98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3066

 

Introduced , by Rep. Mike Fortner

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Budget Stabilization Act. Makes changes concerning transfers from the General Revenue Fund to the Pension Stabilization Fund. Amends the State Universities and Downstate Teachers Articles of the Illinois Pension Code. Requires the Teachers' Retirement System to establish and maintain a self-managed plan one. Authorizes participants to irrevocably elect to participate in such a plan. Provides that, for the purpose of calculating traditional benefit package benefits and contributions, the annual salary of a participant may not, except under certain circumstances, exceed certain limits. Requires participation in the self-managed plan to the extent that a participant's salary exceeds the salary cap. Revises the schedule of contributions for participants. Shifts a portion of the employer contributions for downstate teachers and university employees from the State to the actual employer. Authorizes the boards of trustees of each of these retirement systems to triennially recalculate the normal cost of benefit plans that they offer. Defines "traditional benefit package" and "self-managed plan". Changes the formula for calculating the minimum required State contribution to these systems. Provides that the State is contractually obligated to pay the annual required State contribution to these retirement systems. Contains provisions requiring these retirement systems to bring a mandamus action to compel payment of the required State contribution. 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 3. The Budget Stabilization Act is amended by
5changing Sections 20 and 25 as follows:
 
6    (30 ILCS 122/20)
7    Sec. 20. Pension Stabilization Fund.
8    (a) The Pension Stabilization Fund is hereby created as a
9special fund in the State treasury. Moneys in the fund shall be
10used for the sole purpose of making payments to the designated
11retirement systems as provided in Section 25.
12    (b) For each fiscal year when the General Assembly's
13appropriations and transfers or diversions as required by law
14from general funds do not exceed 99% of the estimated general
15funds revenues pursuant to subsection (a) of Section 10, the
16Comptroller shall transfer from the General Revenue Fund as
17provided by this Section a total amount equal to 0.5% of the
18estimated general funds revenues to the Pension Stabilization
19Fund.
20    (c) For each fiscal year through Fiscal Year 2013, when the
21General Assembly's appropriations and transfers or diversions
22as required by law from general funds do not exceed 98% of the
23estimated general funds revenues pursuant to subsection (b) of

 

 

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1Section 10, the Comptroller shall transfer from the General
2Revenue Fund as provided by this Section a total amount equal
3to 1.0% of the estimated general funds revenues to the Pension
4Stabilization Fund.
5    (c-5) In Fiscal Year 2014, the State Comptroller shall
6order transferred and the State Treasurer shall transfer
7$3,400,000,000 from the General Revenue Fund to the Pension
8Stabilization Fund. In each fiscal year thereafter, the State
9Comptroller shall order transferred and the State Treasurer
10shall transfer from the General Revenue Fund to the Pension
11Stabilization Fund the amount transferred under this
12subsection (c-5) in the previous fiscal year increased by 1.5%.
13    (c-10) In addition, in Fiscal Year 2016 and each fiscal
14year thereafter, the State Comptroller shall order transferred
15and the State Treasurer shall transfer $693,500,000 from the
16General Revenue Fund to the Pension Stabilization Fund.
17    (c-15) In addition, in Fiscal Year 2020 and each fiscal
18year thereafter, the State Comptroller shall order transferred
19and the State Treasurer shall transfer $900,000,000 from the
20General Revenue Fund to the Pension Stabilization Fund.
21    (c-20) In addition, in Fiscal Year 2034 and each fiscal
22year thereafter, the State Comptroller shall order transferred
23and the State Treasurer shall transfer $1,100,000,000 from the
24General Revenue Fund to the Pension Stabilization Fund.
25    (c-25) The transfers made pursuant to subsections (c-5)
26through (c-20) of this Section shall continue until Fiscal Year

 

 

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12045 or until each of the designated retirement systems, as
2defined in Section 25, has achieved a funding ratio of at least
3100%, whichever occurs first.
4    (d) The Comptroller shall transfer 1/12 of the total amount
5to be transferred each fiscal year under this Section into the
6Pension Stabilization Fund on the first day of each month of
7that fiscal year or as soon thereafter as possible; except that
8the final transfer of the fiscal year shall be made as soon as
9practical after the August 31 following the end of the fiscal
10year.
11    Until Fiscal Year 2014, before Before the final transfer
12for a fiscal year is made, the Comptroller shall reconcile the
13estimated general funds revenues used in calculating the other
14transfers under this Section for that fiscal year with the
15actual general funds revenues for that fiscal year. The final
16transfer for the fiscal year shall be adjusted so that the
17total amount transferred under this Section for that fiscal
18year is equal to the percentage specified in subsection (b) or
19(c) of this Section, whichever is applicable, of the actual
20general funds revenues for that fiscal year. The actual general
21funds revenues for the fiscal year shall be calculated in a
22manner consistent with subsection (c) of Section 10 of this
23Act.
24(Source: P.A. 94-839, eff. 6-6-06.)
 
25    (30 ILCS 122/25)

 

 

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1    Sec. 25. Transfers from the Pension Stabilization Fund.
2    (a) As used in this Section, "designated retirement
3systems" means:
4        (1) the State Employees' Retirement System of
5    Illinois;
6        (2) the Teachers' Retirement System of the State of
7    Illinois;
8        (3) the State Universities Retirement System;
9        (4) the Judges Retirement System of Illinois; and
10        (5) the General Assembly Retirement System.
11    (b) As soon as may be practical after any money is
12deposited into the Pension Stabilization Fund, the State
13Comptroller shall apportion the deposited amount among the
14designated retirement systems and the State Comptroller and
15State Treasurer shall pay the apportioned amounts to the
16designated retirement systems. The amount deposited shall be
17apportioned among the designated retirement systems in
18proportion to their respective certified State contributions
19for the State fiscal year in which the payment is made to those
20systems in the same proportion as their respective portions of
21the total actuarial reserve deficiency of the designated
22retirement systems, as most recently determined by the
23Governor's Office of Management and Budget. Amounts received by
24a designated retirement system under this Section shall be used
25for funding the unfunded liabilities of the retirement system.
26Payments under this Section are authorized by the continuing

 

 

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1appropriation under Section 1.7 of the State Pension Funds
2Continuing Appropriation Act. The total amount transferred to
3the designated retirement systems in Fiscal Year 2014 shall not
4be less than $3,400,000,000. In each Fiscal Year thereafter,
5the total amount transferred to the designated retirement
6systems shall not be less than the total amount transferred in
7the previous fiscal year.
8    (c) At the request of the State Comptroller, the Governor's
9Office of Management and Budget shall determine the individual
10and total actuarial reserve deficiencies of the designated
11retirement systems. For this purpose, the Governor's Office of
12Management and Budget shall consider the latest available audit
13and actuarial reports of each of the retirement systems and the
14relevant reports and statistics of the Public Pension Division
15of the Department of Financial and Professional Regulation.
16    (d) Payments to the designated retirement systems under
17this Section shall be in addition to, and not in lieu of, any
18State contributions required under Section 2-124, 14-131,
1915-155, 16-158, or 18-131 of the Illinois Pension Code.
20(Source: P.A. 94-839, eff. 6-6-06.)
 
21    Section 5. The Illinois Pension Code is amended by adding
22Sections 15-112.1, 15-165.1, 16-121.1, 16-122.2, 16-122.3,
2316-158.2, and 16-181.4, and by changing Sections 15-111,
2415-155, 15-157, 15-158.2, 16-121, 16-152, and 16-158 as
25follows:
 

 

 

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1    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
2    Sec. 15-111. Earnings. "Earnings": An amount paid for
3personal services equal to the sum of the basic compensation
4plus extra compensation for summer teaching, overtime or other
5extra service. For periods for which an employee receives
6service credit under subsection (c) of Section 15-113.1 or
7Section 15-113.2, earnings are equal to the basic compensation
8on which contributions are paid by the employee during such
9periods. Compensation for employment which is irregular,
10intermittent and temporary shall not be considered earnings,
11unless the participant is also receiving earnings from the
12employer as an employee under Section 15-107.
13    With respect to transition pay paid by the University of
14Illinois to a person who was a participating employee employed
15in the fire department of the University of Illinois's
16Champaign-Urbana campus immediately prior to the elimination
17of that fire department:
18        (1) "Earnings" includes transition pay paid to the
19    employee on or after the effective date of this amendatory
20    Act of the 91st General Assembly.
21        (2) "Earnings" includes transition pay paid to the
22    employee before the effective date of this amendatory Act
23    of the 91st General Assembly only if (i) employee
24    contributions under Section 15-157 have been withheld from
25    that transition pay or (ii) the employee pays to the System

 

 

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1    before January 1, 2001 an amount representing employee
2    contributions under Section 15-157 on that transition pay.
3    Employee contributions under item (ii) may be paid in a
4    lump sum, by withholding from additional transition pay
5    accruing before January 1, 2001, or in any other manner
6    approved by the System. Upon payment of the employee
7    contributions on transition pay, the corresponding
8    employer contributions become an obligation of the State.
9    Notwithstanding any other provision of this Section,
10"earnings", except as used in Section 15-158.2, does not
11include any future increase in income due to a provision in a
12collectively bargained contract that grants an increase in
13earnings based on an employee's expected date of retirement.
14The changes made to this Section by this amendatory Act of the
1598th General Assembly do not apply to an employee who is
16covered by a collective bargaining agreement or employment
17contract that is in effect on the effective date of this
18amendatory Act of the 98th General Assembly and that provides
19for such increases, until that agreement or contract expires or
20is amended or renewed.
21(Source: P.A. 91-887, eff. 7-6-00.)
 
