Public Act 098-0439
 
HB2656 EnrolledLRB098 03984 JDS 34004 b


  
    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 
Section 7-139 as follows:
 



    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)


    Sec. 7-139. Credits and creditable service to employees. 

    (a) Each participating employee shall be granted credits 
and creditable
service, for purposes of determining the amount 
of any annuity or benefit
to which he or a beneficiary is 
entitled, as follows:


        1. For prior service: Each participating employee who 
    is an employee
of a participating municipality or 
    participating instrumentality on the
effective date shall 
    be granted creditable service, but no credits under

    paragraph 2 of this subsection (a), for periods of prior 
    service for which
credit has not been received under any 
    other pension fund or retirement system
established under 
    this Code, as follows:


        If the effective date of participation for the 
    participating municipality
or participating 
    instrumentality is on or before January 1, 1998, creditable

    service shall be granted for the entire period of prior 
    service with that
employer without any employee 
    contribution.


        If the effective date of participation for the 
    participating municipality
or participating 
    instrumentality is after January 1, 1998, creditable

    service shall be granted for the last 20% of the period of 
    prior service with
that employer, but no more than 5 years, 
    without any employee contribution.  A
participating 
    employee may establish creditable service for the 
    remainder of
the period of prior service with that employer 
    by making an application in
writing, accompanied by payment 
    of an employee contribution in an
amount determined by the 
    Fund, based on the employee contribution rates in
effect at 
    the time of application for the creditable service and the 
    employee's
salary rate on the effective date of 
    participation for that employer, plus
interest at the 
    effective rate from the date of the prior service to the 
    date
of payment.  Application for this creditable service 
    may be made at any time
while the employee is still in 
    service.

        A municipality that (i) has at least 35 employees; (ii) 
    is located in a county with at least 2,000,000 inhabitants;  
    and (iii) maintains an independent defined benefit pension 
    plan for the benefit of its eligible employees may restrict 
    creditable service in whole or in part for periods of prior 
    service with the employer if the governing body of the 
    municipality adopts an irrevocable resolution to restrict 
    that creditable service and files the resolution with the 
    board before the municipality's effective date of 
    participation.


        Any person who has withdrawn from the service of a 
    participating
municipality
or participating 
    instrumentality prior to the effective date, who reenters

    the service of the same municipality or participating 
    instrumentality after
the effective date and becomes a 
    participating employee is entitled to
creditable service 
    for prior service as otherwise provided in this
subdivision 
    (a)(1) only if he or she renders 2 years of service as a

    participating employee after the effective date.  
    Application
for such service must be made while in a 
    participating status.
The salary rate to be used in the 
    calculation of the required employee
contribution, if any, 
    shall be the employee's salary rate at the time of first

    reentering service with the employer after the employer's 
    effective date of
participation.


        2. For current service, each participating employee 
    shall be
credited with:


            a. Additional credits of amounts equal to each 
        payment of additional
contributions received from him 
        under Section 7-173, as of the
date the corresponding 
        payment of earnings is payable to him.


            b. Normal credits of amounts equal to each payment 
        of normal
contributions received from him, as of the 
        date the corresponding payment of
earnings is payable 
        to him, and normal contributions made for the purpose 
        of
establishing out-of-state service credits as 
        permitted under the conditions set
forth in paragraph 6 
        of this subsection (a).


            c. Municipality credits in an amount equal to 1.4 
        times the normal
credits, except those established by 
        out-of-state service credits, as of
the date of 
        computation of any benefit if these credits would 
        increase
the benefit.


            d. Survivor credits equal to each payment of 
        survivor contributions
received from the participating 
        employee as of the date the
corresponding payment of 
        earnings is payable, and survivor contributions made

        for the purpose of establishing out-of-state service 
        credits.


        3. For periods of temporary and total and permanent 
    disability
benefits, each employee receiving disability 
    benefits shall be granted
creditable service for the period 
    during which disability benefits are
payable.  Normal and 
    survivor credits, based upon the rate of earnings
applied 
    for disability benefits, shall also be granted if such 
    credits
would result in a higher benefit to any such 
    employee or his
beneficiary.


