member is participating in the self-managed plan provided under Section 14-108.2e of this Code, the member shall receive a minimum allocation equal to 7.5% of the member's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/14-131)

Sec. 14-131. Contributions by State.

(a) The State shall make contributions to the System by appropriations of amounts which, together with other employer contributions from trust, federal, and other funds, employee contributions, investment income, and other income, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

For the purposes of this Section and Section 14-135.08, references to State contributions refer only to employer contributions and do not include employee contributions that are picked up or otherwise paid by the State or a department on behalf of the employee.

(b) The Board shall determine the total amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board, using the formula in subsection (e).

The Board shall also determine a State contribution rate for each fiscal year, expressed as a percentage of payroll, based on the total required State contribution for that fiscal year (less the amount received by the System from appropriations under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act, if any, for the fiscal year ending on the June 30 immediately preceding the applicable November 15 certification deadline), the estimated payroll (including all forms of compensation) for personal services rendered by eligible employees, and the recommendations of the actuary.

For the purposes of this Section and Section 14.1 of the State Finance Act, the term "eligible employees" includes employees who participate in the System, persons who may elect to participate in the System but have not so elected, persons who are serving a qualifying period that is required for participation, and annuitants employed by a department as described in subdivision (a)(1) or (a)(2) of Section 14-111.

(c) Contributions shall be made by the several departments for each pay period by warrants drawn by the State Comptroller against their respective funds or appropriations based upon vouchers stating the amount to be so contributed. These amounts shall be based on the full rate certified by the Board under Section 14-135.08 for that fiscal year. From the effective date of this amendatory Act of the 93rd General Assembly through the payment of the final payroll from fiscal year 2004 appropriations, the several departments shall not make contributions for the remainder of fiscal year 2004 but shall instead make payments as required under subsection (a-1) of Section 14.1 of the State Finance Act. The several departments shall resume those contributions at the commencement of fiscal year 2005.

(c-1) Notwithstanding subsection (c) of this Section, for fiscal years 2010 and 2012 only, contributions by the several departments are not required to be made for General Revenue Funds payrolls processed by the Comptroller. Payrolls paid by the several departments from all other State funds must continue to be processed pursuant to subsection (c) of this Section.

(c-2) For State fiscal years 2010 and 2012 only, on or as soon as possible after the 15th day of each month, the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the fiscal year General Revenue Fund contribution as certified by the System pursuant to Section 14-135.08 of the Illinois Pension Code.

(d) If an employee is paid from trust funds or federal funds, the department or other employer shall pay employer contributions from those funds to the System at the certified rate, unless the terms of the trust or the federal-State agreement preclude the use of the funds for that purpose, in which case the required employer contributions shall be paid by the State. From the effective date of this amendatory Act of the 93rd General Assembly through the payment of the final payroll from fiscal year 2004 appropriations, the department or other employer shall not pay contributions for the remainder of fiscal year 2004 but shall instead make payments as required under subsection (a-1) of Section 14.1 of the State Finance Act. The department or other employer shall resume payment of contributions at the commencement of fiscal year 2005.

(e) For State fiscal years 2014 2012 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount equal to the sum of (i) the contribution determined under Section 14-131.1, plus (ii) an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making the these determinations under item (ii) of this subsection (e), for State fiscal years 2017 through 2045, the required State contribution shall be calculated each year as a level percentage of revenue provided by the individual income tax, sales tax, and corporate income tax assuming a 2.3% average annual growth rate in these revenues based on the most recent fiscal year's actual revenues as reported by the Commission on Government Forecasting and Accountability payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

Notwithstanding any other provision of this Article, for For State fiscal years 2014 1996 through 2016 2005, the State contribution to the System under item (ii) of this subsection (e), as a percentage of State revenue from the individual income tax, sales tax, and corporate income tax the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2017 2011, the State is contributing at the rate required under this Section.

For State fiscal years 2014 through 2045, the total State contribution required in each fiscal year under this subsection (e) must not be less than 100% of the prior fiscal year's actual or required contribution, whichever is greater.

Notwithstanding any other provision of this Article, the total required State contribution for this System for State fiscal year 2013 shall be $1,697,411,761.

For ; except that (i) for State fiscal year 1998, for all purposes of this Code and any other law of this State, the certified percentage of the applicable employee payroll shall be 5.052% for employees earning eligible creditable service under Section 14-110 and 6.500% for all other employees, notwithstanding any contrary certification made under Section 14-135.08 before the effective date of this amendatory Act of 1997. In , and (ii) in the following specified State fiscal years, the State contribution to the System shall not be less than the following indicated percentages of the applicable employee payroll, even if the indicated percentage will produce a State contribution in excess of the amount otherwise required under this subsection and subsection (a): 9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY 2002; 10.6% in FY 2003; and 10.8% in FY 2004.

Notwithstanding any other provision of this Article, the total required State contribution to the System for State fiscal year 2006 is $203,783,900.

Notwithstanding any other provision of this Article, the total required State contribution to the System for State fiscal year 2007 is $344,164,400.

For each of State fiscal years 2008 through 2009, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State General Revenue Fund contribution for State fiscal year 2010 is $723,703,100 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the total required State General Revenue Fund contribution for State fiscal year 2011 is the amount recertified by the System on or before April 1, 2011 pursuant to Section 14-135.08 and shall be made from the proceeds of bonds sold in fiscal year 2011 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2011, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Beginning in State fiscal year 2046, the minimum State contribution shall be an amount equal to the contribution determined under Section 14-131.1, plus an amount sufficient for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter until fiscal year 2013, as calculated under this Section and certified under Section 14-135.08, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(f) After the submission of all payments for eligible employees from personal services line items in fiscal year 2004 have been made, the Comptroller shall provide to the System a certification of the sum of all fiscal year 2004 expenditures for personal services that would have been covered by payments to the System under this Section if the provisions of this amendatory Act of the 93rd General Assembly had not been enacted. Upon receipt of the certification, the System shall determine the amount due to the System based on the full rate certified by the Board under Section 14-135.08 for fiscal year 2004 in order to meet the State's obligation under this Section. The System shall compare this amount due to the amount received by the System in fiscal year 2004 through payments under this Section and under Section 6z-61 of the State Finance Act. If the amount due is more than the amount received, the difference shall be termed the "Fiscal Year 2004 Shortfall" for purposes of this Section, and the Fiscal Year 2004 Shortfall shall be satisfied under Section 1.2 of the State Pension Funds Continuing Appropriation Act. If the amount due is less than the amount received, the difference shall be termed the "Fiscal Year 2004 Overpayment" for purposes of this Section, and the Fiscal Year 2004 Overpayment shall be repaid by the System to the Pension Contribution Fund as soon as practicable after the certification.

(g) For purposes of determining the required State contribution to the System, the value of the System's assets shall be equal to the actuarial value of the System's assets, which shall be calculated as follows:

As of June 30, 2008, the actuarial value of the System's assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System's assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(h) For purposes of determining the required State contribution to the System for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the System's actuarially assumed rate of return.

(i) After the submission of all payments for eligible employees from personal services line items paid from the General Revenue Fund in fiscal year 2010 have been made, the Comptroller shall provide to the System a certification of the sum of all fiscal year 2010 expenditures for personal services that would have been covered by payments to the System under this Section if the provisions of this amendatory Act of the 96th General Assembly had not been enacted. Upon receipt of the certification, the System shall determine the amount due to the System based on the full rate certified by the Board under Section 14-135.08 for fiscal year 2010 in order to meet the State's obligation under this Section. The System shall compare this amount due to the amount received by the System in fiscal year 2010 through payments under this Section. If the amount due is more than the amount received, the difference shall be termed the "Fiscal Year 2010 Shortfall" for purposes of this Section, and the Fiscal Year 2010 Shortfall shall be satisfied under Section 1.2 of the State Pension Funds Continuing Appropriation Act. If the amount due is less than the amount received, the difference shall be termed the "Fiscal Year 2010 Overpayment" for purposes of this Section, and the Fiscal Year 2010 Overpayment shall be repaid by the System to the General Revenue Fund as soon as practicable after the certification.

(j) After the submission of all payments for eligible employees from personal services line items paid from the General Revenue Fund in fiscal year 2011 have been made, the Comptroller shall provide to the System a certification of the sum of all fiscal year 2011 expenditures for personal services that would have been covered by payments to the System under this Section if the provisions of this amendatory Act of the 96th General Assembly had not been enacted. Upon receipt of the certification, the System shall determine the amount due to the System based on the full rate certified by the Board under Section 14-135.08 for fiscal year 2011 in order to meet the State's obligation under this Section. The System shall compare this amount due to the amount received by the System in fiscal year 2011 through payments under this Section. If the amount due is more than the amount received, the difference shall be termed the "Fiscal Year 2011 Shortfall" for purposes of this Section, and the Fiscal Year 2011 Shortfall shall be satisfied under Section 1.2 of the State Pension Funds Continuing Appropriation Act. If the amount due is less than the amount received, the difference shall be termed the "Fiscal Year 2011 Overpayment" for purposes of this Section, and the Fiscal Year 2011 Overpayment shall be repaid by the System to the General Revenue Fund as soon as practicable after the certification.

(k) For fiscal year 2012 only, after the submission of all payments for eligible employees from personal services line items paid from the General Revenue Fund in the fiscal year have been made, the Comptroller shall provide to the System a certification of the sum of all expenditures in the fiscal year for personal services. Upon receipt of the certification, the System shall determine the amount due to the System based on the full rate certified by the Board under Section 14-135.08 for the fiscal year in order to meet the State's obligation under this Section. The System shall compare this amount due to the amount received by the System for the fiscal year. If the amount due is more than the amount received, the difference shall be termed the "Fiscal Year Shortfall" for purposes of this Section, and the Fiscal Year Shortfall shall be satisfied under Section 1.2 of the State Pension Funds Continuing Appropriation Act. If the amount due is less than the amount received, the difference shall be termed the "Fiscal Year Overpayment" for purposes of this Section, and the Fiscal Year Overpayment shall be repaid by the System to the General Revenue Fund as soon as practicable after the certification.

(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09; 96-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)

(40 ILCS 5/14-131.1 new)

Sec. 14-131.1. Additional State contributions.

(a) In fiscal year 2014, 2015, and 2016, the following rules apply in determining the additional contributions by the State of Illinois:

(1) With respect to covered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (1) of subsection (a) of Section 14-133, 4.04% of pensionable payroll.

(2) With respect to noncovered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (2), (3), or (6) of subsection (a) of Section 14-133, 6.00% of pensionable payroll.

(3) With respect to covered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (4) or (5) of subsection (a) of Section 14-133, 4.46% of pensionable payroll.

(b) In fiscal year 2017 and in each fiscal year thereafter, the following rules apply in determining the additional contributions by the State of Illinois:

(1) With respect to covered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (1) of subsection (a) of Section 14-133, one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

(2) With respect to noncovered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (2), (3), or (6) of subsection (a) of Section 14-133, 6.00% of total compensation for the employee group.

(3) With respect to covered employees who (i) participate in the traditional or revised benefit package or the self-managed plan and (ii) are subject to paragraph (4) or (5) of subsection (a) of Section 14-133, one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

For purposes of this subsection (b), long term normal cost shall be defined as the normal cost of the revised benefit package assuming that all employees are covered under the revised benefit package.

(c) For all employees covered under the self-managed plan, the State of Illinois shall contribute an amount determined by the System to be sufficient to fund the disability benefits provided under this Article.

(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)

Sec. 14-133. Contributions on behalf of members.

(a) Each participating employee shall make contributions to the System, based on the employee's compensation, as follows:

(1) Covered employees, except as indicated below, 3.5% for retirement annuity, and 0.5% for a widow or survivors annuity;

(2) Noncovered employees, except as indicated below, 7% for retirement annuity and 1% for a widow or survivors annuity;

(3) Noncovered employees serving in a position in which "eligible creditable service" as defined in Section 14-110 may be earned, 1% for a widow or survivors annuity plus the following amount for retirement annuity: 8.5% through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5% in 2004 and thereafter;

(4) Covered employees serving in a position in which "eligible creditable service" as defined in Section 14-110 may be earned, 0.5% for a widow or survivors annuity plus the following amount for retirement annuity: 5% through December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004 and thereafter;

(5) Each security employee of the Department of Corrections or of the Department of Human Services who is a covered employee, 0.5% for a widow or survivors annuity plus the following amount for retirement annuity: 5% through December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004 and thereafter;

(6) Each security employee of the Department of Corrections or of the Department of Human Services who is not a covered employee, 1% for a widow or survivors annuity plus the following amount for retirement annuity: 8.5% through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5% in 2004 and thereafter.

(7) Notwithstanding anything in this Section to the contrary, beginning July 1, 2013, all participating employees shall be required to make the following contributions:

(A) Covered employees who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 14-108.2d of this Code and who are subject to paragraph (1) of subsection (a) of Section 14-133 shall contribute:

(I) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, 9.29%.

(II) In fiscal year 2017 and in each fiscal year thereafter, a percentage of compensation equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus contributions by the State of Illinois in fiscal year 2017 under paragraph (1) of subsection (a) of Section 14-131.1, provided that no employee's contribution shall be more than 2% greater than the employee contribution certified for fiscal year 2014.

(B) Noncovered employees who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 14-108.2d of this Code and who are subject to either paragraph (3) or (6) of subsection (a) of Section 14-133 shall contribute:

(I) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 18.91% of compensation.

(II) In fiscal year 2017 and in each fiscal year thereafter, a percentage of compensation equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus contributions by the State of Illinois in fiscal year 2017 under paragraph (2) of subsection (a) of Section 14-131.1, provided that no employee's contribution shall be less than 6% or more than 20.91% of compensation.

(C) Covered employees who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 14-108.2d of this Code and who are subject to either paragraph (4) or (5) of subsection (a) of Section 14-133 shall contribute:

(I) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, 16.65%.

(II) In fiscal year 2017 and in each fiscal year thereafter, a percentage of compensation equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus contributions by the State of Illinois in fiscal year 2017 under paragraph (3) of subsection (a) of Section 14-131.1, provided that no employee's contribution shall be more than 2% greater than the employee contribution certified for fiscal year 2014.

(D) Noncovered employees who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 14-108.2d of this Code and who are subject to paragraph (2) of subsection (a) of Section 14-133 shall contribute:

(I) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 9.29% of compensation.

(II) In fiscal year 2017 and in each fiscal year thereafter, a percentage of compensation equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus contributions by the State of Illinois in fiscal year 2017 under paragraph (2) of subsection (a) of Section 14-131.1, provided that no employee's contribution shall be less than 6% or more than 2% greater than the employee's contribution certified for fiscal year 2014.

(E) Employees who elect the revised benefit package provided under paragraph (2) of subsection (a) of Section 14-108.2d of this Code shall contribute a percentage of compensation determined as follows:

(I) In fiscal year 2014 and in each fiscal year thereafter, covered employees who are subject to paragraph (1) of subsection (a) of Section 14-133 shall contribute one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

(II) In fiscal year 2014 and in each fiscal year thereafter, covered employees who are subject to either paragraph (4) or (5) of subsection (a) of Section 14-133 shall contribute one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

(III) In fiscal year 2014 and in each fiscal year thereafter, noncovered employees who are subject to either paragraph (2), (3), or (6) of subsection (a) of Section 14-133 shall contribute an amount equal to the greater of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014 or 12%, minus contributions by the State of Illinois in fiscal year 2014 under paragraph (2) of subsection (a) of Section 14-131.1.

Contributions under this subparagraph (E) shall be based on pensionable payroll.

(F) In fiscal year 2014 and in each fiscal year thereafter, employees who elect the self-managed plan provided under paragraph (3) of subsection (a) of Section 14-108.2d of this Code shall contribute a minimum percentage of compensation determined as follows:

(I) Covered employees who are subject to paragraph (1) of subsection (a) of Section 14-133 shall contribute one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

(II) Covered employees who are subject to either paragraph (4) or (5) of subsection (a) of Section 14-133 shall contribute one half of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014.

(III) Noncovered employees who are subject to either paragraph (2), (3) or (6) of subsection (a) of Section 14-133 shall contribute 6% of compensation.

Employees who elect the self-managed plan provided under paragraph (3) of subsection (a) of Section 14-108.2d of this Code may elect to increase the employee contribution in accordance with rules prescribed by the Board.

