Public Act 093-0347
Public Act 93-0347 of the 93rd General Assembly
Public Act 93-0347
HB3183 Enrolled LRB093 07931 EFG 08122 b
AN ACT in relation to public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by
changing Sections 1-119, 15-107, 15-112, 15-113.3, 15-134,
15-136, 15-153, 15-154, 15-158.2, 15-186.1, 15-187, and
15-190 as follows:
(40 ILCS 5/1-119)
Sec. 1-119. Qualified Illinois Domestic Relations
Orders.
(a) For the purposes of this Section:
(1) "Alternate payee" means the spouse, former
spouse, child, or other dependent of a member, as
designated in a QILDRO.
(2) "Death benefit" means any nonperiodic benefit
payable upon the death of a member to a survivor of the
member or to the member's estate or designated
beneficiary, including any refund of contributions
following the member's death, whether or not the benefit
is so called under the applicable Article of this Code.
(3) "Disability benefit" means any periodic or
nonperiodic benefit payable to a disabled member based on
occupational or nonoccupational disability or disease,
including any periodic or nonperiodic increases in the
benefit, whether or not the benefit is so called under
the applicable Article of this Code.
(4) "Member" means any person who participates in
or has service credits in a retirement system, including
a person who is receiving or is eligible to receive a
retirement or disability benefit, without regard to
whether the person has withdrawn from service.
(5) "Member's refund" means a return of all or a
portion of a member's contributions that is elected by
the member (or provided by operation of law) and is
payable before the member's death.
(6) "Qualified Illinois Domestic Relations Order"
or "QILDRO" means an Illinois court order that creates or
recognizes the existence of an alternate payee's right to
receive all or a portion of a member's accrued benefits
in a retirement system, is issued pursuant to this
Section and Section 503(b)(2) of the Illinois Marriage
and Dissolution of Marriage Act, and meets the
requirements of this Section. A QILDRO is not the same
as a qualified domestic relations order or QDRO issued
pursuant to Section 414(p) of the Internal Revenue Code
of 1986. The requirements of paragraphs (2) and (3) of
that Section do not apply to orders issued under this
Section and shall not be deemed a guide to the
interpretation of this Section; a QILDRO is intended to
be a domestic relations order within the meaning of
paragraph (11) of that Section.
(7) "Regular payee" means the person to whom a
benefit would be payable in the absence of an effective
QILDRO.
(8) "Retirement benefit" means any periodic or
nonperiodic benefit payable to a retired member based on
age or service, or on the amounts accumulated to the
credit of the member for retirement purposes, including
any periodic or nonperiodic increases in the benefit,
whether or not the benefit is so called under the
applicable Article of this Code.
(9) "Retirement system" or "system" means any
retirement system, pension fund, or other public employee
retirement benefit plan that is maintained or established
under any of Articles 2 through 18 of this Code.
(10) "Surviving spouse" means the spouse of a
member at the time of the member's death.
(11) "Survivor's benefit" means any periodic
benefit payable to a surviving spouse, child, parent, or
other survivor of a deceased member, including any
periodic or nonperiodic increases in the benefit, whether
or not the benefit is so called under the applicable
Article of this Code.
(b) (1) An Illinois court of competent jurisdiction in a
proceeding for declaration of invalidity of marriage, legal
separation, or dissolution of marriage that provides for the
distribution of property, or any proceeding to amend or
enforce such a property distribution, may order that all or
any part of any (i) retirement benefit or (ii) member's
refund payable to or on behalf of the member be instead paid
by the retirement system to a designated alternate payee.
(2) An order issued under this Section provides only for
the diversion to an alternate payee of certain benefits
otherwise payable by the retirement system under the
provisions of this Code. The existence of a QILDRO shall not
cause the retirement system to pay any benefit, or any amount
of benefit, to an alternate payee that would not have been
payable by the system to a regular payee in the absence of
the QILDRO.
(3) A QILDRO shall not affect the vesting, accrual, or
amount of any benefit, nor the date or conditions upon which
any benefit becomes payable, nor the right of the member or
the member's survivors to make any election otherwise
authorized under this Code, except as provided in subsections
(i) and (j).
(4) A QILDRO shall not apply to or affect the payment of
any survivor's benefit, death benefit, disability benefit,
life insurance benefit, or health insurance benefit.
(c) (1) A QILDRO must contain the name, residence
address, and social security number of the member and of the
alternate payee and must identify the retirement system to
which it is directed and the court issuing the order.
(2) A QILDRO must specify each benefit to which it
applies, and it must specify the amount of the benefit to be
paid to the alternate payee, which in the case of a
nonperiodic benefit shall be expressed as a dollar amount
(except that a nonperiodic benefit payable to an alternate
payee of a participant in the self-managed plan authorized
under Article 15 of this Code may be expressed as a dollar
amount or as a percentage of the participant's account), and
in the case of a periodic benefit shall be expressed as a
dollar amount per month.
(3) With respect to each benefit to which it applies, a
QILDRO must specify when the order will take effect. In the
case of a periodic benefit that is being paid at the time the
order is received, a QILDRO shall take effect immediately or
on a specified later date; if it takes effect immediately, it
shall become effective on the first benefit payment date
occurring at least 30 days after the order is received by the
retirement system. In the case of any other benefit, a
QILDRO shall take effect when the benefit becomes payable,
except that a lump-sum benefit payable to an alternate payee
of a participant in the self-managed plan authorized under
Article 15 of this Code may be paid upon the request of the
alternate payee. However, in no event shall a QILDRO apply
to any benefit paid by the retirement system before or within
30 days after the order is received. A retirement system may
adopt rules to prorate the amount of the first and final
periodic payments to an alternate payee.
(4) A QILDRO must also contain any provisions required
under subsection (n) or (p).
(d) (1) An order issued under this Section shall not be
implemented unless a certified copy of the order has been
filed with the retirement system. The system shall promptly
notify the member and the alternate payee by first class mail
of its receipt of the order.
(2) Neither the retirement system, nor its board, nor
any of its employees shall be liable to the member, the
regular payee, or any other person for any amount of a
benefit that is paid in good faith to an alternate payee in
accordance with a QILDRO.
(3) At the time the order is submitted to the retirement
system, it shall be accompanied by a nonrefundable $50
processing fee payable to the retirement system, to be used
by the system to defer any administrative costs arising out
of the implementation of the QILDRO.
(e) (1) Each alternate payee is responsible for
maintaining a current residence address on file with the
retirement system. The retirement system shall have no duty
to attempt to locate any alternate payee by any means other
than sending written notice to the last known address of the
alternate payee on file with the system.
