98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1271

 

Introduced , by Rep. André M. Thapedi

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/1-163 new
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/14-131
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131
30 ILCS 805/8.37 new

    Amends the Illinois Pension Code. Creates a Tier III benefit package applicable to persons who first begin participating in one of the State-funded retirement systems on or after July 1, 2014. Provides for retirement benefits and certain employee contribution changes that supersede the corresponding provisions of the applicable retirement system. Provides that those retirement benefits may be annually increased or decreased in response to the retirement system's investment earnings. Changes the amount of the required State contributions and, in the State Universities and Downstate Teacher Articles, requires the actual employers to make contributions to amortize any unfunded liabilities arising out of their employees who are Tier III participants. Provides that, when the State's total debt service obligation for certain pension bonds has ended, any funds remaining available for the payment of that debt service shall be distributed to the 5 State-funded retirement systems, to be used to reduce their unfunded actuarial liabilities. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Legislative findings. The General Assembly
5hereby finds that:
6        (1) the last two decades of the Twentieth Century saw
7    simultaneously robust growth in bond and stock markets,
8    which boosted funding for promised benefits;
9        (2) there was a tendency, as a result, to spend that
10    newfound wealth by granting higher benefits or by providing
11    employers substantial contribution reductions;
12        (3) benefit levels were raised to what now appear to be
13    unsustainable levels, given prevailing financial
14    constraints;
15        (4) current required contributions are higher than the
16    State budget can tolerate during current severe economic
17    distress, and near-term reductions will not reduce
18    ultimate costs, but distribute them differently, creating
19    an intergenerational debt transfer;
20        (5) financial markets will offer fewer and
21    lower-returning investment opportunities; and
22        (6) many funds and plan sponsors are interested in less
23    volatility after the experiences of the past decade.
 

 

 

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1    Section 5. The Illinois Pension Code is amended by changing
2Sections 1-160, 2-124, 14-131, 15-155, 16-158, and 18-131 and
3by adding Section 1-163 as follows:
 
4    (40 ILCS 5/1-160)
5    Sec. 1-160. Tier II provisions Provisions applicable to
6certain new hires.
7    (a) The provisions of this Section apply to a person who,
8on or after January 1, 2011, first becomes a member or a
9participant under any reciprocal retirement system or pension
10fund established under this Code, other than a retirement
11system or pension fund established under Article 2, 3, 4, 5, 6,
12or 18 of this Code, notwithstanding any other provision of this
13Code to the contrary, but do not apply (i) to any self-managed
14plan established under this Code, (ii) to any person with
15respect to service as a sheriff's law enforcement employee
16under Article 7, (iii) to any person with respect to service
17for which the person is subject to the Tier III benefit package
18established under Section 1-163, or (iv) to any participant of
19the retirement plan established under Section 22-101.
20    (b) "Final average salary" means the average monthly (or
21annual) salary obtained by dividing the total salary or
22earnings calculated under the Article applicable to the member
23or participant during the 96 consecutive months (or 8
24consecutive years) of service within the last 120 months (or 10
25years) of service in which the total salary or earnings

 

 

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1calculated under the applicable Article was the highest by the
2number of months (or years) of service in that period. For the
3purposes of a person who first becomes a member or participant
4of any retirement system or pension fund to which this Section
5applies on or after January 1, 2011, in this Code, "final
6average salary" shall be substituted for the following:
7        (1) In Articles 7 (except for service as sheriff's law
8    enforcement employees) and 15, "final rate of earnings".
9        (2) In Articles 8, 9, 10, 11, and 12, "highest average
10    annual salary for any 4 consecutive years within the last
11    10 years of service immediately preceding the date of
12    withdrawal".
13        (3) In Article 13, "average final salary".
14        (4) In Article 14, "final average compensation".
15        (5) In Article 17, "average salary".
16        (6) In Section 22-207, "wages or salary received by him
17    at the date of retirement or discharge".
18    (b-5) Beginning on January 1, 2011, for all purposes under
19this Code (including without limitation the calculation of
20benefits and employee contributions), the annual earnings,
21salary, or wages (based on the plan year) of a member or
22participant to whom this Section applies shall not exceed
23$106,800; however, that amount shall annually thereafter be
24increased by the lesser of (i) 3% of that amount, including all
25previous adjustments, or (ii) one-half the annual unadjusted
26percentage increase (but not less than zero) in the consumer

 

 

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1price index-u for the 12 months ending with the September
2preceding each November 1, including all previous adjustments.
3    For the purposes of this Section, "consumer price index-u"
4means the index published by the Bureau of Labor Statistics of
5the United States Department of Labor that measures the average
6change in prices of goods and services purchased by all urban
7consumers, United States city average, all items, 1982-84 =
8100. The new amount resulting from each annual adjustment shall
9be determined by the Public Pension Division of the Department
10of Insurance and made available to the boards of the retirement
11systems and pension funds by November 1 of each year.
12    (c) A member or participant is entitled to a retirement
13annuity upon written application if he or she has attained age
1467 and has at least 10 years of service credit and is otherwise
15eligible under the requirements of the applicable Article.
16    A member or participant who has attained age 62 and has at
17least 10 years of service credit and is otherwise eligible
18under the requirements of the applicable Article may elect to
19receive the lower retirement annuity provided in subsection (d)
20of this Section.
21    (d) The retirement annuity of a member or participant who
22is retiring after attaining age 62 with at least 10 years of
23service credit shall be reduced by one-half of 1% for each full
24month that the member's age is under age 67.
25    (e) Any retirement annuity or supplemental annuity shall be
26subject to annual increases on the January 1 occurring either

 

 

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1on or after the attainment of age 67 or the first anniversary
2of the annuity start date, whichever is later. Each annual
3increase shall be calculated at 3% or one-half the annual
4unadjusted percentage increase (but not less than zero) in the
5consumer price index-u for the 12 months ending with the
6September preceding each November 1, whichever is less, of the
7originally granted retirement annuity. If the annual
8unadjusted percentage change in the consumer price index-u for
9the 12 months ending with the September preceding each November
101 is zero or there is a decrease, then the annuity shall not be
11increased.
12    (f) The initial survivor's or widow's annuity of an
13otherwise eligible survivor or widow of a retired member or
14participant who first became a member or participant on or
15after January 1, 2011 shall be in the amount of 66 2/3% of the
16retired member's or participant's retirement annuity at the
17date of death. In the case of the death of a member or
18participant who has not retired and who first became a member
19or participant on or after January 1, 2011, eligibility for a
20survivor's or widow's annuity shall be determined by the
21applicable Article of this Code. The initial benefit shall be
2266 2/3% of the earned annuity without a reduction due to age. A
23child's annuity of an otherwise eligible child shall be in the
24amount prescribed under each Article if applicable. Any
25survivor's or widow's annuity shall be increased (1) on each
26January 1 occurring on or after the commencement of the annuity

 

 

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1if the deceased member died while receiving a retirement
2annuity or (2) in other cases, on each January 1 occurring
3after the first anniversary of the commencement of the annuity.
4Each annual increase shall be calculated at 3% or one-half the
5annual unadjusted percentage increase (but not less than zero)
6in the consumer price index-u for the 12 months ending with the
7September preceding each November 1, whichever is less, of the
8originally granted survivor's annuity. If the annual
9unadjusted percentage change in the consumer price index-u for
10the 12 months ending with the September preceding each November
111 is zero or there is a decrease, then the annuity shall not be
12increased.
13    (g) The benefits in Section 14-110 apply only if the person
14is a State policeman, a fire fighter in the fire protection
15service of a department, or a security employee of the
16Department of Corrections or the Department of Juvenile
17Justice, as those terms are defined in subsection (c) (b) of
18Section 14-110. A person who meets the requirements of this
19Section is entitled to an annuity calculated under the
20provisions of Section 14-110, in lieu of the regular or minimum
21retirement annuity, only if the person has withdrawn from
22service with not less than 20 years of eligible creditable
23service and has attained age 60, regardless of whether the
24attainment of age 60 occurs while the person is still in
25service.
26    (h) If a person who first becomes a member or a participant

 

 

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

 

 

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1accepting contractual employment. A person who fails to submit
2such notification shall be guilty of a Class A misdemeanor and
3required to pay a fine of $1,000. Upon termination of that
4contractual employment, the person's retirement annuity or
5retirement pension payments shall resume and, if appropriate,
6be recalculated under the applicable provisions of this Code.
7    (i) Notwithstanding any other provision of this Section, a
8person who first becomes a participant of the retirement system
9established under Article 15 on or after January 1, 2011 shall
10have the option to enroll in the self-managed plan created
11under Section 15-158.2 of this Code.
12    (j) In the case of a conflict between the provisions of
13this Section and any other provision of this Code, the
14provisions of this Section shall control.
15(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1697-609, eff. 1-1-12.)
 