The System shall certify the actuarially determined normal cost and long term normal cost amounts, and the amount of the required employee contribution, as provided above. For purposes of this paragraph (7), long term normal cost shall be defined as the normal cost of the revised benefit package assuming that all employees are participants under the revised benefit package.

(b) Contributions shall be in the form of a deduction from compensation and shall be made notwithstanding that the compensation paid in cash to the employee shall be reduced thereby below the minimum prescribed by law or regulation. Each member is deemed to consent and agree to the deductions from compensation provided for in this Article, and shall receipt in full for salary or compensation.

(Source: P.A. 92-14, eff. 6-28-01.)

(40 ILCS 5/14-133.2 new)

Sec. 14-133.2. Increases in participant contributions. If the employee contribution required under Section 14-133 increases for any employee pursuant to this amendatory Act of the 97th General Assembly, the additional employee contribution in excess of the prior employee contribution shall be deducted from the employee's compensation unless the department that employs such employee agrees pursuant to Section 414(h) of the Internal Revenue Code to pick up and pay part or all of such increased contribution in addition to the employee's compensation.

(40 ILCS 5/14-202 new)

Sec. 14-202. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the System to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/15-103.4 new)

Sec. 15-103.4. Revised benefit package. "Revised benefit package": The defined benefit retirement program maintained under the System as provided by Public Act 96-889 and described in Section 15-134.6.

(40 ILCS 5/15-113.6) (from Ch. 108 1/2, par. 15-113.6)

Sec. 15-113.6. Service for employment in public schools. "Service for employment in public schools": Includes those periods not exceeding the lesser of 10 years or 2/3 of the service granted under other Sections of this Article dealing with service credit, during which a person who entered the system after September 1, 1974 was employed full time by a public common school, public college and public university, or by an agency or instrumentality of any of the foregoing, of any state, territory, dependency or possession of the United States of America, including the Philippine Islands, or a school operated by or under the auspices of any agency or department of any other state, if the person (1) cannot qualify for a retirement pension or other benefit based upon employer contributions from another retirement system, exclusive of federal social security, based in whole or in part upon this employment, and (2) pays the lesser of (A) an amount equal to 8% of his or her annual basic compensation on the date of becoming a participating employee subsequent to this service multiplied by the number of years of such service, together with compound interest from the date participation begins to the date payment is received by the board at the rate of 6% per annum through August 31, 1982, and at the effective rates after that date, and (B) 50% of the actuarial value of the increase in the retirement annuity provided by this service, and (3) contributes for at least 5 years subsequent to this employment to one or more of the following systems: the State Universities Retirement System, the Teachers' Retirement System of the State of Illinois, and the Public School Teachers' Pension and Retirement Fund of Chicago.

The service granted under this Section shall not be considered in determining whether the person has the minimum of 8 years of service required to qualify for a retirement annuity at age 55 or the 5 years of service required to qualify for a retirement annuity at age 62, as provided in Section 15-135, or the 10 years required by subsection (c) of Section 15-134.6 1-160 for a person who first becomes a participant on or after January 1, 2011. The maximum allowable service of 10 years for this governmental employment shall be reduced by the service credit which is validated under paragraph (2) of subsection (b) of Section 16-127 and paragraph 1 of Section 17-133.

(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)

(40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)

Sec. 15-134. Participant.

(a) Each person shall, as a condition of employment, become a participant and be subject to this Article on the date that he or she becomes an employee, makes an election to participate in, or otherwise becomes a participant in one of the retirement programs offered under this Article, whichever date is later.

An employee who becomes a participant shall continue to be a participant until he or she becomes an annuitant, dies or accepts a refund of contributions. For purposes of subsection (f) of Section 15-134.6 1-160, the term "participant" shall include a person receiving a retirement annuity.

(b) A person employed concurrently by 2 or more employers is eligible to participate in the system on compensation received from all employers.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/15-134.5)

Sec. 15-134.5. Retirement program elections.

(a) All participating employees are participants under the traditional benefit package prior to January 1, 1998.

Effective as of the date that an employer elects, as described in Section 15-158.2, to offer to its employees the portable benefit package and the self-managed plan as alternatives to the traditional benefit package, each of that employer's eligible employees (as defined in subsection (b)) shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of covered employment occurring on and after the effective date of the employee's election. The retirement program election made by an eligible employee must be made in writing, in the manner prescribed by the System, and within the time period described in subsection (d) or (d-1).

The employee election authorized by this Section is a one-time, irrevocable election. If an employee terminates employment after making the election provided under this subsection (a), then upon his or her subsequent re-employment with an employer the original election shall automatically apply to him or her, provided that the employer is then a participating employer as described in Section 15-158.2.

An eligible employee who fails to make this election shall, by default, participate in the traditional benefit package. Beginning on July 1, 2013, all participating employees who are not participants in the self-managed plan, except persons who qualify as employees under subsection (h) of Section 15-107 and police officers, shall be required to make the election provided under Section 15-134.7, and a participating employee who fails to make such an election shall, by default, participate in the revised benefit package.

(b) "Eligible employee" means an employee (as defined in Section 15-107) who is either a currently eligible employee or a newly eligible employee. For purposes of this Section, a "currently eligible employee" is an employee who is employed by an employer on the effective date on which the employer offers to its employees the portable benefit package and the self-managed plan as alternatives to the traditional benefit package. A "newly eligible employee" is an employee who first becomes employed by an employer after the effective date on which the employer offers its employees the portable benefit package and the self-managed plan as alternatives to the traditional benefit package. A newly eligible employee participates in the traditional benefit package until he or she makes an election to participate in the portable benefit package or the self-managed plan. If an employee does not elect to participate in the portable benefit package or the self-managed plan, he or she shall continue to participate in the traditional benefit package by default.

(c) An eligible employee who at the time he or she is first eligible to make the election described in subsection (a) does not have sufficient age and service to qualify for a retirement annuity under Section 15-135 may elect to participate in the traditional benefit package, the portable benefit package, or the self-managed plan. An eligible employee who has sufficient age and service to qualify for a retirement annuity under Section 15-135 at the time he or she is first eligible to make the election described in subsection (a) may elect to participate in the traditional benefit package or the portable benefit package, but may not elect to participate in the self-managed plan.

(d) A currently eligible employee must make this election within one year after the effective date of the employer's adoption of the self-managed plan.

A newly eligible employee must make this election within 6 months after the date on which the System receives the report of status certification from the employer. If an employee elects to participate in the self-managed plan, no employer contributions shall be remitted to the self-managed plan when the employee's account balance transfer is made. Employer contributions to the self-managed plan shall commence as of the first pay period that begins after the System receives the employee's election.

(d-1) A newly eligible employee who, prior to the effective date of this amendatory Act of the 91st General Assembly, fails to make the election within the period provided under subsection (d) and participates by default in the traditional benefit package may make a late election to participate in the portable benefit package or the self-managed plan instead of the traditional benefit package at any time within 6 months after the effective date of this amendatory Act of the 91st General Assembly.

(e) If a currently eligible employee elects the portable benefit package, that election shall not become effective until the one-year anniversary of the date on which the election is filed with the System, provided the employee remains continuously employed by the employer throughout the one-year waiting period, and any benefits payable to or on account of the employee before such one-year waiting period has ended shall not be determined under the provisions applicable to the portable benefit package but shall instead be determined in accordance with the traditional benefit package. If a currently eligible employee who has elected the portable benefit package terminates employment covered by the System before the one-year waiting period has ended, then no benefits shall be determined under the portable benefit package provisions while he or she is inactive in the System and upon re-employment with an employer covered by the System he or she shall begin a new one-year waiting period before the provisions of the portable benefit package become effective.

(f) An eligible employee shall be provided with written information prepared or prescribed by the System which describes the employee's retirement program choices. The eligible employee shall be offered an opportunity to receive counseling from the System prior to making his or her election. This counseling may consist of videotaped materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of these methods.

(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)

(40 ILCS 5/15-134.6 new)

Sec. 15-134.6. Revised benefit package.

(a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes a participant under this Article, and any person who elects this benefit package pursuant to Section 15-134.7, but do not apply to the self-managed plan established under this Article.

(b) "Final rate of earnings" means the average monthly (or annual) earnings obtained by dividing the total earnings or earnings calculated under this Article applicable to the participant during the 96 consecutive months (or 8 consecutive years) of service within the last 120 months (or 10 years) of service in which the total earnings calculated under this Article was the highest by the number of months (or years) of service in that period.

(b-5) For all purposes under this Article (including without limitation the calculation of benefits and employee contributions and contributions by the State of Illinois under paragraph (2) of Section 15-155.1 with respect to the revised benefit package), the annual earnings of a participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982 84 =100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

Beginning on July 1, 2013, the maximum annual earnings amount shall be adjusted to $110,100, as adjusted for periods after 2012 based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program. Each year thereafter on January 1, this amount shall be adjusted based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program.

(c) A participant is entitled to a retirement annuity upon written application if he or she has attained age 67 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article. A participant who has attained age 62 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.

(d) The retirement annuity of a participant who is retiring after attaining age 62 with at least 10 years of service credit shall be reduced by one half of 1% for each full month that the member's age is under age 67.

(e) Any retirement annuity or supplemental annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(f) The initial survivor's or widow's annuity of an otherwise eligible survivor or widow of a retired participant shall be in the amount of 66 2/3% of the retired participant's retirement annuity at the date of death. In the case of the death of a participant who has not retired, eligibility for a survivor's or widow's annuity shall be determined by the applicable section of this Article. The initial benefit shall be 66 2/3% of the earned annuity without a reduction due to age. A child's annuity of an otherwise eligible child shall be in the amount prescribed under this Article if applicable. Any survivor's or widow's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 3% or one half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(g) If a person who first becomes a participant on or after January 1, 2011 is receiving a retirement annuity under this system and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, except for those members or participants exempted from the provisions of this Section under subsection (a) of this Section, then the person's retirement annuity shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity shall resume and be recalculated if recalculation is provided for under this Article.

(h) Notwithstanding any other provision of this Section, a participant in the revised benefit package provided by this Section shall have the option to enroll in the self-managed plan created under Section 15-158.2.

(i) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.

(40 ILCS 5/15-134.7 new)

Sec. 15-134.7. Benefits accruals on and after July 1, 2013.

(a) Each participating employee under this Article, other than a person who first becomes an employee and a participant on or after January 1, 2011, a person who qualifies as an employee under subsection (h) of Section 15-107, a person who qualifies as a police officer, or a person who becomes an employee and a participant before July 1, 2013 and who elects the self-managed plan provided under Section 15-158.2, shall elect which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after July 1, 2013. The retirement program election made by the participating employee must be made (i) no later than July 1, 2013 in the manner prescribed by the System, and (ii) if applicable, every 3 years thereafter. The participating employee shall elect one of the following retirement programs:

(1) the traditional or portable benefit package;

(2) the revised benefit package; or

(3) the self-managed plan provided by the System.

(b) A person who first becomes an employee and a participant in the System, on or after January 1, 2011, shall elect which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after July 1, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make that election (i) by June 30, 2013 or within 6 months after the participant's first day of employment, whichever is later, and (ii) if applicable, ever 3 years thereafter.

(c) The participant election authorized by this Section is an irrevocable election, except that any individual making an election for the benefit described in paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make a subsequent election during the benefit recalculation period in the manner prescribed by the System. The election shall be made in the manner prescribed by the System. Any participant who fails to make the initial election shall, by default, participate in the revised benefit package provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the revised benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section;

(2) each participant in the revised benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the revised benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section; and

(3) the elections permitted under paragraphs (1) and (2) must be made during a 6-month period in a manner prescribed by the System.

(e) If a participant with an accrued benefit under the traditional or portable benefit package elects to participate under the revised benefit package, the participant's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals under the traditional or portable benefit package before the effective date of the election, based on the participant's final rate of earnings and service under the traditional or portable benefit package as of the effective date of the election and frozen on such date, and (ii) the participant's benefit accruals based on the participant's final rate of earnings and service on and after the effective date of the election under the revised benefit package. All rights and features provided under the traditional or portable benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to participation in the revised benefit package. Participants who elect to participate under the revised benefit package shall be entitled to the benefit of the survivor's annuity provided under the revised benefit package based upon all service completed under the System. All service completed under the System shall count for purposes of determining retirement eligibility and vesting under both the traditional or portable defined benefit package and the revised benefit package.

(f) If a participant with an accrued benefit under the traditional, portable, or revised benefit package elects to participate under the self-managed plan, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals prior to the effective date of the election, based on the participant's final rate of earnings and service as of the effective date of the election, and frozen on such date. However, the participant shall also have an accrued self-managed plan benefit as specified in subsection (k) of Section 15-158.2, for periods of service on or after the effective date of the election. All rights and features provided under the traditional, portable, or revised benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed with the System shall count for purposes of determining retirement eligibility and vesting under the traditional or portable benefit package, the revised benefit package, and the self-managed plan.

(g) An individual who is a in the System, but is not a participating employee as of July 1, 2013, shall, based on the eligibility criteria specified in this Article, elect one of the 3 retirement programs provided under paragraphs (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming a participating employee, provided that a participant who previously elected the self-managed plan provided under Section 15-158.2 may not make a subsequent election of a different retirement program.

(h) This Section does not apply to persons who qualify as employees under subsection (h) of Section 15-107.

(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)

Sec. 15-136. Retirement annuities - Amount. The provisions of this Section 15-136 apply only to those participants who are participating in the traditional benefit package or the portable benefit package and do not apply to participants who are participating in the self-managed plan.

(a) The amount of a participant's retirement annuity, expressed in the form of a single-life annuity, shall be determined by whichever of the following rules is applicable and provides the largest annuity:

Rule 1: The retirement annuity shall be 1.67% of final rate of earnings for each of the first 10 years of service, 1.90% for each of the next 10 years of service, 2.10% for each year of service in excess of 20 but not exceeding 30, and 2.30% for each year in excess of 30; or for persons who retire on or after January 1, 1998, 2.2% of the final rate of earnings for each year of service.

Rule 2: The retirement annuity shall be the sum of the following, determined from amounts credited to the participant in accordance with the actuarial tables and the prescribed rate of interest in effect at the time the retirement annuity begins:

(i) the normal annuity which can be provided on an actuarially equivalent basis, by the accumulated normal contributions as of the date the annuity begins;

(ii) an annuity from employer contributions of an amount equal to that which can be provided on an actuarially equivalent basis from the accumulated normal contributions made by the participant under Section 15-113.6 and Section 15-113.7 plus 1.4 times all other accumulated normal contributions made by the participant; and

(iii) the annuity that can be provided on an actuarially equivalent basis from the entire contribution made by the participant under Section 15-113.3.

With respect to a police officer or firefighter who retires on or after August 14, 1998, the accumulated normal contributions taken into account under clauses (i) and (ii) of this Rule 2 shall include the additional normal contributions made by the police officer or firefighter under Section 15-157(a).

Beginning on July 1, 2013, for purposes of calculating an annuity under this Rule 2, employee contributions in excess of the employee contribution rates that apply to the annuity and are in effect immediately prior to July 1, 2013 shall not be considered when determining the participant's accumulated normal contributions under clause (i) or the employer contribution under clause (ii).

The amount of a retirement annuity calculated under this Rule 2 shall be computed solely on the basis of the participant's accumulated normal contributions, as specified in this Rule and defined in Section 15-116. Neither an employee or employer contribution for early retirement under Section 15-136.2 nor any other employer contribution shall be used in the calculation of the amount of a retirement annuity under this Rule 2.

This amendatory Act of the 91st General Assembly is a clarification of existing law and applies to every participant and annuitant without regard to whether status as an employee terminates before the effective date of this amendatory Act.

This Rule 2 does not apply to a person who first becomes an employee under this Article on or after July 1, 2005.