22    (40 ILCS 5/15-112.1 new)
23    Sec. 15-112.1. Limitation on earnings and required
24participation in the self-managed plan.
25    (a) For the purpose of calculating traditional benefit

 

 

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1package benefits and contributions, the annual earnings,
2salary, or wages of a participant shall not exceed the greater
3of (i) the amount specified under subsection (b-5) of Section
41-160 or (ii) the annual earnings of the participant during the
5365 days immediately before the effective date of this Section.
6If, however, an employment contract that is in place on or
7before the effective date of this Section authorizes an
8increase in earnings, salary, or wages on or after the
9effective date of this Section, then the annual earnings,
10salary, or wages of the participant during the 365 days that
11immediately precede the date that the contract expires may be
12used in lieu of the amount specified in item (ii) of this
13Section.
14    (b) Notwithstanding any other provision of this Code, (i)
15for a participant who does not make an election under Section
1615-134.5, any portion of his or her earnings that exceeds the
17limit specified in subsection (a) of this Section for that year
18shall be subject to the self-managed plan and (ii) for a
19participant who makes an election under Section 15-134.5, the
20entirety of the participant's earnings shall, after the date of
21the election, be subject to the self-managed plan created under
22this Section, as is provided in Section 15-158.2.
 
23    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
24    Sec. 15-155. Employer contributions.
25    (a) The State of Illinois shall make contributions by

 

 

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1appropriations of amounts which, together with the other
2employer contributions from trust, federal, and other funds,
3employee contributions, income from investments, and other
4income of this System, will be sufficient to meet the cost of
5maintaining and administering the System on a 100% 90% funded
6basis in 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(a-1).
12    (a-1) For State fiscal years 2012 through 2045, the minimum
13contribution to the System to be made by the State for each
14fiscal year shall be an amount determined by the System to be
15sufficient to bring the total assets of the System up to 100%
1690% of the total actuarial liabilities of the System by the end
17of State fiscal year 2045.
18    Pursuant to Article XIII of the 1970 Constitution of the
19State of Illinois, beginning on July 1, 2013, the State shall,
20as a retirement benefit to each participant and annuitant of
21the System be contractually obligated to the System (as a
22fiduciary and trustee of the participants and annuitants) to
23pay the Annual Required State Contribution, as determined by
24the Board of the System using generally accepted actuarial
25principles, as is necessary to bring the total assets of the
26System up to 100% of the total actuarial liabilities of the

 

 

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1System by the end of State fiscal year 2045. As a further
2retirement benefit and contractual obligation, each fiscal
3year, the State shall pay to each designated retirement system
4the Annual Required State Contribution certified by the Board
5for that fiscal year. Payments of the Annual Required State
6Contribution for each fiscal year shall be made in equal
7monthly installments. This Section, and the security it
8provides to participants and annuitants is intended to be, and
9is, a contractual right that is part of the pension benefits
10provided to the participants and annuitants. Notwithstanding
11anything to the contrary in the Court of Claims Act or any
12other law, a designated retirement system has the exclusive
13right to and shall bring a Mandamus action in the Circuit Court
14of Champaign County against the State to compel the State to
15make any installment of the Annual Required State Contribution
16required by this Section, irrespective of other remedies that
17may be available to the System. Each member or annuitant of the
18System has the right to bring a Mandamus action against the
19System in the Circuit Court in any judicial district in which
20the System maintains an office if the System fails to bring an
21action specified in this Section, irrespective of other
22remedies that may be available to the member or annuitant. In
23making these determinations, the required State contribution
24shall be calculated each year as a level percentage of payroll
25over the years remaining to and including fiscal year 2045 and
26shall be determined under the projected unit credit actuarial

 

 

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1cost method.
2    For State fiscal years 1996 through 2005, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5so that by State fiscal year 2011, the State is contributing at
6the rate required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2006 is
9$166,641,900.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2007 is
12$252,064,100.
13    For each of State fiscal years 2008 through 2009, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16from the required State contribution for State fiscal year
172007, so that by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2010 is
21$702,514,000 and shall be made from the State Pensions Fund and
22proceeds of bonds sold in fiscal year 2010 pursuant to Section
237.2 of the General Obligation Bond Act, less (i) the pro rata
24share of bond sale expenses determined by the System's share of
25total bond proceeds, (ii) any amounts received from the General
26Revenue Fund in fiscal year 2010, (iii) any reduction in bond

 

 

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1proceeds due to the issuance of discounted bonds, if
2applicable.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2011 is
5the amount recertified by the System on or before April 1, 2011
6pursuant to Section 15-165 and shall be made from the State
7Pensions Fund and proceeds of bonds sold in fiscal year 2011
8pursuant to Section 7.2 of the General Obligation Bond Act,
9less (i) the pro rata share of bond sale expenses determined by
10the System's share of total bond proceeds, (ii) any amounts
11received from the General Revenue Fund in fiscal year 2011, and
12(iii) any reduction in bond proceeds due to the issuance of
13discounted bonds, if applicable.
14    Beginning in State fiscal year 2046, the minimum State
15contribution for each fiscal year shall be the amount needed to
16maintain the total assets of the System at 100% 90% of the
17total actuarial liabilities of the System.
18    Amounts received by the System pursuant to Section 25 of
19the Budget Stabilization Act or Section 8.12 of the State
20Finance Act in any fiscal year do not reduce and do not
21constitute payment of any portion of the minimum State
22contribution required under this Article in that fiscal year.
23Such amounts shall not reduce, and shall not be included in the
24calculation of, the required State contributions under this
25Article in any future year until the System has reached a
26funding ratio of at least 90%. A reference in this Article to

 

 

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1the "required State contribution" or any substantially similar
2term does not include or apply to any amounts payable to the
3System under Section 25 of the Budget Stabilization Act.
4    Notwithstanding any other provision of this Section, the
5required State contribution for State fiscal year 2005 and for
6fiscal year 2008 and each fiscal year thereafter, as calculated
7under this Section and certified under Section 15-165, shall
8not exceed an amount equal to (i) the amount of the required
9State contribution that would have been calculated under this
10Section for that fiscal year if the System had not received any
11payments under subsection (d) of Section 7.2 of the General
12Obligation Bond Act, minus (ii) the portion of the State's
13total debt service payments for that fiscal year on the bonds
14issued in fiscal year 2003 for the purposes of that Section
157.2, as determined and certified by the Comptroller, that is
16the same as the System's portion of the total moneys
17distributed under subsection (d) of Section 7.2 of the General
18Obligation Bond Act. In determining this maximum for State
19fiscal years 2008 through 2010, however, the amount referred to
20in item (i) shall be increased, as a percentage of the
21applicable employee payroll, in equal increments calculated
22from the sum of the required State contribution for State
23fiscal year 2007 plus the applicable portion of the State's
24total debt service payments for fiscal year 2007 on the bonds
25issued in fiscal year 2003 for the purposes of Section 7.2 of
26the General Obligation Bond Act, so that, by State fiscal year

 

 

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12011, the State is contributing at the rate otherwise required
2under this Section.
3    (b) If an employee is paid from trust or federal funds, the
4employer shall pay to the Board contributions from those funds
5which are sufficient to cover the accruing normal costs on
6behalf of the employee. However, universities having employees
7who are compensated out of local auxiliary funds, income funds,
8or service enterprise funds are not required to pay such
9contributions on behalf of those employees. The local auxiliary
10funds, income funds, and service enterprise funds of
11universities shall not be considered trust funds for the
12purpose of this Article, but funds of alumni associations,
13foundations, and athletic associations which are affiliated
14with the universities included as employers under this Article
15and other employers which do not receive State appropriations
16are considered to be trust funds for the purpose of this
17Article.
18    (b-1) The City of Urbana and the City of Champaign shall
19each make employer contributions to this System for their
20respective firefighter employees who participate in this
21System pursuant to subsection (h) of Section 15-107. The rate
22of contributions to be made by those municipalities shall be
23determined annually by the Board on the basis of the actuarial
24assumptions adopted by the Board and the recommendations of the
25actuary, and shall be expressed as a percentage of salary for
26each such employee. The Board shall certify the rate to the

 

 