17    (40 ILCS 5/1-163 new)
18    Sec. 1-163. Tier III benefit package.
19    (a) This Section may be referred to as the "Tier III
20benefit package", and a person subject to this Section may be
21referred to as a "Tier III participant" of the applicable
22retirement system.
23    This Section creates the Tier III benefit package,
24consisting of retirement benefits (and certain employee
25contribution changes) that supersede the corresponding

 

 

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1provisions of the applicable Article of this Code for Tier III
2participants, including without limitation provisions relating
3to minimum retirement annuity or automatic annual increases in
4retirement annuity. The other provisions of the applicable
5Article of this Code continue to apply to Tier III participants
6and their survivors and beneficiaries, including without
7limitation those relating to eligibility, survivor benefits,
8and refunds; except that in the case of an irreconcilable
9conflict between this Section and the provisions of the
10applicable Article, the provisions of this Section shall
11control.
12    (b) The provisions of this Section apply to a person who,
13on or after July 1, 2014, first begins participating in a
14retirement system established under Article 2, 14, 15, 16, or
1518 of this Code, with respect to that person's participation in
16the applicable retirement system.
17    (c) As used in this Section:
18    "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the participant's total
20salary, compensation, or earnings as determined under the
21applicable Article of this Code for the final 36 months of
22service by the number of months (or years) of service in that
23period.
24    "Interest at the experienced rate" means the interest rate
25for all or any part of a fiscal year that is determined by the
26board of the applicable retirement system to represent the

 

 

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1actual investment earnings of the system; or, if those actual
2earnings are not yet known, then the projected rate of earnings
3based on factors including the system's past and expected
4investment experience, historical and expected fluctuations in
5the market value of investments, the desirability of minimizing
6volatility in the effective rate of interest from year to year,
7and the provision of reserves for anticipated losses upon sale,
8redemption, or other disposition of investments and for
9variations in interest experience.
10    (d) In lieu of the retirement annuity otherwise provided
11for under the applicable Article of this Code, a Tier III
12participant, upon reaching eligibility for a retirement
13annuity under the applicable Article, shall instead be entitled
14to receive an initial retirement annuity determined as provided
15in this Section, consisting of whichever of the following is
16higher:
17        (1) The defined benefit calculation, which shall
18    consist of 1.6% of final average salary for each year of
19    service.
20        (2) The defined contribution calculation, which shall
21    consist of the annuity that can be provided on an
22    actuarially equivalent basis from the sum of (i) the
23    participant's contributions to the applicable retirement
24    system, plus (ii) the total of the State and actual
25    employer contributions to the applicable retirement system
26    with respect to the participant, plus (iii) interest at the

 

 

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1    experienced rate on the amounts specified in items (i) and
2    (ii), calculated to the date of retirement.
3    (e) The retirement annuity shall be subject to annual
4post-retirement adjustments on each January 1, in an amount
5determined by the applicable retirement system, based solely on
6the retirement system's investment return for the previous
7fiscal year. If the experienced investment return exceeds the
8assumed rate, the annuity may be increased, and if the
9experienced investment return is less than the assumed rate,
10the annuity may be decreased. The increase or decrease shall be
11a percentage of the annuity amount then payable, and shall be a
12uniform percentage for all Tier III participants receiving a
13retirement annuity from the applicable retirement system on the
14annual adjustment date. Any increase in annuity is a
15non-guaranteed dividend and is not guaranteed to continue
16beyond the next annual adjustment date.
17    (f) For a Tier III participant, the required employee
18contributions otherwise specified in the applicable Article
19shall be subject to annual adjustments on each January 1, in an
20amount determined by the applicable retirement system, based
21solely on the retirement system's investment return for the
22previous fiscal year. If the experienced investment return
23exceeds the assumed rate, the employee contribution rate may be
24increased, and if the experienced investment return is less
25than the assumed rate, the employee contribution rate may be
26decreased. The increase or decrease shall be a percentage of

 

 

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1the participant's salary, compensation, or earnings, and shall
2be a uniform percentage for all Tier III participants under the
3applicable retirement system. Any increase or decrease in
4employee contribution rates shall apply equally to the required
5State or employer contribution rate.
6    A Tier III participant who does not participate in Social
7Security with respect to his or her Tier III service may elect
8to contribute an additional 7.65% of each payment of salary,
9compensation, or earnings for retirement annuity in order to
10increase the amount of annuity available under the defined
11contribution calculation.
12    (g) The participant's employer may agree to pay some or all
13of the employee contribution, depending on the employer's
14contribution plan or collective bargaining agreements.
15    (h) Affected retirement systems may adopt rules and
16procedures as necessary or useful for the effective
17implementation of this Section.
18    
 
19    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
20    Sec. 2-124. Contributions by State.
21    (a) The State shall make contributions to the System by
22appropriations of amounts which, together with the
23contributions of participants, interest earned on investments,
24and other income will meet the cost of maintaining and
25administering the System on a 90% funded basis in accordance

 

 

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1with actuarial recommendations.
2    (b) The Board shall determine the amount of State
3contributions required for each fiscal year on the basis of the
4actuarial tables and other assumptions adopted by the Board and
5the prescribed rate of interest, using the formula in
6subsection (c).
7    (c) For State fiscal year 2015 and thereafter, the minimum
8contribution to the System to be made by the State for each
9fiscal year shall be an amount determined by the System to be
10equal to the sum of the following:
11        (1) representing the State's portion of the projected
12    normal cost for that fiscal year relating to Tier III
13    participants under Section 1-163, a percentage of the
14    applicable Tier III participant payroll equal to the Tier
15    III participant contribution rate, as annually adjusted
16    under Section 1-163, plus a matching 7.65% of payroll for
17    each participant who elects to make the optional employee
18    contribution authorized for participants ineligible for
19    Social Security; plus
20        (2) the State's portion of the projected normal cost
21    for that fiscal year relating to participants other than
22    Tier III participants; plus
23        (3) an amount sufficient to amortize the unfunded
24    accrued liability of the System under a rolling 30-yer
25    amortization period. In making these determinations, the
26    required State contribution under this item (3) shall be

 

 

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1    calculated each year as a level percentage of payroll and
2    shall be determined under the projected unit credit
3    actuarial cost method.
4    For State fiscal years 2012 through 2014 through 2045, the
5minimum contribution to the System to be made by the State for
6each fiscal year shall be an amount determined by the System to
7be sufficient to bring the total assets of the System up to 90%
8of the total actuarial liabilities of the System by the end of
9State fiscal year 2045. In making these determinations, the
10required State contribution shall be calculated each year as a
11level percentage of payroll over the years remaining to and
12including fiscal year 2045 and shall be determined under the
13projected unit credit actuarial cost method.
14    For State fiscal years 1996 through 2005, the State
15contribution to the System, as a percentage of the applicable
16employee payroll, shall be increased in equal annual increments
17so that by State fiscal year 2011, the State is contributing at
18the rate required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2006 is
21$4,157,000.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2007 is
24$5,220,300.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