Rule 3: The retirement annuity of a participant who is employed at least one-half time during the period on which his or her final rate of earnings is based, shall be equal to the participant's years of service not to exceed 30, multiplied by (1) $96 if the participant's final rate of earnings is less than $3,500, (2) $108 if the final rate of earnings is at least $3,500 but less than $4,500, (3) $120 if the final rate of earnings is at least $4,500 but less than $5,500, (4) $132 if the final rate of earnings is at least $5,500 but less than $6,500, (5) $144 if the final rate of earnings is at least $6,500 but less than $7,500, (6) $156 if the final rate of earnings is at least $7,500 but less than $8,500, (7) $168 if the final rate of earnings is at least $8,500 but less than $9,500, and (8) $180 if the final rate of earnings is $9,500 or more, except that the annuity for those persons having made an election under Section 15-154(a-1) shall be calculated and payable under the portable retirement benefit program pursuant to the provisions of Section 15-136.4.

Rule 4: A participant who is at least age 50 and has 25 or more years of service as a police officer or firefighter, and a participant who is age 55 or over and has at least 20 but less than 25 years of service as a police officer or firefighter, shall be entitled to a retirement annuity of 2 1/4% of the final rate of earnings for each of the first 10 years of service as a police officer or firefighter, 2 1/2% for each of the next 10 years of service as a police officer or firefighter, and 2 3/4% for each year of service as a police officer or firefighter in excess of 20. The retirement annuity for all other service shall be computed under Rule 1.

For purposes of this Rule 4, a participant's service as a firefighter shall also include the following:

(i) service that is performed while the person is an employee under subsection (h) of Section 15-107; and

(ii) in the case of an individual who was a participating employee employed in the fire department of the University of Illinois's Champaign-Urbana campus immediately prior to the elimination of that fire department and who immediately after the elimination of that fire department transferred to another job with the University of Illinois, service performed as an employee of the University of Illinois in a position other than police officer or firefighter, from the date of that transfer until the employee's next termination of service with the University of Illinois.

Rule 5: The retirement annuity of a participant who elected early retirement under the provisions of Section 15-136.2 and who, on or before February 16, 1995, brought administrative proceedings pursuant to the administrative rules adopted by the System to challenge the calculation of his or her retirement annuity shall be the sum of the following, determined from amounts credited to the participant in accordance with the actuarial tables and the prescribed rate of interest in effect at the time the retirement annuity begins:

(i) the normal annuity which can be provided on an actuarially equivalent basis, by the accumulated normal contributions as of the date the annuity begins; and

(ii) an annuity from employer contributions of an amount equal to that which can be provided on an actuarially equivalent basis from the accumulated normal contributions made by the participant under Section 15-113.6 and Section 15-113.7 plus 1.4 times all other accumulated normal contributions made by the participant; and

(iii) an annuity which can be provided on an actuarially equivalent basis from the employee contribution for early retirement under Section 15-136.2, and an annuity from employer contributions of an amount equal to that which can be provided on an actuarially equivalent basis from the employee contribution for early retirement under Section 15-136.2.

In no event shall a retirement annuity under this Rule 5 be lower than the amount obtained by adding (1) the monthly amount obtained by dividing the combined employee and employer contributions made under Section 15-136.2 by the System's annuity factor for the age of the participant at the beginning of the annuity payment period and (2) the amount equal to the participant's annuity if calculated under Rule 1, reduced under Section 15-136(b) as if no contributions had been made under Section 15-136.2.

With respect to a participant who is qualified for a retirement annuity under this Rule 5 whose retirement annuity began before the effective date of this amendatory Act of the 91st General Assembly, and for whom an employee contribution was made under Section 15-136.2, the System shall recalculate the retirement annuity under this Rule 5 and shall pay any additional amounts due in the manner provided in Section 15-186.1 for benefits mistakenly set too low.

The amount of a retirement annuity calculated under this Rule 5 shall be computed solely on the basis of those contributions specifically set forth in this Rule 5. Except as provided in clause (iii) of this Rule 5, neither an employee nor employer contribution for early retirement under Section 15-136.2, nor any other employer contribution, shall be used in the calculation of the amount of a retirement annuity under this Rule 5.

The General Assembly has adopted the changes set forth in Section 25 of this amendatory Act of the 91st General Assembly in recognition that the decision of the Appellate Court for the Fourth District in Mattis v. State Universities Retirement System et al. might be deemed to give some right to the plaintiff in that case. The changes made by Section 25 of this amendatory Act of the 91st General Assembly are a legislative implementation of the decision of the Appellate Court for the Fourth District in Mattis v. State Universities Retirement System et al. with respect to that plaintiff.

The changes made by Section 25 of this amendatory Act of the 91st General Assembly apply without regard to whether the person is in service as an employee on or after its effective date.

(b) The retirement annuity provided under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each month the participant is under age 60 at the time of retirement. However, this reduction shall not apply in the following cases:

(1) For a disabled participant whose disability benefits have been discontinued because he or she has exhausted eligibility for disability benefits under clause (6) of Section 15-152;

(2) For a participant who has at least the number of years of service required to retire at any age under subsection (a) of Section 15-135; or

(3) For that portion of a retirement annuity which has been provided on account of service of the participant during periods when he or she performed the duties of a police officer or firefighter, if these duties were performed for at least 5 years immediately preceding the date the retirement annuity is to begin.

(c) The maximum retirement annuity provided under Rules 1, 2, 4, and 5 shall be the lesser of (1) the annual limit of benefits as specified in Section 415 of the Internal Revenue Code of 1986, as such Section may be amended from time to time and as such benefit limits shall be adjusted by the Commissioner of Internal Revenue, and (2) 80% of final rate of earnings.

(d) An annuitant whose status as an employee terminates after August 14, 1969 shall receive automatic increases in his or her retirement annuity as follows:

Effective January 1 immediately following the date the retirement annuity begins, the annuitant shall receive an increase in his or her monthly retirement annuity of 0.125% of the monthly retirement annuity provided under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5, contained in this Section, multiplied by the number of full months which elapsed from the date the retirement annuity payments began to January 1, 1972, plus 0.1667% of such annuity, multiplied by the number of full months which elapsed from January 1, 1972, or the date the retirement annuity payments began, whichever is later, to January 1, 1978, plus 0.25% of such annuity multiplied by the number of full months which elapsed from January 1, 1978, or the date the retirement annuity payments began, whichever is later, to the effective date of the increase.

The annuitant shall receive an increase in his or her monthly retirement annuity on each January 1 thereafter during the annuitant's life of 3% of the monthly annuity provided under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in this Section. The change made under this subsection by P.A. 81-970 is effective January 1, 1980 and applies to each annuitant whose status as an employee terminates before or after that date.

Beginning January 1, 1990, all automatic annual increases payable under this Section shall be calculated as a percentage of the total annuity payable at the time of the increase, including all increases previously granted under this Article.

The change made in this subsection by P.A. 85-1008 is effective January 26, 1988, and is applicable without regard to whether status as an employee terminated before that date.

(e) If, on January 1, 1987, or the date the retirement annuity payment period begins, whichever is later, the sum of the retirement annuity provided under Rule 1 or Rule 2 of this Section and the automatic annual increases provided under the preceding subsection or Section 15-136.1, amounts to less than the retirement annuity which would be provided by Rule 3, the retirement annuity shall be increased as of January 1, 1987, or the date the retirement annuity payment period begins, whichever is later, to the amount which would be provided by Rule 3 of this Section. Such increased amount shall be considered as the retirement annuity in determining benefits provided under other Sections of this Article. This paragraph applies without regard to whether status as an employee terminated before the effective date of this amendatory Act of 1987, provided that the annuitant was employed at least one-half time during the period on which the final rate of earnings was based.

(f) A participant is entitled to such additional annuity as may be provided on an actuarially equivalent basis, by any accumulated additional contributions to his or her credit. However, the additional contributions made by the participant toward the automatic increases in annuity provided under this Section shall not be taken into account in determining the amount of such additional annuity.

(g) If, (1) by law, a function of a governmental unit, as defined by Section 20-107 of this Code, is transferred in whole or in part to an employer, and (2) a participant transfers employment from such governmental unit to such employer within 6 months after the transfer of the function, and (3) the sum of (A) the annuity payable to the participant under Rule 1, 2, or 3 of this Section (B) all proportional annuities payable to the participant by all other retirement systems covered by Article 20, and (C) the initial primary insurance amount to which the participant is entitled under the Social Security Act, is less than the retirement annuity which would have been payable if all of the participant's pension credits validated under Section 20-109 had been validated under this system, a supplemental annuity equal to the difference in such amounts shall be payable to the participant.

(h) On January 1, 1981, an annuitant who was receiving a retirement annuity on or before January 1, 1971 shall have his or her retirement annuity then being paid increased $1 per month for each year of creditable service. On January 1, 1982, an annuitant whose retirement annuity began on or before January 1, 1977, shall have his or her retirement annuity then being paid increased $1 per month for each year of creditable service.

(i) On January 1, 1987, any annuitant whose retirement annuity began on or before January 1, 1977, shall have the monthly retirement annuity increased by an amount equal to 8¢ per year of creditable service times the number of years that have elapsed since the annuity began.

(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)

(40 ILCS 5/15-136.3)

Sec. 15-136.3. Minimum retirement annuity.

(a) Beginning January 1, 1997, any person who is receiving a monthly retirement annuity under this Article which, after inclusion of (1) all one-time and automatic annual increases to which the person is entitled, (2) any supplemental annuity payable under Section 15-136.1, and (3) any amount deducted under Section 15-138 or 15-140 to provide a reversionary annuity, is less than the minimum monthly retirement benefit amount specified in subsection (b) of this Section, shall be entitled to a monthly supplemental payment equal to the difference.

(b) For purposes of the calculation in subsection (a), the minimum monthly retirement benefit amount is the sum of $25 for each year of service credit, up to a maximum of 30 years of service.

(c) This Section applies to all persons receiving a retirement annuity under this Article, without regard to whether or not employment terminated prior to the effective date of this Section. The annual increase provided in subsection (e) of Section 15-134.6 1-160 does not apply to any benefit provided under this Section.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/15-136.4)

Sec. 15-136.4. Retirement and Survivor Benefits Under Portable Benefit Package.

(a) This Section 15-136.4 describes the form of annuity and survivor benefits available to a participant who has elected the portable benefit package and has completed the one-year waiting period required under subsection (e) of Section 15-134.5. For purposes of this Section, the term "eligible spouse" means the husband or wife of a participant to whom the participant is married on the date the participant's annuity payment period begins, provided however, that if the participant should die prior to the commencement of retirement annuity benefits, then "eligible spouse" means the husband or wife, if any, to whom the participant was married throughout the one-year period preceding the date of his or her death.

(b) This subsection (b) describes the normal form of annuity payable to a participant subject to this Section 15-136.4. If the participant is unmarried on the date his or her annuity payment period begins, then the annuity payments shall be made in the form of a single-life annuity as described in Section 15-118. If the participant is married on the date his or her annuity payments commence, then the annuity payments shall be paid in the form of a qualified joint and survivor annuity that is the actuarial equivalent of the single-life annuity. Under the "qualified joint and survivor annuity", a reduced amount shall be paid to the participant for his or her lifetime and his or her eligible spouse, if surviving at the participant's death, shall be entitled to receive thereafter a lifetime survivorship annuity in a monthly amount equal to 50% of the reduced monthly amount that was payable to the participant. The last payment of a qualified joint and survivor annuity shall be made as of the first day of the month in which the death of the survivor occurs.

(c) Instead of the normal form of annuity that would be paid under subsection (b), a participant may elect in writing within the 90-day period prior to the date his or her annuity payments commence to waive the normal form of annuity payment and receive an optional form of payment as described in subsection (h). If the participant is married and elects an optional form of payment under subsection (h) other than a joint and survivor annuity with the eligible spouse designated as the contingent annuitant, then such election shall require the consent of his or her eligible spouse in the manner described in subsection (d). At any time during the 90-day period preceding the date the participant's payment period begins, the participant may revoke the optional form of payment elected under this subsection (c) and reinstate coverage under the qualified joint and survivor annuity without the spouse's consent, but an election to revoke the optional form elected and elect a new optional form of payment or designate a different contingent annuitant shall not be effective without the eligible spouse's consent.

(d) The eligible spouse's consent to any election made pursuant to this Section that requires the eligible spouse's consent shall be in writing and shall acknowledge the effect of the consent. In addition, the eligible spouse's signature on the written consent must be witnessed by a notary public. The eligible spouse's consent need not be obtained if the system is satisfied that there is no eligible spouse, that the eligible spouse cannot be located, or because of any other relevant circumstances. An eligible spouse's consent under this Section is valid only with respect to the specified optional form of payment and, if applicable, contingent annuitant designated by the participant. If the optional form of payment or the contingent annuitant is subsequently changed (other than by a revocation of the optional form of payment and reinstatement of the qualified joint and survivor annuity), a new consent by the eligible spouse is required. The eligible spouse's consent to an election made by a participant pursuant to this Section, once made, may not be revoked by the eligible spouse.

(e) Within a reasonable period of time preceding the date a participant's annuity commences, a participant shall be supplied with a written explanation of (1) the terms and conditions of the normal form single-life annuity and qualified joint and survivor annuity, (2) the participant's right to elect a single-life annuity or an optional form of payment under subsection (h) subject to his or her eligible spouse's consent, if applicable, and (3) the participant's right to reinstate coverage under the qualified joint and survivor annuity prior to his or her annuity commencement date by revoking an election of an optional form of payment under subsection (h).

(f) If a married participant with at least 1.5 years of service dies prior to commencing retirement annuity payments and prior to taking a refund under Section 15-154, his or her eligible spouse is entitled to receive a pre-retirement survivor annuity, if there is not then in effect a waiver of the pre-retirement survivor annuity. The pre-retirement survivor annuity payable under this subsection shall be a monthly annuity payable for the eligible spouse's life, commencing as of the beginning of the month next following the later of the date of the participant's death or the date the participant would have first met the eligibility requirements for retirement, and continuing through the beginning of the month in which the death of the eligible spouse occurs. The monthly amount payable to the spouse under the pre-retirement survivor annuity shall be equal to the monthly amount that would be payable as a survivor annuity under the qualified joint and survivor annuity described in subsection (b) if: (1) in the case of a participant who dies on or after the date on which the participant has met the eligibility requirements for retirement, the participant had retired with an immediate qualified joint and survivor annuity on the day before the participant's date of death; or (2) in the case of a participant who dies before the earliest date on which the participant would have met the eligibility requirements for retirement age, the participant had separated from service on the date of death, survived to the earliest retirement age based on service prior to his or her death, retired with an immediate qualified joint and survivor annuity at the earliest retirement age, and died on the day after the day on which the participant would have attained the earliest retirement age.

(g) A married participant who has not retired may elect at any time to waive the pre-retirement survivor annuity described in subsection (f). Any such election shall require the consent of the participant's eligible spouse in the manner described in subsection (d). A waiver of the pre-retirement survivor annuity shall increase the lump sum death benefit payable under subsection (b) of Section 15-141. Prior to electing any waiver of the pre-retirement survivor annuity, the participant shall be provided with a written explanation of (1) the terms and conditions of the pre-retirement survivor annuity and the death benefits payable from the system both with and without the pre-retirement survivor annuity, (2) the participant's right to elect a waiver of the pre-retirement survivor annuity coverage subject to his or her spouse's consent, and (3) the participant's right to reinstate pre-retirement survivor annuity coverage at any time by revoking a prior waiver of such coverage.

(h) By filing a timely election with the system, a participant who will be eligible to receive a retirement annuity under this Section may waive the normal form of annuity payment described in subsection (b), subject to obtaining the consent of his or her eligible spouse, if applicable, and elect to receive any one of the following optional forms of payment:

(1) Joint and Survivor Annuity Options: The participant may elect to receive a reduced annuity payable for his or her life and to have a lifetime survivorship annuity in a monthly amount equal to 50%, 75%, or 100% (as elected by the participant) of that reduced monthly amount, to be paid after the participant's death to his or her contingent annuitant, if the contingent annuitant is alive at the time of the participant's death.

(2) Single-Life Annuity Option (optional for married participants). The participant may elect to receive a single-life annuity payable for his or her life only.

(3) Lump sum retirement benefit. The participant may elect to receive a lump sum retirement benefit that is equal to the amount of a refund payable under Section 15-154(a-2), as modified for periods of service beginning on or after July 1, 2013.

All joint and survivor annuity forms shall be in an amount that is the actuarial equivalent of the single-life annuity.

For the purposes of this Section, the term "contingent annuitant" means the beneficiary who is designated by a participant at the time the participant elects a joint and survivor annuity to receive the lifetime survivorship annuity in the event the beneficiary survives the participant at the participant's death.