(2) In the event that the system cannot locate an
alternate payee when a benefit becomes payable, the system
shall hold the amount of the benefit payable to the alternate
payee and make payment to the alternate payee if he or she is
located within the following 180 days. If the alternate
payee has not been located within 180 days from the date the
benefit becomes payable, the system shall pay the benefit and
the amounts held to the regular payee. If the alternate
payee is subsequently located, the system shall thereupon
implement the QILDRO, but the interest of the alternate payee
in any amounts already paid to the regular payee shall be
extinguished. Amounts held under this subsection shall not
bear interest.
(f) (1) If the amount of a benefit that is specified in
a QILDRO for payment to an alternate payee exceeds the
actual amount of that benefit payable by the retirement
system, the excess shall be disregarded. The retirement
system shall have no liability to any alternate payee or any
other person for the disregarded amounts.
(2) In the event of multiple QILDROs against a member,
the retirement system shall honor all of the QILDROs to the
extent possible. However, if the total amount of a benefit
to be paid to alternate payees under all QILDROs in effect
against the member exceeds the actual amount of that benefit
payable by the system, the QILDROs shall be satisfied in the
order of their receipt by the system until the amount of the
benefit is exhausted, and shall not be adjusted pro rata.
Any amounts that cannot be paid due to exhaustion of the
benefit shall remain unpaid, and the retirement system shall
have no liability to any alternate payee or any other person
for such amounts.
(3) A modification of a QILDRO shall be filed with the
retirement system in the same manner as a new QILDRO. A
modification that does not increase the amount of any benefit
payable to the alternate payee, and does not expand the
QILDRO to affect any benefit not affected by the unmodified
QILDRO, does not affect the priority of payment under
subdivision (f)(2); the priority of payment of a QILDRO that
has been modified to increase the amount of any benefit
payable to the alternate payee, or to expand the QILDRO to
affect a benefit not affected by the unmodified QILDRO, shall
be based on the date on which the system receives the
modification of the QILDRO.
(g) (1) Upon the death of the alternate payee under a
QILDRO, the QILDRO shall expire and cease to be effective,
and in the absence of another QILDRO, the right to receive
any affected benefit shall revert to the regular payee.
(2) All QILDROs relating to a member's participation in
a particular retirement system shall expire and cease to be
effective upon the issuance of a member's refund that
terminates the member's participation in that retirement
system, without regard to whether the refund was paid to the
member or to an alternate payee under a QILDRO. An expired
QILDRO shall not be automatically revived by any subsequent
return by the member to service under that retirement system.
(h) (1) Within 45 days after receiving a subpoena from
any party to a proceeding for declaration of invalidity of
marriage, legal separation, or dissolution of marriage in
which a QILDRO may be issued, or after receiving a request
from the member, a retirement system shall issue a statement
of a member's accumulated contributions, accrued benefits,
and other interests in the plan administered by the
retirement system based on the data on file with the system
on the date the subpoena is received, and of any relevant
procedures, rules, or modifications to the model QILDRO form
that have been adopted by the retirement system.
(2) In no event shall the retirement system be required
to furnish to any person an actuarial opinion as to the
present value of the member's benefits or other interests.
(3) The papers, entries, and records, or parts thereof,
of any retirement system may be proved by a copy thereof,
certified under the signature of the secretary of the system
or other duly appointed keeper of the records of the system
and the corporate seal, if any.
(i) In a retirement system in which a member or
beneficiary is required to apply to the system for payment of
a benefit, the required application may be made by an
alternate payee who is entitled to all of that benefit under
a QILDRO, provided that all other qualifications and
requirements have been met. However, the alternate payee may
not make the required application for a member's refund or a
retirement benefit if the member is in active service or
below the minimum age for receiving an undiscounted
retirement annuity in the retirement system that has received
the QILDRO or in any other retirement system in which the
member has creditable service and in which the member's
rights under the Retirement Systems Reciprocal Act would be
affected as a result of the alternate payee's application for
a member's refund or retirement benefit.
(j) (1) So long as there is in effect a QILDRO relating
to a member's retirement benefit, the affected member may not
elect a form of payment that has the effect of diminishing
the amount of the payment to which any alternate payee is
entitled, unless the alternate payee has consented to the
election in writing and this consent has been filed with the
retirement system.
(2) If a member attempts to make an election prohibited
under subdivision (j)(1), the retirement system shall reject
the election and advise the member of the need to obtain the
alternate payee's consent.
(3) If a retirement system discovers that it has
mistakenly allowed an election prohibited under subdivision
(j)(1), it shall thereupon disallow that election and
recalculate any benefits affected thereby. If the system
determines that an amount paid to a regular payee should have
been paid to an alternate payee, the system shall, if
possible, recoup the amounts as provided in subsection (k) of
this Section.
(k) In the event that a regular payee or an alternate
payee is overpaid, the retirement system shall recoup the
amounts by deducting the overpayment from future payments and
making payment to the other payee. The system may make
deductions for recoupment over a period of time in the same
manner as is provided by law or rule for the recoupment of
other amounts incorrectly disbursed by the system in
instances not involving a QILDRO. The retirement system
shall incur no liability to either the alternate payee or the
regular payee as a result of any payment made in good faith,
regardless of whether the system is able to accomplish
recoupment.
(l) (1) A retirement system that has, before the
effective date of this Section, received and implemented a
domestic relations order that directs payment of a benefit to
a person other than the regular payee may continue to
implement that order, and shall not be liable to the regular
payee for any amounts paid in good faith to that other person
in accordance with the order.
(2) A domestic relations order directing payment of a
benefit to a person other than the regular payee that was
issued by a court but not implemented by a retirement system
prior to the effective date of this Section shall be void.
However, a person who is the beneficiary or alternate payee
of a domestic relations order that is rendered void under
this subsection may petition the court that issued the order
for an amended order that complies with this Section.
(m) (1) In accordance with Article XIII, Section 5 of
the Illinois Constitution, which prohibits the impairment or
diminishment of benefits granted under this Code, a QILDRO
issued against a member of a retirement system established
under an Article of this Code that exempts the payment of
benefits or refunds from attachment, garnishment, judgment or
other legal process shall not be effective without the
written consent of the member if the member began
participating in the retirement system on or before the
effective date of this Section. That consent must specify
the retirement system, the court case number, and the names
and social security numbers of the member and the alternate
payee. The consent must accompany the QILDRO when it is
filed with the retirement system, and must be in
substantially the following form:
CONSENT TO ISSUANCE OF QILDRO
Court Case Number: ....................
Member's Social Security Number: ........................
Alternate payee's Social Security Number: ...............