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1employee payroll, shall be increased in equal annual increments
2from the required State contribution for State fiscal year
32007, so that by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2010 is
7$10,454,000 and shall be made from the proceeds of bonds sold
8in fiscal year 2010 pursuant to Section 7.2 of the General
9Obligation Bond Act, less (i) the pro rata share of bond sale
10expenses determined by the System's share of total bond
11proceeds, (ii) any amounts received from the General Revenue
12Fund in fiscal year 2010, and (iii) any reduction in bond
13proceeds due to the issuance of discounted bonds, if
14applicable.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2011 is
17the amount recertified by the System on or before April 1, 2011
18pursuant to Section 2-134 and shall be made from the proceeds
19of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
20the General Obligation Bond Act, less (i) the pro rata share of
21bond sale expenses determined by the System's share of total
22bond proceeds, (ii) any amounts received from the General
23Revenue Fund in fiscal year 2011, and (iii) any reduction in
24bond proceeds due to the issuance of discounted bonds, if
25applicable.
26    Beginning in State fiscal year 2046, the minimum State

 

 

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1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 90% of the total
3actuarial liabilities of the System.
4    Amounts received by the System pursuant to Section 25 of
5the Budget Stabilization Act or Section 8.12 of the State
6Finance Act in any fiscal year do not reduce and do not
7constitute payment of any portion of the minimum State
8contribution required under this Article in that fiscal year.
9Such amounts shall not reduce, and shall not be included in the
10calculation of, the required State contributions under this
11Article in any future year until the System has reached a
12funding ratio of at least 90%. A reference in this Article to
13the "required State contribution" or any substantially similar
14term does not include or apply to any amounts payable to the
15System under Section 25 of the Budget Stabilization Act.
16    Notwithstanding any other provision of this Section, the
17required State contribution for State fiscal year 2005 and for
18fiscal year 2008 and each fiscal year thereafter, as calculated
19under this Section and certified under Section 2-134, shall not
20exceed an amount equal to (i) the amount of the required State
21contribution that would have been calculated under this Section
22for that fiscal year if the System had not received any
23payments under subsection (d) of Section 7.2 of the General
24Obligation Bond Act, minus (ii) the portion of the State's
25total debt service payments for that fiscal year on the bonds
26issued in fiscal year 2003 for the purposes of that Section

 

 

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17.2, as determined and certified by the Comptroller, that is
2the same as the System's portion of the total moneys
3distributed under subsection (d) of Section 7.2 of the General
4Obligation Bond Act. In determining this maximum for State
5fiscal years 2008 through 2010, however, the amount referred to
6in item (i) shall be increased, as a percentage of the
7applicable employee payroll, in equal increments calculated
8from the sum of the required State contribution for State
9fiscal year 2007 plus the applicable portion of the State's
10total debt service payments for fiscal year 2007 on the bonds
11issued in fiscal year 2003 for the purposes of Section 7.2 of
12the General Obligation Bond Act, so that, by State fiscal year
132011, the State is contributing at the rate otherwise required
14under this Section. When the State's total debt service
15obligation for those bonds has ended, any funds remaining
16available for the payment of that debt service shall be
17distributed to this System and the 4 other State-funded
18retirement systems, in the same proportion as the total moneys
19distributed under subsection (d) of Section 7.2 of the General
20Obligation Bond Act, to be used to reduce their unfunded
21actuarial liabilities.
22    (d) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

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1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (e) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
137-13-12.)
 
14    (40 ILCS 5/14-131)
15    Sec. 14-131. Contributions by State.
16    (a) The State shall make contributions to the System by
17appropriations of amounts which, together with other employer
18contributions from trust, federal, and other funds, employee
19contributions, investment income, and other income, will be
20sufficient to meet the cost of maintaining and administering
21the System on a 90% funded basis in accordance with actuarial
22recommendations.
23    For the purposes of this Section and Section 14-135.08,
24references to State contributions refer only to employer
25contributions and do not include employee contributions that

 

 

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1are picked up or otherwise paid by the State or a department on
2behalf of the employee.
3    (b) The Board shall determine the total amount of State
4contributions required for each fiscal year on the basis of the
5actuarial tables and other assumptions adopted by the Board,
6using the formula in subsection (e).
7    The Board shall also determine a State contribution rate
8for each fiscal year, expressed as a percentage of payroll,
9based on the total required State contribution for that fiscal
10year (less the amount received by the System from
11appropriations under Section 8.12 of the State Finance Act and
12Section 1 of the State Pension Funds Continuing Appropriation
13Act, if any, for the fiscal year ending on the June 30
14immediately preceding the applicable November 15 certification
15deadline), the estimated payroll (including all forms of
16compensation) for personal services rendered by eligible
17employees, and the recommendations of the actuary.
18    For the purposes of this Section and Section 14.1 of the
19State Finance Act, the term "eligible employees" includes
20employees who participate in the System, persons who may elect
21to participate in the System but have not so elected, persons
22who are serving a qualifying period that is required for
23participation, and annuitants employed by a department as
24described in subdivision (a)(1) or (a)(2) of Section 14-111.
25    (c) Contributions shall be made by the several departments
26for each pay period by warrants drawn by the State Comptroller

 

 

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1against their respective funds or appropriations based upon
2vouchers stating the amount to be so contributed. These amounts
3shall be based on the full rate certified by the Board under
4Section 14-135.08 for that fiscal year. From the effective date
5of this amendatory Act of the 93rd General Assembly through the
6payment of the final payroll from fiscal year 2004
7appropriations, the several departments shall not make
8contributions for the remainder of fiscal year 2004 but shall
9instead make payments as required under subsection (a-1) of
10Section 14.1 of the State Finance Act. The several departments
11shall resume those contributions at the commencement of fiscal
12year 2005.
13    (c-1) Notwithstanding subsection (c) of this Section, for
14fiscal years 2010, 2012, and 2013 only, contributions by the
15several departments are not required to be made for General
16Revenue Funds payrolls processed by the Comptroller. Payrolls
17paid by the several departments from all other State funds must
18continue to be processed pursuant to subsection (c) of this
19Section.
20    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
21or as soon as possible after the 15th day of each month, the
22Board shall submit vouchers for payment of State contributions
23to the System, in a total monthly amount of one-twelfth of the
24fiscal year General Revenue Fund contribution as certified by
25the System pursuant to Section 14-135.08 of the Illinois
26Pension Code.

 

 

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1    (d) If an employee is paid from trust funds or federal
2funds, the department or other employer shall pay employer
3contributions from those funds to the System at the certified
4rate, unless the terms of the trust or the federal-State
5agreement preclude the use of the funds for that purpose, in
6which case the required employer contributions shall be paid by
7the State. From the effective date of this amendatory Act of
8the 93rd General Assembly through the payment of the final
9payroll from fiscal year 2004 appropriations, the department or
10other employer shall not pay contributions for the remainder of
11fiscal year 2004 but shall instead make payments as required
12under subsection (a-1) of Section 14.1 of the State Finance
13Act. The department or other employer shall resume payment of
14contributions at the commencement of fiscal year 2005.
15    (e) For State fiscal year 2015 and each fiscal year
16thereafter, the minimum contribution to the System to be made
17by the State for each fiscal year shall be the sum of the
18following:
19        (1) representing the State's portion of the projected
20    normal cost for that fiscal year relating to Tier III
21    participants under Section 1-163, a percentage of the
22    applicable Tier III participant payroll equal to the Tier
23    III participant contribution rate, as annually adjusted
24    under Section 1-163, plus a matching 7.65% of payroll for
25    each participant who elects to make the optional employee
26    contribution authorized for participants ineligible for

 

 

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1    Social Security; plus
2        (2) the State's portion of the projected normal cost
3    for that fiscal year relating to participants other than
4    Tier III participants; plus
5        (3) an amount sufficient to amortize the unfunded
6    accrued liability of the System under a rolling 30-yer
7    amortization period. In making these determinations, the
8    required State contribution under this item (3) shall be
9    calculated each year as a level percentage of payroll and
10    shall be determined under the projected unit credit
11    actuarial cost method.
12    For State fiscal years 2012 through 2014 through 2045, the
13minimum contribution to the System to be made by the State for
14each fiscal year shall be an amount determined by the System to
15be sufficient to bring the total assets of the System up to 90%
16of the total actuarial liabilities of the System by the end of
17State fiscal year 2045. In making these determinations, the
18required State contribution shall be calculated each year as a
19level percentage of payroll over the years remaining to and
20including fiscal year 2045 and shall be determined under the
21projected unit credit actuarial cost method.
22    For State fiscal years 1996 through 2005, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25so that by State fiscal year 2011, the State is contributing at
26the rate required under this Section; except that (i) for State