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1affected municipalities as soon as may be practical. The
2employer contributions required under this subsection shall be
3remitted by the municipality to the System at the same time and
4in the same manner as employee contributions.
5    (c) Through State fiscal year 1995: The total employer
6contribution shall be apportioned among the various funds of
7the State and other employers, whether trust, federal, or other
8funds, in accordance with actuarial procedures approved by the
9Board. State of Illinois contributions for employers receiving
10State appropriations for personal services shall be payable
11from appropriations made to the employers or to the System. The
12contributions for Class I community colleges covering earnings
13other than those paid from trust and federal funds, shall be
14payable solely from appropriations to the Illinois Community
15College Board or the System for employer contributions.
16    (d) Beginning in State fiscal year 1996, the required State
17contributions to the System shall be appropriated directly to
18the System and shall be payable through vouchers issued in
19accordance with subsection (c) of Section 15-165, except as
20provided in subsection (g).
21    (e) The State Comptroller shall draw warrants payable to
22the System upon proper certification by the System or by the
23employer in accordance with the appropriation laws and this
24Code.
25    (f) Normal costs under this Section means liability for
26pensions and other benefits which accrues to the System because

 

 

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

 

 

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1amount due. If the employer disputes the amount of the bill, it
2may, within 30 days after receipt of the bill, apply to the
3System in writing for a recalculation. The application must
4specify in detail the grounds of the dispute and, if the
5employer asserts that the calculation is subject to subsection
6(h) or (i) of this Section, must include an affidavit setting
7forth and attesting to all facts within the employer's
8knowledge that are pertinent to the applicability of subsection
9(h) or (i). Upon receiving a timely application for
10recalculation, the System shall review the application and, if
11appropriate, recalculate the amount due.
12    The employer contributions required under this subsection
13(f) may be paid in the form of a lump sum within 90 days after
14receipt of the bill. If the employer contributions are not paid
15within 90 days after receipt of the bill, then interest will be
16charged at a rate equal to the System's annual actuarially
17assumed rate of return on investment compounded annually from
18the 91st day after receipt of the bill. Payments must be
19concluded within 3 years after the employer's receipt of the
20bill.
21    (h) This subsection (h) applies only to payments made or
22salary increases given on or after June 1, 2005 but before July
231, 2011. The changes made by Public Act 94-1057 shall not
24require the System to refund any payments received before July
2531, 2006 (the effective date of Public Act 94-1057).
26    When assessing payment for any amount due under subsection

 

 

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1(g), the System shall exclude earnings increases paid to
2participants under contracts or collective bargaining
3agreements entered into, amended, or renewed before June 1,
42005.
5    When assessing payment for any amount due under subsection
6(g), the System shall exclude earnings increases paid to a
7participant at a time when the participant is 10 or more years
8from retirement eligibility under Section 15-135.
9    When assessing payment for any amount due under subsection
10(g), the System shall exclude earnings increases resulting from
11overload work, including a contract for summer teaching, or
12overtime when the employer has certified to the System, and the
13System has approved the certification, that: (i) in the case of
14overloads (A) the overload work is for the sole purpose of
15academic instruction in excess of the standard number of
16instruction hours for a full-time employee occurring during the
17academic year that the overload is paid and (B) the earnings
18increases are equal to or less than the rate of pay for
19academic instruction computed using the participant's current
20salary rate and work schedule; and (ii) in the case of
21overtime, the overtime was necessary for the educational
22mission.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude any earnings increase resulting
25from (i) a promotion for which the employee moves from one
26classification to a higher classification under the State

 

 

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1Universities Civil Service System, (ii) a promotion in academic
2rank for a tenured or tenure-track faculty position, or (iii) a
3promotion that the Illinois Community College Board has
4recommended in accordance with subsection (k) of this Section.
5These earnings increases shall be excluded only if the
6promotion is to a position that has existed and been filled by
7a member for no less than one complete academic year and the
8earnings increase as a result of the promotion is an increase
9that results in an amount no greater than the average salary
10paid for other similar positions.
11    (i) When assessing payment for any amount due under
12subsection (g), the System shall exclude any salary increase
13described in subsection (h) of this Section given on or after
14July 1, 2011 but before July 1, 2014 under a contract or
15collective bargaining agreement entered into, amended, or
16renewed on or after June 1, 2005 but before July 1, 2011.
17Notwithstanding any other provision of this Section, any
18payments made or salary increases given after June 30, 2014
19shall be used in assessing payment for any amount due under
20subsection (g) of this Section.
21    (j) The System shall prepare a report and file copies of
22the report with the Governor and the General Assembly by
23January 1, 2007 that contains all of the following information:
24        (1) The number of recalculations required by the
25    changes made to this Section by Public Act 94-1057 for each
26    employer.

 

 

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1        (2) The dollar amount by which each employer's
2    contribution to the System was changed due to
3    recalculations required by Public Act 94-1057.
4        (3) The total amount the System received from each
5    employer as a result of the changes made to this Section by
6    Public Act 94-4.
7        (4) The increase in the required State contribution
8    resulting from the changes made to this Section by Public
9    Act 94-1057.
10    (k) The Illinois Community College Board shall adopt rules
11for recommending lists of promotional positions submitted to
12the Board by community colleges and for reviewing the
13promotional lists on an annual basis. When recommending
14promotional lists, the Board shall consider the similarity of
15the positions submitted to those positions recognized for State
16universities by the State Universities Civil Service System.
17The Illinois Community College Board shall file a copy of its
18findings with the System. The System shall consider the
19findings of the Illinois Community College Board when making
20determinations under this Section. The System shall not exclude
21any earnings increases resulting from a promotion when the
22promotion was not submitted by a community college. Nothing in
23this subsection (k) shall require any community college to
24submit any information to the Community College Board.
25    (l) 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    (m) 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; 97-813, eff.
167-13-12.)
 
17    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
18    Sec. 15-157. Employee Contributions.
19    (a) Each participating employee shall make contributions
20towards the retirement benefits payable under the retirement
21program applicable to the employee from each payment of
22earnings applicable to employment under this system on and
23after the date of becoming a participant as follows: Prior to
24September 1, 1949, 3 1/2% of earnings; from September 1, 1949
25to August 31, 1955, 5%; from September 1, 1955 to August 31,

 

 

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11969, 6%; from September 1, 1969, 6 1/2%. These contributions
2are to be considered as normal contributions for purposes of
3this Article.
4    Each participant who is a police officer or firefighter
5shall make normal contributions of 8% of each payment of
6earnings applicable to employment as a police officer or
7firefighter under this system on or after September 1, 1981,
8unless he or she files with the board within 60 days after the
9effective date of this amendatory Act of 1991 or 60 days after
10the board receives notice that he or she is employed as a
11police officer or firefighter, whichever is later, a written
12notice waiving the retirement formula provided by Rule 4 of
13Section 15-136. This waiver shall be irrevocable. If a
14participant had met the conditions set forth in Section
1515-132.1 prior to the effective date of this amendatory Act of
161991 but failed to make the additional normal contributions
17required by this paragraph, he or she may elect to pay the
18additional contributions plus compound interest at the
19effective rate. If such payment is received by the board, the
20service shall be considered as police officer service in
21calculating the retirement annuity under Rule 4 of Section
2215-136. While performing service described in clause (i) or
23(ii) of Rule 4 of Section 15-136, a participating employee
24shall be deemed to be employed as a firefighter for the purpose
25of determining the rate of employee contributions under this
26Section.

 

 

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1    (b) Starting September 1, 1969, each participating
2employee shall make additional contributions of 1/2 of 1% of
3earnings to finance a portion of the cost of the annual
4increases in retirement annuity provided under Section 15-136,
5except that with respect to participants in the self-managed
6plan this additional contribution shall be used to finance the
7benefits obtained under that retirement program.
8    (c) In addition to the amounts described in subsections (a)
9and (b) of this Section, each participating employee shall make
10contributions of 1% of earnings applicable under this system on
11and after August 1, 1959. The contributions made under this
12subsection (c) shall be considered as survivor's insurance
13contributions for purposes of this Article if the employee is
14covered under the traditional benefit package, and such
15contributions shall be considered as additional contributions
16for purposes of this Article if the employee is participating
17in the self-managed plan or has elected to participate in the
18portable benefit package and has completed the applicable
19one-year waiting period. Contributions in excess of $80 during
20any fiscal year beginning before August 31, 1969 and in excess
21of $120 during any fiscal year thereafter until September 1,
221971 shall be considered as additional contributions for
23purposes of this Article.
24    (d) If the board by board rule so permits and subject to
25such conditions and limitations as may be specified in its
26rules, a participant may make other additional contributions of

 

 

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1such percentage of earnings or amounts as the participant shall
2elect in a written notice thereof received by the board.
3    (e) That fraction of a participant's total accumulated
4normal contributions, the numerator of which is equal to the
5number of years of service in excess of that which is required
6to qualify for the maximum retirement annuity, and the
7denominator of which is equal to the total service of the
8participant, shall be considered as accumulated additional
9contributions. The determination of the applicable maximum
10annuity and the adjustment in contributions required by this
11provision shall be made as of the date of the participant's
12retirement.
13    (f) Notwithstanding the foregoing, a participating
14employee shall not be required to make contributions under this
15Section after the date upon which continuance of such
16contributions would otherwise cause his or her retirement
17annuity to exceed the maximum retirement annuity as specified
18in clause (1) of subsection (c) of Section 15-136.
19    (g) A participating employee may make contributions for the
20purchase of service credit under this Article.
21    (h) Notwithstanding any provision of this Code to the
22contrary, (i) for a member who does not file an election under
23subsection (e) of Section 15-158.2, any contributions on
24amounts of earnings in excess of the limit specified in Section
2515-112.1 for that year shall instead be used to finance
26self-managed plan benefits and (ii) for a member who files an

