|
|
||||
| Public Act 096-0586 |
||||
| ||||
| ||||
AN ACT concerning 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 1-106 and 15-136.4 as follows:
| ||||
(40 ILCS 5/1-106) (from Ch. 108 1/2, par. 1-106)
| ||||
Sec. 1-106. Payment of distribution other than direct.
| ||||
(a) The board of trustees of any retirement fund or system | ||||
operating
under this Code may, at the written direction and | ||||
request of any annuitant,
solely as an accommodation to the | ||||
annuitant, pay the annuity
due the annuitant to a bank, savings | ||||
and loan association,
or any other financial institution | ||||
insured by an agency of the federal
government, for deposit to | ||||
the account of the annuitant, or to a bank,
savings and loan | ||||
association, or trust company for deposit in a trust
| ||||
established by the annuitant for his or her benefit with that | ||||
bank, savings and
loan association, or trust company. The | ||||
annuitant may withdraw the direction
at any time.
| ||||
(b) Beginning January 1, 1993, each pension fund or | ||||
retirement system
operating under this Code may, and to the | ||||
extent required by federal law
shall, at the request of any | ||||
person entitled to receive a refund, lump-sum
benefit, or other | ||||
nonperiodic distribution from the pension fund or retirement
| ||||
system, pay the taxable portion of that distribution directly | ||
to any entity
that (1) is designated in writing by the person, | ||
(2) is qualified under federal
law to accept an eligible | ||
rollover distribution from a qualified plan, and (3)
has agreed | ||
to accept the distribution.
| ||
(Source: P.A. 87-1265.)
| ||
(40 ILCS 5/15-136.4)
| ||
Sec. 15-136.4. Retirement and Survivor Benefits Under | ||
Portable
Benefit Package. | ||
(a) This Section 15-136.4 describes the form of annuity and | ||
survivor
benefits available to a participant who has elected | ||
the portable benefit
package and has completed the one-year | ||
waiting period required under subsection
(e) of Section | ||
15-134.5. For purposes of this Section, the term
"eligible | ||
spouse" means the husband or wife of a participant to whom the
| ||
participant is married on the date the participant's retirement | ||
annuity
payment period begins, provided however, that if the | ||
participant should die prior
to the commencement of retirement | ||
annuity benefits, then "eligible spouse"
means the husband or | ||
wife, if any, to whom
the participant was married throughout | ||
the one-year period preceding the date
of his or her death.
| ||
(b) This subsection (b) describes the normal form of | ||
annuity payable
to a participant subject to this Section | ||
15-136.4. If the participant is
unmarried on the date his or | ||
her annuity payment period begins payments commence, then the | ||
annuity
payments shall be made in the form of a single-life | ||
annuity as described in
Section 15-118. If the participant is | ||
married on the date his or her annuity
payments commence, then | ||
the annuity payments shall be paid in the form of a
qualified | ||
joint and survivor annuity that is the actuarial equivalent of | ||
the
single-life annuity. Under the "qualified joint and | ||
survivor annuity", a
reduced amount shall be paid to the | ||
participant for his or her lifetime and his
or her eligible | ||
spouse, if surviving at the participant's death, shall be
| ||
entitled to receive thereafter a lifetime survivorship annuity | ||
in a monthly
amount equal to 50% of the reduced monthly amount | ||
that was payable to the
participant. The last payment of a | ||
qualified joint and survivor annuity shall
be made as of the | ||
first day of the month in which the death of the survivor
| ||
occurs.
| ||
(c) Instead of the normal form of annuity that would be | ||
paid under
subsection (b), a participant may elect in writing | ||
within the 90-day period
prior to the date his or her annuity | ||
payments commence to waive the normal form
of annuity payment | ||
and receive an optional form of payment annuity as described in
| ||
subsection (h). If the participant is married and elects an | ||
optional form of
payment annuity under subsection (h) other | ||
than a joint and survivor annuity with the
eligible spouse | ||
designated as the contingent annuitant, then such election
| ||
shall require the consent of his or her eligible spouse in the | ||
manner described
in subsection (d). At any time during the | ||
90-day period preceding the date the
participant's payment | ||
period begins annuity commences, the participant may revoke the | ||
optional form
of payment elected under this subsection (c) and | ||
reinstate coverage under the qualified
joint and survivor | ||
annuity without the spouse's consent, but an election to
revoke | ||
the optional form elected and elect a new optional form of | ||
payment or designate a
different contingent annuitant shall not | ||
be effective without the eligible
spouse's consent.
| ||
(d) The eligible spouse's consent to any election made
| ||
pursuant to this Section that requires the eligible spouse's | ||
consent shall be
in writing and shall acknowledge the effect of | ||
the consent. In addition, the
eligible spouse's signature on | ||
the written consent must be witnessed by a
notary public. The | ||
eligible spouse's consent need not be obtained if the
system is | ||
satisfied that there is no eligible spouse, that the eligible | ||
spouse
cannot be located, or because of any other relevant | ||
circumstances. An eligible
spouse's consent under this Section | ||
is valid only with respect to the specified
optional form of | ||
payment and, if applicable, contingent
annuitant designated by | ||
the participant. If the optional form of payment or
the | ||
contingent annuitant is subsequently changed (other than
by a | ||
revocation of the optional form of payment and reinstatement of | ||
the qualified joint
and survivor annuity), a new consent by the | ||
eligible spouse is required. The
eligible spouse's consent to | ||
an election made by a participant pursuant to this
Section, | ||
once made, may not be revoked by the eligible spouse.