 

 

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1fiscal year 1998, for all purposes of this Code and any other
2law of this State, the certified percentage of the applicable
3employee payroll shall be 5.052% for employees earning eligible
4creditable service under Section 14-110 and 6.500% for all
5other employees, notwithstanding any contrary certification
6made under Section 14-135.08 before the effective date of this
7amendatory Act of 1997, and (ii) in the following specified
8State fiscal years, the State contribution to the System shall
9not be less than the following indicated percentages of the
10applicable employee payroll, even if the indicated percentage
11will produce a State contribution in excess of the amount
12otherwise required under this subsection and subsection (a):
139.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
142002; 10.6% in FY 2003; and 10.8% in FY 2004.
15    Notwithstanding any other provision of this Article, the
16total required State contribution to the System for State
17fiscal year 2006 is $203,783,900.
18    Notwithstanding any other provision of this Article, the
19total required State contribution to the System for State
20fiscal year 2007 is $344,164,400.
21    For each of State fiscal years 2008 through 2009, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24from the required State contribution for State fiscal year
252007, so that by State fiscal year 2011, the State is
26contributing at the rate otherwise required under this Section.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State General Revenue Fund contribution for
3State fiscal year 2010 is $723,703,100 and shall be made from
4the proceeds of bonds sold in fiscal year 2010 pursuant to
5Section 7.2 of the General Obligation Bond Act, less (i) the
6pro rata share of bond sale expenses determined by the System's
7share of total bond proceeds, (ii) any amounts received from
8the General Revenue Fund in fiscal year 2010, and (iii) any
9reduction in bond proceeds due to the issuance of discounted
10bonds, if applicable.
11    Notwithstanding any other provision of this Article, the
12total required State General Revenue Fund contribution for
13State fiscal year 2011 is the amount recertified by the System
14on or before April 1, 2011 pursuant to Section 14-135.08 and
15shall be made from the proceeds of bonds sold in fiscal year
162011 pursuant to Section 7.2 of the General Obligation Bond
17Act, less (i) the pro rata share of bond sale expenses
18determined by the System's share of total bond proceeds, (ii)
19any amounts received from the General Revenue Fund in fiscal
20year 2011, and (iii) any reduction in bond proceeds due to the
21issuance of discounted bonds, if applicable.
22    Beginning in State fiscal year 2046, the minimum State
23contribution for each fiscal year shall be the amount needed to
24maintain the total assets of the System at 90% of the total
25actuarial liabilities of the System.
26    Amounts received by the System pursuant to Section 25 of

 

 

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1the Budget Stabilization Act or Section 8.12 of the State
2Finance Act in any fiscal year do not reduce and do not
3constitute payment of any portion of the minimum State
4contribution required under this Article in that fiscal year.
5Such amounts shall not reduce, and shall not be included in the
6calculation of, the required State contributions under this
7Article in any future year until the System has reached a
8funding ratio of at least 90%. A reference in this Article to
9the "required State contribution" or any substantially similar
10term does not include or apply to any amounts payable to the
11System under Section 25 of the Budget Stabilization Act.
12    Notwithstanding any other provision of this Section, the
13required State contribution for State fiscal year 2005 and for
14fiscal year 2008 and each fiscal year thereafter, as calculated
15under this Section and certified under Section 14-135.08, shall
16not exceed an amount equal to (i) the amount of the required
17State contribution that would have been calculated under this
18Section for that fiscal year if the System had not received any
19payments under subsection (d) of Section 7.2 of the General
20Obligation Bond Act, minus (ii) the portion of the State's
21total debt service payments for that fiscal year on the bonds
22issued in fiscal year 2003 for the purposes of that Section
237.2, as determined and certified by the Comptroller, that is
24the same as the System's portion of the total moneys
25distributed under subsection (d) of Section 7.2 of the General
26Obligation Bond Act. In determining this maximum for State

 

 

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1fiscal years 2008 through 2010, however, the amount referred to
2in item (i) shall be increased, as a percentage of the
3applicable employee payroll, in equal increments calculated
4from the sum of the required State contribution for State
5fiscal year 2007 plus the applicable portion of the State's
6total debt service payments for fiscal year 2007 on the bonds
7issued in fiscal year 2003 for the purposes of Section 7.2 of
8the General Obligation Bond Act, so that, by State fiscal year
92011, the State is contributing at the rate otherwise required
10under this Section. When the State's total debt service
11obligation for those bonds has ended, any funds remaining
12available for the payment of that debt service shall be
13distributed to this System and the 4 other State-funded
14retirement systems, in the same proportion as the total moneys
15distributed under subsection (d) of Section 7.2 of the General
16Obligation Bond Act, to be used to reduce their unfunded
17actuarial liabilities.
18    (f) After the submission of all payments for eligible
19employees from personal services line items in fiscal year 2004
20have been made, the Comptroller shall provide to the System a
21certification of the sum of all fiscal year 2004 expenditures
22for personal services that would have been covered by payments
23to the System under this Section if the provisions of this
24amendatory Act of the 93rd General Assembly had not been
25enacted. Upon receipt of the certification, the System shall
26determine the amount due to the System based on the full rate

 

 

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1certified by the Board under Section 14-135.08 for fiscal year
22004 in order to meet the State's obligation under this
3Section. The System shall compare this amount due to the amount
4received by the System in fiscal year 2004 through payments
5under this Section and under Section 6z-61 of the State Finance
6Act. If the amount due is more than the amount received, the
7difference shall be termed the "Fiscal Year 2004 Shortfall" for
8purposes of this Section, and the Fiscal Year 2004 Shortfall
9shall be satisfied under Section 1.2 of the State Pension Funds
10Continuing Appropriation Act. If the amount due is less than
11the amount received, the difference shall be termed the "Fiscal
12Year 2004 Overpayment" for purposes of this Section, and the
13Fiscal Year 2004 Overpayment shall be repaid by the System to
14the Pension Contribution Fund as soon as practicable after the
15certification.
16    (g) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

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1    (h) For purposes of determining the required State
2contribution to the System for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the System's actuarially assumed rate of return.
5    (i) After the submission of all payments for eligible
6employees from personal services line items paid from the
7General Revenue Fund in fiscal year 2010 have been made, the
8Comptroller shall provide to the System a certification of the
9sum of all fiscal year 2010 expenditures for personal services
10that would have been covered by payments to the System under
11this Section if the provisions of this amendatory Act of the
1296th General Assembly had not been enacted. Upon receipt of the
13certification, the System shall determine the amount due to the
14System based on the full rate certified by the Board under
15Section 14-135.08 for fiscal year 2010 in order to meet the
16State's obligation under this Section. The System shall compare
17this amount due to the amount received by the System in fiscal
18year 2010 through payments under this Section. If the amount
19due is more than the amount received, the difference shall be
20termed the "Fiscal Year 2010 Shortfall" for purposes of this
21Section, and the Fiscal Year 2010 Shortfall shall be satisfied
22under Section 1.2 of the State Pension Funds Continuing
23Appropriation Act. If the amount due is less than the amount
24received, the difference shall be termed the "Fiscal Year 2010
25Overpayment" for purposes of this Section, and the Fiscal Year
262010 Overpayment shall be repaid by the System to the General

 

 

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1Revenue Fund as soon as practicable after the certification.
2    (j) After the submission of all payments for eligible
3employees from personal services line items paid from the
4General Revenue Fund in fiscal year 2011 have been made, the
5Comptroller shall provide to the System a certification of the
6sum of all fiscal year 2011 expenditures for personal services
7that would have been covered by payments to the System under
8this Section if the provisions of this amendatory Act of the
996th General Assembly had not been enacted. Upon receipt of the
10certification, the System shall determine the amount due to the
11System based on the full rate certified by the Board under
12Section 14-135.08 for fiscal year 2011 in order to meet the
13State's obligation under this Section. The System shall compare
14this amount due to the amount received by the System in fiscal
15year 2011 through payments under this Section. If the amount
16due is more than the amount received, the difference shall be
17termed the "Fiscal Year 2011 Shortfall" for purposes of this
18Section, and the Fiscal Year 2011 Shortfall shall be satisfied
19under Section 1.2 of the State Pension Funds Continuing
20Appropriation Act. If the amount due is less than the amount
21received, the difference shall be termed the "Fiscal Year 2011
22Overpayment" for purposes of this Section, and the Fiscal Year
232011 Overpayment shall be repaid by the System to the General
24Revenue Fund as soon as practicable after the certification.
25    (k) For fiscal years 2012 and 2013 only, after the
26submission of all payments for eligible employees from personal