I, (name), a member of the (retirement system), hereby
consent to the issuance of a Qualified Illinois Domestic
Relations Order. I understand that under the Order, certain
benefits that would otherwise be payable to me, or to my
surviving spouse or estate, will instead be payable to (name
of alternate payee). I also understand that my right to
elect certain forms of payment of my retirement benefit or
member's refund may be limited as a result of the Order.
DATED:.......................
SIGNED:......................
(2) A member's consent to the issuance of a QILDRO shall
be irrevocable, and shall apply to any QILDRO that pertains
to the alternate payee and retirement system named in the
consent.
(n) An order issued under this Section shall be in
substantially the following form (omitting any provisions
that are not applicable):
QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER
THIS CAUSE coming before the Court for the purpose of the
entry of a Qualified Illinois Domestic Relations Order under
the provisions of Section 1-119 of the Illinois Pension Code,
the Court having jurisdiction over the parties and the
subject matter hereof; the Court finding that one of the
parties to this proceeding is a member of a retirement system
subject to Section 1-119 of the Illinois Pension Code, this
Order is entered to implement a division of that party's
interest in the retirement system; and the Court being fully
advised;
IT IS HEREBY ORDERED AS FOLLOWS:
(1) The definitions and other provisions of Section
1-119 of the Illinois Pension Code are adopted by reference
and made a part of this Order.
(2) Identification of Retirement System and parties:
Retirement System: (name and address)
Member: (name, residence address and social security
number)
Alternate payee: (name, residence address and social
security number)
(3) The Retirement System shall pay the indicated
amounts of the following specified benefits to the alternate
payee under the following terms and conditions:
(i) Of the member's retirement benefit, the
Retirement System shall pay to the alternate payee
$...... per month, beginning (if the benefit is already
being paid, either immediately or on a specified later
date; otherwise, on the date the retirement benefit
commences), and ending upon the termination of the
retirement benefit or the death of the alternate payee,
whichever occurs first.
(ii) Of any member's refund that becomes payable,
the Retirement System shall pay to the alternate payee
$...... when the member's refund becomes payable.
(4) In accordance with subsection (j) of Section 1-119
of the Illinois Pension Code, so long as this QILDRO is in
effect, the member may not elect a form of payment of the
retirement benefit that has the effect of diminishing the
amount of the payment to which the alternate payee is
entitled, unless the alternate payee has consented to the
election in writing and this consent has been filed with the
retirement system.
(5) If the member began participating in the Retirement
System before the effective date of this Section, this Order
shall not take effect unless accompanied by the written
consent of the member as required under subsection (m) of
Section 1-119 of the Illinois Pension Code.
(6) The Court retains jurisdiction to modify this Order.
DATED:.......................
SIGNED:......................
(o) (1) A court in Illinois that has issued a QILDRO
shall retain jurisdiction of all issues relating to the
modification of the QILDRO. The Administrative Review Law
and the rules adopted pursuant thereto shall govern and apply
to all proceedings for judicial review of final
administrative decisions of the board of trustees of the
retirement system arising under this Section.
(2) The term "administrative decision" is defined as in
Section 3-101 of the Code of Civil Procedure. The venue for
review under the Administrative Review Law shall be the same
as is provided by law for judicial review of other
administrative decisions of the retirement system.
(p) (1) Each retirement system may adopt any procedures
or rules that it deems necessary or useful for the
implementation of this Section.
(2) Each retirement system may by rule modify the model
QILDRO form provided in subsection (n) or require that
additional information be included in QILDROs presented to
the system, as may be necessary to meet the needs of the
retirement system.
(Source: P.A. 90-731, eff. 7-1-99.)
(40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
Sec. 15-107. Employee.
(a) "Employee" means any member of the educational,
administrative, secretarial, clerical, mechanical, labor or
other staff of an employer whose employment is permanent and
continuous or who is employed in a position in which services
are expected to be rendered on a continuous basis for at
least 4 months or one academic term, whichever is less, who
(A) receives payment for personal services on a warrant
issued pursuant to a payroll voucher certified by an employer
and drawn by the State Comptroller upon the State Treasurer
or by an employer upon trust, federal or other funds, or (B)
is on a leave of absence without pay. Employment which is
irregular, intermittent or temporary shall not be considered
continuous for purposes of this paragraph.
However, a person is not an "employee" if he or she:
(1) is a student enrolled in and regularly
attending classes in a college or university which is an
employer, and is employed on a temporary basis at less
than full time;
(2) is currently receiving a retirement annuity or
a disability retirement annuity under Section 15-153.2
from this System;
(3) is on a military leave of absence;
(4) is eligible to participate in the Federal Civil
Service Retirement System and is currently making
contributions to that system based upon earnings paid by
an employer;
(5) is on leave of absence without pay for more
than 60 days immediately following termination of
disability benefits under this Article;
(6) is hired after June 30, 1979 as a public
service employment program participant under the Federal
Comprehensive Employment and Training Act and receives
earnings in whole or in part from funds provided under
that Act; or
(7) is employed on or after July 1, 1991 to perform
services that are excluded by subdivision (a)(7)(f) or
(a)(19) of Section 210 of the federal Social Security Act
from the definition of employment given in that Section
(42 U.S.C. 410).; or
(8) participates in an optional program for
part-time workers under Section 15-158.1.
(b) Any employer may, by filing a written notice with
the board, exclude from the definition of "employee" all
persons employed pursuant to a federally funded contract
entered into after July 1, 1982 with a federal military
department in a program providing training in military
courses to federal military personnel on a military site
owned by the United States Government, if this exclusion is
not prohibited by the federally funded contract or federal
laws or rules governing the administration of the contract.
(c) Any person appointed by the Governor under the Civil
Administrative Code of the State is an employee, if he or she
is a participant in this system on the effective date of the
appointment.
(d) A participant on lay-off status under civil service
rules is considered an employee for not more than 120 days
from the date of the lay-off.
(e) A participant is considered an employee during (1)
the first 60 days of disability leave, (2) the period, not to
exceed one year, in which his or her eligibility for
disability benefits is being considered by the board or
reviewed by the courts, and (3) the period he or she receives
disability benefits under the provisions of Section 15-152,
workers' compensation or occupational disease benefits, or
disability income under an insurance contract financed wholly
or partially by the employer.
(f) Absences without pay, other than formal leaves of
absence, of less than 30 calendar days, are not considered as
an interruption of a person's status as an employee. If such
absences during any period of 12 months exceed 30 work days,
the employee status of the person is considered as
interrupted as of the 31st work day.
(g) A staff member whose employment contract requires
services during an academic term is to be considered an
employee during the summer and other vacation periods, unless
he or she declines an employment contract for the succeeding
academic term or his or her employment status is otherwise
terminated, and he or she receives no earnings during these
periods.