(i) Under no circumstances may an option be elected, changed, or revoked after the date the participant's retirement annuity commences.

(j) An election made pursuant to subsection (h) shall become inoperative if the participant or the contingent annuitant dies before the date the participant's annuity payments commence, or if the eligible spouse's consent is required and not given.

(k) (Blank).

(l) The automatic annual increases described in subsection (d) of Section 15-136 shall apply to retirement benefits under the portable benefit package and the automatic annual increases described in subsection (j) of Section 15-145 shall apply to survivor benefits under the portable benefit package.

(Source: P.A. 96-586, eff. 8-18-09.)

(40 ILCS 5/15-136.5 new)

Sec. 15-136.5. Minimum benefit and allocation provisions. Each employee participating in the System shall receive a minimum benefit or allocation for service on or after July 1, 2013 determined as follows:

(1) If the employee is participating in the traditional or portable benefit package or the revised benefit package, the employee shall receive a minimum benefit (commencing on his or her Social Security retirement age) for the employee's period of service covered by each such defined benefit package that is equal to the annual primary insurance amount the employee would have under Social Security for such period of service. For the purposes of this item (1), the primary insurance amount an individual would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the employee is participating in the self-managed plan, the employee shall receive a minimum allocation equal to 7.5% of the employee's earnings for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/15-141) (from Ch. 108 1/2, par. 15-141)

Sec. 15-141. Death benefits - Death of participant.

(a) The beneficiary of a participant under the traditional benefit package is entitled to a death benefit equal to the sum of (1) the employee's accumulated normal and additional contributions on the date of death, (2) the employee's accumulated survivors insurance contributions on the date of death, if a survivors insurance benefit is not payable, (3) an amount equal to the employee's final rate of earnings, but not more than $5,000, if (i) the beneficiary, under rules of the board, was dependent upon the participant, (ii) the participant was a participating employee immediately prior to his or her death, and (iii) a survivors insurance benefit is not payable, and (4) $2,500 if (i) the beneficiary was not dependent upon the participant, (ii) the participant was a participating employee immediately prior to his or her death, and (iii) a survivors insurance benefit is not payable.

(b) If the participant has elected to participate in the portable benefit package and has completed the one-year waiting period required under subsection (e) of Section 15-134.5, the death benefit shall be equal to the employee's accumulated normal and additional contributions on the date of death plus, if the employee died with 1.5 or more years of service for employment as defined in Section 15-113.1, employer contributions in an amount equal to the sum of the accumulated normal and additional contributions; except that if a pre-retirement survivor annuity is payable under Section 15-136.4, the death benefit payable under this paragraph shall be reduced, but to not less than zero, by the actuarial value of the benefit payable to the surviving spouse. If the recipient of a pre-retirement survivor annuity dies before an amount equal to all accumulated normal and additional contributions as of the date of death have been paid out, the remaining difference shall be paid to the member's beneficiary. The primary beneficiary of the participant must be his or her spouse unless the spouse has consented to the designation of another beneficiary in the manner described in subsection (d) of Section 15-136.4.

(c) If payments are made under any State or federal workers' compensation or occupational diseases law because of the death of an employee, the portion of the death benefit payable from employer contributions shall be reduced by the total amount of the payments.

(d) Beginning on July 1, 2013, for purposes of calculating the death benefit under subsection (b) of this Section, employee contributions in excess of the employee contribution rates that apply to that benefit and are in effect immediately prior to July 1, 2013 shall not be considered when determining the participant's accumulated normal and additional contributions or the employer contribution, provided that the death benefit amount attributable to service on or after July 1, 2013 shall not be less than the participant's employee contributions during such period of service.

(Source: P.A. 95-83, eff. 8-13-07.)

(40 ILCS 5/15-146) (from Ch. 108 1/2, par. 15-146)

Sec. 15-146. Survivors insurance benefits - Minimum amounts.

(a) The minimum total survivors annuity payable on account of the death of a participant shall be 50% of the retirement annuity which would have been provided under Rule 1, Rule 2, Rule 3, or Rule 5 of Section 15-136 upon the participant's attainment of the minimum age at which the penalty for early retirement would not be applicable or the date of the participant's death, whichever is later, on the basis of credits earned prior to the time of death.

(b) The minimum total survivors annuity payable on account of the death of an annuitant shall be 50% of the retirement annuity which is payable under Section 15-136 at the time of death or 50% of the disability retirement annuity payable under Section 15-153.2. This minimum survivors annuity shall apply to each participant and annuitant who dies after September 16, 1979, whether or not his or her employee status terminates before or after that date.

(c) If an annuitant has elected a reversionary annuity, the retirement annuity referred to in this Section is that which would have been payable had such election not been filed.

(d) Beginning January 1, 2002, any person who is receiving a survivors annuity under this Article which, after inclusion of all one-time and automatic annual increases to which the person is entitled, is less than the sum of $17.50 for each year (up to a maximum of 30 years) of the deceased member's service credit, shall be entitled to a monthly supplemental payment equal to the difference.

If 2 or more persons are receiving survivors annuities based on the same deceased member, the calculation of the supplemental payment under this subsection shall be based on the total of those annuities and divided pro rata. The supplemental payment is not subject to any limitation on the maximum amount of the annuity and shall not be included in the calculation of any automatic annual increase under Section 15-145. The annual increase provided in subsection (f) of Section 15-134.6 1-160 does not apply to any benefit provided under this subsection.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)

Sec. 15-154. Refunds.

(a) A participant whose status as an employee is terminated, regardless of cause, or who has been on lay off status for more than 120 days, and who is not on leave of absence, is entitled to a refund of contributions upon application; except that not more than one such refund application may be made during any academic year.

Except as set forth in subsections (a-1) and (a-2), the refund shall be the sum of the accumulated normal, additional, and survivors insurance contributions, plus the entire contribution made by the participant under Section 15-113.3, less the amount of interest credited on these contributions each year in excess of 4 1/2% of the amount on which interest was calculated.

(a-1) A person who elects, in accordance with the requirements of Section 15-134.5, to participate in the portable benefit package and who becomes a participating employee under that retirement program upon the conclusion of the one-year waiting period applicable to the portable benefit package election shall have his or her refund calculated in accordance with the provisions of subsection (a-2).

(a-2) The refund payable to a participant described in subsection (a-1) shall be the sum of the participant's accumulated normal and additional contributions, as defined in Sections 15-116 and 15-117, plus the entire contribution made by the participant under Section 15-113.3. If the participant terminates with 5 or more years of service for employment as defined in Section 15-113.1, he or she shall also be entitled to a distribution of employer contributions in an amount equal to the sum of the accumulated normal and additional contributions, as defined in Sections 15-116 and 15-117. Beginning on July 1, 2013, for purposes of calculating the refund amount payable to a participant described in subsection (a-1), employee contributions in excess of the employee contribution rates that apply to that benefit and are in effect immediately prior to July 1, 2013 shall not be considered when determining the participant's accumulated normal and additional contributions or the employer contribution, provided that the refund amount attributable to service on or after July 1, 2013 shall not be less than the participant's employee contributions during such period of service.

(b) Upon acceptance of a refund, the participant forfeits all accrued rights and credits in the System, and if subsequently reemployed, the participant shall be considered a new employee subject to all the qualifying conditions for participation and eligibility for benefits applicable to new employees. If such person again becomes a participating employee and continues as such for 2 years, or is employed by an employer and participates for at least 2 years in the Federal Civil Service Retirement System, all such rights, credits, and previous status as a participant shall be restored upon repayment of the amount of the refund, together with compound interest thereon from the date the refund was received to the date of repayment at the rate of 6% per annum through August 31, 1982, and at the effective rates after that date. When a participant in the portable benefit package who received a refund which included a distribution of employer contributions repays a refund pursuant to this Section, one-half of the amount repaid shall be deemed the member's reinstated accumulated normal and additional contributions and the other half shall be allocated as an employer contribution to the System, except that any amount repaid for previously purchased military service credit under Section 15-113.3 shall be accounted for as such.

(c) If a participant covered under the traditional benefit package has made survivors insurance contributions, but has no survivors insurance beneficiary upon retirement, he or she shall be entitled to elect a refund of the accumulated survivors insurance contributions, or to elect an additional annuity the value of which is equal to the accumulated survivors insurance contributions. This election must be made prior to the date the person's retirement annuity is approved by the System.

(d) A participant, upon application, is entitled to a refund of his or her accumulated additional contributions attributable to the additional contributions described in the last sentence of subsection (c) of Section 15-157. Upon the acceptance of such a refund of accumulated additional contributions, the participant forfeits all rights and credits which may have accrued because of such contributions.

(e) A participant who terminates his or her employee status and elects to waive service credit under Section 15-154.2, is entitled to a refund of the accumulated normal, additional and survivors insurance contributions, if any, which were credited the participant for this service, or to an additional annuity the value of which is equal to the accumulated normal, additional and survivors insurance contributions, if any; except that not more than one such refund application may be made during any academic year. Upon acceptance of this refund, the participant forfeits all rights and credits accrued because of this service.

(f) If a police officer or firefighter receives a retirement annuity under Rule 1 or 3 of Section 15-136, he or she shall be entitled at retirement to a refund of the difference between his or her accumulated normal contributions and the normal contributions which would have accumulated had such person filed a waiver of the retirement formula provided by Rule 4 of Section 15-136.

(g) If, at the time of retirement, a participant would be entitled to a retirement annuity under Rule 1, 2, 3, 4, or 5 of Section 15-136, or under Section 15-136.4, that exceeds the maximum specified in clause (1) of subsection (c) of Section 15-136, he or she shall be entitled to a refund of the employee contributions, if any, paid under Section 15-157 after the date upon which continuance of such contributions would have otherwise caused the retirement annuity to exceed this maximum, plus compound interest at the effective rates.

(Source: P.A. 92-16, eff. 6-28-01; 92-424, eff. 8-17-01; 93-347, eff. 7-24-03.)

(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)

Sec. 15-155. Employer contributions.

(a) The State of Illinois shall make contributions by appropriations of amounts which, together with the other employer contributions from trust, federal, and other funds, employee contributions, income from investments, and other income of this System, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, using the formula in subsection (a-1).

(a-1) For State fiscal years 2014 2012 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount equal to the sum of (i) the contribution determined under Section 15-155.1, plus (ii) an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making the these determinations under item (ii) of this subsection (a-1), for State fiscal years 2017 through 2045, the required State contribution shall be calculated each year as a level percentage of revenue provided by the individual income tax, sales tax, and corporate income tax assuming a 2.3% average annual growth rate in these revenues based on the most recent fiscal year's actual revenues as reported by the Commission on Government Forecasting and Accountability payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

Notwithstanding any other provision of this Article, for For State fiscal years 2014 1996 through 2016 2005, the State contribution to the System under item (ii) of this subsection (a-1), as a percentage of State revenue from the individual income tax, sales tax, and corporate income tax the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2017 2011, the State is contributing at the rate required under this Section.

For State fiscal years 2014 through 2045, the total State contribution required in each fiscal year under this subsection (a-1) must not be less than 100% of the prior fiscal year's actual or required contribution, whichever is greater.

Notwithstanding any other provision of this Article, the total required State contribution for this System for State fiscal year 2013 shall be $1,434,771,284.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $166,641,900.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $252,064,100.

For each of State fiscal years 2008 through 2009, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $702,514,000 and shall be made from the State Pensions Fund and proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2010, (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is the amount recertified by the System on or before April 1, 2011 pursuant to Section 15-165 and shall be made from the State Pensions Fund and proceeds of bonds sold in fiscal year 2011 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2011, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the total required State contribution for fiscal year 2011 is $775,781,000, and the total required State contribution for fiscal year 2012 is 980,485,000.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be an amount equal to the contribution determined under Section 15-155.1, plus the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as calculated under this Section and certified under Section 15-165, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(b) If an employee is paid from trust or federal funds, the employer shall pay to the Board contributions from those funds which are sufficient to cover the accruing normal costs on behalf of the employee. However, universities having employees who are compensated out of local auxiliary funds, income funds, or service enterprise funds are not required to pay such contributions on behalf of those employees. The local auxiliary funds, income funds, and service enterprise funds of universities shall not be considered trust funds for the purpose of this Article, but funds of alumni associations, foundations, and athletic associations which are affiliated with the universities included as employers under this Article and other employers which do not receive State appropriations are considered to be trust funds for the purpose of this Article.

(b-1) The City of Urbana and the City of Champaign shall each make employer contributions to this System for their respective firefighter employees who participate in this System pursuant to subsection (h) of Section 15-107. The rate of contributions to be made by those municipalities shall be determined annually by the Board on the basis of the actuarial assumptions adopted by the Board and the recommendations of the actuary, and shall be expressed as a percentage of salary for each such employee. The Board shall certify the rate to the affected municipalities as soon as may be practical. The employer contributions required under this subsection shall be remitted by the municipality to the System at the same time and in the same manner as employee contributions.

(c) Through State fiscal year 1995: The total employer contribution shall be apportioned among the various funds of the State and other employers, whether trust, federal, or other funds, in accordance with actuarial procedures approved by the Board. State of Illinois contributions for employers receiving State appropriations for personal services shall be payable from appropriations made to the employers or to the System. The contributions for Class I community colleges covering earnings other than those paid from trust and federal funds, shall be payable solely from appropriations to the Illinois Community College Board or the System for employer contributions.

(d) Beginning in State fiscal year 1996, the required State contributions to the System shall be appropriated directly to the System and shall be payable through vouchers issued in accordance with subsection (c) of Section 15-165, except as provided in subsection (g).

(e) The State Comptroller shall draw warrants payable to the System upon proper certification by the System or by the employer in accordance with the appropriation laws and this Code.

(f) Normal costs under this Section means liability for pensions and other benefits which accrues to the System because of the credits earned for service rendered by the participants during the fiscal year and expenses of administering the System, but shall not include the principal of or any redemption premium or interest on any bonds issued by the Board or any expenses incurred or deposits required in connection therewith.

(g) If the amount of a participant's earnings for any academic year used to determine the final rate of earnings, determined on a full-time equivalent basis, exceeds the amount of his or her earnings with the same employer for the previous academic year, determined on a full-time equivalent basis, by more than 6%, the participant's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. The System may require the employer to provide any pertinent information or documentation.

Whenever it determines that a payment is or may be required under this subsection (g), the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (h) or (i) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of subsection (h) or (i). Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(h) This subsection (h) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases paid to participants under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases paid to a participant at a time when the participant is 10 or more years from retirement eligibility under Section 15-135.

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases resulting from overload work, including a contract for summer teaching, or overtime when the employer has certified to the System, and the System has approved the certification, that: (i) in the case of overloads (A) the overload work is for the sole purpose of academic instruction in excess of the standard number of instruction hours for a full-time employee occurring during the academic year that the overload is paid and (B) the earnings increases are equal to or less than the rate of pay for academic instruction computed using the participant's current salary rate and work schedule; and (ii) in the case of overtime, the overtime was necessary for the educational mission.

When assessing payment for any amount due under subsection (g), the System shall exclude any earnings increase resulting from (i) a promotion for which the employee moves from one classification to a higher classification under the State Universities Civil Service System, (ii) a promotion in academic rank for a tenured or tenure-track faculty position, or (iii) a promotion that the Illinois Community College Board has recommended in accordance with subsection (k) of this Section. These earnings increases shall be excluded only if the promotion is to a position that has existed and been filled by a member for no less than one complete academic year and the earnings increase as a result of the promotion is an increase that results in an amount no greater than the average salary paid for other similar positions.

(i) When assessing payment for any amount due under subsection (g), the System shall exclude any salary increase described in subsection (h) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (g) of this Section.

(j) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.

(2) The dollar amount by which each employer's contribution to the System was changed due to recalculations required by Public Act 94-1057.

(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.

(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(k) The Illinois Community College Board shall adopt rules for recommending lists of promotional positions submitted to the Board by community colleges and for reviewing the promotional lists on an annual basis. When recommending promotional lists, the Board shall consider the similarity of the positions submitted to those positions recognized for State universities by the State Universities Civil Service System. The Illinois Community College Board shall file a copy of its findings with the System. The System shall consider the findings of the Illinois Community College Board when making determinations under this Section. The System shall not exclude any earnings increases resulting from a promotion when the promotion was not submitted by a community college. Nothing in this subsection (k) shall require any community college to submit any information to the Community College Board.