 

 

HB1271- 30 -LRB098 06357 EFG 36399 b

1services line items paid from the General Revenue Fund in the
2fiscal year have been made, the Comptroller shall provide to
3the System a certification of the sum of all expenditures in
4the fiscal year for personal services. Upon receipt of the
5certification, the System shall determine the amount due to the
6System based on the full rate certified by the Board under
7Section 14-135.08 for the fiscal year in order to meet the
8State's obligation under this Section. The System shall compare
9this amount due to the amount received by the System for the
10fiscal year. If the amount due is more than the amount
11received, the difference shall be termed the "Prior Fiscal Year
12Shortfall" for purposes of this Section, and the Prior Fiscal
13Year Shortfall shall be satisfied under Section 1.2 of the
14State Pension Funds Continuing Appropriation Act. If the amount
15due is less than the amount received, the difference shall be
16termed the "Prior Fiscal Year Overpayment" for purposes of this
17Section, and the Prior Fiscal Year Overpayment shall be repaid
18by the System to the General Revenue Fund as soon as
19practicable after the certification.
20(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
2196-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
221-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
23eff. 6-30-12.)
 
24    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
25    Sec. 15-155. Employer contributions.

 

 

HB1271- 31 -LRB098 06357 EFG 36399 b

1    (a) The State of Illinois shall make contributions by
2appropriations of amounts which, together with the other
3employer contributions from trust, federal, and other funds,
4employee contributions, income from investments, and other
5income of this System, will be sufficient to meet the cost of
6maintaining and administering the System on a 90% funded basis
7in accordance with actuarial recommendations.
8    The Board shall determine the amount of State contributions
9required for each fiscal year on the basis of the actuarial
10tables and other assumptions adopted by the Board and the
11recommendations of the actuary, using the formula in subsection
12(a-1).
13    (a-1) For State fiscal year 2015 and thereafter, the
14minimum contribution to the System to be made by the State for
15each fiscal year shall be an amount determined by the System to
16be equal to the sum of the following:
17        (1) representing the State's portion of the projected
18    normal cost for that fiscal year relating to Tier III
19    participants under Section 1-163, a percentage of the
20    applicable Tier III participant payroll equal to the Tier
21    III participant contribution rate, as annually adjusted
22    under Section 1-163, plus a matching 7.65% of payroll for
23    each participant who elects to make the optional employee
24    contribution authorized for participants ineligible for
25    Social Security; plus
26        (2) the State's portion of the projected normal cost

 

 

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1    for that fiscal year relating to participants other than
2    Tier III participants; plus
3        (3) an amount determined by the Board, sufficient to
4    amortize, under a rolling 30-yer amortization period, the
5    unfunded accrued liability of the System not relating to
6    Tier III participants. In making these determinations, the
7    required State contribution under this item (3) shall be
8    calculated each year as a level percentage of payroll and
9    shall be determined under the projected unit credit
10    actuarial cost method.
11    For State fiscal year 2015 and thereafter, the actual
12employer shall contribute to the System an amount determined by
13the Board, sufficient to amortize, under a rolling 30-yer
14amortization period, the unfunded accrued liability of the
15System relating to Tier III participants of that employer.
16    For State fiscal years 2012 through 2014 through 2045, the
17minimum contribution to the System to be made by the State for
18each fiscal year shall be an amount determined by the System to
19be sufficient to bring the total assets of the System up to 90%
20of the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2045 and shall be determined under the
25projected unit credit actuarial cost method.
26    For State fiscal years 1996 through 2005, the State

 

 

HB1271- 33 -LRB098 06357 EFG 36399 b

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3so that by State fiscal year 2011, the State is contributing at
4the rate required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2006 is
7$166,641,900.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2007 is
10$252,064,100.
11    For each of State fiscal years 2008 through 2009, the State
12contribution to the System, as a percentage of the applicable
13employee payroll, shall be increased in equal annual increments
14from the required State contribution for State fiscal year
152007, so that by State fiscal year 2011, the State is
16contributing at the rate otherwise required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2010 is
19$702,514,000 and shall be made from the State Pensions Fund and
20proceeds of bonds sold in fiscal year 2010 pursuant to Section
217.2 of the General Obligation Bond Act, less (i) the pro rata
22share of bond sale expenses determined by the System's share of
23total bond proceeds, (ii) any amounts received from the General
24Revenue Fund in fiscal year 2010, (iii) any reduction in bond
25proceeds due to the issuance of discounted bonds, if
26applicable.

 

 

HB1271- 34 -LRB098 06357 EFG 36399 b

1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2011 is
3the amount recertified by the System on or before April 1, 2011
4pursuant to Section 15-165 and shall be made from the State
5Pensions Fund and proceeds of bonds sold in fiscal year 2011
6pursuant to Section 7.2 of the General Obligation Bond Act,
7less (i) the pro rata share of bond sale expenses determined by
8the System's share of total bond proceeds, (ii) any amounts
9received from the General Revenue Fund in fiscal year 2011, and
10(iii) any reduction in bond proceeds due to the issuance of
11discounted bonds, if applicable.
12    Beginning in State fiscal year 2046, the minimum State
13contribution for each fiscal year shall be the amount needed to
14maintain the total assets of the System at 90% of the total
15actuarial liabilities of the System.
16    Amounts received by the System pursuant to Section 25 of
17the Budget Stabilization Act or Section 8.12 of the State
18Finance Act in any fiscal year do not reduce and do not
19constitute payment of any portion of the minimum State
20contribution required under this Article in that fiscal year.
21Such amounts shall not reduce, and shall not be included in the
22calculation of, the required State contributions under this
23Article in any future year until the System has reached a
24funding ratio of at least 90%. A reference in this Article to
25the "required State contribution" or any substantially similar
26term does not include or apply to any amounts payable to the

 

 

HB1271- 35 -LRB098 06357 EFG 36399 b

1System under Section 25 of the Budget Stabilization Act.
2    Notwithstanding any other provision of this Section, the
3required State contribution for State fiscal year 2005 and for
4fiscal year 2008 and each fiscal year thereafter, as calculated
5under this Section and certified under Section 15-165, shall
6not exceed an amount equal to (i) the amount of the required
7State contribution that would have been calculated under this
8Section for that fiscal year if the System had not received any
9payments under subsection (d) of Section 7.2 of the General
10Obligation Bond Act, minus (ii) the portion of the State's
11total debt service payments for that fiscal year on the bonds
12issued in fiscal year 2003 for the purposes of that Section
137.2, as determined and certified by the Comptroller, that is
14the same as the System's portion of the total moneys
15distributed under subsection (d) of Section 7.2 of the General
16Obligation Bond Act. In determining this maximum for State
17fiscal years 2008 through 2010, however, the amount referred to
18in item (i) shall be increased, as a percentage of the
19applicable employee payroll, in equal increments calculated
20from the sum of the required State contribution for State
21fiscal year 2007 plus the applicable portion of the State's
22total debt service payments for fiscal year 2007 on the bonds
23issued in fiscal year 2003 for the purposes of Section 7.2 of
24the General Obligation Bond Act, so that, by State fiscal year
252011, the State is contributing at the rate otherwise required
26under this Section. When the State's total debt service

 

 