(h) An individual who was a participating employee
employed in the fire department of the University of
Illinois's Champaign-Urbana campus immediately prior to the
elimination of that fire department and who immediately after
the elimination of that fire department became employed by
the fire department of the City of Urbana or the City of
Champaign shall continue to be considered as an employee for
purposes of this Article for so long as the individual
remains employed as a firefighter by the City of Urbana or
the City of Champaign. The individual shall cease to be
considered an employee under this subsection (h) upon the
first termination of the individual's employment as a
firefighter by the City of Urbana or the City of Champaign.
(i) An individual who is employed on a full-time basis
as an officer or employee of a statewide teacher organization
that serves System participants or an officer of a national
teacher organization that serves System participants may
participate in the System and shall be deemed an employee,
provided that (1) the individual has previously earned
creditable service under this Article, (2) the individual
files with the System an irrevocable election to become a
participant, and (3) the individual does not receive credit
for that employment under any other Article of this Code. An
employee under this subsection (i) is responsible for paying
to the System both (A) employee contributions based on the
actual compensation received for service with the teacher
organization and (B) employer contributions equal to the
normal costs (as defined in Section 15-155) resulting from
that service; all or any part of these contributions may be
paid on the employee's behalf or picked up for tax purposes
(if authorized under federal law) by the teacher
organization.
A person who is an employee as defined in this subsection
(i) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to
the System for that employment the contributions specified in
this subsection, plus interest at the effective rate from the
date of service to the date of payment. However, credit
shall not be granted under this subsection for any such prior
employment for which the applicant received credit under any
other provision of this Code, or during which the applicant
was on a leave of absence under Section 15-113.2.
(Source: P.A. 90-448, eff. 8-16-97; 90-576, eff. 3-31-98;
90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
(40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
Sec. 15-112. Final rate of earnings. "Final rate of
earnings": For an employee who is paid on an hourly basis or
who receives an annual salary in installments during 12
months of each academic year, the average annual earnings
during the 48 consecutive calendar month period ending with
the last day of final termination of employment or the 4
consecutive academic years of service in which the employee's
earnings were the highest, whichever is greater. For any
other employee, the average annual earnings during the 4
consecutive academic years of service in which his or her
earnings were the highest. For an employee with less than 48
months or 4 consecutive academic years of service, the
average earnings during his or her entire period of service.
The earnings of an employee with more than 36 months of
service prior to the date of becoming a participant are, for
such period, considered equal to the average earnings during
the last 36 months of such service. For an employee on leave
of absence with pay, or on leave of absence without pay who
makes contributions during such leave, earnings are assumed
to be equal to the basic compensation on the date the leave
began. For an employee on disability leave, earnings are
assumed to be equal to the basic compensation on the date
disability occurs or the average earnings during the 24
months immediately preceding the month in which disability
occurs, whichever is greater.
For a participant who retires on or after the effective
date of this amendatory Act of 1997 with at least 20 years of
service as a firefighter or police officer under this
Article, the final rate of earnings shall be the annual rate
of earnings received by the participant on his or her last
day as a firefighter or police officer under this Article, if
that is greater than the final rate of earnings as calculated
under the other provisions of this Section.
If a participant is an employee for at least 6 months
during the academic year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for that year,
and (2) the amount earned during the 36 months immediately
preceding that year, if this is greater than the final rate
of earnings as calculated under the other provisions of this
Section.
In the determination of the final rate of earnings for an
employee, that part of an employee's earnings for any
academic year beginning after June 30, 1997, which exceeds
the employee's earnings with that employer for the preceding
year by more than 20 percent shall be excluded; in the event
that an employee has more than one employer this limitation
shall be calculated separately for the earnings with each
employer. In making such calculation, only the basic
compensation of employees shall be considered, without regard
to vacation or overtime or to contracts for summer
employment.
The following are not considered as earnings in
determining final rate of earnings: (1) severance or
separation pay, (2) retirement pay, (3) payment for unused
sick leave, and (4) payments from an employer for the period
used in determining final rate of earnings for any purpose
other than (i) services rendered, (ii) leave of absence or
vacation granted during that period, and (iii) vacation of up
to 56 work days allowed upon termination of employment;
except that, if the benefit has been collectively bargained
between the employer and the recognized collective bargaining
agent pursuant to the Illinois Educational Labor Relations
Act, payment received during a period of up to 2 academic
years for unused sick leave may be considered as earnings in
accordance with the applicable collective bargaining
agreement, subject to the 20% increase limitation of this
Section. Any unused sick leave considered as earnings under
this Section shall not be taken into account in calculating
service credit under Section 15-113.4.
Intermittent periods of service shall be considered as
consecutive in determining final rate of earnings.
(Source: P.A. 91-887, eff. 7-6-00; 92-599, eff. 6-28-02.)
(40 ILCS 5/15-113.3) (from Ch. 108 1/2, par. 15-113.3)
Sec. 15-113.3. Service for periods of military service.
"Service for periods of military service": Those periods,
not exceeding 5 years, during which a person served in the
armed forces of the United States, of which all but 2 years
must have immediately followed a period of employment with an
employer under this System or the State Employees' Retirement
System of Illinois; provided that the person received a
discharge other than dishonorable and again became an
employee under this System within one year after discharge.
However, for the up to 2 years of military service not
immediately following employment, the applicant must make
contributions to the System equal to (1) 8% of at the rates
provided in Section 15-157 based upon the employee's basic
compensation on the last date as a participating employee
prior to such military service, or on the first date as a
participating employee after such military service, whichever
is greater, plus (2) an amount determined by the board to be
equal to the employer's normal cost of the benefits accrued
for such military service, plus (3) interest on items (1) and
(2) at the effective rate from the later of the date of first
membership in the System or the date of conclusion of
military service to the date of payment. The change in the
required contribution for purchased military credit made by
this amendatory Act of 1993 does not entitle any person to a
refund of contributions already paid. The contributions paid
under this Section are not normal contributions as defined in
Section 15-114 or additional contributions as defined in
Section 15-115.
The changes to this Section made by this amendatory Act
of 1991 shall apply not only to persons who on or after its
effective date are in service under the System, but also to
persons whose employment terminated prior to that date,
whether or not the person is an annuitant on that date. In
the case of an annuitant who applies for credit allowable
under this Section for a period of military service that did
not immediately follow employment, and who has made the
required contributions for such credit, the annuity shall be
recalculated to include the additional service credit, with
the increase taking effect on the date the System received
written notification of the annuitant's intent to purchase
the credit, if payment of all the required contributions is
made within 60 days of such notice, or else on the first
annuity payment date following the date of payment of the
required contributions. In calculating the automatic annual
increase for an annuity that has been recalculated under this
Section, the increase attributable to the additional service
allowable under this amendatory Act of 1991 shall be included
in the calculation of automatic annual increases accruing
after the effective date of the recalculation.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
(40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
Sec. 15-134. Participant.