(l) For purposes of determining the required State contribution to the System, the value of the System's assets shall be equal to the actuarial value of the System's assets, which shall be calculated as follows:

As of June 30, 2008, the actuarial value of the System's assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System's assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(m) For purposes of determining the required State contribution to the system for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the system's actuarially assumed rate of return.

(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)

(40 ILCS 5/15-155.1 new)

Sec. 15-155.1. Additional State contribution. The following rules apply in determining the additional contribution by the State of Illinois in State fiscal year 2014 and each fiscal year thereafter:

(1) With respect to employees who elect the traditional or portable benefit package, an amount equal to 6% of the total earnings of the employee group.

(2) With respect to employees who elect the revised benefit package, an amount equal to 6% of the total pensionable earnings of the employee group.

(3) With respect to employees who elect the self-managed plan, an amount equal to (i) 6% of total earnings of the employee group and (ii) an amount determined by the System to fund the disability plan provided in this Article.

(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)

Sec. 15-157. Employee Contributions.

(a) Each participating employee shall make contributions towards the retirement benefits payable under the retirement program applicable to the employee from each payment of earnings applicable to employment under this system on and after the date of becoming a participant as follows: Prior to September 1, 1949, 3 1/2% of earnings; from September 1, 1949 to August 31, 1955, 5%; from September 1, 1955 to August 31, 1969, 6%; from September 1, 1969, 6 1/2%. These contributions are to be considered as normal contributions for purposes of this Article.

Each participant who is a police officer or firefighter shall make normal contributions of 8% of each payment of earnings applicable to employment as a police officer or firefighter under this system on or after September 1, 1981, unless he or she files with the board within 60 days after the effective date of this amendatory Act of 1991 or 60 days after the board receives notice that he or she is employed as a police officer or firefighter, whichever is later, a written notice waiving the retirement formula provided by Rule 4 of Section 15-136. This waiver shall be irrevocable. If a participant had met the conditions set forth in Section 15-132.1 prior to the effective date of this amendatory Act of 1991 but failed to make the additional normal contributions required by this paragraph, he or she may elect to pay the additional contributions plus compound interest at the effective rate. If such payment is received by the board, the service shall be considered as police officer service in calculating the retirement annuity under Rule 4 of Section 15-136. While performing service described in clause (i) or (ii) of Rule 4 of Section 15-136, a participating employee shall be deemed to be employed as a firefighter for the purpose of determining the rate of employee contributions under this Section.

(b) Starting September 1, 1969, each participating employee shall make additional contributions of 1/2 of 1% of earnings to finance a portion of the cost of the annual increases in retirement annuity provided under Section 15-136, except that with respect to participants in the self-managed plan this additional contribution shall be used to finance the benefits obtained under that retirement program.

(c) In addition to the amounts described in subsections (a) and (b) of this Section, each participating employee shall make contributions of 1% of earnings applicable under this system on and after August 1, 1959. The contributions made under this subsection (c) shall be considered as survivor's insurance contributions for purposes of this Article if the employee is covered under the traditional benefit package, and such contributions shall be considered as additional contributions for purposes of this Article if the employee is participating in the self-managed plan or has elected to participate in the portable benefit package and has completed the applicable one-year waiting period. Contributions in excess of $80 during any fiscal year beginning before August 31, 1969 and in excess of $120 during any fiscal year thereafter until September 1, 1971 shall be considered as additional contributions for purposes of this Article.

(d) If the board by board rule so permits and subject to such conditions and limitations as may be specified in its rules, a participant may make other additional contributions of such percentage of earnings or amounts as the participant shall elect in a written notice thereof received by the board.

(e) That fraction of a participant's total accumulated normal contributions, the numerator of which is equal to the number of years of service in excess of that which is required to qualify for the maximum retirement annuity, and the denominator of which is equal to the total service of the participant, shall be considered as accumulated additional contributions. The determination of the applicable maximum annuity and the adjustment in contributions required by this provision shall be made as of the date of the participant's retirement.

(f) Notwithstanding the foregoing, a participating employee shall not be required to make contributions under this Section after the date upon which continuance of such contributions would otherwise cause his or her retirement annuity to exceed the maximum retirement annuity as specified in clause (1) of subsection (c) of Section 15-136.

(g) A participating employee may make contributions for the purchase of service credit under this Article.

(h) Notwithstanding anything in this Section to the contrary, beginning July 1, 2013, all participating employees shall be required to make the following contributions:

(1) Participating employees who elect the traditional or portable benefit package shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 15.31% of earnings.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of earnings equal to the actuarially determined fiscal year 2017 normal cost of the traditional and portable benefit package, minus contributions by the State of Illinois in fiscal year 2017 under paragraph (1) of Section 15-155.1, provided that no participating employee's contribution shall be less than 6% or more than 17.31% of earnings. The System shall certify the actuarially determined fiscal year 2017 normal cost of the traditional and portable benefit package and the amount of the required participating employee contribution.

(2) In fiscal year 2014 and in each fiscal year thereafter, participating employees who elect the revised benefit package shall contribute a percentage of earnings equal to the greater of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014 or 12%, minus contributions by the State of Illinois in fiscal year 2014 under paragraph (2) of Section 15-155.1, provided that no participating employee's contribution shall be less than 6% of earnings. The System shall certify the actuarially determined long term normal cost of such revised benefit package and the amount of the required participating employee contribution. For purposes of this paragraph (2), long term normal cost shall be defined as the normal cost of the revised benefit package assuming that all employees are covered under the revised benefit package. Contributions under this paragraph (2) shall be based on pensionable earnings.

(3) In fiscal year 2014 and in each fiscal year thereafter, participating employees who elect the self-managed plan shall contribute a minimum of 6% of earnings. Participants who elect the self-managed plan may elect to increase their employee contribution in accordance with rules prescribed by the Board.

(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448, eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98; 90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)

(40 ILCS 5/15-157.2 new)

Sec. 15-157.2. Increases in participant contribution. If the employee contribution required under Section 15-157 increases for any employee pursuant to this amendatory Act of the 97th General Assembly, the additional employee contribution in excess of the prior employee contribution for such employee shall be deducted from the employee's earnings unless the employee's employer agrees pursuant to Section 414(h) of the Internal Revenue Code to pick up and pay part or all of such increased contribution in addition to the employee's earnings.

(40 ILCS 5/15-158.2)

Sec. 15-158.2. Self-managed plan.

(a) Purpose. The General Assembly finds that it is important for colleges and universities to be able to attract and retain the most qualified employees and that in order to attract and retain these employees, colleges and universities should have the flexibility to provide a defined contribution plan as an alternative for eligible employees who elect not to participate in a defined benefit retirement program provided under this Article. Accordingly, the State Universities Retirement System is hereby authorized to establish and administer a self-managed plan, which shall offer participating employees the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) Adoption by employers. Each employer subject to this Article may elect to adopt the self-managed plan established under this Section; this election is irrevocable. An employer's election to adopt the self-managed plan makes available to the eligible employees of that employer the elections described in Section 15-134.5 and paragraph (3) of subsection (a) of 15-134.7.

The State Universities Retirement System shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the System may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State, to the employers, or to a combination of both.

(c) Selection of service providers and funding vehicles. The System, in consultation with the employers, shall solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State. In reviewing the proposals received and approving and contracting with no fewer than 2 and no more than 7 companies, the Board of Trustees of the System shall consider, among other things, the following criteria:

(1) the nature and extent of the benefits that would be provided to the participants;

(2) the reasonableness of the benefits in relation to the premium charged;

(3) the suitability of the benefits to the needs and interests of the participating employees and the employer;

(4) the ability of the company to provide benefits under the contract and the financial stability of the company; and

(5) the efficacy of the contract in the recruitment and retention of employees.

The System, in consultation with the employers, shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Employee Direction. Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The participant shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the System nor the employer guarantees any of the investments in the employee's account balances.

(e) Participation. An employee eligible to participate in the self-managed plan must make a written election in accordance with the provisions of Section 15-134.5 and the procedures established by the System. Participation in the self-managed plan by an electing employee shall begin on the first day of the first pay period following the later of the date the employee's election is filed with the System or the effective date as of which the employee's employer begins to offer participation in the self-managed plan. Employers may not make the self-managed plan available earlier than January 1, 1998. An employee's participation in any other retirement program administered by the System under this Article shall terminate on the date that participation in the self-managed plan begins.

An employee who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position, and may not participate in any other retirement program administered by the System under this Article while employed by that employer or any other employer that has adopted the self-managed plan, unless the self-managed plan is terminated in accordance with subsection (i).

Participation in the self-managed plan under this Section shall constitute membership in the State Universities Retirement System.

A participant under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Establishment of Initial Account Balance. If at the time an employee elects to participate in the self-managed plan he or she has rights and credits in the System due to previous participation in the traditional benefit package, the System shall establish for the employee an opening account balance in the self-managed plan, equal to the amount of contribution refund that the employee would be eligible to receive under Section 15-154 if the employee terminated employment on that date and elected a refund of contributions, except that this hypothetical refund shall include interest at the effective rate for the respective years. The System shall transfer assets from the defined benefit retirement program to the self-managed plan, as a tax free transfer in accordance with Internal Revenue Service guidelines, for purposes of funding the employee's opening account balance.

(g) No Duplication of Service Credit. Notwithstanding any other provision of this Article, an employee may not purchase or receive service or service credit applicable to any other retirement program administered by the System under this Article for any period during which the employee was a participant in the self-managed plan established under this Section.

(h) Contributions. The self-managed plan shall be funded by contributions from employees participating in the self-managed plan and employer contributions as provided in this Section.

The contribution rate for employees participating in the self-managed plan under this Section shall be equal to the employee contribution rate for other participants in the System, as provided in Section 15-157, provided that for fiscal year 2014 and each year thereafter the contribution rate for employees participating in the self-managed plan shall be equal to the amount specified in paragraph (3) of subsection (h) of Section 15-157. This required contribution shall be made as an "employer pick-up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. Any employee participating in the System's traditional benefit package prior to his or her election to participate in the self-managed plan shall continue to have the employer pick up the contributions required under Section 15-157. However, the amounts picked up after the election of the self-managed plan shall be remitted to and treated as assets of the self-managed plan. In no event shall an employee have an option of receiving these amounts in cash, and payment of the employee contribution shall be a condition of employment. Employees may make additional contributions to the self-managed plan in accordance with procedures prescribed by the System, to the extent permitted under rules prescribed by the System.

The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 7.6% of the participating employee's salary, less the amount used by the System to provide disability benefits for the employee, provided that for fiscal year 2014 and each year thereafter the employer contribution required by this Section shall be equal to the amount specified by item (i) of paragraph (3) of Section 15-155.1. The amounts so credited shall be paid into the participant's self-managed plan accounts in a manner to be prescribed by the System.

An amount of employer contribution, not exceeding 1% of the participating employee's salary, shall be used for the purpose of providing the disability benefits of the System to the employee. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for employees in the self-managed plan.

The State of Illinois shall make contributions by appropriations to the System of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board of Trustees of the System and paid by the State in accordance with Section 15-165. The System shall not be obligated to remit the required employer contributions to any of the insurance and annuity companies, mutual fund companies, banks, trust companies, financial institutions, or other sponsors of any of the funding vehicles offered under the self-managed plan until it has received the required employer contributions from the State. In the event of a deficiency in the amount of State contributions, the System shall implement those procedures described in subsection (c) of Section 15-165 to obtain the required funding from the General Revenue Fund.

(i) Termination. The self-managed plan authorized under this Section may be terminated by the System, subject to the terms of any relevant contracts, and the System shall have no obligation to reestablish the self-managed plan under this Section. This Section does not create a right to continued participation in any self-managed plan set up by the System under this Section. If the self-managed plan is terminated, the participants shall have the right to participate in one of the other retirement programs offered by the System and receive service credit in such other retirement program for any years of employment following the termination.

(j) Vesting; Withdrawal; Return to Service. A participant in the self-managed plan becomes vested in the employer contributions credited to his or her accounts in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of service with an employer described in Section 15-106; (2) the death of the participating employee while employed by an employer described in Section 15-106, if the participant has completed at least 1 1/2 years of service; or (3) the participant's election to retire and apply the reciprocal provisions of Article 20 of this Code.

A participant in the self-managed plan who receives a distribution of his or her vested amounts from the self-managed plan while not yet eligible for retirement under this Article (and Article 20, if applicable) shall forfeit all service credit and accrued rights in the System; if subsequently re-employed, the participant shall be considered a new employee. If a former participant again becomes a participating employee (or becomes employed by a participating system under Article 20 of this Code) and continues as such for at least 2 years, all such rights, service credits, and previous status as a participant shall be restored upon repayment of the amount of the distribution, without interest.

(k) Benefit amounts. If an employee who is vested in employer contributions terminates employment, the employee shall be entitled to a benefit which is based on the account values attributable to both employer and employee contributions and any investment return thereon.

If an employee who is not vested in employer contributions terminates employment, the employee shall be entitled to a benefit based solely on the account values attributable to the employee's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the System for future allocations of employer contributions or for the restoration of amounts previously forfeited by former participants who again become participating employees.

(Source: P.A. 93-347, eff. 7-24-03.)

(40 ILCS 5/15-158.5 new)

Sec. 15-158.5. Preservation of self-managed plan benefits. The provisions of this amendatory Act of the 97th General Assembly do not apply to any participant who participates in the self-managed plan created under Section 15-158.2 on the effective date of this Section.

(40 ILCS 5/15-199 new)

Sec. 15-199. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the System to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)

Sec. 16-133. Retirement annuity; amount.

(a) The amount of the retirement annuity shall be (i) in the case of a person who first became a teacher under this Article before July 1, 2005, the larger of the amounts determined under paragraphs (A) and (B) below, or (ii) in the case of a person who first becomes a teacher under this Article on or after July 1, 2005, the amount determined under the applicable provisions of paragraph (B):

(A) An amount consisting of the sum of the following:

(1) An amount that can be provided on an actuarially equivalent basis by the member's accumulated contributions at the time of retirement; and

(2) The sum of (i) the amount that can be provided on an actuarially equivalent basis by the member's accumulated contributions representing service prior to July 1, 1947, and (ii) the amount that can be provided on an actuarially equivalent basis by the amount obtained by multiplying 1.4 times the member's accumulated contributions covering service subsequent to June 30, 1947; and

(3) If there is prior service, 2 times the amount that would have been determined under subparagraph (2) of paragraph (A) above on account of contributions which would have been made during the period of prior service creditable to the member had the System been in operation and had the member made contributions at the contribution rate in effect prior to July 1, 1947.

Beginning on July 1, 2013, for purposes of calculating the sum provided under this paragraph (A), member contributions in excess of the member contribution rates that apply to this benefit and are in effect immediately prior to July 1, 2013 shall not be considered when determining the amount of the member's accumulated contributions under subparagraph (1) or the additional sum based on the member's accumulated contributions under subparagraph (2).

This paragraph (A) does not apply to a person who first becomes a teacher under this Article on or after July 1, 2005.

(B) An amount consisting of the greater of the following:

(1) For creditable service earned before July 1, 1998 that has not been augmented under Section 16-129.1: 1.67% of final average salary for each of the first 10 years of creditable service, 1.90% of final average salary for each year in excess of 10 but not exceeding 20, 2.10% of final average salary for each year in excess of 20 but not exceeding 30, and 2.30% of final average salary for each year in excess of 30; and

For creditable service earned on or after July 1, 1998 by a member who has at least 24 years of creditable service on July 1, 1998 and who does not elect to augment service under Section 16-129.1: 2.2% of final average salary for each year of creditable service earned on or after July 1, 1998 but before the member reaches a total of 30 years of creditable service and 2.3% of final average salary for each year of creditable service earned on or after July 1, 1998 and after the member reaches a total of 30 years of creditable service; and

For all other creditable service: 2.2% of final average salary for each year of creditable service; or

(2) 1.5% of final average salary for each year of creditable service plus the sum $7.50 for each of the first 20 years of creditable service.

