HB5562 94TH GENERAL ASSEMBLY

LRB094 17418 AMC 52713 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB5562

Introduced 01/27/06, by Rep. Kevin Joyce

SYNOPSIS AS INTRODUCED:

40 ILCS 5/6-164	from Ch. 108 1/2, par. 6-164
30 ILCS 805/8.30 new

Amends the Chicago Firefighter Article of the Illinois Pension Code. Increases the required employee contribution by 0.5% of salary. Compounds the 3% automatic annual increase in retirement annuity for members who have paid the increased contribution for at least one year. Allows certain persons no longer in service to elect to pay an additional contribution and thereby qualify for the compounding. For firemen born on or after January 1, 1955 and before January 1, 1965, increases the automatic annual increase in retirement annuity to 3%, removes the 30% maximum, and permits the initial increase at age 55. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

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 6-164 as follows:

(40 ILCS 5/6-164) (from Ch. 108 1/2, par. 6-164)

Sec. 6-164. Automatic annual increase; retirement after September 1, 1959.

(a) A fireman qualifying for a minimum annuity who retires from service after September 1, 1959 shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1965 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1965 1955) if that occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2%, and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning July 1, 1982 for firemen born before January 1, 1930, and beginning January 1, 1990 for firemen born after December 31, 1929 and before January 1, 1940, and beginning January 1, 1996 for firemen born after December 31, 1939 but before January 1, 1945, and beginning January 1, 2004, for firemen born after December 31, 1944 but before January 1, 1955, and beginning January 1, 2007 for firemen born after December 31, 1954 but before January 1, 1965, such increases shall be 3% and such firemen shall not be subject to the 30% maximum increase. For a fireman born before January 1, 1965 who has made the contribution required under subsection (c) for at least one year at the 7/8 of 1% rate, such increases shall be 3% of the total amount of annuity payable at the time of the increase, including any previous increases under this Article, and the fireman shall not be subject to the 30% maximum increase.

Any fireman born before January 1, 1945 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 1996 is entitled to receive the initial increase under this subsection on (1) January 1, 1996, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of 1995 apply beginning January 1, 1996 and apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act of 1995.

Any fireman born before January 1, 1955 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2004 is entitled to receive the initial increase under this subsection on (1) January 1, 2004, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by Public Act 93-654 this amendatory Act of the 93rd General Assembly apply without regard to whether the fireman or annuitant terminated service before the effective date of this amendatory Act.

(b) Subsection (a) of this Section is not applicable to an employee receiving a term annuity.

(c) To help defray the cost of such increases in annuity, there shall be deducted, beginning September 1, 1959, from each payment of salary to a fireman, 1/8 of 1% of each such salary payment and an additional 1/8 of 1% beginning on September 1, 1961, and September 1, 1963, respectively, concurrently with and in addition to the salary deductions otherwise made for annuity purposes. Beginning January 1, 2007, the deduction from salary under this subsection (c) shall be 7/8 of 1%.

(d) A fireman born before January 1, 1965 who terminates service without having made the contribution required under subsection (c) for at least one year at the 7/8 of 1% rate may elect to pay to the Fund an additional contribution in an amount to be calculated by the Board, equal to 7/8 of 1% of his or her annual salary at the time of termination of service, less the amount, if any, contributed under subsection (c) during the last year of service.

A fireman who has paid the additional contribution under this subsection shall be entitled to have any increases thereafter payable under subsection (a) calculated at the rate of 3% of the total amount of annuity payable at the time of the increase, including any previous increases under this Article.

This subsection (d) and the other changes to this Section made by this amendatory Act of the 94th General Assembly apply without regard to whether the fireman terminated service before the effective date of this amendatory Act.

(e) Each such additional 1/8 of 1% deduction from salary under subsection (c) and any additional contribution received under subsection (d) which shall, on September 1, 1963, result in a total increase of 3/8 of 1% of salary, shall be credited to the Automatic Increase Reserve, to be used, together with city contributions as provided in this Article, to defray the cost of the 1 1/2% annuity increments provided under this Section herein specified. Any balance in such reserve as of the beginning of each calendar year shall be credited with interest at the rate of 3% per annum.

(f) The salary deductions provided in this Section are not subject to refund, except to the fireman himself, in any case in which a fireman withdraws prior to qualification for minimum annuity and applies for refund, or applies for annuity, and also where a term annuity becomes payable. In such cases, the total of such salary deductions shall be refunded to the fireman, without interest, and charged to the aforementioned reserve.

(Source: P.A. 93-654, eff. 1-16-04.)

Section 90. The State Mandates Act is amended by adding Section 8.30 as follows:

(30 ILCS 805/8.30 new)

Sec. 8.30. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 94th General Assembly.

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