(a) Each person shall, as a condition of employment,
become a participant and be subject to this Article on the
date that he or she becomes an employee, makes an election to
participate in, or otherwise becomes a participant in one of
the retirement programs offered under this Article, whichever
date is later.
An employee who becomes a participant shall continue to
be a participant until he or she becomes an annuitant, dies
or accepts a refund of contributions, except that a person
shall not be deemed a participant while participating in an
optional program for part-time workers established under
Section 15-158.1.
(b) A person employed concurrently by 2 or more
employers is eligible to participate in the system on
compensation received from all employers.
(Source: P.A. 89-430, eff. 12-15-95; 90-65, eff. 7-7-97;
90-448, eff. 8-16-97; 90-655, eff. 7-30-98.)
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount. The
provisions of this Section 15-136 apply only to those
participants who are participating in the traditional benefit
package or the portable benefit package and do not apply to
participants who are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final
rate of earnings for each of the first 10 years of service,
1.90% for each of the next 10 years of service, 2.10% for
each year of service in excess of 20 but not exceeding 30,
and 2.30% for each year in excess of 30; or for persons who
retire on or after January 1, 1998, 2.2% of the final rate of
earnings for each year of service.
Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the
participant in accordance with the actuarial tables and the
prescribed rate of interest in effect at the time the
retirement annuity begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins; and
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
With respect to a police officer or firefighter who
retires on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii)
of this Rule 2 shall include the additional normal
contributions made by the police officer or firefighter under
Section 15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an
employee or employer contribution for early retirement under
Section 15-136.2 nor any other employer contribution shall be
used in the calculation of the amount of a retirement annuity
under this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every
participant and annuitant without regard to whether status as
an employee terminates before the effective date of this
amendatory Act.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which
his or her final rate of earnings is based, shall be equal to
the participant's years of service not to exceed 30,
multiplied by (1) $96 if the participant's final rate of
earnings is less than $3,500, (2) $108 if the final rate of
earnings is at least $3,500 but less than $4,500, (3) $120 if
the final rate of earnings is at least $4,500 but less than
$5,500, (4) $132 if the final rate of earnings is at least
$5,500 but less than $6,500, (5) $144 if the final rate of
earnings is at least $6,500 but less than $7,500, (6) $156 if
the final rate of earnings is at least $7,500 but less than
$8,500, (7) $168 if the final rate of earnings is at least
$8,500 but less than $9,500, and (8) $180 if the final rate
of earnings is $9,500 or more, except that the annuity for
those persons having made an election under Section
15-154(a-1) shall be calculated and payable under the
portable retirement benefit program pursuant to the
provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25
or more years of service as a police officer or firefighter,
and a participant who is age 55 or over and has at least 20
but less than 25 years of service as a police officer or
firefighter, shall be entitled to a retirement annuity of
2 1/4% of the final rate of earnings for each of the first 10
years of service as a police officer or firefighter, 2 1/2%
for each of the next 10 years of service as a police officer
or firefighter, and 2 3/4% for each year of service as a
police officer or firefighter in excess of 20. The
retirement annuity for all other service shall be computed
under Rule 1.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is
an employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee
of the University of Illinois in a position other than
police officer or firefighter, from the date of that
transfer until the employee's next termination of service
with the University of Illinois.
Rule 5: The retirement annuity of a participant who
elected early retirement under the provisions of Section
15-136.2 and who, on or before February 16, 1995, brought
administrative proceedings pursuant to the administrative
rules adopted by the System to challenge the calculation of
his or her retirement annuity shall be the sum of the
following, determined from amounts credited to the
participant in accordance with the actuarial tables and the
prescribed rate of interest in effect at the time the
retirement annuity begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins; and
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) an annuity which can be provided on an
actuarially equivalent basis from the employee
contribution for early retirement under Section 15-136.2,
and an annuity from employer contributions of an amount
equal to that which can be provided on an actuarially
equivalent basis from the employee contribution for early
retirement under Section 15-136.2.
In no event shall a retirement annuity under this Rule 5
be lower than the amount obtained by adding (1) the monthly
amount obtained by dividing the combined employee and
employer contributions made under Section 15-136.2 by the
System's annuity factor for the age of the participant at the
beginning of the annuity payment period and (2) the amount
equal to the participant's annuity if calculated under Rule
1, reduced under Section 15-136(b) as if no contributions had
been made under Section 15-136.2.
With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except
as provided in clause (iii) of this Rule 5, neither an
employee nor employer contribution for early retirement under
Section 15-136.2, nor any other employer contribution, shall
be used in the calculation of the amount of a retirement
annuity under this Rule 5.
The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General
Assembly in recognition that the decision of the Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement System et al. might be deemed to give some right
to the plaintiff in that case. The changes made by Section
25 of this amendatory Act of the 91st General Assembly are a
legislative implementation of the decision of the Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement System et al. with respect to that plaintiff.
The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
(b) The retirement annuity provided under Rules 1 and 3
above shall be reduced by 1/2 of 1% for each month the
participant is under age 60 at the time of retirement.
However, this reduction shall not apply in the following
cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under
clause (6) of Section 15-152;
(2) For a participant who has at least the number
of years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which
has been provided on account of service of the
participant during periods when he or she performed the
duties of a police officer or firefighter, if these
duties were performed for at least 5 years immediately
preceding the date the retirement annuity is to begin.
(c) The maximum retirement annuity provided under Rules
1, 2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to
time and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate
of earnings.
(d) An annuitant whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in
his or her retirement annuity as follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125%
of the monthly retirement annuity provided under Rule 1, Rule
2, Rule 3, Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from
the date the retirement annuity payments began to January 1,
1972, plus 0.1667% of such annuity, multiplied by the number
of full months which elapsed from January 1, 1972, or the
date the retirement annuity payments began, whichever is
later, to January 1, 1978, plus 0.25% of such annuity
multiplied by the number of full months which elapsed from
January 1, 1978, or the date the retirement annuity payments
began, whichever is later, to the effective date of the
increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter
during the annuitant's life of 3% of the monthly annuity
provided under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5
contained in this Section. The change made under this
subsection by P.A. 81-970 is effective January 1, 1980 and
applies to each annuitant whose status as an employee
terminates before or after that date.
Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a
percentage of the total annuity payable at the time of the
increase, including all increases previously granted under
this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard
to whether status as an employee terminated before that date.