The amount of the retirement annuity determined under this paragraph (B) shall be reduced by 1/2 of 1% for each month that the member is less than age 60 at the time the retirement annuity begins. However, this reduction shall not apply (i) if the member has at least 35 years of creditable service, or (ii) if the member retires on account of disability under Section 16-149.2 of this Article with at least 20 years of creditable service, or (iii) if the member (1) has earned during the period immediately preceding the last day of service at least one year of contributing creditable service as an employee of a department as defined in Section 14-103.04, (2) has earned at least 5 years of contributing creditable service as an employee of a department as defined in Section 14-103.04, (3) retires on or after January 1, 2001, and (4) retires having attained an age which, when added to the number of years of his or her total creditable service, equals at least 85. Portions of years shall be counted as decimal equivalents.

(b) For purposes of this Section, final average salary shall be the average salary for the highest 4 consecutive years within the last 10 years of creditable service as determined under rules of the board. The minimum final average salary shall be considered to be $2,400 per year.

In the determination of final average salary for members other than elected officials and their appointees when such appointees are allowed by statute, that part of a member's salary for any year beginning after June 30, 1979 which exceeds the member's annual full-time salary rate with the same employer for the preceding year by more than 20% shall be excluded. The exclusion shall not apply in any year in which the member's creditable earnings are less than 50% of the preceding year's mean salary for downstate teachers as determined by the survey of school district salaries provided in Section 2-3.103 of the School Code.

(c) In determining the amount of the retirement annuity under paragraph (B) of this Section, a fractional year shall be granted proportional credit.

(d) The retirement annuity determined under paragraph (B) of this Section shall be available only to members who render teaching service after July 1, 1947 for which member contributions are required, and to annuitants who re-enter under the provisions of Section 16-150.

(e) The maximum retirement annuity provided under paragraph (B) of this Section shall be 75% of final average salary.

(f) A member retiring after the effective date of this amendatory Act of 1998 shall receive a pension equal to 75% of final average salary if the member is qualified to receive a retirement annuity equal to at least 74.6% of final average salary under this Article or as proportional annuities under Article 20 of this Code.

(Source: P.A. 94-4, eff. 6-1-05.)

(40 ILCS 5/16-133.6 new)

Sec. 16-133.6. Benefits on and after July 1, 2013.

(a) Each member under this Article, other than a person who first becomes a member on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after July 1, 2013. The retirement program election made by the member must be made (i) no later than July 1, 2013 in accordance with rules prescribed by the System and (ii) if applicable, every 3 years thereafter. The member shall elect one of the following retirement programs:

(1) the traditional benefit package offered under Sections 16-133 through 16-133.2, except that future contributions will be remitted as required under Section 16-152;

(2) the revised benefit package offered under Section 16-133.7; or

(3) the self-managed plan offered under Section 16-133.8.

(b) A person who first becomes a member in the System, on or after January 1, 2011, shall elect, based on the eligibility criteria specified in this Article, which retirement program he or she wishes to participate in with respect to all periods of service occurring on and after July 1, 2013. The member shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The member must make that election (i) by July 1, 2013 or within 6 months after the first date of membership, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The member election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years, and shall make a subsequent election during the benefit recalculation period prescribed by the System. The election shall be made in the manner prescribed by the System. Any member who fails to make the initial election shall, by default, participate in the revised benefit package provided under paragraph (2) of subsection (a) of this Section.

(d) Members who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) each member in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future creditable service provided under either the revised benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section;

(2) each member in the revised benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the revised benefit package and to elect to have retirement benefits for future creditable service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section; and

(3) the elections permitted under paragraphs (1) and (2) must be made during the 6-month period in the manner prescribed by the System.

(e) If a member with an accrued benefit under Sections 16-133 through 16-133.2 of this Code elects the revised benefit package provided under paragraph (2) of subsection (a) of this Section, the member's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the member's benefit accruals before the effective date of the election, based on the member's final average salary and creditable service as of the effective date of the election and fixed on such date, and (ii) the member's benefit accruals based on final average salary and creditable service on and after the effective date of the election, as modified by the rules provided in Section 16-133.7. All rights and features provided under the benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the revised benefit package. Furthermore, the participant shall be entitled to the benefit of the survivor's annuity provided under Public Act 96-889 and Public Act 96-1490. All creditable service completed under the System shall count for purposes of determining retirement eligibility and vesting under both the retirement programs offered under paragraphs (1) and (2) of subsection (a).

(f) If a member with an accrued benefit under Sections 16-133 through 16-133.2 or under Section 16-133.7 elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the member's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals before the effective date of the election, based on the member's final average salary and creditable service as of the effective date of the election and fixed on such date. However, the member shall also have an accrued self-managed plan balance as specified in Section 16-133.8, for periods of creditable service on and after the effective date of the election. All accrued benefits will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All creditable service completed under the System shall count for purposes of determining retirement eligibility and vesting under the retirement programs offered under paragraphs (1), (2), and (3) of subsection (a) of this Section.

(g) An individual who is a member in the System, but is not an active teacher as of July 1, 2013, shall be required to make the election specified by subsection (a) or subsection (b) of this Section, as applicable, within 6 months after resuming active service as a teacher.

(40 ILCS 5/16-133.7 new)

Sec. 16-133.7. Revised benefit package.

(a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes a member under this Article, and any member who elects this benefit package pursuant to Section 16-133.6, but do not apply to the self-managed plan established under this Article.

(b) "Final average salary" means the average annual salary obtained by dividing the total salary calculated under the Article applicable to the member during the 8 consecutive years of service within the last 10 years of service in which the total salary calculated under this Article was the highest by the number of years of service in that period.

(b-5) For all purposes under this Article (including without limitation the calculation of benefits and member contributions, and contributions by the State of Illinois under subsection (b) of Section 16-158.2 with respect to the revised benefit package), the annual salary of a member shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 =100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

Beginning on July 1, 2013, the maximum annual salary amount shall be adjusted to $110,100, as adjusted for periods after 2012 based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program. Each year thereafter on January 1, this amount shall be adjusted based on the methodology and formula used to calculate annual increases in wages under 42 U.S.C. Section 415(a) for purposes of computing benefits and adjusting wages under the federal Social Security program.

(c) A member is entitled to a retirement annuity upon written application if he or she has attained age 67 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article. A member who has attained age 62 and has at least 10 years of service credit and is otherwise eligible under the requirements of this Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.

(d) The retirement annuity of a member who is retiring after attaining age 62 with at least 10 years of service credit shall be reduced by one-half of 1% for each full month that the member's age is under age 67.

(e) Any retirement annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(f) The initial survivor's annuity of an otherwise eligible survivor of a retired member shall be in the amount of 66 2/3% of the retired member's retirement annuity at the date of death. In the case of the death of a member who has not retired and, eligibility for a survivor's or widow's annuity shall be determined by this Article. The initial benefit shall be 66 2/3% of the earned annuity without a reduction due to age. Any survivor's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(g) If a person who first becomes a member on or after January 1, 2011 is receiving a retirement annuity and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, then the person's retirement annuity shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity payments shall resume and be recalculated.

(h) Notwithstanding any other provision of this Section, a participant in the revised benefit package provided by this Section shall have the option to enroll in the self-managed plan created under Section 16-133.8.

(40 ILCS 5/16-133.8 new)

Sec. 16-133.8. Self-managed plan.

(a) Purpose. The Teachers' Retirement System of the State of Illinois shall establish and administer a self-managed plan, which shall offer members the opportunity to accumulate assets for retirement through a combination of member and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986. The plan shall not include the retirement annuities, survivors' benefits, death benefits, or refunds provided under this Article.

(b) The Teachers' Retirement System of the State of Illinois shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the System may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The System may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The System shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Member direction. Members who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The member shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the System nor the member's employer guarantees any of the investments in the member's account balances.

(e) Participation. A member eligible to participate in the self-managed plan must make a written election under Section 16-133.6 and the procedures established by the System.

A member who has elected to participate in the self-managed plan under Section 16-133.6 must continue participation while employed as a teacher. Participation in the self-managed plan under this Section shall constitute membership in the Teachers' Retirement System.

A member under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions pursuant to salary reduction agreements for members participating in the self-managed plan and employer contributions as provided in this Section.

The member contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a member have an option of receiving these amounts in cash, and payment of the member contribution shall be a condition of employment. The member contribution shall be deducted from the member's salary in the amount specified by paragraph 3 of subsection (f) of Section 16-152, unless the employer agrees to pick up and pay the member contribution in addition to the member's salary, pursuant to Section 16-152.1.

The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the member's salary. The amounts so credited shall be paid into the member's self-managed plan account in a manner to be prescribed by the System. An additional amount of employer contributions shall be used for the purpose of providing the disability benefits of the System to the member. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for members in the self-managed plan.

The State of Illinois shall make contributions by appropriations to the System of the employer contributions required for members who participate in the self-managed plan under this Section. The amount required and the payment schedule shall be certified by the Board of Trustees of the System and paid by the State in accordance with Section 16-158.2. The System shall not be obligated to remit the required State contributions to any person or entity until it has received the required contributions from the State.

(g) Vesting; withdrawal; return to service. A member in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the member while in active service, if the member has completed at least 1 ½ years of service; or (3) the member's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) If a member who is vested in employer contributions terminates employment, the member shall be entitled to the account values attributable to employer and member contributions and any investment return thereon.

If a member who is not vested in employer contributions terminates employment, the member shall be entitled to the account values attributable to the member's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall be used as directed by the System for future allocations of employer contributions.

(40 ILCS 5/16-136.2) (from Ch. 108 1/2, par. 16-136.2)

Sec. 16-136.2. Minimum retirement annuity.

(a) Any annuitant receiving a retirement annuity under this Article is entitled to such additional amount of retirement annuity under this Section, if necessary, that is sufficient to provide a minimum retirement annuity of $10 per month for each year of creditable service forming the basis of the retirement annuity, up to $300 per month for 30 or more years of creditable service. Effective January 1, 1984, the minimum retirement annuity under this Section is $15 per month per year of service up to $450 per month. Beginning January 1, 1996, the minimum retirement annuity payable under this Section shall be $25 per month for each year of creditable service, up to a maximum of $750 per month for 30 or more years of creditable service.

An annuitant entitled to an increase in retirement annuity under this Section shall be entitled to such increase in retirement annuity effective the later of (1) September 1 following attainment of age 60; (2) September 1 following the first anniversary in retirement; or (3) the first of the month following receipt of the required qualifying contribution from the annuitant.

(b) An annuitant who qualifies for an additional amount of retirement annuity under subsection (a) of this Section must make a one-time payment of 1% of the monthly average salary for each full year of the creditable service forming the basis of the retirement annuity or, if the retirement annuity was not computed using average salary, 1% of the original monthly retirement annuity for each full year of service forming the basis of the retirement annuity.

(c) The minimum retirement annuity provided under this Section shall continue to be paid only to the extent that funds are available in the minimum retirement annuity reserve established under Section 16-186.3.

(d) The annual increase provided on and after September 1, 1977 under Section 16-136.1 and on and after January 1, 1978 under Section 16-133.1 shall be paid in addition to the minimum retirement annuity. Where an initial increase is first payable on or after September 1, 1977, only that portion of the increase based on the period in retirement after August 31, 1976, under Section 16-136.1 and after December 31, 1976, under Section 16-133.1 may be added to the minimum retirement annuity.

(e) Notwithstanding any other provisions of this Article, the minimum retirement annuity for service on or after July 1, 2013 shall be calculated as follows:

(1) If the member chooses the traditional benefit package under paragraph (1) of subsection (a) of Section 16-133.6, or the revised benefit package under paragraph (2) of subsection (a) of Section 16-133.6, the member shall receive a minimum benefit (commencing on his or her Social Security retirement age) for the member's creditable service covered by each such defined benefit package that is equal to the annual primary insurance amount the member would have under Social Security for such period of creditable service. For the purposes of this item (1), the primary insurance amount a member would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the member chooses the self-managed plan under paragraph (3) of subsection (a) of Section 16-133.6, the member shall receive a minimum allocation equal to 7.5% of the member's salary for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(Source: P.A. 89-21, eff. 6-6-95; 89-25, eff. 6-21-95.)

(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)

Sec. 16-152. Contributions by members.

(a) Each member shall make contributions for membership service to this System as follows:

(1) Effective July 1, 1998, contributions of 7.50% of salary towards the cost of the retirement annuity. Such contributions shall be deemed "normal contributions".

(2) Effective July 1, 1969, contributions of 1/2 of 1% of salary toward the cost of the automatic annual increase in retirement annuity provided under Section 16-133.1.

(3) Effective July 24, 1959, contributions of 1% of salary towards the cost of survivor benefits. Such contributions shall not be credited to the individual account of the member and shall not be subject to refund except as provided under Section 16-143.2.

(4) Effective July 1, 2005, contributions of 0.40% of salary toward the cost of the early retirement without discount option provided under Section 16-133.2. This contribution shall cease upon termination of the early retirement without discount option as provided in Section 16-176.

(b) The minimum required contribution for any year of full-time teaching service shall be $192.

(c) Contributions shall not be required of any annuitant receiving a retirement annuity who is given employment as permitted under Section 16-118 or 16-150.1.

(d) A person who (i) was a member before July 1, 1998, (ii) retires with more than 34 years of creditable service, and (iii) does not elect to qualify for the augmented rate under Section 16-129.1 shall be entitled, at the time of retirement, to receive a partial refund of contributions made under this Section for service occurring after the later of June 30, 1998 or attainment of 34 years of creditable service, in an amount equal to 1.00% of the salary upon which those contributions were based.

(e) A member's contributions toward the cost of early retirement without discount made under item (a)(4) of this Section shall not be refunded if the member has elected early retirement without discount under Section 16-133.2 and has begun to receive a retirement annuity under this Article calculated in accordance with that election. Otherwise, a member's contributions toward the cost of early retirement without discount made under item (a)(4) of this Section shall be refunded according to whichever one of the following circumstances occurs first:

(1) The contributions shall be refunded to the member, without interest, within 120 days after the member's retirement annuity commences, if the member does not elect early retirement without discount under Section 16-133.2.

(2) The contributions shall be included, without interest, in any refund claimed by the member under Section 16-151.

(3) The contributions shall be refunded to the member's designated beneficiary (or if there is no beneficiary, to the member's estate), without interest, if the member dies without having begun to receive a retirement annuity under this Article.

(4) The contributions shall be refunded to the member, without interest, within 120 days after the early retirement without discount option provided under Section 16-133.2 is terminated under Section 16-176.

(f) Notwithstanding anything in this Section to the contrary, beginning July 1, 2013, all members shall be required to make the following contributions:

(1) Members who elect the traditional benefit package provided under paragraph (1) of subsection (a) of Section 16-133.6 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 13.77% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined fiscal year 2017 normal cost of the traditional benefit package, minus contributions by the State of Illinois in fiscal year 2017 under subsection (a) of Section 16-158.2, provided that no member's contribution shall be less than 6% or more than 15.77% of salary. The System shall certify the actuarially determined fiscal year 2017 normal cost of the traditional benefit package and the amount of the required member contribution.

(2) In fiscal year 2014 and in each fiscal year thereafter, members who elect the revised benefit package provided under paragraph (2) of subsection (a) of Section 16-133.6 of this Code shall contribute an amount equal to the greater of the actuarially determined long term normal cost of the revised benefit package as calculated in fiscal year 2014 or 12%, minus contributions by the State of Illinois in fiscal year 2014 under subsection (b) of Section 16-158.2, provided that no member's contribution shall be less than 6% of salary. The System shall certify the actuarially determined long term normal cost of such revised benefit package and the amount of the required member contribution. For purposes of this paragraph (2), long term normal cost shall be defined as the normal cost of the revised benefit package assuming that all employees are covered under the revised benefit package. Contributions under this paragraph (2) shall be based on pensionable salary.

(3) In fiscal year 2014 and in each fiscal year thereafter, members who elect the self-managed plan provided under Section 16-133.8 of this Code shall contribute a minimum of 6% of salary. Members who elect the self-managed plan provided under Section 16-133.8 of this Code may elect to increase their member contribution in accordance with rules prescribed by the Board.

(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)

(40 ILCS 5/16-152.2 new)

Sec. 16-152.2. Increases in member contributions. If the member contribution required under Section 16-152 increases for any member pursuant to this amendatory Act of the 97th General Assembly, the additional member contribution in excess of the prior member contribution for such member shall be deducted from the member's salary unless the member's employer agrees pursuant to Section 414(h) of the Internal Revenue Code to pick up and pay part or all of such increased contribution in addition to the member's salary.