| ||
(e) Within a reasonable period of time preceding the date a
| ||
participant's annuity commences, a participant shall be | ||
supplied with a written
explanation of (1) the terms and | ||
conditions of the normal form single-life
annuity and qualified | ||
joint and survivor annuity, (2) the
participant's right to | ||
elect a single-life annuity or an optional
form of payment | ||
under subsection (h) subject to his or her eligible
spouse's | ||
consent, if applicable, and (3) the participant's right to
| ||
reinstate coverage under the qualified joint and survivor | ||
annuity
prior to his or her annuity commencement date by | ||
revoking an election of an
optional form of payment benefit | ||
under subsection (h).
| ||
(f) If a married participant with at least 1.5 years of
| ||
service dies prior to commencing retirement annuity payments | ||
and prior to
taking a refund under Section 15-154, his or her | ||
eligible spouse is entitled
to receive a pre-retirement | ||
survivor annuity, if there is not then in effect
a waiver of | ||
the pre-retirement survivor annuity. The pre-retirement | ||
survivor
annuity payable under this subsection shall be a | ||
monthly annuity payable for
the eligible spouse's life, | ||
commencing as of the beginning of the month next
following the | ||
later of the date of the participant's death or the date the
| ||
participant would have first met the eligibility requirements | ||
for retirement,
and continuing through the beginning of the | ||
month in which the death of the
eligible spouse occurs. The | ||
monthly amount payable to the spouse under the
pre-retirement | ||
survivor annuity shall be equal to the monthly
amount that | ||
would be payable as a survivor annuity under the qualified | ||
joint
and survivor annuity described in subsection (b) if: (1) | ||
in the case of a
participant who dies on or after the date on | ||
which the participant has
met the eligibility requirements for | ||
retirement, the participant had retired
with an immediate | ||
qualified joint and
survivor annuity on the day before the | ||
participant's date of death; or (2) in
the case of a | ||
participant who dies before the earliest date on
which the | ||
participant would have met the eligibility requirements for | ||
retirement age, the participant had separated from
service on | ||
the date of death, survived to the earliest retirement age | ||
based
on service prior to his or her death, retired with an | ||
immediate qualified
joint and survivor annuity at the earliest | ||
retirement age, and died on the day
after the day on which the | ||
participant would have attained the earliest
retirement age.
| ||
(g) A married participant who has not retired may elect at | ||
any time to
waive the pre-retirement survivor annuity described | ||
in subsection (f). Any
such election shall require the consent | ||
of the participant's eligible spouse
in the manner described in | ||
subsection (d) (e). A waiver of the pre-retirement
survivor | ||
annuity shall increase the lump sum death benefit payable under
| ||
subsection (b) of Section 15-141. Prior to electing any waiver | ||
of the
pre-retirement survivor annuity, the participant shall | ||
be provided with a
written explanation of (1) the terms and | ||
conditions of the pre-retirement
survivor annuity and the death | ||
benefits payable from the system both with and
without the | ||
pre-retirement survivor annuity, (2) the participant's right | ||
to
elect a waiver of the pre-retirement survivor annuity | ||
coverage subject to his
or her spouse's consent, and (3) the | ||
participant's right to reinstate
pre-retirement survivor | ||
annuity coverage at any time by revoking a prior waiver
of such | ||
coverage.
| ||
(h) By filing a timely election with the system, a | ||
participant who will
be eligible to receive a retirement | ||
annuity under this Section may waive the
normal form of annuity | ||
payment described in subsection (b), subject to
obtaining the | ||
consent of his or her eligible spouse, if applicable, and elect
| ||
to receive any one of the following optional forms of payment:
| ||
(1) Joint and Survivor Annuity Options: The | ||
participant may elect to
receive a reduced annuity payable | ||
for his or her life and to have a lifetime
survivorship | ||
annuity in a monthly amount equal to 50%, 75%, or 100% (as | ||
elected
by the participant) of that reduced monthly amount, | ||
to be paid after the
participant's death to his or her | ||
contingent annuitant, if the contingent
annuitant is alive | ||
at the time of the participant's death.
| ||
(2) Single-Life Annuity Option (optional for married | ||
participants). The
participant may elect to receive a | ||
single-life annuity payable for his or her
life only.
| ||
(3) Lump sum retirement benefit. The participant may | ||
elect to receive a
lump sum retirement benefit that is | ||
equal to the amount of a refund payable
under Section | ||
15-154(a-2).
| ||
All joint and survivor optional annuity forms shall be in an | ||
amount that is the actuarial
equivalent of the single-life | ||
annuity.
| ||
For the purposes of this Section, the term "contingent | ||
annuitant" means the
beneficiary who is designated by a | ||
participant at the time the participant
elects a joint and | ||
survivor annuity to receive the lifetime survivorship
annuity | ||
in the event the beneficiary survives the participant at the
| ||
participant's death.
| ||
(i) Under no circumstances may an option be elected, | ||
changed, or revoked
after the date the participant's retirement | ||
annuity commences.
| ||
(j) An election made pursuant to subsection (h)
shall | ||
become inoperative if the participant or the
contingent | ||
annuitant dies before the date the participant's annuity | ||
payments
commence, or if the eligible spouse's consent is | ||
required and not given.
| ||
(k) (Blank).
| ||
(l) The automatic annual increases described in subsection | ||
(d) of Section
15-136 shall apply to retirement benefits under | ||
the portable benefit package
and the automatic annual increases | ||
described in subsection (j) of Section
15-145 shall apply to | ||
survivor benefits under the portable benefit package.
| ||
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98; | ||
91-887, eff.
7-6-00.)
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
| ||