 

 

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1election under subsection (e) of Section 15-158.2, any
2contributions made after the date of the election, including
3the contributions for a survivor's annuity, shall be used to
4finance the benefits under Section 15-158.2. Notwithstanding
5any provision of this Code to the contrary, a member who does
6not file an election under subsection (a-5) of Section 15-158.2
7shall contribute towards the traditional benefit package a
8percentage of earnings equal to the greater of (i) one-half of
9the normal cost of the traditional benefit package or (ii) 6%
10of earnings.
11(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
12eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1390-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
14    (40 ILCS 5/15-158.2)
15    Sec. 15-158.2. Self-managed plan.
16    (a) Purpose. The General Assembly finds that it is
17important for colleges and universities to be able to attract
18and retain the most qualified employees and that in order to
19attract and retain these employees, colleges and universities
20should have the flexibility to provide a defined contribution
21plan as an alternative for eligible employees who elect not to
22participate in a defined benefit retirement program provided
23under this Article. Accordingly, the State Universities
24Retirement System is hereby authorized to establish and
25administer a self-managed plan, which shall offer

 

 

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1participating employees the opportunity to accumulate assets
2for retirement through a combination of employee and employer
3contributions that may be invested in mutual funds, collective
4investment funds, or other investment products and used to
5purchase annuity contracts, either fixed or variable or a
6combination thereof. The plan must be qualified under the
7Internal Revenue Code of 1986.
8    (b) Adoption by employers. Each employer subject to this
9Article may elect to adopt the self-managed plan established
10under this Section; this election is irrevocable. An employer's
11election to adopt the self-managed plan makes available to the
12eligible employees of that employer the elections described in
13Section 15-134.5.
14    The State Universities Retirement System shall be the plan
15sponsor for the self-managed plan and shall prepare a plan
16document and prescribe such rules and procedures as are
17considered necessary or desirable for the administration of the
18self-managed plan. Consistent with its fiduciary duty to the
19participants and beneficiaries of the self-managed plan, the
20Board of Trustees of the System may delegate aspects of plan
21administration as it sees fit to companies authorized to do
22business in this State, to the employers, or to a combination
23of both.
24    (c) Selection of service providers and funding vehicles.
25The System, in consultation with the employers, shall solicit
26proposals to provide administrative services and funding

 

 

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1vehicles for the self-managed plan from insurance and annuity
2companies and mutual fund companies, banks, trust companies, or
3other financial institutions authorized to do business in this
4State. In reviewing the proposals received and approving and
5contracting with no fewer than 2 and no more than 7 companies,
6the Board of Trustees of the System shall consider, among other
7things, the following criteria:
8        (1) the nature and extent of the benefits that would be
9    provided to the participants;
10        (2) the reasonableness of the benefits in relation to
11    the premium charged;
12        (3) the suitability of the benefits to the needs and
13    interests of the participating employees and the employer;
14        (4) the ability of the company to provide benefits
15    under the contract and the financial stability of the
16    company; and
17        (5) the efficacy of the contract in the recruitment and
18    retention of employees.
19    The System, in consultation with the employers, shall
20periodically review each approved company. A company may
21continue to provide administrative services and funding
22vehicles for the self-managed plan only so long as it continues
23to be an approved company under contract with the Board.
24    (d) Employee Direction. Employees who are participating in
25the program must be allowed to direct the transfer of their
26account balances among the various investment options offered,

 

 

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1subject to applicable contractual provisions. The participant
2shall not be deemed a fiduciary by reason of providing such
3investment direction. A person who is a fiduciary shall not be
4liable for any loss resulting from such investment direction
5and shall not be deemed to have breached any fiduciary duty by
6acting in accordance with that direction. Neither the System
7nor the employer guarantees any of the investments in the
8employee's account balances.
9    (e) Participation. An employee eligible to participate in
10the self-managed plan must make a written election in
11accordance with the provisions of Section 15-134.5 and the
12procedures established by the System or become subject to the
13limitation specified in Section 15-112.1. Participation in the
14self-managed plan by an electing employee shall begin on the
15first day of the first pay period following the later of the
16date the employee's election is filed with the System, or the
17effective date as of which the employee's employer begins to
18offer participation in the self-managed plan, or the date the
19participant's annual earnings exceeds the limitation specified
20in Section 15-112.1. Employers may not make the self-managed
21plan available earlier than January 1, 1998. An employee's
22participation in any other retirement program administered by
23the System under this Article shall terminate on the date that
24participation in the self-managed plan begins.
25    An employee who participates has elected to participate in
26the self-managed plan under this Section must continue

 

 

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1participation while employed in an eligible position, and may
2not participate in any other retirement program administered by
3the System under this Article while employed by that employer
4or any other employer that has adopted the self-managed plan,
5unless the self-managed plan is terminated in accordance with
6subsection (i).
7    Participation in the self-managed plan under this Section
8shall constitute membership in the State Universities
9Retirement System.
10    A participant under this Section shall be entitled to the
11benefits of Article 20 of this Code.
12    (f) Establishment of Initial Account Balance. If at the
13time an employee elects to participate in the self-managed plan
14he or she has rights and credits in the System due to previous
15participation in the traditional benefit package, the System
16shall establish for the employee an opening account balance in
17the self-managed plan, equal to the amount of contribution
18refund that the employee would be eligible to receive under
19Section 15-154 if the employee terminated employment on that
20date and elected a refund of contributions, except that this
21hypothetical refund shall include interest at the effective
22rate for the respective years. The System shall transfer assets
23from the defined benefit retirement program to the self-managed
24plan, as a tax free transfer in accordance with Internal
25Revenue Service guidelines, for purposes of funding the
26employee's opening account balance.

 

 

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1    (g) No Duplication of Service Credit. Notwithstanding any
2other provision of this Article, an employee may not purchase
3or receive service or service credit applicable to any other
4retirement program administered by the System under this
5Article for any period during which the employee was a
6participant in the self-managed plan established under this
7Section.
8    (h) Contributions.
9        (1) The self-managed plan shall be funded by
10    contributions from employees participating in the
11    self-managed plan and employer contributions as provided
12    in this Section.
13            (A) Before the effective date of this amendatory
14        Act of the 98th General Assembly, the The contribution
15        rate for employees participating in the self-managed
16        plan under this Section shall be equal to the employee
17        contribution rate for other participants in the
18        System, as provided in Section 15-157. This required
19        contribution shall be made as an "employer pick-up"
20        under Section 414(h) of the Internal Revenue Code of
21        1986 or any successor Section thereof. Any employee
22        participating in the System's traditional benefit
23        package prior to his or her election to participate in
24        the self-managed plan shall continue to have the
25        employer pick up the contributions required under
26        Section 15-157. However, the amounts picked up after

 

 

HB3066- 31 -LRB098 07778 EFG 37857 b

1        the election of the self-managed plan shall be remitted
2        to and treated as assets of the self-managed plan. In
3        no event shall an employee have an option of receiving
4        these amounts in cash. Employees may make additional
5        contributions to the self-managed plan in accordance
6        with procedures prescribed by the System, to the extent
7        permitted under rules prescribed by the System.
8            (B) On and after the effective date of this
9        amendatory Act of the 98th General Assembly, the
10        contribution rate for participants in the self-managed
11        plan shall be, (i) for a participant who does not file
12        an election under subsection (e) of this Section, 6% of
13        the amount of earnings in excess of the limit specified
14        in 15-112.1 for that year, in addition to the amount
15        specified under subsection (h) of Section 15-157 for
16        that year and (ii) for a participant who files an
17        election under subsection (e) of this Section, 8% of
18        any amount of earnings up to and including the limit
19        specified in Section 15-112.1 for that year and 6% of
20        any amount of earnings in excess of that limit for that
21        year. This required contribution shall be made as an
22        employer pick-up under Section 414(h) of the Internal
23        Revenue Code of 1986 or any successor Section thereof.
24        Any participant in the System's traditional benefit
25        package prior to his or her election to participate in
26        the self-managed plan shall continue to have the

 

 