(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)

Sec. 16-158. Contributions by State and other employing units.

(a) The State shall make contributions to the System by means of appropriations from the Common School Fund and other State funds of amounts which, together with other employer contributions, employee contributions, investment income, and other income, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, using the formula in subsection (b-3).

(a-1) Annually, on or before November 15, the Board shall certify to the Governor the amount of the required State contribution for the coming fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005 April 1, 2011, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before April 1, 2011 June 15, 2010, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2011, applying the changes made by Public Act 96-889 to the System's assets and liabilities as of June 30, 2009 as though Public Act 96-889 was approved on that date.

(b) Through State fiscal year 1995, the State contributions shall be paid to the System in accordance with Section 18-7 of the School Code.

(b-1) Beginning in State fiscal year 1996, on the 15th day of each month, or as soon thereafter as may be practicable, the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a-1). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (a) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this subsection, the difference shall be paid from the Common School Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(b-2) Allocations from the Common School Fund apportioned to school districts not coming under this System shall not be diminished or affected by the provisions of this Article.

(b-3) For State fiscal years 2014 2012 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount equal to the sum of (i) the contribution determined under Section 16-158.2, plus (ii) an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making the these determinations under item (ii) of this subsection (b-3), for State fiscal years 2017 through 2045, the required State contribution shall be calculated each year as a level percentage of revenue provided by the individual income tax, sales tax, and corporate income tax assuming a 2.3% average annual growth rate in these revenues based on the most recent fiscal year's actual revenues as reported by the Commission on Government Forecasting and Accountability payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

Notwithstanding any other provision of this Article, For State fiscal years 2014 1996 through 2016 2005, the State contribution to the System under item (ii) of this subsection (b-3), as a percentage of State revenue from the individual income tax, sales tax, and corporate income tax the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2017 2011, the State is contributing at the rate required under this Section.

For State fiscal years 2014 through 2045, the total State contribution required in each fiscal year under this subsection (b-3) must not be less than 100% of the prior fiscal year's actual or required contribution, whichever is greater.

Notwithstanding any other provision of this Article, the total required State contribution for this System for State fiscal year 2013 shall be $2,765,140,669.

In ; except that in the following specified State fiscal years, the State contribution to the System shall not be less than the following indicated percentages of the applicable employee payroll, even if the indicated percentage will produce a State contribution in excess of the amount otherwise required under this subsection and subsection (a), and notwithstanding any contrary certification made under subsection (a-1) before the effective date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY 2003; and 13.56% in FY 2004.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $534,627,700.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $738,014,500.

For each of State fiscal years 2008 through 2009, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $2,089,268,000 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the Common School Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is the amount recertified by the System on or before April 1, 2011 pursuant to subsection (a-1) of this Section and shall be made from the proceeds of bonds sold in fiscal year 2011 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the Common School Fund in fiscal year 2011, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable. This amount shall include, in addition to the amount certified by the System, an amount necessary to meet employer contributions required by the State as an employer under paragraph (e) of this Section, which may also be used by the System for contributions required by paragraph (a) of Section 16-127.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be an amount equal to the contribution determined under Section 16-158.1, plus the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as calculated under this Section and certified under subsection (a-1), shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(c) Payment of the required State contributions and of all pensions, retirement annuities, death benefits, refunds, and other benefits granted under or assumed by this System, and all expenses in connection with the administration and operation thereof, are obligations of the State.

If members are paid from special trust or federal funds which are administered by the employing unit, whether school district or other unit, the employing unit shall pay to the System from such funds the full accruing retirement costs based upon that service, as determined by the System. Employer contributions, based on salary paid to members from federal funds, may be forwarded by the distributing agency of the State of Illinois to the System prior to allocation, in an amount determined in accordance with guidelines established by such agency and the System.

(d) Effective July 1, 1986, any employer of a teacher as defined in paragraph (8) of Section 16-106 shall pay the employer's normal cost of benefits based upon the teacher's service, in addition to employee contributions, as determined by the System. Such employer contributions shall be forwarded monthly in accordance with guidelines established by the System.

However, with respect to benefits granted under Section 16-133.4 or 16-133.5 to a teacher as defined in paragraph (8) of Section 16-106, the employer's contribution shall be 12% (rather than 20%) of the member's highest annual salary rate for each year of creditable service granted, and the employer shall also pay the required employee contribution on behalf of the teacher. For the purposes of Sections 16-133.4 and 16-133.5, a teacher as defined in paragraph (8) of Section 16-106 who is serving in that capacity while on leave of absence from another employer under this Article shall not be considered an employee of the employer from which the teacher is on leave.

(e) Beginning July 1, 1998, every employer of a teacher shall pay to the System an employer contribution computed as follows:

(1) Beginning July 1, 1998 through June 30, 1999, the employer contribution shall be equal to 0.3% of each teacher's salary.

(2) Beginning July 1, 1999 and thereafter, the employer contribution shall be equal to 0.58% of each teacher's salary.

The school district or other employing unit may pay these employer contributions out of any source of funding available for that purpose and shall forward the contributions to the System on the schedule established for the payment of member contributions.

These employer contributions are intended to offset a portion of the cost to the System of the increases in retirement benefits resulting from this amendatory Act of 1998.

Each employer of teachers is entitled to a credit against the contributions required under this subsection (e) with respect to salaries paid to teachers for the period January 1, 2002 through June 30, 2003, equal to the amount paid by that employer under subsection (a-5) of Section 6.6 of the State Employees Group Insurance Act of 1971 with respect to salaries paid to teachers for that period.

The additional 1% employee contribution required under Section 16-152 by this amendatory Act of 1998 is the responsibility of the teacher and not the teacher's employer, unless the employer agrees, through collective bargaining or otherwise, to make the contribution on behalf of the teacher.

If an employer is required by a contract in effect on May 1, 1998 between the employer and an employee organization to pay, on behalf of all its full-time employees covered by this Article, all mandatory employee contributions required under this Article, then the employer shall be excused from paying the employer contribution required under this subsection (e) for the balance of the term of that contract. The employer and the employee organization shall jointly certify to the System the existence of the contractual requirement, in such form as the System may prescribe. This exclusion shall cease upon the termination, extension, or renewal of the contract at any time after May 1, 1998.

(f) If the amount of a teacher's salary for any school year used to determine final average salary exceeds the member's annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. If a teacher's salary for the 2005-2006 school year is used to determine final average salary under this subsection (f), then the changes made to this subsection (f) by Public Act 94-1057 shall apply in calculating whether the increase in his or her salary is in excess of 6%. For the purposes of this Section, change in employment under Section 10-21.12 of the School Code on or after June 1, 2005 shall constitute a change in employer. The System may require the employer to provide any pertinent information or documentation. The changes made to this subsection (f) by this amendatory Act of the 94th General Assembly apply without regard to whether the teacher was in service on or after its effective date.

Whenever it determines that a payment is or may be required under this subsection, the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (g) or (h) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of that subsection. Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(g) This subsection (g) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to a teacher at a time when the teacher is 10 or more years from retirement eligibility under Section 16-132 or 16-133.2.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload work, including summer school, when the school district has certified to the System, and the System has approved the certification, that (i) the overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full-time teacher in a school district during a school year and (ii) the salary increases are equal to or less than the rate of pay for classroom instruction computed on the teacher's current salary and work schedule.

When assessing payment for any amount due under subsection (f), the System shall exclude a salary increase resulting from a promotion (i) for which the employee is required to hold a certificate or supervisory endorsement issued by the State Teacher Certification Board that is a different certification or supervisory endorsement than is required for the teacher's previous position and (ii) to a position that has existed and been filled by a member for no less than one complete academic year and the salary increase from the promotion is an increase that results in an amount no greater than the lesser of the average salary paid for other similar positions in the district requiring the same certification or the amount stipulated in the collective bargaining agreement for a similar position requiring the same certification.

When assessing payment for any amount due under subsection (f), the System shall exclude any payment to the teacher from the State of Illinois or the State Board of Education over which the employer does not have discretion, notwithstanding that the payment is included in the computation of final average salary.

(h) When assessing payment for any amount due under subsection (f), the System shall exclude any salary increase described in subsection (g) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (f) of this Section.

(i) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.

(2) The dollar amount by which each employer's contribution to the System was changed due to recalculations required by Public Act 94-1057.

(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.

(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(j) For purposes of determining the required State contribution to the System, the value of the System's assets shall be equal to the actuarial value of the System's assets, which shall be calculated as follows:

As of June 30, 2008, the actuarial value of the System's assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System's assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(k) For purposes of determining the required State contribution to the system for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the system's actuarially assumed rate of return.

(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)

(40 ILCS 5/16-158.2 new)

Sec. 16-158.2. Additional State contributions. In addition to any amounts required to amortize the unfunded liabilities of the System, as required of the State of Illinois in Section 16-158, the following amounts shall be required of the State of Illinois for fiscal year 2014 and each fiscal year thereafter:

(a) For all members electing benefits under paragraphs (1) of subsection (a) of Section 16-133.6, an amount equal to 6% of total salary for the respective member group.

(b) For all members electing benefits under paragraphs (2) of subsection (a) of Section 16-133.6, an amount equal to 6% of total pensionable salary for the respective member group.

(c) For all members electing benefits under paragraph (3) of subsection (a) of Section 16-133.6, an amount equal to (i) 6% of salary for all such members and (ii) an amount determined by the System to fund the disability plan provided for such members.

(40 ILCS 5/16-204 new)

Sec. 16-204. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the System to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/17-109.3 new)

Sec. 17-109.3. Reformed benefit package. "Reformed benefit package": The defined benefit retirement program maintained under the Fund for members who first become members in the Fund on or after January 1, 2011.

(40 ILCS 5/17-109.4 new)

Sec. 17-109.4. Self-managed plan. "Self-managed plan": The defined contribution retirement program maintained under the Fund as described in Section 17-130.5. The self-managed plan shall not include service retirement pensions, early retirement pensions, reversionary pensions, survivor's benefits, children's benefits, death benefits, or automatic increases in pensions.

(40 ILCS 5/17-109.5 new)

Sec. 17-109.5. Traditional benefit package. "Traditional benefit package": The defined benefit retirement program maintained under the Fund for members who first became members in the Fund before January 1, 2011.

(40 ILCS 5/17-116) (from Ch. 108 1/2, par. 17-116)

Sec. 17-116. Service retirement pension. The provisions of this Section do not apply to participants who are participating in the self-managed plan.

(a) Each teacher having 20 years of service upon attainment of age 55, or who thereafter attains age 55 shall be entitled to a service retirement pension upon or after attainment of age 55; and each teacher in service on or after July 1, 1971, with 5 or more but less than 20 years of service shall be entitled to receive a service retirement pension upon or after attainment of age 62.

(b) The service retirement pension for a teacher who retires on or after June 25, 1971, at age 60 or over, shall be calculated as follows:

(1) For creditable service earned before July 1, 1998 that has not been augmented under Section 17-119.1: 1.67% for each of the first 10 years of service; 1.90% for each of the next 10 years of service; 2.10% for each year of service in excess of 20 but not exceeding 30; and 2.30% for each year of service in excess of 30, based upon average salary as herein defined.

(2) For creditable service earned on or after July 1, 1998 by a member who has at least 30 years of creditable service on July 1, 1998 and who does not elect to augment service under Section 17-119.1: 2.3% of average salary for each year of creditable service earned on or after July 1, 1998.

(3) For all other creditable service: 2.2% of average salary for each year of creditable service.

(c) When computing such service retirement pensions, the following conditions shall apply:

1. Average salary shall consist of the average annual rate of salary for the 4 consecutive years of validated service within the last 10 years of service when such average annual rate was highest. In the determination of average salary for retirement allowance purposes, for members who commenced employment after August 31, 1979, that part of the salary for any year shall be excluded which exceeds the annual full-time salary rate for the preceding year by more than 20%. In the case of a member who commenced employment before August 31, 1979 and who receives salary during any year after September 1, 1983 which exceeds the annual full time salary rate for the preceding year by more than 20%, an Employer and other employers of eligible contributors as defined in Section 17-106 shall pay to the Fund an amount equal to the present value of the additional service retirement pension resulting from such excess salary. The present value of the additional service retirement pension shall be computed by the Board on the basis of actuarial tables adopted by the Board. If a member elects to receive a pension from this Fund provided by Section 20-121, his salary under the State Universities Retirement System and the Teachers' Retirement System of the State of Illinois shall be considered in determining such average salary. Amounts paid after the effective date of this amendatory Act of 1991 for unused vacation time earned after that effective date shall not under any circumstances be included in the calculation of average salary or the annual rate of salary for the purposes of this Article.

2. Proportionate credit shall be given for validated service of less than one year.

3. For retirement at age 60 or over the pension shall be payable at the full rate.

4. For separation from service below age 60 to a minimum age of 55, the pension shall be discounted at the rate of 1/2 of one per cent for each month that the age of the contributor is less than 60, but a teacher may elect to defer the effective date of pension in order to eliminate or reduce this discount. This discount shall not be applicable to any participant who has at least 34 years of service or a retirement pension of at least 74.6% of average salary on the date the retirement annuity begins.

5. No additional pension shall be granted for service exceeding 45 years. Beginning June 26, 1971 no pension shall exceed the greater of $1,500 per month or 75% of average salary as herein defined.

6. Service retirement pensions shall begin on the effective date of resignation, retirement, the day following the close of the payroll period for which service credit was validated, or the time the person resigning or retiring attains age 55, or on a date elected by the teacher, whichever shall be latest.

7. A member who is eligible to receive a retirement pension of at least 74.6% of average salary and will attain age 55 on or before December 31 during the year which commences on July 1 shall be deemed to attain age 55 on the preceding June 1.

8. A member retiring after the effective date of this amendatory Act of 1998 shall receive a pension equal to 75% of average salary if the member is qualified to receive a retirement pension equal to at least 74.6% of average salary under this Article or as proportional annuities under Article 20 of this Code.

(Source: P.A. 90-566, eff. 1-2-98; 90-582, eff. 5-27-98.)

(40 ILCS 5/17-130) (from Ch. 108 1/2, par. 17-130)

Sec. 17-130. Participants' contributions by payroll deductions.

(a) There shall be deducted from the salary of each teacher 7.50% of his salary for service or disability retirement pension and 0.5% of salary for the annual increase in base pension.

In addition, there shall be deducted from the salary of each teacher 1% of his salary for survivors' and children's pensions.

(b) An Employer and any employer of eligible contributors as defined in Section 17-106 is authorized to make the necessary deductions from the salaries of its teachers. Such amounts shall be included as a part of the Fund. An Employer and any employer of eligible contributors as defined in Section 17-106 shall formulate such rules and regulations as may be necessary to give effect to the provisions of this Section.

(c) All persons employed as teachers shall, by such employment, accept the provisions of this Article and of Sections 34-83 to 34-85, inclusive, of "The School Code", approved March 18, 1961, as amended, and thereupon become contributors to the Fund in accordance with the terms thereof. The provisions of this Article and of those Sections shall become a part of the contract of employment.

(d) A person who (i) was a member before July 1, 1998, (ii) retires with more than 34 years of creditable service, and (iii) does not elect to qualify for the augmented rate under Section 17-119.1 shall be entitled, at the time of retirement, to receive a partial refund of contributions made under this Section for service occurring after the later of June 30, 1998 or attainment of 34 years of creditable service, in an amount equal to 1.00% of the salary upon which those contributions were based.

(d-5) Notwithstanding any other provision of this Article, beginning July 1, 2013, all members shall be required to make the following contributions:

(1) Members who elect the traditional benefit package under paragraph (1) of subsection (a) of Section 17-130.4 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 12.75% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the traditional benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the traditional benefit package and the amount of required participant contributions by July 1, 2016 and every 3 years thereafter.

(2) Members who elect the reformed benefit package under paragraph (2) of subsection (a) of Section 17-130.4 of this Code shall contribute:

(A) In fiscal year 2014, fiscal year 2015, and fiscal year 2016, an amount equal to 7% of salary.