(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of
this Section and the automatic annual increases provided
under the preceding subsection or Section 15-136.1, amounts
to less than the retirement annuity which would be provided
by Rule 3, the retirement annuity shall be increased as of
January 1, 1987, or the date the retirement annuity payment
period begins, whichever is later, to the amount which would
be provided by Rule 3 of this Section. Such increased amount
shall be considered as the retirement annuity in determining
benefits provided under other Sections of this Article. This
paragraph applies without regard to whether status as an
employee terminated before the effective date of this
amendatory Act of 1987, provided that the annuitant was
employed at least one-half time during the period on which
the final rate of earnings was based.
(f) A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit,
as defined by Section 20-107 of this Code, is transferred in
whole or in part to an employer, and (2) a participant
transfers employment from such governmental unit to such
employer within 6 months after the transfer of the function,
and (3) the sum of (A) the annuity payable to the participant
under Rule 1, 2, or 3 of this Section (B) all proportional
annuities payable to the participant by all other retirement
systems covered by Article 20, and (C) the initial primary
insurance amount to which the participant is entitled under
the Social Security Act, is less than the retirement annuity
which would have been payable if all of the participant's
pension credits validated under Section 20-109 had been
validated under this system, a supplemental annuity equal to
the difference in such amounts shall be payable to the
participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have
his or her retirement annuity then being paid increased $1
per month for each year of creditable service. On January 1,
1982, an annuitant whose retirement annuity began on or
before January 1, 1977, shall have his or her retirement
annuity then being paid increased $1 per month for each year
of creditable service.
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 91-887 (Sections 20 and 25), eff. 7-6-00;
92-16, eff. 6-28-01.)
(40 ILCS 5/15-153) (from Ch. 108 1/2, par. 15-153)
Sec. 15-153. Disability benefits - Amount. The
disability benefit shall be the greater of (1) 50% of the
basic compensation which would have been paid had the
participant continued in service for the entire period during
which disability benefits are payable, excluding wage or
salary increases subsequent to the date of disability or
extra prospective earnings on a summer teaching contract or
other extra service not yet entered upon or (2) 50% of the
participant's average earnings during the 24 months
immediately preceding the month in which disability occurs.
In determining the disability benefit, the basic compensation
of a participating employee on leave of absence or on lay-off
status shall be assumed to be equal to his or her basic
compensation on the date the leave of absence or lay-off
begins.
If the disability benefit is 50% of basic compensation,
payments during the academic fiscal year shall accrue over
the period that the basic compensation would have been paid
had the participant continued in service. If the disability
benefit is 50% of the average earnings of the participant
during the 24 months immediately preceding the month in which
disability occurs, payments during the year shall accrue over
a period of 12 months. Disability benefits shall be paid as
of the end of each calendar month during which payments
accrue. Payments for fractional parts of a month shall be
determined by prorating the total amount payable for the full
month on the basis of days elapsing during the month. Any
disability benefit accrued but unpaid on the death of a
participant shall be paid to the participant's beneficiary.
(Source: P.A. 84-1472.)
(40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
Sec. 15-154. Refunds.
(a) A participant whose status as an employee is
terminated, regardless of cause, or who has been on lay off
status for more than 120 days, and who is not on leave of
absence, is entitled to a refund of contributions upon
application; except that not more than one such refund
application may be made during any academic year.
Except as set forth in subsections (a-1) and (a-2), the
refund shall be the sum of the accumulated normal,
additional, and survivors insurance contributions, plus the
entire contribution made by the participant under Section
15-113.3, less the amount of interest credited on these
contributions each year in excess of 4 1/2% of the amount on
which interest was calculated.
(a-1) A person who elects, in accordance with the
requirements of Section 15-134.5, to participate in the
portable benefit package and who becomes a participating
employee under that retirement program upon the conclusion of
the one-year waiting period applicable to the portable
benefit package election shall have his or her refund
calculated in accordance with the provisions of subsection
(a-2).
(a-2) The refund payable to a participant described in
subsection (a-1) shall be the sum of the participant's
accumulated normal and additional contributions, as defined
in Sections 15-116 and 15-117, plus the entire contribution
made by the participant under Section 15-113.3. If the
participant terminates with 5 or more years of service for
employment as defined in Section 15-113.1, he or she shall
also be entitled to a distribution of employer contributions
in an amount equal to the sum of the accumulated normal and
additional contributions, as defined in Sections 15-116 and
15-117.
(b) Upon acceptance of a refund, the participant
forfeits all accrued rights and credits in the System, and if
subsequently reemployed, the participant shall be considered
a new employee subject to all the qualifying conditions for
participation and eligibility for benefits applicable to new
employees. If such person again becomes a participating
employee and continues as such for 2 years, or is employed by
an employer and participates for at least 2 years in the
Federal Civil Service Retirement System, all such rights,
credits, and previous status as a participant shall be
restored upon repayment of the amount of the refund, together
with compound interest thereon from the date the refund was
received to the date of repayment at the rate of 6% per annum
through August 31, 1982, and at the effective rates after
that date. When a participant in the portable benefit
package who received a refund which included a distribution
of employer contributions repays a refund pursuant to this
Section, one-half of the amount repaid shall be deemed the
member's reinstated accumulated normal and additional
contributions and the other half shall be allocated as an
employer contribution to the System, except that any amount
repaid for previously purchased military service credit under
Section 15-113.3 shall be accounted for as such.
Notwithstanding Section 1-103.1 and the other provisions of
this Section, a person who was a participant in the System
from February 14, 1966 until March 13, 1981 may restore
credits previously forfeited by acceptance of a refund,
without returning to service, by applying in writing and
repaying to the System by July 1, 2002 the amount of the
refund plus interest at the effective rate calculated from
the date of the refund to the date of repayment.
(c) If a participant covered under the traditional
benefit package has made survivors insurance contributions,
but has no survivors insurance beneficiary upon retirement,
he or she shall be entitled to elect a refund of the
accumulated survivors insurance contributions, or to elect an
additional annuity the value of which is equal to the
accumulated survivors insurance contributions. This election
must be made prior to the date the person's retirement
annuity is approved by the System Board of Trustees.
(d) A participant, upon application, is entitled to a
refund of his or her accumulated additional contributions
attributable to the additional contributions described in the
last sentence of subsection (c) of Section 15-157. Upon the
acceptance of such a refund of accumulated additional
contributions, the participant forfeits all rights and
credits which may have accrued because of such contributions.