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1        employer pick up the contributions required under
2        Section 15-157. However, the amounts picked up after
3        the election of the self-managed plan shall be remitted
4        to and treated as assets of the self-managed plan. In
5        no event shall a participant have the option of
6        receiving these amounts in cash. Participants may make
7        additional contributions to the self-managed plan in
8        accordance with procedures prescribed by the System,
9        to the extent permitted under rules adopted by the
10        System.
11        (2) The program shall provide for employer and State
12    contributions to the self-managed plan in the following
13    amounts: (i) for a member who does not file an election
14    under subsection (e) of this Section, 3% of the amount of
15    earnings in excess of the limit specified in Section
16    15-112.1 for that year, to be paid by the actual employer,
17    and (ii) for a member who files an election under
18    subsection (e) of this Section, 7.1% of any amount of
19    earnings up to and including the limit specified in Section
20    15-112.1 for that year, to be paid by the State, and 3% of
21    any amount of earnings in excess of that limit for that
22    year, to be paid by the actual employer.
23        The program shall provide for these employer and State
24    contributions to be credited to each self-managed plan
25    participant at a rate of 7.6% of the participating
26    employee's salary, less the amount used by the System to

 

 

HB3066- 33 -LRB098 07778 EFG 37857 b

1    provide disability benefits for the employee. The amounts
2    so credited shall be paid into the participant's
3    self-managed plan accounts in a manner to be prescribed by
4    the System.
5        (3) An amount of employer contribution, not exceeding
6    1% of the participating employee's salary, shall be used
7    for the purpose of providing the disability benefits of the
8    System to the employee. Prior to the beginning of each plan
9    year under the self-managed plan, the Board of Trustees
10    shall determine, as a percentage of salary, the amount of
11    employer contributions to be allocated during that plan
12    year for providing disability benefits for employees in the
13    self-managed plan.
14        (4) The State of Illinois shall make contributions by
15    appropriations to the System of the employer contributions
16    required for employees who participate in the self-managed
17    plan under this Section. The amount required shall be
18    certified by the Board of Trustees of the System and paid
19    by the State in accordance with Section 15-165. The System
20    shall not be obligated to remit the required employer
21    contributions to any of the insurance and annuity
22    companies, mutual fund companies, banks, trust companies,
23    financial institutions, or other sponsors of any of the
24    funding vehicles offered under the self-managed plan until
25    it has received the required employer contributions from
26    the State. In the event of a deficiency in the amount of

 

 

HB3066- 34 -LRB098 07778 EFG 37857 b

1    State contributions, the System shall implement those
2    procedures described in subsection (c) of Section 15-165 to
3    obtain the required funding from the General Revenue Fund.
4    (i) Termination. The self-managed plan authorized under
5this Section may be terminated by the System, subject to the
6terms of any relevant contracts, and the System shall have no
7obligation to reestablish the self-managed plan under this
8Section. This Section does not create a right to continued
9participation in any self-managed plan set up by the System
10under this Section. If the self-managed plan is terminated, the
11participants shall have the right to participate in one of the
12other retirement programs offered by the System and receive
13service credit in such other retirement program for any years
14of employment following the termination.
15    (j) Vesting; Withdrawal; Return to Service. A participant
16in the self-managed plan becomes vested in the employer
17contributions credited to his or her accounts in the
18self-managed plan on the earliest to occur of the following:
19(1) completion of 5 years of service with an employer described
20in Section 15-106; (2) the death of the participating employee
21while employed by an employer described in Section 15-106, if
22the participant has completed at least 1 1/2 years of service;
23or (3) the participant's election to retire and apply the
24reciprocal provisions of Article 20 of this Code.
25    A participant in the self-managed plan who receives a
26distribution of his or her vested amounts from the self-managed

 

 

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1plan while not yet eligible for retirement under this Article
2(and Article 20, if applicable) shall forfeit all service
3credit and accrued rights in the System; if subsequently
4re-employed, the participant shall be considered a new
5employee. If a former participant again becomes a participating
6employee (or becomes employed by a participating system under
7Article 20 of this Code) and continues as such for at least 2
8years, all such rights, service credits, and previous status as
9a participant shall be restored upon repayment of the amount of
10the distribution, without interest.
11    (k) Benefit amounts. If an employee who is vested in
12employer contributions terminates employment, the employee
13shall be entitled to a benefit which is based on the account
14values attributable to both employer and employee
15contributions and any investment return thereon.
16    If an employee who is not vested in employer contributions
17terminates employment, the employee shall be entitled to a
18benefit based solely on the account values attributable to the
19employee's contributions and any investment return thereon,
20and the employer contributions and any investment return
21thereon shall be forfeited. Any employer contributions which
22are forfeited shall be held in escrow by the company investing
23those contributions and shall be used as directed by the System
24for future allocations of employer contributions or for the
25restoration of amounts previously forfeited by former
26participants who again become participating employees.

 

 

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1(Source: P.A. 93-347, eff. 7-24-03.)
 
2    (40 ILCS 5/15-165.1 new)
3    Sec. 15-165.1. To calculate the normal cost of benefits. To
4calculate the normal cost of each plan offered by the system as
5a percentage of earnings and to update those amounts at least
6every 3 years.
 
7    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
8    Sec. 16-121. Salary. "Salary": The actual compensation
9received by a teacher during any school year and recognized by
10the system in accordance with rules of the board. For purposes
11of this Section, "school year" includes the regular school term
12plus any additional period for which a teacher is compensated
13and such compensation is recognized by the rules of the board.
14Notwithstanding any other provision of this Section, "salary",
15except as used in Section 16-158.2, does not include any future
16increase in income due to a provision in a collectively
17bargained contract that grants an increase in salary based on a
18teacher's expected date of retirement. The changes made to this
19Section by this amendatory Act of the 98th General Assembly do
20not apply to a teacher who is covered by a collective
21bargaining agreement or employment contract that is in effect
22on the effective date of this amendatory Act of the 98th
23General Assembly and that provides for such increases, until
24that agreement or contract expires or is amended or renewed.

 

 

HB3066- 37 -LRB098 07778 EFG 37857 b

1(Source: P.A. 84-1028.)
 
2    (40 ILCS 5/16-121.1 new)
3    Sec. 16-121.1. Limitation on salary. For the purpose of
4calculating traditional benefit package benefits and
5contributions, the annual earnings, salary, or wages of a
6member shall not exceed the greater of (i) the amount specified
7under subsection (b-5) of Section 1-160 or (ii) the annual
8salary of the member during the 365 days immediately before the
9effective date of this Section. If, however, an employment
10contract that is in place on or before the effective date of
11this Section authorizes an increase in earnings, salary, or
12wages on or after the effective date of this Section, then the
13annual earnings, salary, or wages of the member during the 365
14days that immediately precede the date that the contract
15expires may be used in lieu of the amount specified in item
16(ii) of this Section.
 
17    (40 ILCS 5/16-122.2 new)
18    Sec. 16-122.2. Traditional benefit package. "Traditional
19benefit package" means the defined benefit retirement program
20maintained by the System, which includes retirement annuities
21payable directly from the System, as provided in Sections
2216-132, 16-133, 16-133.1, and 16-136; survivor's annuities
23payable directly from the System, as provided in Sections
2416-140, 16-141, 16-142, 16-142.1, 16-142.2, 16-142.3, 16-143,

 

 

HB3066- 38 -LRB098 07778 EFG 37857 b

1and 16-143.1; and contribution refunds, as provided in Section
216-151.
 
3    (40 ILCS 5/16-122.3 new)
4    Sec. 16-122.3. Self-managed plan. "Self-managed plan"
5means the defined contribution retirement program maintained
6by the System, as described in Section 16-158.2. The
7self-managed plan does not include retirement annuities or
8survivor's benefits payable directly from the System, as
9provided in Sections 16-132, 16-133, 16-133.1, 16-136, 16-140,
1016-141, 16-142, 16-142.1, 16-142.2, 16-142.3, 16-143, and
1116-143.1 or refunds determined under Section 16-151.
 
12    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
13    Sec. 16-152. Contributions by members.
14    (a) Each member shall make contributions for membership
15service to this System as follows:
16        (1) Effective July 1, 1998, contributions of 7.50% of
17    salary towards the cost of the retirement annuity. Such
18    contributions shall be deemed "normal contributions".
19        (2) Effective July 1, 1969, contributions of 1/2 of 1%
20    of salary toward the cost of the automatic annual increase
21    in retirement annuity provided under Section 16-133.1.
22        (3) Effective July 24, 1959, contributions of 1% of
23    salary towards the cost of survivor benefits. Such
24    contributions shall not be credited to the individual

 

 

HB3066- 39 -LRB098 07778 EFG 37857 b

1    account of the member and shall not be subject to refund
2    except as provided under Section 16-143.2.
3        (4) Effective July 1, 2005, contributions of 0.40% of
4    salary toward the cost of the early retirement without
5    discount option provided under Section 16-133.2. This
6    contribution shall cease upon termination of the early
7    retirement without discount option as provided in Section
8    16-176.
9    (b) The minimum required contribution for any year of
10full-time teaching service shall be $192.
11    (c) Contributions shall not be required of any annuitant
12receiving a retirement annuity who is given employment as
13permitted under Section 16-118 or 16-150.1.
14    (d) A person who (i) was a member before July 1, 1998, (ii)
15retires with more than 34 years of creditable service, and
16(iii) does not elect to qualify for the augmented rate under
17Section 16-129.1 shall be entitled, at the time of retirement,
18to receive a partial refund of contributions made under this
19Section for service occurring after the later of June 30, 1998
20or attainment of 34 years of creditable service, in an amount
21equal to 1.00% of the salary upon which those contributions
22were based.
23    (e) A member's contributions toward the cost of early
24retirement without discount made under item (a)(4) of this
25Section shall not be refunded if the member has elected early
26retirement without discount under Section 16-133.2 and has