HB1271- 36 -LRB098 06357 EFG 36399 b

1obligation for those bonds has ended, any funds remaining
2available for the payment of that debt service shall be
3distributed to this System and the 4 other State-funded
4retirement systems, in the same proportion as the total moneys
5distributed under subsection (d) of Section 7.2 of the General
6Obligation Bond Act, to be used to reduce their unfunded
7actuarial liabilities.
8    (b) If an employee is paid from trust or federal funds, the
9employer shall pay to the Board contributions from those funds
10which are sufficient to cover the accruing normal costs on
11behalf of the employee. However, universities having employees
12who are compensated out of local auxiliary funds, income funds,
13or service enterprise funds are not required to pay such
14contributions on behalf of those employees. The local auxiliary
15funds, income funds, and service enterprise funds of
16universities shall not be considered trust funds for the
17purpose of this Article, but funds of alumni associations,
18foundations, and athletic associations which are affiliated
19with the universities included as employers under this Article
20and other employers which do not receive State appropriations
21are considered to be trust funds for the purpose of this
22Article.
23    (b-1) The City of Urbana and the City of Champaign shall
24each make employer contributions to this System for their
25respective firefighter employees who participate in this
26System pursuant to subsection (h) of Section 15-107. The rate

 

 

HB1271- 37 -LRB098 06357 EFG 36399 b

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

 

 

HB1271- 38 -LRB098 06357 EFG 36399 b

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

 

 

HB1271- 39 -LRB098 06357 EFG 36399 b

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

 

 

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1salary increases given on or after June 1, 2005 but before July
21, 2011. The changes made by Public Act 94-1057 shall not
3require the System to refund any payments received before July
431, 2006 (the effective date of Public Act 94-1057).
5    When assessing payment for any amount due under subsection
6(g), the System shall exclude earnings increases paid to
7participants under contracts or collective bargaining
8agreements entered into, amended, or renewed before June 1,
92005.
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to a
12participant at a time when the participant is 10 or more years
13from retirement eligibility under Section 15-135.
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude earnings increases resulting from
16overload work, including a contract for summer teaching, or
17overtime when the employer has certified to the System, and the
18System has approved the certification, that: (i) in the case of
19overloads (A) the overload work is for the sole purpose of
20academic instruction in excess of the standard number of
21instruction hours for a full-time employee occurring during the
22academic year that the overload is paid and (B) the earnings
23increases are equal to or less than the rate of pay for
24academic instruction computed using the participant's current
25salary rate and work schedule; and (ii) in the case of
26overtime, the overtime was necessary for the educational

 

 

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

 

 

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

 

 

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1promotion was not submitted by a community college. Nothing in
2this subsection (k) shall require any community college to
3submit any information to the Community College Board.
4    (l) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (m) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2096-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
217-13-12; revised 10-17-12.)
 
22    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
23    Sec. 16-158. Contributions by State and other employing
24units.
25    (a) The State shall make contributions to the System by

 

 

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1means of appropriations from the Common School Fund and other
2State funds of amounts which, together with other employer
3contributions, employee contributions, investment income, and
4other income, will be sufficient to meet the cost of
5maintaining and administering the System on a 90% funded basis
6in accordance with actuarial recommendations.
7    The Board shall determine the amount of State contributions
8required for each fiscal year on the basis of the actuarial
9tables and other assumptions adopted by the Board and the
10recommendations of the actuary, using the formula in subsection
11(b-3).
12    (a-1) Annually, on or before November 15 until November 15,
132011, the Board shall certify to the Governor the amount of the
14required State contribution for the coming fiscal year. The
15certification under this subsection (a-1) shall include a copy
16of the actuarial recommendations upon which it is based and
17shall specifically identify the System's projected State
18normal cost for that fiscal year.
19    On or before May 1, 2004, the Board shall recalculate and
20recertify to the Governor the amount of the required State
21contribution to the System for State fiscal year 2005, taking
22into account the amounts appropriated to and received by the
23System under subsection (d) of Section 7.2 of the General
24Obligation Bond Act.
25    On or before July 1, 2005, the Board shall recalculate and
26recertify to the Governor the amount of the required State

 

 

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1contribution to the System for State fiscal year 2006, taking
2into account the changes in required State contributions made
3by this amendatory Act of the 94th General Assembly.
4    On or before April 1, 2011, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2011, applying
7the changes made by Public Act 96-889 to the System's assets
8and liabilities as of June 30, 2009 as though Public Act 96-889
9was approved on that date.
10    (a-5) On or before November 1 of each year, beginning
11November 1, 2012, the Board shall submit to the State Actuary,
12the Governor, and the General Assembly a proposed certification
13of the amount of the required State contribution to the System
14for the next fiscal year, along with all of the actuarial
15assumptions, calculations, and data upon which that proposed
16certification is based. On or before January 1 of each year,
17beginning January 1, 2013, the State Actuary shall issue a
18preliminary report concerning the proposed certification and
19identifying, if necessary, recommended changes in actuarial
20assumptions that the Board must consider before finalizing its
21certification of the required State contributions. On or before
22January 15, 2013 and each January 15 thereafter, the Board
23shall certify to the Governor and the General Assembly the
24amount of the required State contribution for the next fiscal
25year. The Board's certification must note any deviations from
26the State Actuary's recommended changes, the reason or reasons

 

 

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1for not following the State Actuary's recommended changes, and
2the fiscal impact of not following the State Actuary's
3recommended changes on the required State contribution.
4    (b) Through State fiscal year 1995, the State contributions
5shall be paid to the System in accordance with Section 18-7 of
6the School Code.
7    (b-1) Beginning in State fiscal year 1996, on the 15th day
8of each month, or as soon thereafter as may be practicable, the
9Board shall submit vouchers for payment of State contributions
10to the System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a-1). From the effective date of this amendatory Act of the
1393rd General Assembly through June 30, 2004, the Board shall
14not submit vouchers for the remainder of fiscal year 2004 in
15excess of the fiscal year 2004 certified contribution amount
16determined under this Section after taking into consideration
17the transfer to the System under subsection (a) of Section
186z-61 of the State Finance Act. These vouchers shall be paid by
19the State Comptroller and Treasurer by warrants drawn on the
20funds appropriated to the System for that fiscal year.
21    If in any month the amount remaining unexpended from all
22other appropriations to the System for the applicable fiscal
23year (including the appropriations to the System under Section
248.12 of the State Finance Act and Section 1 of the State
25Pension Funds Continuing Appropriation Act) is less than the
26amount lawfully vouchered under this subsection, the

 

 

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1difference shall be paid from the Common School Fund under the
2continuing appropriation authority provided in Section 1.1 of
3the State Pension Funds Continuing Appropriation Act.
4    (b-2) Allocations from the Common School Fund apportioned
5to school districts not coming under this System shall not be
6diminished or affected by the provisions of this Article.
7    (b-3) For State fiscal year 2015 and thereafter, the
8minimum contribution to the System to be made by the State for
9each fiscal year shall be an amount determined by the System to
10be equal to the sum of the following:
11        (1) representing the State's portion of the projected
12    normal cost for that fiscal year relating to Tier III
13    participants under Section 1-163, a percentage of the
14    applicable Tier III participant payroll equal to the Tier
15    III participant contribution rate, as annually adjusted
16    under Section 1-163, plus a matching 7.65% of payroll for
17    each participant who elects to make the optional employee
18    contribution authorized for participants ineligible for
19    Social Security; plus
20        (2) the State's portion of the projected normal cost
21    for that fiscal year relating to participants other than
22    Tier III participants; plus
23        (3) an amount determined by the Board, sufficient to
24    amortize, under a rolling 30-yer amortization period, the
25    unfunded accrued liability of the System not relating to
26    Tier III participants. In making these determinations, the

 

 

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1    required State contribution under this item (3) shall be
2    calculated each year as a level percentage of payroll and
3    shall be determined under the projected unit credit
4    actuarial cost method.
5    For State fiscal year 2015 and thereafter, the actual
6employer shall contribute to the System an amount determined by
7the Board, sufficient to amortize, under a rolling 30-yer
8amortization period, the unfunded accrued liability of the
9System relating to Tier III participants of that employer.
10    For State fiscal years 2012 through 2014 through 2045, the
11minimum contribution to the System to be made by the State for
12each fiscal year shall be an amount determined by the System to
13be sufficient to bring the total assets of the System up to 90%
14of the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of payroll over the years remaining to and
18including fiscal year 2045 and shall be determined under the
19projected unit credit actuarial cost method.
20    For State fiscal years 1996 through 2005, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23so that by State fiscal year 2011, the State is contributing at
24the rate required under this Section; except that in the
25following specified State fiscal years, the State contribution
26to the System shall not be less than the following indicated