        4. For authorized leave of absence without pay:  A 
    participating
employee shall be granted credits and 
    creditable service for periods of
authorized leave of 
    absence without pay under the following
conditions:


            a. An application for credits and creditable 
        service is submitted to the
board while the employee is 
        in a status of
active employment.


            b. Not more than 12 complete months of creditable 
        service
for authorized leave of absence without pay 
        shall be counted for purposes of
determining any 
        benefits payable under this Article.


            c. Credits and creditable service shall be granted 
        for leave of
absence only if such leave is approved by 
        the governing body of the
municipality, including 
        approval of the estimated cost thereof to the

        municipality as determined by the fund, and employee 
        contributions, plus
interest at the effective rate 
        applicable for each year from the end of
the period of 
        leave to date of payment, have been paid to the fund in

        accordance with Section 7-173.  The contributions shall 
        be computed upon the
assumption earnings continued 
        during the period of leave at the rate in
effect when 
        the leave began.


            d. Benefits under the provisions of Sections 
        7-141, 7-146, 7-150
and 7-163 shall become payable to 
        employees on authorized leave of
absence, or their 
        designated beneficiary, only if such leave of absence

        is creditable hereunder, and if the employee has at 
        least one year of
creditable service other than the 
        service granted for leave of absence.
Any employee 
        contributions due may be deducted from any benefits

        payable.


            e. No credits or creditable service shall be 
        allowed for leave of
absence without pay during any 
        period of prior service.


        5. For military service: The governing body of a 
    municipality or
participating instrumentality may elect to 
    allow creditable service to
participating employees who 
    leave their employment to serve in the armed
forces of the 
    United States for all periods of such service, provided

    that the person returns to active employment within 90 days 
    after
completion
of full time active duty, but no 
    creditable service shall be allowed such
person for any 
    period that can be used in the computation of a pension
or 
    any other pay or benefit, other than pay for active duty, 
    for service
in any branch of the armed forces of the United 
    States.  If necessary to
the computation of any benefit, the 
    board shall establish municipality
credits for 
    participating employees under this paragraph on the

    assumption that the employee received earnings at the rate 
    received at
the time he left the employment to enter the 
    armed forces.  A
participating employee in the armed forces 
    shall not be considered an
employee during such period of 
    service and no additional death and no
disability benefits 
    are payable for death or disability during such period.


        Any participating employee who left his employment 
    with a
municipality or participating instrumentality to 
    serve in the armed
forces of the United States and who 
    again became a participating
employee within 90 days after 
    completion of full time active duty by
entering the service 
    of a different municipality or participating

    instrumentality, which has elected to allow creditable 
    service for
periods of military service under the preceding 
    paragraph, shall also be
allowed creditable service for his 
    period of military service on the
same terms that would 
    apply if he had been employed, before entering
military 
    service, by the municipality or instrumentality which 
    employed
him after he left the military service and the 
    employer costs arising in
relation to such grant of 
    creditable service shall be charged to and
paid by that 
    municipality or instrumentality.


        Notwithstanding the foregoing, any participating 
    employee
shall be entitled to creditable service as 
    required by any federal law
relating to re-employment 
    rights of persons who served in the United States
Armed 
    Services.  Such creditable service shall be granted upon 
    payment by
the member of an amount equal to the employee 
    contributions which would
have been required had the 
    employee continued in service at the same
rate of earnings 
    during the military leave period, plus interest at
the 
    effective rate.


        5.1. In addition to any creditable service established 
    under
paragraph 5 of this subsection (a), creditable 
    service may be granted for
up to 48 months of service in 
    the armed forces of the United States.


        In order to receive creditable service for military 
    service under this
paragraph 5.1, a participating employee 
    must (1) apply to the Fund
in writing and provide evidence 
    of the military service that is satisfactory
to the Board; 
    (2) obtain the written approval of the current employer; 
    and (3)
make contributions to the Fund equal to (i)
the 
    employee contributions that would have been required had 
    the service been
rendered as a member, plus (ii) an amount 
    determined by the board to be equal
to the employer's 
    normal cost of the benefits accrued for that military

    service, plus (iii) interest on items (i) and (ii) from the 
    date of first
membership in the Fund to the date of 
    payment.  The required interest shall be
calculated at the 
    regular interest rate.

        The changes made to this paragraph 5.1 by Public Acts 
    95-483 and 95-486
 apply only to participating employees in 
    service on or after August 28, 2007 (the effective date of 
    those Public Acts).


        6. For out-of-state service: Creditable service shall 
    be granted for
service rendered to an out-of-state local 
    governmental body under the
following conditions: The 
    employee had participated and has irrevocably
forfeited 
    all rights to benefits in the out-of-state public employees

    pension system; the governing body of his participating 
    municipality or
instrumentality authorizes the employee to 
    establish such service; the
employee has 2 years current 
    service with this municipality or
participating 
    instrumentality; the employee makes a payment of

    contributions, which shall be computed at 8% (normal) plus 
    2% (survivor)
times length of service purchased times the 
    average rate of earnings for the
first 2
years of service 
    with the municipality or participating
instrumentality 
    whose governing body authorizes the service established

    plus interest at the effective rate on the date such 
    credits are
established, payable from the date the employee 
    completes the required 2
years of current service to date 
    of payment.  In no case shall more than
120 months of 
    creditable service be granted under this provision.