 

 

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1begun to receive a retirement annuity under this Article
2calculated in accordance with that election. Otherwise, a
3member's contributions toward the cost of early retirement
4without discount made under item (a)(4) of this Section shall
5be refunded according to whichever one of the following
6circumstances occurs first:
7        (1) The contributions shall be refunded to the member,
8    without interest, within 120 days after the member's
9    retirement annuity commences, if the member does not elect
10    early retirement without discount under Section 16-133.2.
11        (2) The contributions shall be included, without
12    interest, in any refund claimed by the member under Section
13    16-151.
14        (3) The contributions shall be refunded to the member's
15    designated beneficiary (or if there is no beneficiary, to
16    the member's estate), without interest, if the member dies
17    without having begun to receive a retirement annuity under
18    this Article.
19        (4) The contributions shall be refunded to the member,
20    without interest, within 120 days after the early
21    retirement without discount option provided under Section
22    16-133.2 is terminated under Section 16-176.
23    (f) Notwithstanding any provision of this Code to the
24contrary, (i) for a member who does not file an election under
25subsection (a-5) of Section 16-158.2, any contributions on
26amounts of salary in excess of the limit specified in Section

 

 

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116-121.1 for that year shall instead be used to finance
2self-managed plan benefits and (ii) for a member who files an
3election under subsection (a-5) of Section 16-158.2, any
4contributions made after the date of the election, including
5the contributions for a survivor's annuity, shall be used to
6finance the benefits under Section 16-158.2. Notwithstanding
7any provision of this Code to the contrary, a member who does
8not file an election under subsection (a-5) of Section 16-158.2
9shall contribute towards the traditional benefit package a
10percentage of salary equal to the greater of (i) one-half of
11the normal cost of the traditional benefit package or (ii) 6%
12of salary.
13(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
14    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
15    Sec. 16-158. Contributions by State and other employing
16units.
17    (a) The State shall make contributions to the System by
18means of appropriations from the Common School Fund and other
19State funds of amounts which, together with other employer
20contributions, employee contributions, investment income, and
21other income, will be sufficient to meet the cost of
22maintaining and administering the System on a 100% 90% funded
23basis in accordance with actuarial recommendations.
24    The Board shall determine the amount of State contributions
25required for each fiscal year on the basis of the actuarial

 

 

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1tables and other assumptions adopted by the Board and the
2recommendations of the actuary, using the formula in subsection
3(b-3).
4    (a-1) Annually, on or before November 15 until November 15,
52011, the Board shall certify to the Governor the amount of the
6required State contribution for the coming fiscal year. The
7certification under this subsection (a-1) shall include a copy
8of the actuarial recommendations upon which it is based and
9shall specifically identify the System's projected State
10normal cost for that fiscal year.
11    On or before May 1, 2004, the Board shall recalculate and
12recertify to the Governor the amount of the required State
13contribution to the System for State fiscal year 2005, taking
14into account the amounts appropriated to and received by the
15System under subsection (d) of Section 7.2 of the General
16Obligation Bond Act.
17    On or before July 1, 2005, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2006, taking
20into account the changes in required State contributions made
21by this amendatory Act of the 94th General Assembly.
22    On or before April 1, 2011, the Board shall recalculate and
23recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2011, applying
25the changes made by Public Act 96-889 to the System's assets
26and liabilities as of June 30, 2009 as though Public Act 96-889

 

 

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1was approved on that date.
2    (a-5) On or before November 1 of each year, beginning
3November 1, 2012, the Board shall submit to the State Actuary,
4the Governor, and the General Assembly a proposed certification
5of the amount of the required State contribution to the System
6for the next fiscal year, along with all of the actuarial
7assumptions, calculations, and data upon which that proposed
8certification is based. On or before January 1 of each year,
9beginning January 1, 2013, the State Actuary shall issue a
10preliminary report concerning the proposed certification and
11identifying, if necessary, recommended changes in actuarial
12assumptions that the Board must consider before finalizing its
13certification of the required State contributions. On or before
14January 15, 2013 and each January 15 thereafter, the Board
15shall certify to the Governor and the General Assembly the
16amount of the required State contribution for the next fiscal
17year. The Board's certification must note any deviations from
18the State Actuary's recommended changes, the reason or reasons
19for not following the State Actuary's recommended changes, and
20the fiscal impact of not following the State Actuary's
21recommended changes on the required State contribution.
22    (b) Through State fiscal year 1995, the State contributions
23shall be paid to the System in accordance with Section 18-7 of
24the School Code.
25    (b-1) Beginning in State fiscal year 1996, on the 15th day
26of each month, or as soon thereafter as may be practicable, the

 

 

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1Board shall submit vouchers for payment of State contributions
2to the System, in a total monthly amount of one-twelfth of the
3required annual State contribution certified under subsection
4(a-1). From the effective date of this amendatory Act of the
593rd General Assembly through June 30, 2004, the Board shall
6not submit vouchers for the remainder of fiscal year 2004 in
7excess of the fiscal year 2004 certified contribution amount
8determined under this Section after taking into consideration
9the transfer to the System under subsection (a) of Section
106z-61 of the State Finance Act. These vouchers shall be paid by
11the State Comptroller and Treasurer by warrants drawn on the
12funds appropriated to the System for that fiscal year.
13    If in any month the amount remaining unexpended from all
14other appropriations to the System for the applicable fiscal
15year (including the appropriations to the System under Section
168.12 of the State Finance Act and Section 1 of the State
17Pension Funds Continuing Appropriation Act) is less than the
18amount lawfully vouchered under this subsection, the
19difference shall be paid from the Common School Fund under the
20continuing appropriation authority provided in Section 1.1 of
21the State Pension Funds Continuing Appropriation Act.
22    (b-2) Allocations from the Common School Fund apportioned
23to school districts not coming under this System shall not be
24diminished or affected by the provisions of this Article.
25    (b-3) For State fiscal years 2012 through 2045, the minimum
26contribution to the System to be made by the State for each

 

 

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1fiscal year shall be an amount determined by the System to be
2sufficient to bring the total assets of the System up to 100%
390% of the total actuarial liabilities of the System by the end
4of State fiscal year 2045.
5    Pursuant to Article XIII of the 1970 Constitution of the
6State of Illinois, beginning on July 1, 2013, the State shall,
7as a retirement benefit to each participant and annuitant of
8the System be contractually obligated to the System (as a
9fiduciary and trustee of the participants and annuitants) to
10pay the Annual Required State Contribution, as determined by
11the Board of the System using generally accepted actuarial
12principles, as is necessary to bring the total assets of the
13System up to 100% of the total actuarial liabilities of the
14System by the end of State fiscal year 2045. As a further
15retirement benefit and contractual obligation, each fiscal
16year, the State shall pay to each designated retirement system
17the Annual Required State Contribution certified by the Board
18for that fiscal year. Payments of the Annual Required State
19Contribution for each fiscal year shall be made in equal
20monthly installments. This Section, and the security it
21provides to participants and annuitants is intended to be, and
22is, a contractual right that is part of the pension benefits
23provided to the participants and annuitants. Notwithstanding
24anything to the contrary in the Court of Claims Act or any
25other law, a designated retirement system has the exclusive
26right to and shall bring a Mandamus action in the Circuit Court

 

 

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1of Champaign County against the State to compel the State to
2make any installment of the Annual Required State Contribution
3required by this Section, irrespective of other remedies that
4may be available to the System. Each member or annuitant of the
5System has the right to bring a Mandamus action against the
6System in the Circuit Court in any judicial district in which
7the System maintains an office if the System fails to bring an
8action specified in this Section, irrespective of other
9remedies that may be available to the member or annuitant. In
10making these determinations, the required State contribution
11shall be calculated each year as a level percentage of payroll
12over the years remaining to and including fiscal year 2045 and
13shall be determined under the projected unit credit actuarial
14cost method.
15    For State fiscal years 1996 through 2005, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18so that by State fiscal year 2011, the State is contributing at
19the rate required under this Section; except that in the
20following specified State fiscal years, the State contribution
21to the System shall not be less than the following indicated
22percentages of the applicable employee payroll, even if the
23indicated percentage will produce a State contribution in
24excess of the amount otherwise required under this subsection
25and subsection (a), and notwithstanding any contrary
26certification made under subsection (a-1) before the effective

 

 

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1date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
2in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
32003; and 13.56% in FY 2004.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2006 is
6$534,627,700.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2007 is
9$738,014,500.
10    For each of State fiscal years 2008 through 2009, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13from the required State contribution for State fiscal year
142007, so that by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2010 is
18$2,089,268,000 and shall be made from the proceeds of bonds
19sold in fiscal year 2010 pursuant to Section 7.2 of the General
20Obligation Bond Act, less (i) the pro rata share of bond sale
21expenses determined by the System's share of total bond
22proceeds, (ii) any amounts received from the Common School Fund
23in fiscal year 2010, and (iii) any reduction in bond proceeds
24due to the issuance of discounted bonds, if applicable.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2011 is