 

 

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

 

 

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

 

 

HB1271- 51 -LRB098 06357 EFG 36399 b

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

 

 

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1applicable employee payroll, in equal increments calculated
2from the sum of the required State contribution for State
3fiscal year 2007 plus the applicable portion of the State's
4total debt service payments for fiscal year 2007 on the bonds
5issued in fiscal year 2003 for the purposes of Section 7.2 of
6the General Obligation Bond Act, so that, by State fiscal year
72011, the State is contributing at the rate otherwise required
8under this Section. When the State's total debt service
9obligation for those bonds has ended, any funds remaining
10available for the payment of that debt service shall be
11distributed to this System and the 4 other State-funded
12retirement systems, in the same proportion as the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act, to be used to reduce their unfunded
15actuarial liabilities.
16    (c) Payment of the required State contributions and of all
17pensions, retirement annuities, death benefits, refunds, and
18other benefits granted under or assumed by this System, and all
19expenses in connection with the administration and operation
20thereof, are obligations of the State.
21    If members are paid from special trust or federal funds
22which are administered by the employing unit, whether school
23district or other unit, the employing unit shall pay to the
24System from such funds the full accruing retirement costs based
25upon that service, as determined by the System. Employer
26contributions, based on salary paid to members from federal

 

 

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1funds, may be forwarded by the distributing agency of the State
2of Illinois to the System prior to allocation, in an amount
3determined in accordance with guidelines established by such
4agency and the System.
5    (d) Effective July 1, 1986, any employer of a teacher as
6defined in paragraph (8) of Section 16-106 shall pay the
7employer's normal cost of benefits based upon the teacher's
8service, in addition to employee contributions, as determined
9by the System. Such employer contributions shall be forwarded
10monthly in accordance with guidelines established by the
11System.
12    However, with respect to benefits granted under Section
1316-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
14of Section 16-106, the employer's contribution shall be 12%
15(rather than 20%) of the member's highest annual salary rate
16for each year of creditable service granted, and the employer
17shall also pay the required employee contribution on behalf of
18the teacher. For the purposes of Sections 16-133.4 and
1916-133.5, a teacher as defined in paragraph (8) of Section
2016-106 who is serving in that capacity while on leave of
21absence from another employer under this Article shall not be
22considered an employee of the employer from which the teacher
23is on leave.
24    (e) Beginning July 1, 1998, every employer of a teacher
25shall pay to the System an employer contribution computed as
26follows:

 

 

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1        (1) Beginning July 1, 1998 through June 30, 1999, the
2    employer contribution shall be equal to 0.3% of each
3    teacher's salary.
4        (2) Beginning July 1, 1999 and thereafter, the employer
5    contribution shall be equal to 0.58% of each teacher's
6    salary.
7The school district or other employing unit may pay these
8employer contributions out of any source of funding available
9for that purpose and shall forward the contributions to the
10System on the schedule established for the payment of member
11contributions.
12    These employer contributions are intended to offset a
13portion of the cost to the System of the increases in
14retirement benefits resulting from this amendatory Act of 1998.
15    Each employer of teachers is entitled to a credit against
16the contributions required under this subsection (e) with
17respect to salaries paid to teachers for the period January 1,
182002 through June 30, 2003, equal to the amount paid by that
19employer under subsection (a-5) of Section 6.6 of the State
20Employees Group Insurance Act of 1971 with respect to salaries
21paid to teachers for that period.
22    The additional 1% employee contribution required under
23Section 16-152 by this amendatory Act of 1998 is the
24responsibility of the teacher and not the teacher's employer,
25unless the employer agrees, through collective bargaining or
26otherwise, to make the contribution on behalf of the teacher.

 

 

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1    If an employer is required by a contract in effect on May
21, 1998 between the employer and an employee organization to
3pay, on behalf of all its full-time employees covered by this
4Article, all mandatory employee contributions required under
5this Article, then the employer shall be excused from paying
6the employer contribution required under this subsection (e)
7for the balance of the term of that contract. The employer and
8the employee organization shall jointly certify to the System
9the existence of the contractual requirement, in such form as
10the System may prescribe. This exclusion shall cease upon the
11termination, extension, or renewal of the contract at any time
12after May 1, 1998.
13    (f) If the amount of a teacher's salary for any school year
14used to determine final average salary exceeds the member's
15annual full-time salary rate with the same employer for the
16previous school year by more than 6%, the teacher's employer
17shall pay to the System, in addition to all other payments
18required under this Section and in accordance with guidelines
19established by the System, the present value of the increase in
20benefits resulting from the portion of the increase in salary
21that is in excess of 6%. This present value shall be computed
22by the System on the basis of the actuarial assumptions and
23tables used in the most recent actuarial valuation of the
24System that is available at the time of the computation. If a
25teacher's salary for the 2005-2006 school year is used to
26determine final average salary under this subsection (f), then

 

 

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1the changes made to this subsection (f) by Public Act 94-1057
2shall apply in calculating whether the increase in his or her
3salary is in excess of 6%. For the purposes of this Section,
4change in employment under Section 10-21.12 of the School Code
5on or after June 1, 2005 shall constitute a change in employer.
6The System may require the employer to provide any pertinent
7information or documentation. The changes made to this
8subsection (f) by this amendatory Act of the 94th General
9Assembly apply without regard to whether the teacher was in
10service on or after its effective date.
11    Whenever it determines that a payment is or may be required
12under this subsection, the System shall calculate the amount of
13the payment and bill the employer for that amount. The bill
14shall specify the calculations used to determine the amount
15due. If the employer disputes the amount of the bill, it may,
16within 30 days after receipt of the bill, apply to the System
17in writing for a recalculation. The application must specify in
18detail the grounds of the dispute and, if the employer asserts
19that the calculation is subject to subsection (g) or (h) of
20this Section, must include an affidavit setting forth and
21attesting to all facts within the employer's knowledge that are
22pertinent to the applicability of that subsection. Upon
23receiving a timely application for recalculation, the System
24shall review the application and, if appropriate, recalculate
25the amount due.
26    The employer contributions required under this subsection

 

 

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1(f) may be paid in the form of a lump sum within 90 days after
2receipt of the bill. If the employer contributions are not paid
3within 90 days after receipt of the bill, then interest will be
4charged at a rate equal to the System's annual actuarially
5assumed rate of return on investment compounded annually from
6the 91st day after receipt of the bill. Payments must be
7concluded within 3 years after the employer's receipt of the
8bill.
9    (g) This subsection (g) applies only to payments made or
10salary increases given on or after June 1, 2005 but before July
111, 2011. The changes made by Public Act 94-1057 shall not
12require the System to refund any payments received before July
1331, 2006 (the effective date of Public Act 94-1057).
14    When assessing payment for any amount due under subsection
15(f), the System shall exclude salary increases paid to teachers
16under contracts or collective bargaining agreements entered
17into, amended, or renewed before June 1, 2005.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude salary increases paid to a
20teacher at a time when the teacher is 10 or more years from
21retirement eligibility under Section 16-132 or 16-133.2.
22    When assessing payment for any amount due under subsection
23(f), the System shall exclude salary increases resulting from
24overload work, including summer school, when the school
25district has certified to the System, and the System has
26approved the certification, that (i) the overload work is for

 

 

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1the sole purpose of classroom instruction in excess of the
2standard number of classes for a full-time teacher in a school
3district during a school year and (ii) the salary increases are
4equal to or less than the rate of pay for classroom instruction
5computed on the teacher's current salary and work schedule.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude a salary increase resulting from
8a promotion (i) for which the employee is required to hold a
9certificate or supervisory endorsement issued by the State
10Teacher Certification Board that is a different certification
11or supervisory endorsement than is required for the teacher's
12previous position and (ii) to a position that has existed and
13been filled by a member for no less than one complete academic
14year and the salary increase from the promotion is an increase
15that results in an amount no greater than the lesser of the
16average salary paid for other similar positions in the district
17requiring the same certification or the amount stipulated in
18the collective bargaining agreement for a similar position
19requiring the same certification.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude any payment to the teacher from
22the State of Illinois or the State Board of Education over
23which the employer does not have discretion, notwithstanding
24that the payment is included in the computation of final
25average salary.
26    (h) When assessing payment for any amount due under