        7. For retroactive service:  Any employee who could have 
    but did not
elect to become a participating employee, or 
    who should have been a
participant in the Municipal Public 
    Utilities Annuity and Benefit Fund
before that fund was 
    superseded, may receive creditable service for the
period 
    of service not to exceed 50 months; however, a current or 
    former
elected or appointed official of a participating 
    municipality may establish credit under this paragraph 7 
    for more than 50
months of service as an official of that 
    municipality, if the excess over 50 months is approved by 
    resolution of the
governing body of the affected 
    municipality filed with
the Fund before January 1, 2002.


        Any employee who is a
participating employee on or 
    after September 24, 1981 and who was
excluded from 
    participation by the age restrictions removed by Public Act

    82-596 may receive creditable service for the period, on or 
    after January
1, 1979, excluded by the age restriction and, 
    in addition, if the governing
body of the participating 
    municipality or participating instrumentality elects
to 
    allow creditable service for all employees excluded by the 
    age restriction
prior to January 1, 1979, for service 
    during the period prior to that date
excluded by the age 
    restriction.  Any employee who was excluded from

    participation by the age restriction removed by Public Act 
    82-596 and who is
not a participating employee on or after 
    September 24, 1981 may receive
creditable service for 
    service after January 1,
1979. Creditable service under 
    this paragraph
shall be granted upon payment of the 
    employee contributions
which would have been required had 
    he participated, with interest at the
effective rate for 
    each year from the end of the period of service
established 
    to date of payment.


        8. For accumulated unused sick leave:  A participating 
    employee who is
applying for a retirement annuity shall be 
    entitled to creditable service
for that portion of the 
    employee's accumulated unused sick leave
for which payment 
    is not received, as follows:


            a. Sick leave days shall be limited to those 
        accumulated under a sick
leave plan established by a 
        participating municipality or participating

        instrumentality which is available to all employees or 
        a class of employees.


            b. Except as provided in item b-1, only sick leave 
        days accumulated with a participating municipality or

        participating instrumentality with which the employee 
        was in service within
60 days of the effective date of 
        his retirement annuity shall be credited;
If the 
        employee was in service with more than one employer 
        during this
period only the sick leave days with the 
        employer with which the employee
has the greatest 
        number of unpaid sick leave days shall be considered.

            b-1. If the employee was in the service of more 
        than one  employer as defined in item (2) of paragraph 
        (a) of subsection (A) of Section 7-132, then the sick 
        leave days from all such employers shall be credited, 
        as long as the creditable service attributed to those 
        sick leave days does not exceed the limitation in item 
        f of this paragraph 8. In calculating the creditable 
        service under this item b-1, the sick leave days from 
        the last employer shall be considered first, then the 
        remaining sick leave days shall be considered until 
        there are no more days or the maximum creditable sick 
        leave threshold under item f of this paragraph 8 has 
        been reached. 

            c. The creditable service granted shall be 
        considered solely for the
purpose of computing the 
        amount of the retirement annuity and shall not be
used 
        to establish any minimum service period required by any 
        provision of the
Illinois Pension Code, the effective 
        date of the retirement annuity, or the
final rate of 
        earnings.


            d. The creditable service shall be at the rate of 
        1/20 of a month for
each full sick day, provided that 
        no more than 12 months may be credited
under this 
        subdivision 8.


            e. Employee contributions shall not be required 
        for creditable service
under this subdivision 8.


            f. Each participating municipality and 
        participating instrumentality
with which an employee 
        has service within 60 days of the effective date of
his 
        retirement annuity shall certify to the board the 
        number of accumulated
unpaid sick leave days credited 
        to the employee at the time of termination
of service.


        9. For service transferred from another system:  
    Credits and
creditable service shall be granted for service 
    under Article 3, 4, 5, 8, 14,
or 16 of this Act, to any 
    active member of this Fund, and to any
inactive member who 
    has been a county sheriff, upon
transfer of such credits 
    pursuant to Section 3-110.3, 4-108.3, 5-235,
8-226.7,

    14-105.6, or 16-131.4, and payment by the member of the 
    amount by
which (1) the employer and employee contributions 
    that would have been required
if he had participated in 
    this Fund as a sheriff's law enforcement employee
during 
    the period for which credit is
being transferred, plus 
    interest thereon at the effective rate for each
year,  
    compounded annually, from the date of termination of the 
    service for
which credit is being transferred to the date 
    of payment, exceeds (2) the
amount actually transferred to 
    the Fund.
Such transferred service shall be deemed to be 
    service as a sheriff's law
enforcement employee for the 
    purposes of Section 7-142.1.