(e) A participant who terminates his or her employee
status and elects to waive service credit under Section
15-154.2, is entitled to a refund of the accumulated normal,
additional and survivors insurance contributions, if any,
which were credited the participant for this service, or to
an additional annuity the value of which is equal to the
accumulated normal, additional and survivors insurance
contributions, if any; except that not more than one such
refund application may be made during any academic year. Upon
acceptance of this refund, the participant forfeits all
rights and credits accrued because of this service.
(f) If a police officer or firefighter receives a
retirement annuity under Rule 1 or 3 of Section 15-136, he or
she shall be entitled at retirement to a refund of the
difference between his or her accumulated normal
contributions and the normal contributions which would have
accumulated had such person filed a waiver of the retirement
formula provided by Rule 4 of Section 15-136.
(g) If, at the time of retirement, a participant would
be entitled to a retirement annuity under Rule 1, 2, 3, 4, or
5 of Section 15-136, or under Section 15-136.4, that exceeds
the maximum specified in clause (1) of subsection (c) of
Section 15-136, he or she shall be entitled to a refund of
the employee contributions, if any, paid under Section 15-157
after the date upon which continuance of such contributions
would have otherwise caused the retirement annuity to exceed
this maximum, plus compound interest at the effective rates.
(Source: P.A. 91-887 (Sections 10 and 25), eff. 7-6-00;
92-16, eff. 6-28-01; 92-424, eff. 8-17-01.)
(40 ILCS 5/15-158.2)
Sec. 15-158.2. Self-managed plan.
(a) Purpose. The General Assembly finds that it is
important for colleges and universities to be able to attract
and retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who elect not
to participate in a defined benefit retirement program
provided under this Article. Accordingly, the State
Universities Retirement System is hereby authorized to
establish and administer a self-managed plan, which shall
offer participating employees the opportunity to accumulate
assets for retirement through a combination of employee and
employer contributions that may be invested in mutual funds,
collective investment funds, or other investment products and
used to purchase annuity contracts, either fixed or variable
or a combination thereof. The plan must be qualified under
the Internal Revenue Code of 1986.
(b) Adoption by employers. Each employer subject to
this Article may elect to adopt the self-managed plan
established under this Section; this election is irrevocable.
An employer's election to adopt the self-managed plan makes
available to the eligible employees of that employer the
elections described in Section 15-134.5.
The State Universities Retirement System shall be the
plan sponsor for the self-managed plan and shall prepare a
plan document and prescribe such rules and procedures as are
considered necessary or desirable for the administration of
the self-managed plan. Consistent with its fiduciary duty to
the participants and beneficiaries of the self-managed plan,
the Board of Trustees of the System may delegate aspects of
plan administration as it sees fit to companies authorized to
do business in this State, to the employers, or to a
combination of both.
(c) Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit
proposals to provide administrative services and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust companies,
or other financial institutions authorized to do business in
this State. In reviewing the proposals received and
approving and contracting with no fewer than 2 and no more
than 7 companies, at least 2 of which must be insurance and
annuity companies, the Board of Trustees of the System shall
consider, among other things, the following criteria:
(1) the nature and extent of the benefits that
would be provided to the participants;
(2) the reasonableness of the benefits in relation
to the premium charged;
(3) the suitability of the benefits to the needs
and interests of the participating employees and the
employer;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment
and retention of employees.
The System, in consultation with the employers, shall
periodically review each approved company. A company may
continue to provide administrative services and funding
vehicles for the self-managed plan only so long as it
continues to be an approved company under contract with the
Board.
(d) Employee Direction. Employees who are participating
in the program must be allowed to direct the transfer of
their account balances among the various investment options
offered, subject to applicable contractual provisions. The
participant shall not be deemed a fiduciary by reason of
providing such investment direction. A person who is a
fiduciary shall not be liable for any loss resulting from
such investment direction and shall not be deemed to have
breached any fiduciary duty by acting in accordance with that
direction. Neither the System nor the employer guarantees
any of the investments in the employee's account balances.
(e) Participation. An employee eligible to participate
in the self-managed plan must make a written election in
accordance with the provisions of Section 15-134.5 and the
procedures established by the System. Participation in the
self-managed plan by an electing employee shall begin on the
first day of the first pay period following the later of the
date the employee's election is filed with the System or the
effective date as of which the employee's employer begins to
offer participation in the self-managed plan. Employers may
not make the self-managed plan available earlier than January
1, 1998. An employee's participation in any other retirement
program administered by the System under this Article shall
terminate on the date that participation in the self-managed
plan begins.
An employee who has elected to participate in the
self-managed plan under this Section must continue
participation while employed in an eligible position, and may
not participate in any other retirement program administered
by the System under this Article while employed by that
employer or any other employer that has adopted the
self-managed plan, unless the self-managed plan is terminated
in accordance with subsection (i).
Participation in the self-managed plan under this Section
shall constitute membership in the State Universities
Retirement System.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) Establishment of Initial Account Balance. If at the
time an employee elects to participate in the self-managed
plan he or she has rights and credits in the System due to
previous participation in the traditional benefit package,
the System shall establish for the employee an opening
account balance in the self-managed plan, equal to the amount
of contribution refund that the employee would be eligible to
receive under Section 15-154 if the employee terminated
employment on that date and elected a refund of
contributions, except that this hypothetical refund shall
include interest at the effective rate for the respective
years. The System shall transfer assets from the defined
benefit retirement program to the self-managed plan, as a tax
free transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the employee's opening
account balance.
(g) No Duplication of Service Credit. Notwithstanding
any other provision of this Article, an employee may not
purchase or receive service or service credit applicable to
any other retirement program administered by the System under
this Article for any period during which the employee was a
participant in the self-managed plan established under this
Section.
(h) Contributions. The self-managed plan shall be
funded by contributions from employees participating in the
self-managed plan and employer contributions as provided in
this Section.
The contribution rate for employees participating in the
self-managed plan under this Section shall be equal to the
employee contribution rate for other participants in the
System, as provided in Section 15-157. This required
contribution shall be made as an "employer pick-up" under
Section 414(h) of the Internal Revenue Code of 1986 or any
successor Section thereof. Any employee participating in the
System's traditional benefit package prior to his or her
election to participate in the self-managed plan shall
continue to have the employer pick up the contributions
required under Section 15-157. However, the amounts picked
up after the election of the self-managed plan shall be
remitted to and treated as assets of the self-managed plan.
In no event shall an employee have an option of receiving
these amounts in cash. Employees may make additional
contributions to the self-managed plan in accordance with
procedures prescribed by the System, to the extent permitted
under rules prescribed by the System.
The program shall provide for employer contributions to
be credited to each self-managed plan participant at a rate
of 7.6% of the participating employee's salary, less the
amount used by the System to provide disability benefits for
the employee. The amounts so credited shall be paid into the
participant's self-managed plan accounts in a manner to be
prescribed by the System.