 

 

HB3066- 48 -LRB098 07778 EFG 37857 b

1the amount recertified by the System on or before April 1, 2011
2pursuant to subsection (a-1) of this Section and shall be made
3from the proceeds of bonds sold in fiscal year 2011 pursuant to
4Section 7.2 of the General Obligation Bond Act, less (i) the
5pro rata share of bond sale expenses determined by the System's
6share of total bond proceeds, (ii) any amounts received from
7the Common School Fund in fiscal year 2011, and (iii) any
8reduction in bond proceeds due to the issuance of discounted
9bonds, if applicable. This amount shall include, in addition to
10the amount certified by the System, an amount necessary to meet
11employer contributions required by the State as an employer
12under paragraph (e) of this Section, which may also be used by
13the System for contributions required by paragraph (a) of
14Section 16-127.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 100% 90% of the
18total actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

HB3066- 49 -LRB098 07778 EFG 37857 b

1funding ratio of at least 90%. A reference in this Article to
2the "required State contribution" or any substantially similar
3term does not include or apply to any amounts payable to the
4System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter, as calculated
8under this Section and certified under subsection (a-1), shall
9not exceed an amount equal to (i) the amount of the required
10State contribution that would have been calculated under this
11Section for that fiscal year if the System had not received any
12payments under subsection (d) of Section 7.2 of the General
13Obligation Bond Act, minus (ii) the portion of the State's
14total debt service payments for that fiscal year on the bonds
15issued in fiscal year 2003 for the purposes of that Section
167.2, as determined and certified by the Comptroller, that is
17the same as the System's portion of the total moneys
18distributed under subsection (d) of Section 7.2 of the General
19Obligation Bond Act. In determining this maximum for State
20fiscal years 2008 through 2010, however, the amount referred to
21in item (i) shall be increased, as a percentage of the
22applicable employee payroll, in equal increments calculated
23from the sum of the required State contribution for State
24fiscal year 2007 plus the applicable portion of the State's
25total debt service payments for fiscal year 2007 on the bonds
26issued in fiscal year 2003 for the purposes of Section 7.2 of

 

 

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1the General Obligation Bond Act, so that, by State fiscal year
22011, the State is contributing at the rate otherwise required
3under this Section.
4    (c) Payment of the required State contributions and of all
5pensions, retirement annuities, death benefits, refunds, and
6other benefits granted under or assumed by this System, and all
7expenses in connection with the administration and operation
8thereof, are obligations of the State.
9    If members are paid from special trust or federal funds
10which are administered by the employing unit, whether school
11district or other unit, the employing unit shall pay to the
12System from such funds the full accruing retirement costs based
13upon that service, as determined by the System. Employer
14contributions, based on salary paid to members from federal
15funds, may be forwarded by the distributing agency of the State
16of Illinois to the System prior to allocation, in an amount
17determined in accordance with guidelines established by such
18agency and the System.
19    (d) Effective July 1, 1986, any employer of a teacher as
20defined in paragraph (8) of Section 16-106 shall pay the
21employer's normal cost of benefits based upon the teacher's
22service, in addition to employee contributions, as determined
23by the System. Such employer contributions shall be forwarded
24monthly in accordance with guidelines established by the
25System.
26    However, with respect to benefits granted under Section

 

 

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116-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
2of Section 16-106, the employer's contribution shall be 12%
3(rather than 20%) of the member's highest annual salary rate
4for each year of creditable service granted, and the employer
5shall also pay the required employee contribution on behalf of
6the teacher. For the purposes of Sections 16-133.4 and
716-133.5, a teacher as defined in paragraph (8) of Section
816-106 who is serving in that capacity while on leave of
9absence from another employer under this Article shall not be
10considered an employee of the employer from which the teacher
11is on leave.
12    (e) Beginning July 1, 1998, every employer of a teacher
13shall pay to the System an employer contribution computed as
14follows:
15        (1) Beginning July 1, 1998 through June 30, 1999, the
16    employer contribution shall be equal to 0.3% of each
17    teacher's salary.
18        (2) Beginning July 1, 1999 and thereafter, the employer
19    contribution shall be equal to 0.58% of each teacher's
20    salary.
21The school district or other employing unit may pay these
22employer contributions out of any source of funding available
23for that purpose and shall forward the contributions to the
24System on the schedule established for the payment of member
25contributions.
26    These employer contributions are intended to offset a

 

 

HB3066- 52 -LRB098 07778 EFG 37857 b

1portion of the cost to the System of the increases in
2retirement benefits resulting from this amendatory Act of 1998.
3    Each employer of teachers is entitled to a credit against
4the contributions required under this subsection (e) with
5respect to salaries paid to teachers for the period January 1,
62002 through June 30, 2003, equal to the amount paid by that
7employer under subsection (a-5) of Section 6.6 of the State
8Employees Group Insurance Act of 1971 with respect to salaries
9paid to teachers for that period.
10    The additional 1% employee contribution required under
11Section 16-152 by this amendatory Act of 1998 is the
12responsibility of the teacher and not the teacher's employer,
13unless the employer agrees, through collective bargaining or
14otherwise, to make the contribution on behalf of the teacher.
15    If an employer is required by a contract in effect on May
161, 1998 between the employer and an employee organization to
17pay, on behalf of all its full-time employees covered by this
18Article, all mandatory employee contributions required under
19this Article, then the employer shall be excused from paying
20the employer contribution required under this subsection (e)
21for the balance of the term of that contract. The employer and
22the employee organization shall jointly certify to the System
23the existence of the contractual requirement, in such form as
24the System may prescribe. This exclusion shall cease upon the
25termination, extension, or renewal of the contract at any time
26after May 1, 1998.

 

 

HB3066- 53 -LRB098 07778 EFG 37857 b

1    (f) If the amount of a teacher's salary for any school year
2used to determine final average salary exceeds the member's
3annual full-time salary rate with the same employer for the
4previous school year by more than 6%, the teacher's employer
5shall pay to the System, in addition to all other payments
6required under this Section and in accordance with guidelines
7established by the System, the present value of the increase in
8benefits resulting from the portion of the increase in salary
9that is in excess of 6%. This present value shall be computed
10by the System on the basis of the actuarial assumptions and
11tables used in the most recent actuarial valuation of the
12System that is available at the time of the computation. If a
13teacher's salary for the 2005-2006 school year is used to
14determine final average salary under this subsection (f), then
15the changes made to this subsection (f) by Public Act 94-1057
16shall apply in calculating whether the increase in his or her
17salary is in excess of 6%. For the purposes of this Section,
18change in employment under Section 10-21.12 of the School Code
19on or after June 1, 2005 shall constitute a change in employer.
20The System may require the employer to provide any pertinent
21information or documentation. The changes made to this
22subsection (f) by this amendatory Act of the 94th General
23Assembly apply without regard to whether the teacher was in
24service on or after its effective date.
25    Whenever it determines that a payment is or may be required
26under this subsection, the System shall calculate the amount of

 

 

HB3066- 54 -LRB098 07778 EFG 37857 b

1the payment and bill the employer for that amount. The bill
2shall specify the calculations used to determine the amount
3due. If the employer disputes the amount of the bill, it may,
4within 30 days after receipt of the bill, apply to the System
5in writing for a recalculation. The application must specify in
6detail the grounds of the dispute and, if the employer asserts
7that the calculation is subject to subsection (g) or (h) of
8this Section, must include an affidavit setting forth and
9attesting to all facts within the employer's knowledge that are
10pertinent to the applicability of that subsection. Upon
11receiving a timely application for recalculation, the System
12shall review the application and, if appropriate, recalculate
13the amount due.
14    The employer contributions required under this subsection
15(f) may be paid in the form of a lump sum within 90 days after
16receipt of the bill. If the employer contributions are not paid
17within 90 days after receipt of the bill, then interest will be
18charged at a rate equal to the System's annual actuarially
19assumed rate of return on investment compounded annually from
20the 91st day after receipt of the bill. Payments must be
21concluded within 3 years after the employer's receipt of the
22bill.
23    (g) This subsection (g) applies only to payments made or
24salary increases given on or after June 1, 2005 but before July
251, 2011. The changes made by Public Act 94-1057 shall not
26require the System to refund any payments received before July

 

 