(B) In fiscal year 2017 and in each fiscal year thereafter, a percentage of salary equal to the actuarially determined normal cost of the reformed benefit package, minus an amount equal to 6% of total pensionable salary. The Fund shall certify the actuarially determined normal cost of the reformed benefit package and the amount of required employee contributions by July 1, 2016 and every 3 years thereafter.

(3) Members who elect the self-managed plan under paragraph (3) of subsection (a) of Section 17-130.4 of this Code shall contribute a minimum of 6% of salary. Participants who elect the self-managed plan provided under Section 17-130.4 of this Code may elect to increase their employee contributions in accordance with rules prescribed by the Board.

No prior contribution increases or other additional contributions specified by this Section shall apply to any participant for service on or after July 1, 2013.

(Source: P.A. 97-8, eff. 6-13-11.)

(40 ILCS 5/17-130.4 new)

Sec. 17-130.4. Benefit accruals on and after July 1, 2013.

(a) Each participating member under this Article, other than a person who first becomes a member and a participant on or after January 1, 2011, shall choose which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013, except that such participants with more than 5 years of creditable service shall only be eligible to elect one of the retirement programs in paragraphs (1) or (2) of this subsection (a). The retirement program election made by the participating member must be made no later than January 1, 2013. The participating member shall elect one of the following retirement programs:

(1) the traditional benefit package provided by the Fund;

(2) the reformed benefit package provided by the Fund; or

(3) the self-managed plan provided by the Fund.

(b) A person who first becomes a member and a participant in the Fund on or after January 1, 2011 shall be given the choice to elect which retirement program he or she wishes to participate in with respect to all periods of employment occurring on and after July 1, 2013. The participant shall elect one of the retirement programs provided in paragraph (2) or (3) of subsection (a) of this Section. The participant must make the election (i) by January 1, 2013 or within 6 months after the participant's first day of employment, whichever is later, and (ii) if applicable, every 3 years thereafter.

(c) The participant election authorized by this Section is an irrevocable election, except that any individual making an election for the retirement program described under paragraph (1) or (2) of subsection (a) shall make an election for a period of 3 years and shall make subsequent elections every 3 years during a 6-month period prescribed by the Fund. The election shall be made in writing, in the manner prescribed by the fund. Any participant who fails to make the election shall, by default, participate in the benefit program provided under paragraph (2) of subsection (a) of this Section.

(d) Participants who have already made an election pursuant to subsection (a) or (b) shall be given the opportunity to make a new election as follows:

(1) Each participant in the traditional benefit package provided under paragraph (1) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the traditional benefit package and to elect to have retirement benefits for future service provided under either the reformed benefit package provided under paragraph (2) of subsection (a) of this Section or the self-managed plan provided under paragraph (3) of subsection (a) of this Section. However, such participants with more than 5 years of creditable service shall be prohibited from electing the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(2) Each participant that has less than 5 years of creditable service and participates in the reformed benefit package provided under paragraph (2) of subsection (a) of this Section shall have the opportunity to elect to terminate participation in the reformed benefit package and to elect to have retirement benefits for future service provided under the self-managed plan provided under paragraph (3) of subsection (a) of this Section.

(3) The elections permitted under paragraphs (1) and (2) must be made during a 6-month period in the manner prescribed by the Fund.

(e) If a participant with an accrued benefit under the traditional benefit package elects the reformed benefit package, the participant's total accrued benefit for purposes of determining an annuity shall be the sum of (i) the participant's benefit accruals under the traditional benefit package, based on the participant's salary and service under the traditional benefit package and frozen with respect to salary for service earned subsequent to participation under the traditional benefit package, and (ii) the participant's benefit accruals based on salary and service under the reformed benefit package. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the reformed benefit package. Furthermore, the participant shall be entitled to the benefit of the survivor's annuity provided in Public Act 96-889 and Public Act 96-1490. All service completed under the Fund shall count for purposes of determining retirement eligibility and vesting under both the traditional benefit package and the reformed benefit package, provided that the vesting requirements of the traditional benefit package shall continue to govern vesting for participants in the reformed benefit package.

(f) If a participant with an accrued benefit under the traditional benefit package or the reformed benefit package elects the self-managed plan provided under paragraph (3) of subsection (a) of this Section, the participant's total accrued benefit for purposes of determining an annuity shall be the participant's benefit accruals prior to participation in the self-managed plan, based on the participant's salary and service and frozen with respect to salary for service earned subsequent to participation in the traditional or reformed benefit package. However, the participant shall also have an accrued self-managed plan balance as specified in subsection (h) of Section 17-130.5, for periods of covered employment on or after participation in the self-managed plan. All rights and features provided under the traditional benefit package will be preserved with respect to benefits earned under such package with respect to service completed prior to the election to participate in the self-managed plan. All service completed under the traditional or reformed benefit package and the self-managed plan shall count for purposes of determining retirement eligibility and vesting under the traditional benefit package and the self-managed plan.

(g) An individual with less than 5 years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1), (2), or (3) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

An individual with 5 or more years of creditable service and who is a participant in the Fund but is not a participating employee on January 1, 2013 shall be allowed to elect, based on the eligibility criteria specified in this Code, one of the retirement programs provided in paragraph (1) or (2) of subsection (a) of this Section within 6 months after becoming an employee, based on eligibility.

(40 ILCS 5/17-130.5 new)

Sec. 17-130.5. Self-managed plan.

(a) Purpose. The Public School Teachers' Pension and Retirement Fund shall establish and administer a self-managed plan, which shall offer members the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.

(b) The Public School Teachers' Pension and Retirement Fund shall be the plan sponsor for the self-managed plan and shall prepare a plan document and prescribe such rules and procedures as are considered necessary or desirable for the administration of the self-managed plan. Consistent with its fiduciary duty to the participants and beneficiaries of the self-managed plan, the Board of Trustees of the System may delegate aspects of plan administration as it sees fit to companies authorized to do business in this State.

(c) Selection of service providers and funding vehicles. The Fund may solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State.

The Fund shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the Board.

(d) Member direction. Members who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The member shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. Neither the Fund nor the participant's employer guarantees any of the investments in the member's account balances.

(e) Participation. A member eligible to participate in the self-managed plan must make a written election under Section 17-130.4 and the procedures established by the Fund.

A member who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position. Participation in the self-managed plan under this Section shall constitute membership in the Public School Teachers' Pension and Retirement Fund.

A member under this Section shall be entitled to the benefits of Article 20 of this Code.

(f) Contributions. The self-managed plan shall be funded by contributions from employees participating in the self-managed plan and employer contributions as provided in this Section.

This required contribution shall be made as an "employer pick up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. In no event shall a member have an option of receiving these amounts in cash. The program shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 6% of the participating member's salary, less the amount used by the System to provide disability benefits for the member. The amounts so credited shall be paid into the member's self-managed plan account in a manner to be prescribed by the Fund.

The required amount of employer contributions shall be used for the purpose of providing the disability benefits of the Fund to the member. Prior to the beginning of each plan year under the self-managed plan, the Board of Trustees shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for members in the self-managed plan.

The employer shall make contributions to the Fund of the employer contributions required for employees who participate in the self-managed plan under this Section. The amount required shall be certified by the Board of Trustees of the Fund and paid by the employer in accordance with this Article. The Fund shall not be obligated to remit the required employer contributions to any person or entity until it has received the required employer contributions from the employer.

(g) Vesting; withdrawal; return to service. A member in the self-managed plan becomes vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following: (1) completion of 5 years of creditable service; (2) the death of the member while in active service, if the member has completed at least 1 1/2 years of service; or (3) the member's election to retire and apply the reciprocal provisions of Article 20 of this Code.

(h) Benefit amounts. If a member who is vested in employer contributions terminates employment, the member shall be entitled to a benefit which is based on the account values attributable to employer and member contributions and any investment return thereon.

If a member who is not vested in employer contributions terminates employment, the member shall be entitled to a benefit based solely on the account values attributable to the member's contributions and any investment return thereon, and the employer contributions and any investment return thereon shall be forfeited. Any employer contributions which are forfeited shall become part of the trust.

(40 ILCS 5/17-130.6 new)

Sec. 17-130.6. Minimum benefit and allocation provisions. Each participant in the System shall receive a minimum benefit or allocation determined as follows:

(1) If the participant is participating in the traditional benefit package provided under paragraph (1) of subsection (a) of Section 17-130.4 of this Code or the revised defined benefit package provided under paragraph (2) of subsection (a) of Section 17-130.4 of this Code, the participant shall receive a minimum benefit (commencing on his or her Social Security retirement age) that is equal to the annual primary insurance amount the participant would have under Social Security. For the purposes of this item (1), the primary insurance amount a participant would have under Social Security shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(2) If the participant is participating in the self-managed plan provided under Section 17-130.5 of this Code, the member shall receive a minimum allocation equal to 7.5% of the participant's compensation for service during the period. All contributions shall be taken into account for this purpose. For the purposes of this paragraph (2), the minimum allocation shall be calculated so that the System meets the requirements necessary to be considered a retirement system under Section 3121(b)(7)(F) of the Internal Revenue Code and the regulations in effect thereunder.

(40 ILCS 5/17-130.7 new)

Sec. 17-130.7. Additional employer contributions. In addition to any amounts required to amortize the unfunded liabilities of this Fund, the following amounts shall be required by the employer for fiscal year 2014 and each fiscal year thereafter:

(1) For all members electing benefits under paragraphs (1) or (2) of subsection (a) of Section 17-130.4, an amount equal to 6% of total pensionable payroll for the respective employee groups.

(2) For members electing benefits under paragraph (3) of subsection (a) of Section 17-130.4, an employer contribution equal to (i) 6% of total pensionable payroll for the respective employee group and (ii) an amount determined by the Fund to be sufficient to fund the disability plan provided in this Article.

(40 ILCS 5/17-149.1) (from Ch. 108 1/2, par. 17-149.1)

Sec. 17-149.1. Felony conviction. None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a teacher.

This Section shall not operate to impair any contract or vested right acquired prior to January 1, 1988, nor to preclude the right to a refund.

All teachers entering service after January 1, 1988 shall be deemed to have consented to the provisions of this Section as a condition of membership.

No refund paid to any person who is convicted of a felony relating to or arising out of or in connection with the person's service as a member shall include employer contributions or interest or, in the case of the self-managed plan authorized under Section 17-130.5, any employer contributions or investment return on employer contributions.

(Source: P.A. 85-964.)

(40 ILCS 5/17-160 new)

Sec. 17-160. Qualified plan status. No provision of this Article shall be interpreted in a way that would cause the Fund to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code.

(40 ILCS 5/17-165 new)

Sec. 17-165. Public School Teachers' Pension and Retirement Fund Trust Fund. The Fund may offer, as investment option to members under Section 17-130.5 investment into the Public School Teachers' Pension and Retirement Fund Trust Fund, or a unitized portion thereof, consistent with all applicable laws.

(40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)

Sec. 20-121. Calculation of proportional retirement annuities. Upon retirement of the employee, a proportional retirement annuity shall be computed by each participating system in which pension credit has been established on the basis of pension credits under each system. The computation shall be in accordance with the formula or method prescribed by each participating system which is in effect at the date of the employee's latest withdrawal from service covered by any of the systems in which he has pension credits which he elects to have considered under this Article. However, the amount of any retirement annuity payable under a the self-managed plan established under Section 2-119.03, 8-190.2, 9-170.5, 11-131.2, 12-128.2, 14-108.2e, 15-158.2, 16-133.8, or 17-130.5 of this Code depends solely on the value of the participant's vested account balances and is not subject to any proportional adjustment under this Section.

Combined pension credit under all retirement systems subject to this Article shall be considered in determining whether the minimum qualification has been met and the formula or method of computation which shall be applied. If a system has a step-rate formula for calculation of the retirement annuity, pension credits covering previous service which have been established under another system shall be considered in determining which range or ranges of the step-rate formula are to be applicable to the employee.

Interest on pension credit shall continue to accumulate in accordance with the provisions of the law governing the retirement system in which the same has been established during the time an employee is in the service of another employer, on the assumption such employee, for interest purposes for pension credit, is continuing in the service covered by such retirement system.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)

Sec. 20-123. Survivor's annuity. The provisions governing a retirement annuity shall be applicable to a survivor's annuity. Appropriate credits shall be established for survivor's annuity purposes in those participating systems which provide survivor's annuities, according to the same conditions and subject to the same limitations and restrictions herein prescribed for a retirement annuity. If a participating system has no survivor's annuity benefit, or if the survivor's annuity benefit under that system is waived, pension credit established in that system shall not be considered in determining eligibility for or the amount of the survivor's annuity which may be payable by any other participating system.

For persons who participate in a the self-managed plan established under Section 2-119.03, 8-190.2, 9-170.5, 11-131.2, 12-128.2, 14-108.2e, 15-158.2, 16-133.8, or 17-130.5 or the portable benefit package established under Section 15-136.4, pension credit established under Article 15 may be considered in determining eligibility for or the amount of the survivor's annuity that is payable by any other participating system, but pension credit established in any other system shall not result in any right to a survivor's annuity under the Article 15 system.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)

Sec. 20-124. Maximum benefits. In no event shall the combined retirement or survivors annuities exceed the highest annuity which would have been payable by any participating system in which the employee has pension credits, if all of his pension credits had been validated in that system.

If the combined annuities should exceed the highest maximum as determined in accordance with this Section, the respective annuities shall be reduced proportionately according to the ratio which the amount of each proportional annuity bears to the aggregate of all such annuities.

In the case of a participant in a the self-managed plan established under Section 2-119.03, 8-190.2, 9-170.5, 11-131.2, 12-128.2, 14-108.2e, 15-158.2, 16-133.8, or 17-130.5 of this Code to whom the provisions of this Article apply:

(i) For purposes of calculating the combined retirement annuity and the proportionate reduction, if any, in a retirement annuity other than one payable under the self-managed plan, the amount of the Article 15 retirement annuity shall be deemed to be the highest annuity to which the annuitant would have been entitled if he or she had participated in the traditional benefit package as defined in Section 15-103.1 rather than the self-managed plan.

(ii) For purposes of calculating the combined survivor's annuity and the proportionate reduction, if any, in a survivor's annuity other than one payable under the self-managed plan, the amount of the Article 15 survivor's annuity shall be deemed to be the highest survivor's annuity to which the survivor would have been entitled if the deceased employee had participated in the traditional benefit package as defined in Section 15-103.1 rather than the self-managed plan.

(iii) Benefits payable under the self-managed plan are not subject to proportionate reduction under this Section.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)

Sec. 20-125. Return to employment - suspension of benefits. If a retired employee returns to employment which is covered by a system from which he is receiving a proportional annuity under this Article, his proportional annuity from all participating systems shall be suspended during the period of re-employment, except that this suspension does not apply to any distributions payable under a the self-managed plan established under Section 2-119.03, 8-190.2, 9-170.5, 11-131.2, 12-128.2, 14-108.2e, 15-158.2, 16-133.8, or 17-130.5 of this Code.

The provisions of the Article under which such employment would be covered shall govern the determination of whether the employee has returned to employment, and if applicable the exemption of temporary employment or employment not exceeding a specified duration or frequency, for all participating systems from which the retired employee is receiving a proportional annuity under this Article, notwithstanding any contrary provisions in the other Articles governing such systems.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/20-131) (from Ch. 108 1/2, par. 20-131)

Sec. 20-131. Retirement Annuities and Survivors Annuities - Guarantees.

(a) This amendatory Act of 1975 (P.A. 79-782) shall not be applied to deprive any person or his survivor of eligibility for an annuity or to reduce the annuity or to deprive such person of rights to which he or his survivor would have been entitled under the provisions of Article 20 which were in effect immediately prior to September 5, 1975, if he was an employee immediately prior to that date.

(b) If the combined retirement annuity benefits provided under Public Act 79-782 are less than the combined retirement annuity benefits that would have been payable under the alternative formula of Section 20-122, the system under which retirement would have occurred, as provided by Section 20-122, shall increase the proportional retirement annuity by an amount equal to the difference.

(c) Subsection (b) of this Section does not apply to the retirement annuity benefits payable under a the self-managed plan established under Section 2-119.03, 8-190.2, 9-170.5, 11-131.2, 12-128.2, 14-108.2e, 15-158.2, 16-133.8, or 17-130.5 of this Code.

(Source: P.A. 91-887, eff. 7-6-00.)

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect July 1, 2012.".