An amount of employer contribution, not exceeding 1% of
the participating employee's salary, shall be used for the
purpose of providing the disability benefits of the System to
the employee. Prior to the beginning of each plan year under
the self-managed plan, the Board of Trustees shall determine,
as a percentage of salary, the amount of employer
contributions to be allocated during that plan year for
providing disability benefits for employees in the
self-managed plan.
The State of Illinois shall make contributions by
appropriations to the System of the employer contributions
required for employees who participate in the self-managed
plan under this Section. The amount required shall be
certified by the Board of Trustees of the System and paid by
the State in accordance with Section 15-165. The System
shall not be obligated to remit the required employer
contributions to any of the insurance and annuity companies,
mutual fund companies, banks, trust companies, financial
institutions, or other sponsors of any of the funding
vehicles offered under the self-managed plan until it has
received the required employer contributions from the State.
In the event of a deficiency in the amount of State
contributions, the System shall implement those procedures
described in subsection (c) of Section 15-165 to obtain the
required funding from the General Revenue Fund.
(i) Termination. The self-managed plan authorized under
this Section may be terminated by the System, subject to the
terms of any relevant contracts, and the System shall have no
obligation to reestablish the self-managed plan under this
Section. This Section does not create a right to continued
participation in any self-managed plan set up by the System
under this Section. If the self-managed plan is terminated,
the participants shall have the right to participate in one
of the other retirement programs offered by the System and
receive service credit in such other retirement program for
any years of employment following the termination.
(j) Vesting; Withdrawal; Return to Service. A
participant in the self-managed plan becomes vested in the
employer contributions credited to his or her accounts in the
self-managed plan on the earliest to occur of the following:
(1) completion of 5 years of service with an employer
described in Section 15-106; (2) the death of the
participating employee while employed by an employer
described in Section 15-106, if the participant has completed
at least 1 1/2 years of service; or (3) the participant's
election to retire and apply the reciprocal provisions of
Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the
self-managed plan while not yet eligible for retirement under
this Article (and Article 20, if applicable) shall forfeit
all service credit and accrued rights in the System; if
subsequently re-employed, the participant shall be considered
a new employee. If a former participant again becomes a
participating employee (or becomes employed by a
participating system under Article 20 of this Code) and
continues as such for at least 2 years, all such rights,
service credits, and previous status as a participant shall
be restored upon repayment of the amount of the distribution,
without interest.
(k) Benefit amounts. If an employee who is vested in
employer contributions terminates employment, the employee
shall be entitled to a benefit which is based on the account
values attributable to both employer and employee
contributions and any investment return thereon.
If an employee who is not vested in employer
contributions terminates employment, the employee shall be
entitled to a benefit based solely on the account values
attributable to the employee's contributions and any
investment return thereon, and the employer contributions and
any investment return thereon shall be forfeited. Any
employer contributions which are forfeited shall be held in
escrow by the company investing those contributions and shall
be used as directed by the System for future allocations of
employer contributions or for the restoration of amounts
previously forfeited by former participants who again become
participating employees.
(Source: P.A. 90-448, eff. 8-16-97; 90-576, eff. 3-31-98;
90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
(40 ILCS 5/15-186.1) (from Ch. 108 1/2, par. 15-186.1)
Sec. 15-186.1. Mistake in benefit. If the System
mistakenly sets any benefit at an incorrect amount, it shall
recalculate the benefit as soon as may be practicable after
the mistake is discovered.
If the benefit was mistakenly set too low, the System
shall make a lump sum payment to the recipient of an amount
equal to the difference between the benefits that should have
been paid and those actually paid, plus interest at the
effective rate from the date the unpaid amounts accrued to
the date of payment.
If the benefit was mistakenly set too high, the System
may recover the amount overpaid from the recipient thereof,
plus interest at the effective rate from the date of
overpayment to the date of recovery, either directly or by
deducting such amount from the remaining benefits payable to
the recipient. However, if (1) the amount of the benefit was
mistakenly set too high, and (2) the error was undiscovered
for 3 years or longer, and (3) the error was not the result
of incorrect information supplied by the affected member or
beneficiary, then upon discovery of the mistake the benefit
shall be adjusted to the correct level, but the recipient of
the benefit need not repay to the System the excess amounts
received in error.
(Source: P.A. 85-1008.)
(40 ILCS 5/15-187) (from Ch. 108 1/2, par. 15-187)
Sec. 15-187. Felony conviction. None of the benefits
provided under this Article shall be paid to any person who
is convicted of any felony relating to or arising out of or
in connection with the person's service as an employee.
This Section shall not operate to impair any contract or
vested right heretofore acquired under any law or laws
continued in this Article, nor to preclude the right to a
refund. No refund paid to any person who is convicted of a
felony relating to or arising out of or in connection with
the person's service as an employee shall include employer
contributions or interest or, in the case of the self-managed
plan authorized under Section 15-158.2, any employer
contributions or investment return on such employer
contributions.
All persons entering service subsequent to July 9, 1955
shall be deemed to have consented to the provisions of this
Section as a condition of coverage.
(Source: P.A. 83-1440.)
(40 ILCS 5/15-190) (from Ch. 108 1/2, par. 15-190)
Sec. 15-190. Persons under legal disability. If a person
is under legal disability when any right or privilege accrues
to him or her under this Article, a guardian may be appointed
pursuant to law, and may, on behalf of such person, claim and
exercise any such right or privilege with the same force and
effect as if the person had not been under a legal disability
and had claimed or exercised such right or privilege.
If a person's application for benefits or a physician's
certificate on file with the board shows that the person is
under a legal disability, and no guardian has been appointed
for his or her estate, the benefits payable under this
Article may be paid (1) directly to the person under legal
disability, (2) to any person who has legally qualified and
is acting as guardian of the property of the person under
legal disability, (3) to either parent of the person under
legal disability or any adult person with whom the person
under legal disability may at the time be living, provided
only that such parent or adult person to whom any amount is
to be paid shall have advised the board in writing that such
amount will be held or used for the benefit of the person
under legal disability, or (4) (3) to the trustee of any
trust created for the sole benefit of the person under legal
disability while that person is living, provided only that
the trustee of such trust to whom any amount is to be paid
shall have advised the board in writing that such amount will
be held or used for the benefit of the person under legal
disability. The system shall not be required to determine
the validity of the trust or any of the terms thereof. The
representation of the trustee that the trust meets the
requirements of this Section shall be conclusive as to the
system. The written receipt of the person under legal
disability or the other person who receives such payment
shall be an absolute discharge of the system's liability in
respect of the amount so paid.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Effective Date: 07/24/03
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