        10. For service transferred from an Article 3 system 
    under Section 3-110.8:  Credits and
creditable service 
    shall be granted for service under Article 3 of this Act as 
    provided in Section 3-110.8, to any active member of this 
    Fund upon
transfer of such credits pursuant to Section 
    3-110.8. If the amount by
which (1) the employer and 
    employee contributions that would have been required
if he 
    had participated in this Fund during the period for which 
    credit is
being transferred, plus interest thereon at the 
    effective rate for each
year,  compounded annually, from the 
    date of termination of the service for
which credit is 
    being transferred to the date of payment, exceeds (2) the

    amount actually transferred to the Fund, then the amount of 
    creditable service established under this paragraph 10 
    shall be reduced by a corresponding amount in accordance 
    with the rules and procedures established under this 
    paragraph 10.

        The board shall establish by rule the manner of making 
    the calculation required under
this paragraph 10, taking 
    into account the appropriate actuarial
assumptions; the 
    member's service, age, and salary history; the level
of 
    funding of the employer; and
any other factors that the 
    board determines to be relevant.

        Until January 1, 2010, members who transferred service 
    from an Article 3 system under the provisions of Public Act 
    94-356 may establish additional credit in this Fund, but 
    only up to the amount of the service credit reduction in 
    that transfer, as calculated under the actuarial 
    assumptions. This credit may be established upon payment by 
    the member of an amount to be determined by the board, 
    equal to (1) the amount that would have been contributed as 
    employee and employer contributions had all the service 
    been as an employee under this Article, plus interest 
    thereon compounded annually from the date of service to the 
    date of transfer, less (2) the total amount transferred 
    from the Article 3 system, plus (3) interest on the 
    difference at the effective rate for each year, compounded 
    annually, from the date of the transfer to the date of 
    payment.  The additional service credit is allowed under 
    this amendatory Act of the 95th General Assembly 
    notwithstanding the provisions of Article 3 terminating 
    all transferred credits on the date of transfer. 
        11. For service transferred from an Article 3 system 
    under Section 3-110.3: Credits and creditable service 
    shall be granted for service under Article 3 of this Act as 
    provided in Section 3-110.3, to any active member of this 
    Fund, upon transfer of such credits pursuant to Section 
    3-110.3. If the board determines that the amount 
    transferred is less than the true cost to the Fund of 
    allowing that creditable service to be established, then in 
    order to establish that creditable service, the member must 
    pay to the Fund an additional contribution equal to the 
    difference, as determined by the board in accordance with 
    the rules and procedures adopted under this paragraph. If 
    the member does not make the full additional payment as 
    required by this paragraph prior to termination of his 
    participation with that employer, then his or her 
    creditable service shall be reduced by an amount equal to 
    the difference between the amount transferred under 
    Section 3-110.3, including any payments made by the member 
    under this paragraph prior to termination, and the true 
    cost to the Fund of allowing that creditable service to be 
    established, as determined by the board in accordance with 
    the rules and procedures adopted under this paragraph.
        The board shall establish by rule the manner of making 
    the calculation required under this paragraph 11, taking 
    into account the appropriate actuarial assumptions; the 
    member's service, age, and salary history, and any other 
    factors that the board determines to be relevant. 
    (b) Creditable service - amount:


        1. One month of creditable service
shall be allowed for 
    each month for which a participating employee made

    contributions as required under Section 7-173, or for which 
    creditable
service is otherwise granted hereunder.  Not 
    more than 1 month of
service shall be credited and counted 
    for 1 calendar month, and not more
than 1 year of service 
    shall be credited and counted for any calendar
year.  A 
    calendar month means a nominal month beginning on the first 
    day
thereof, and a calendar year means a year beginning 
    January 1 and ending
December 31.


        2. A seasonal employee shall be given 12 months of 
    creditable
service if he renders the number of months of 
    service normally required
by the position in a 12-month 
    period and he remains in service for the
entire 12-month 
    period.  Otherwise a fractional year of service in the

    number of months of service rendered shall be credited.


        3. An intermittent employee shall be given creditable 
    service for
only those months in which a contribution is 
    made under Section 7-173.

    (c) No application for correction of credits or creditable 
service shall
be considered unless the board receives an 
application for correction while
(1) the applicant is a 
participating employee and in active employment
with a 
participating municipality or instrumentality, or (2) while 
the
applicant is actively participating in a pension fund or 
retirement
system which is a participating system under the 
Retirement Systems
Reciprocal Act.  A participating employee or 
other applicant shall not be
entitled to credits or creditable 
service unless the required employee
contributions are made in 
a lump sum or in installments made in accordance
with board 
rule.

    (d) Upon the granting of a retirement, surviving spouse or 
child
annuity, a death benefit or a separation benefit, on 
account of any
employee, all individual accumulated credits 
shall thereupon terminate.
Upon the withdrawal of additional 
contributions, the credits applicable
thereto shall thereupon 
terminate.  Terminated credits shall not be applied
to increase 
the benefits any remaining employee would otherwise receive 
under
this Article.

(Source: P.A. 96-299, eff. 8-11-09; 97-415, eff. 8-16-11.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.