SB2022 101ST GENERAL ASSEMBLY

LRB101 10996 RPS 56182 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2022

Introduced 2/15/2019, by Sen. Heather A. Steans

SYNOPSIS AS INTRODUCED:

40 ILCS 5/7-159

from Ch. 108 1/2, par. 7-159

Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that any surviving spouse of an annuitant who (1) retired prior to June 1, 2011, (2) was not married on the date the retirement annuity began, (3) received a specified refund of survivor credits, and (4) died prior to the implementation of Public Act 99-682, which allowed certain annuitants who received a refund of contributions for survivor benefits to elect to repay the refund and have their survivor benefit rights reinstated, may, within a period of one year beginning 5 months after the effective date of the amendatory Act, make an election to re-establish rights to a surviving spouse annuity by paying to the Fund: (1) the total amount of the refund received for survivor credits; and (2) interest thereon at the actuarially assumed rate of return from the date of the refund to the date of payment. Provides that the surviving spouse must also provide documentation proving he or she was married to the annuitant at the time of death and has not subsequently remarried. Provides that the Fund may allow the surviving spouse to repay this refund over a period of not more than 24 months. Provides that, for federal and State tax purposes and to the extent permitted by law, if a surviving spouse pays in monthly installments by reducing the monthly benefit by the amount of the otherwise applicable contribution, the monthly amount by which the surviving spouse's benefit is reduced shall not be treated as a contribution by the surviving spouse but rather as a reduction of the surviving spouse's monthly benefit. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

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 7-159 as follows:

(40 ILCS 5/7-159) (from Ch. 108 1/2, par. 7-159)

Sec. 7-159. Surviving spouse annuity - refund of survivor credits.

(a) Any employee annuitant who (1) upon the date a retirement annuity begins is not then married, or (2) is married to a person who would not qualify for surviving spouse annuity if the person died on such date, is entitled to a refund of the survivor credits including interest accumulated on the date the annuity begins, excluding survivor credits and interest thereon credited during periods of disability, and no spouse shall have a right to any surviving spouse annuity from this Fund. If the employee annuitant reenters service and upon subsequent retirement has a spouse who would qualify for a surviving spouse annuity, the employee annuitant may pay the fund the amount of the refund plus interest at the effective rate at the date of payment. The payment shall qualify the spouse for a surviving spouse annuity and the amount paid shall be considered as survivor contributions.

(b) Instead of a refund under subsection (a), the retiring employee may elect to convert the amount of the refund into an annuity, payable separately from the retirement annuity. If the annuitant dies before the guaranteed amount has been distributed, the remainder shall be paid in a lump sum to the designated beneficiary of the annuitant. The Board shall adopt any rules necessary for the implementation of this subsection.

(c) An annuitant who retired prior to June 1, 2011 and received a refund of survivor credits under subsection (a), and who thereafter became, and remains, either:

(1) a party to a civil union or a party to a legal relationship that is recognized as a civil union or marriage under the Illinois Religious Freedom Protection and Civil Union Act on or after June 1, 2011; or

(2) a party to a marriage under the Illinois Marriage and Dissolution of Marriage Act on or after February 26, 2014; or

(3) a party to a marriage, civil union or other legal relationship that, at the time it was formed, was not legally recognized in Illinois but was subsequently recognized as a civil union or marriage under the Illinois Religious Freedom Protection and Civil Union Act on or after June 1, 2011, a marriage under the Illinois Marriage and Dissolution of Marriage Act on or after February 26, 2014, or both; may, within a period of one year beginning 5 months after the effective date of this amendatory Act of the 99th General Assembly, make an election to re-establish rights to a surviving spouse annuity under Sections 7-154 through 7-158 (notwithstanding the eligibility requirements of paragraph (a)(1) of Section 7-154), by paying to the Fund: (1) the total amount of the refund received for survivor credits; and (2) interest thereon at the actuarially assumed rate of return from the date of the refund to the date of payment. Such election must be made prior to the date of death of the annuitant.

The Fund may allow the annuitant to repay this refund over a period of not more than 24 months. To the extent permitted by the Internal Revenue Code of 1986, as amended, for federal and State tax purposes, if a member pays in monthly installments by reducing the monthly benefit by the amount of the otherwise applicable contribution, the monthly amount by which the annuitant's benefit is reduced shall not be treated as a contribution by the annuitant but rather as a reduction of the annuitant's monthly benefit.

If an annuitant makes an election under this subsection (c) and the contributions required are not paid in full, an otherwise qualifying spouse shall be given the option to make an additional lump sum payment of the remaining contributions and qualify for a surviving spouse annuity. Otherwise, an additional refund representing contributions made hereunder shall be paid at the annuitant's death and there shall be no surviving spouse annuity paid.

(d) Any surviving spouse of an annuitant who (1) retired prior to June 1, 2011, (2) was not married on the date the retirement annuity began, (3) received a refund of survivor credits under subsection (a), and (4) died prior to the implementation of Public Act 99-682 may, within a period of one year, beginning 5 months after the effective date of this amendatory Act of the 101st General Assembly, make an election to re-establish rights to a surviving spouse annuity under Sections 7-154 through 7-158 (notwithstanding the eligibility requirements of paragraph (a) of subsection (1) of Section 7-154), by paying to the Fund: (i) the total amount of the refund received for survivor credits; and (ii) interest thereon at the actuarially assumed rate of return from the date of the refund to the date of payment. The surviving spouse must also provide documentation proving he or she was married to the annuitant at the time of death and has not subsequently remarried. This proof must include a marriage certificate and any other supporting documents deemed necessary by the Fund.

The Fund may allow the surviving spouse to repay this refund over a period of not more than 24 months. To the extent permitted by the Internal Revenue Code of 1986, as amended, for federal and State tax purposes, if a surviving spouse pays in monthly installments by reducing the monthly benefit by the amount of the otherwise applicable contribution, the monthly amount by which the surviving spouse's benefit is reduced shall not be treated as a contribution by the surviving spouse but rather as a reduction of the surviving spouse's monthly benefit.

(Source: P.A. 99-682, eff. 7-29-16.)

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