HB3066- 55 -LRB098 07778 EFG 37857 b

131, 2006 (the effective date of Public Act 94-1057).
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases paid to teachers
4under contracts or collective bargaining agreements entered
5into, amended, or renewed before June 1, 2005.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude salary increases paid to a
8teacher at a time when the teacher is 10 or more years from
9retirement eligibility under Section 16-132 or 16-133.2.
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases resulting from
12overload work, including summer school, when the school
13district has certified to the System, and the System has
14approved the certification, that (i) the overload work is for
15the sole purpose of classroom instruction in excess of the
16standard number of classes for a full-time teacher in a school
17district during a school year and (ii) the salary increases are
18equal to or less than the rate of pay for classroom instruction
19computed on the teacher's current salary and work schedule.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude a salary increase resulting from
22a promotion (i) for which the employee is required to hold a
23certificate or supervisory endorsement issued by the State
24Teacher Certification Board that is a different certification
25or supervisory endorsement than is required for the teacher's
26previous position and (ii) to a position that has existed and

 

 

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1been filled by a member for no less than one complete academic
2year and the salary increase from the promotion is an increase
3that results in an amount no greater than the lesser of the
4average salary paid for other similar positions in the district
5requiring the same certification or the amount stipulated in
6the collective bargaining agreement for a similar position
7requiring the same certification.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude any payment to the teacher from
10the State of Illinois or the State Board of Education over
11which the employer does not have discretion, notwithstanding
12that the payment is included in the computation of final
13average salary.
14    (h) When assessing payment for any amount due under
15subsection (f), the System shall exclude any salary increase
16described in subsection (g) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (f) of this Section.
24    (i) The System shall prepare a report and file copies of
25the report with the Governor and the General Assembly by
26January 1, 2007 that contains all of the following information:

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (j) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
46-18-12; 97-813, eff. 7-13-12.)
 
5    (40 ILCS 5/16-158.2 new)
6    Sec. 16-158.2. Self-managed plan.
7    (a) The Teachers' Retirement System of the State of
8Illinois must establish and administer a self-managed plan that
9shall offer member the opportunity to accumulate assets for
10retirement through a combination of member and State
11contributions that may be invested in mutual funds, collective
12investment funds, or other investment products and used to
13purchase annuity contracts, that are fixed, variable, or a
14combination of fixed and variable. The plan must be qualified
15under the Internal Revenue Code of 1986.
16    The Teachers' Retirement System of the State of Illinois
17shall be the plan sponsor for the self-managed plan and shall
18prepare a plan document and adopt any rules and procedures that
19are considered necessary or desirable for the administration of
20the self-managed plan. Consistent with its fiduciary duty to
21the members and beneficiaries of the self-managed plan, the
22Board of Trustees of the System may delegate aspects of plan
23administration as it sees fit to companies authorized to do
24business in this State.
25    (a-5) A member may file an irrevocable election to transfer

 

 

HB3066- 59 -LRB098 07778 EFG 37857 b

1amounts equal to the member's total contributions under the
2traditional benefit package, with interest, to the
3self-managed plan under this Section. By filing the election, a
4member forfeits all accrued rights and benefits under the
5traditional benefit package.
6    (b) Notwithstanding any other provision of this Code, (i)
7for a member who does not file an election under subsection
8(a-5) of this Section, any portion of his or her salary that
9exceeds the limit specified in Section 16-121.1 for that year
10shall be subject to the self-managed plan and (ii) for a member
11who files an election under subsection (a-5) of this Section,
12the entirety of the member's salary shall, after the date of
13the election, be subject to the self-managed plan created under
14this Section.
15    (c) The System shall solicit proposals to provide
16administrative services and funding vehicles for the
17self-managed plan from insurance and annuity companies and
18mutual fund companies, banks, trust companies, or other
19financial institutions authorized to do business in this State.
20In reviewing the proposals received and approving and
21contracting with no fewer than 2 and no more than 7 companies,
22the Board of Trustees of the System shall consider, among other
23things, the following criteria:
24        (1) the nature and extent of the benefits that would be
25    provided to the members;
26        (2) the reasonableness of the benefits in relation to

 

 

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1    the premium charged;
2        (3) the suitability of the benefits to the needs and
3    interests of the members and the State; and
4        (4) the ability of the company to provide benefits
5    under the contract and the financial stability of the
6    company.
7    The System shall periodically review each approved
8company. A company may continue to provide administrative
9services and funding vehicles for the self-managed plan only so
10long as it continues to be an approved company under contract
11with the Board.
12    In addition to the companies approved by the System under
13this subsection (c), the System may offer its members an
14investment fund managed by the Illinois State Board of
15Investment.
16    (d) Members in the program must be allowed to direct the
17transfer of their account balances among the various investment
18options offered, subject to applicable contractual provisions.
19The member shall not be deemed a fiduciary by reason of
20providing such investment direction. A person who is a
21fiduciary shall not be liable for any loss resulting from that
22investment direction and shall not be deemed to have breached
23any fiduciary duty by acting in accordance with that direction.
24Neither the System nor the State shall guarantee any of the
25investments in the member's account balances.
26    (e) Participation in the self-managed plan under this

 

 

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1Section shall constitute participation in the Teachers'
2Retirement System of the State of Illinois.
3    (f) The self-managed plan shall be funded by contributions
4from members in the self-managed plan and State contributions
5as provided in this Section.
6    The contribution rate for members in the self-managed plan
7shall be, (i) for a member who does not file an election under
8subsection (a-5) of this Section, 6% of the amount of salary in
9excess of the limit specified in Section 16-121.1 for that
10year, in addition to the amount specified under subsection (f)
11of Section 16-152 for that year and (ii) for a member who files
12an election under subsection (a-5) of this Section, 8% of any
13amount of salary up to and including the limit specified in
14Section 16-121.1 for that year and 6% of any amount of salary
15in excess of that limit for that year. This required
16contribution shall be made as an employer pick-up under Section
17414(h) of the Internal Revenue Code of 1986 or any successor
18Section thereof. Any member in the System's traditional benefit
19package prior to his or her election to participate in the
20self-managed plan shall continue to have the employer pick up
21the contributions required under Section 16-152. However, the
22amounts picked up after the election of the self-managed plan
23shall be remitted to and treated as assets of the self-managed
24plan. In no event shall a member have the option of receiving
25these amounts in cash. Members may make additional
26contributions to the self-managed plan in accordance with

 

 

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1procedures prescribed by the System, to the extent permitted
2under rules adopted by the System.
3    The program shall provide for employer and State
4contributions to the self-managed plan in the following
5amounts: (i) for a member who does not file an election under
6subsection (a-5) of this Section, 3% of the amount of salary in
7excess of the limit specified in Section 16-121.1 for that
8year, to be paid by the actual employer, and (ii) for a member
9who files an election under subsection (a-5) of this Section,
107.1% of any amount of salary up to and including the limit
11specified in Section 16-121.1 for that year, to be paid by the
12State, and 3% of any amount of salary in excess of that limit
13for that year, to be paid by the actual employer.
14    The State of Illinois shall make contributions by
15appropriations to the System for members in the self-managed
16plan under this Section. The amount required shall be certified
17by the Board of Trustees of the System and paid by the State in
18accordance with Section 16-158. The System shall not be
19obligated to remit the required State contributions to any of
20the insurance and annuity companies, mutual fund companies,
21banks, trust companies, financial institutions, or other
22sponsors of any of the funding vehicles offered under the
23self-managed plan until it has received the required State
24contributions from the State.
25    (g) If a member in the self-managed plan who is otherwise
26vested under this Article terminates employment, the member

 

 

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1shall be entitled to a benefit that is based on the account
2values attributable to both State and member contributions and
3any investment return thereon.
4    If a member in the self-managed plan who is not otherwise
5vested under this Article terminates employment, the member
6shall be entitled to a benefit based solely on the account
7values attributable to the member's contributions and any
8investment return thereon, and the State contributions and any
9investment return thereon shall be forfeited. Any State
10contributions that are forfeited shall be held in escrow by the
11company investing those contributions and shall be used, as
12directed by the System, for future allocations of State
13contributions.
 
14    (40 ILCS 5/16-181.4 new)
15    Sec. 16-181.4. To calculate the normal cost of benefits. To
16calculate the normal cost of each plan offered by the system as
17a percentage of salary and to update those amounts at least
18every 3 years.
 
19    Section 90. The State Mandates Act is amended by adding
20Section 8.37 as follows:
 
21    (30 ILCS 805/8.37 new)
22    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
23of this Act, no reimbursement by the State is required for the

 

 

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1implementation of any mandate created by this amendatory Act of
2the 98th General Assembly.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    30 ILCS 122/20
4    30 ILCS 122/25
5    40 ILCS 5/15-111from Ch. 108 1/2, par. 15-111
6    40 ILCS 5/15-112.1 new
7    40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
8    40 ILCS 5/15-157from Ch. 108 1/2, par. 15-157
9    40 ILCS 5/15-158.2
10    40 ILCS 5/15-165.1 new
11    40 ILCS 5/16-121from Ch. 108 1/2, par. 16-121
12    40 ILCS 5/16-121.1 new
13    40 ILCS 5/16-122.2 new
14    40 ILCS 5/16-122.3 new
15    40 ILCS 5/16-152from Ch. 108 1/2, par. 16-152
16    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
17    40 ILCS 5/16-158.2 new
18    40 ILCS 5/16-181.4 new
19    30 ILCS 805/8.37 new