 

 

HB1271- 59 -LRB098 06357 EFG 36399 b

1subsection (f), the System shall exclude any salary increase
2described in subsection (g) of this Section given on or after
3July 1, 2011 but before July 1, 2014 under a contract or
4collective bargaining agreement entered into, amended, or
5renewed on or after June 1, 2005 but before July 1, 2011.
6Notwithstanding any other provision of this Section, any
7payments made or salary increases given after June 30, 2014
8shall be used in assessing payment for any amount due under
9subsection (f) of this Section.
10    (i) The System shall prepare a report and file copies of
11the report with the Governor and the General Assembly by
12January 1, 2007 that contains all of the following information:
13        (1) The number of recalculations required by the
14    changes made to this Section by Public Act 94-1057 for each
15    employer.
16        (2) The dollar amount by which each employer's
17    contribution to the System was changed due to
18    recalculations required by Public Act 94-1057.
19        (3) The total amount the System received from each
20    employer as a result of the changes made to this Section by
21    Public Act 94-4.
22        (4) The increase in the required State contribution
23    resulting from the changes made to this Section by Public
24    Act 94-1057.
25    (j) For purposes of determining the required State
26contribution to the System, the value of the System's assets

 

 

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1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3    As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10    (k) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
166-18-12; 97-813, eff. 7-13-12.)
 
17    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
18    Sec. 18-131. Financing; employer contributions.
19    (a) The State of Illinois shall make contributions to this
20System by appropriations of the amounts which, together with
21the contributions of participants, net earnings on
22investments, and other income, will meet the costs of
23maintaining and administering this System on a 90% funded basis
24in accordance with actuarial recommendations.
25    (b) The Board shall determine the amount of State

 

 

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1contributions required for each fiscal year on the basis of the
2actuarial tables and other assumptions adopted by the Board and
3the prescribed rate of interest, using the formula in
4subsection (c).
5    (c) For State fiscal year 2015 and each fiscal year
6thereafter, the minimum contribution to the System to be made
7by the State for each fiscal year shall be the sum of the
8following:
9        (1) representing the State's portion of the projected
10    normal cost for that fiscal year relating to Tier III
11    participants under Section 1-163, a percentage of the
12    applicable Tier III participant payroll equal to the Tier
13    III participant contribution rate, as annually adjusted
14    under Section 1-163, plus a matching 7.65% of payroll for
15    each participant who elects to make the optional employee
16    contribution authorized for participants ineligible for
17    Social Security; plus
18        (2) the State's portion of the projected normal cost
19    for that fiscal year relating to participants other than
20    Tier III participants; plus
21        (3) an amount sufficient to amortize the unfunded
22    accrued liability of the System under a rolling 30-yer
23    amortization period. In making these determinations, the
24    required State contribution under this item (3) shall be
25    calculated each year as a level percentage of payroll and
26    shall be determined under the projected unit credit

 

 

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1    actuarial cost method.
2    For State fiscal years 2012 through 2014 through 2045, the
3minimum contribution to the System to be made by the State for
4each fiscal year shall be an amount determined by the System to
5be sufficient to bring the total assets of the System up to 90%
6of the total actuarial liabilities of the System by the end of
7State fiscal year 2045. In making these determinations, the
8required State contribution shall be calculated each year as a
9level percentage of payroll over the years remaining to and
10including fiscal year 2045 and shall be determined under the
11projected unit credit actuarial cost method.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2006 is
19$29,189,400.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2007 is
22$35,236,800.
23    For each of State fiscal years 2008 through 2009, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26from the required State contribution for State fiscal year

 

 

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12007, so that by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2010 is
5$78,832,000 and shall be made from the proceeds of bonds sold
6in fiscal year 2010 pursuant to Section 7.2 of the General
7Obligation Bond Act, less (i) the pro rata share of bond sale
8expenses determined by the System's share of total bond
9proceeds, (ii) any amounts received from the General Revenue
10Fund in fiscal year 2010, and (iii) any reduction in bond
11proceeds due to the issuance of discounted bonds, if
12applicable.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2011 is
15the amount recertified by the System on or before April 1, 2011
16pursuant to Section 18-140 and shall be made from the proceeds
17of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
18the General Obligation Bond Act, less (i) the pro rata share of
19bond sale expenses determined by the System's share of total
20bond proceeds, (ii) any amounts received from the General
21Revenue Fund in fiscal year 2011, and (iii) any reduction in
22bond proceeds due to the issuance of discounted bonds, if
23applicable.
24    Beginning in State fiscal year 2046, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 90% of the total

 

 

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1actuarial liabilities of the System.
2    Amounts received by the System pursuant to Section 25 of
3the Budget Stabilization Act or Section 8.12 of the State
4Finance Act in any fiscal year do not reduce and do not
5constitute payment of any portion of the minimum State
6contribution required under this Article in that fiscal year.
7Such amounts shall not reduce, and shall not be included in the
8calculation of, the required State contributions under this
9Article in any future year until the System has reached a
10funding ratio of at least 90%. A reference in this Article to
11the "required State contribution" or any substantially similar
12term does not include or apply to any amounts payable to the
13System under Section 25 of the Budget Stabilization Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter, as calculated
17under this Section and certified under Section 18-140, shall
18not exceed an amount equal to (i) the amount of the required
19State contribution that would have been calculated under this
20Section for that fiscal year if the System had not received any
21payments under subsection (d) of Section 7.2 of the General
22Obligation Bond Act, minus (ii) the portion of the State's
23total debt service payments for that fiscal year on the bonds
24issued in fiscal year 2003 for the purposes of that Section
257.2, as determined and certified by the Comptroller, that is
26the same as the System's portion of the total moneys

 

 

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1distributed under subsection (d) of Section 7.2 of the General
2Obligation Bond Act. In determining this maximum for State
3fiscal years 2008 through 2010, however, the amount referred to
4in item (i) shall be increased, as a percentage of the
5applicable employee payroll, in equal increments calculated
6from the sum of the required State contribution for State
7fiscal year 2007 plus the applicable portion of the State's
8total debt service payments for fiscal year 2007 on the bonds
9issued in fiscal year 2003 for the purposes of Section 7.2 of
10the General Obligation Bond Act, so that, by State fiscal year
112011, the State is contributing at the rate otherwise required
12under this Section. When the State's total debt service
13obligation for those bonds has ended, any funds remaining
14available for the payment of that debt service shall be
15distributed to this System and the 4 other State-funded
16retirement systems, in the same proportion as the total moneys
17distributed under subsection (d) of Section 7.2 of the General
18Obligation Bond Act, to be used to reduce their unfunded
19actuarial liabilities.
20    (d) For purposes of determining the required State
21contribution to the System, the value of the System's assets
22shall be equal to the actuarial value of the System's assets,
23which shall be calculated as follows:
24    As of June 30, 2008, the actuarial value of the System's
25assets shall be equal to the market value of the assets as of
26that date. In determining the actuarial value of the System's

 

 

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1assets for fiscal years after June 30, 2008, any actuarial
2gains or losses from investment return incurred in a fiscal
3year shall be recognized in equal annual amounts over the
45-year period following that fiscal year.
5    (e) For purposes of determining the required State
6contribution to the system for a particular year, the actuarial
7value of assets shall be assumed to earn a rate of return equal
8to the system's actuarially assumed rate of return.
9(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1096-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
117-13-12.)
 
12    Section 90. The State Mandates Act is amended by adding
13Section 8.37 as follows:
 
14    (30 ILCS 805/8.37 new)
15    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
16of this Act, no reimbursement by the State is required for the
17implementation of any mandate created by this amendatory Act of
18the 98th General Assembly.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.