96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB1178


 
Introduced 2/11/2009, by Rep. Michael J. Zalewski
 
SYNOPSIS AS INTRODUCED:
 		













40 ILCS 5/17-116.7 new






40 ILCS 5/17-116.8 new






30 ILCS 805/8.33 new










    Amends the Chicago Teacher Article of the Illinois Pension Code. Provides an early retirement incentive program for certain teachers who terminate service on or after February 1, 2010 and on or before June 30, 2010 or on or after February 1, 2011 and on or before June 30, 2011.  Allows the purchase of up to 5 years of age enhancement and creditable service.   Amends the State Mandates Act to require
 implementation without reimbursement.
Effective immediately.
















LRB096 03513 AMC 13538 b

















FISCAL NOTE ACT MAY APPLY


PENSION IMPACT NOTE ACT MAY APPLY


STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
















 


 


A BILL FOR









 











HB1178

LRB096 03513 AMC 13538 b






1
    AN ACT in relation to public employee benefits.

 
2
    Be it enacted by the People of the State of Illinois,
 
3
represented in the General Assembly:


 
4
    Section 5. The Illinois Pension Code is amended  by adding 
5
Sections 17-116.7 and 17-116.8 as follows:
 
6
    (40 ILCS 5/17-116.7  new)
7
    Sec. 17-116.7. Early retirement incentives.

8
    (a) To be eligible for the benefits provided in this 
9
Section, a person must:
10
        (1) be a member of this Fund who, on November 1,
     2008, 
11
    is (i) in active payroll status as a teacher, or (ii) on 
12
    layoff status from such a position with a right of 
13
    re-employment or recall to service, or (iii) on leave of 
14
    absence from such a position, but only if the member on 
15
    leave has not been receiving a disability benefit under 
16
    this Article for a continuous period of 2 years or more as 
17
    of the date of application;
18
        (2) be a member of this Fund who, on or after May 1,
     
19
    2009, is (i) in active payroll status as a teacher, or (ii) 
20
    on layoff status from such a position with a right of 
21
    re-employment or recall to service, or (iii) on leave of 
22
    absence from such a position, but only if the member on 
23
    leave has not been receiving a disability benefit under 
 


 






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1
    this Article for a continuous period of 2 years or more as 
2
    of the date of application;
3
        (3) have not previously received a retirement
     pension 
4
    under this Article;
5
        (4) file with the Board and the Board of Education,
     
6
    before March 1, 2010, a written application requesting the 
7
    benefits provided in this Section and a notice of 
8
    resignation from employment, which resignation must take 
9
    effect no earlier than February 1, 2010 and no later than 
10
    June 30, 2010, unless the applicant's retirement is delayed 
11
    under subsection (e) or (f) of this Section;
12
        (5) be eligible to receive a retirement pension
     under 
13
    this Article (for which purpose any age enhancement or 
14
    creditable service received under this Section may be used) 
15
    and elect to receive the retirement pension beginning no 
16
    earlier than February 1, 2010 and no later than June 30, 
17
    2010 or the date established under subsection (e) or (f) of 
18
    this Section, if applicable;
19
        (6) have attained age 50 (without the use of any age
     
20
    enhancement or creditable service received under this 
21
    Section) by the effective date of the retirement pension;
22
        (7) have at least 5 years of creditable service
     under 
23
    this Fund or any of the participating systems under the 
24
    Retirement Systems Reciprocal Act (without the use of any 
25
    creditable service received under this Section) by the 
26
    effective date of the retirement pension.

 


 






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1
    (b) An eligible person may establish up to 5 years of 
2
creditable service under this Section. In addition, for each 
3
period of creditable service established under this Section, a 
4
person's age at retirement shall be deemed to be increased by 
5
an equal period.
6
    The creditable service established under this Section may 
7
be used for all purposes under this Article and the Retirement 
8
Systems Reciprocal Act, except for the purposes of Section 
9
17-116.1, and the determination of average salary or 
10
compensation under this or any other Article of this Code.
11
    The age enhancement established under this Section may be 
12
used for all purposes under this Article (including calculation 
13
of a proportionate pension payable by this Fund under the 
14
Retirement Systems Reciprocal Act), except for purposes of the 
15
reversionary pension under Section 17-120, and distributions 
16
required by federal law on account of age. However, age 
17
enhancement established under this Section shall not be used in 
18
determining benefits payable under other Articles of this Code 
19
under the Retirement Systems Reciprocal Act.

20
    (c) For all creditable service established under this 
21
Section, the employer must pay to the Fund an employer 
22
contribution consisting of 12% of the member's highest annual 
23
full-time rate of compensation for each year of creditable 
24
service granted under this Section.
25
    The employer contribution shall be paid to the Fund in one 
26
of the following ways: (i) in a single sum at the time of the 
 


 






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1
member's retirement, (ii) in equal quarterly installments over 
2
a period of 5 years from the date of retirement, or (iii) 
3
subject to the approval of the Board of the Fund, in unequal 
4
installments over a period of no more than 5 years from the 
5
date of retirement, as provided in a payment plan designed by 
6
the Fund to accommodate the needs of the employer. The 
7
employer's failure to make the required contributions in a 
8
timely manner shall not affect the payment of the retirement 
9
pension.
10
    For all creditable service established under this Section, 
11
the employee must pay to the Fund an employee contribution 
12
consisting of 4% of the member's highest annual salary rate 
13
used in the determination of the retirement pension for each 
14
year of creditable service granted under this Section. The 
15
employee contribution shall be deducted from the retirement 
16
annuity in 24 monthly installments.
17
    (d) An annuitant who has received any age enhancement or 
18
creditable service under this Section and whose pension is 
19
suspended or cancelled under Section 17-149 or 17-150 shall 
20
thereby forfeit the age enhancement and creditable service. The 
21
forfeiture of creditable service under this subsection shall 
22
not entitle the employer to a refund of the employer 
23
contribution paid under this Section, nor to forgiveness of any 
24
part of that contribution that remains unpaid. The forfeiture 
25
of creditable service under this subsection shall not entitle 
26
the employee to a refund of the employee contribution paid 
 


 






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1
under this Section.
2
    (e) If the number of employees of an employer that apply 
3
for early retirement under this Section exceeds 30% of those 
4
eligible, the employer may require that, for any or all of the 
5
number of applicants in excess of that 30%, the starting date 
6
of the retirement pension enhanced under this Section be no 
7
earlier than June 1, 2010 and no later than September 1, 2010. 
8
The right to have the retirement pension begin before June 1, 
9
2010 shall be allocated among the applicants on the basis of 
10
seniority in the service of that employer.
    This delay applies 
11
only to persons who are applying for early retirement 
12
incentives under this Section, and does not prevent a person 
13
whose application for early retirement incentives has been 
14
withdrawn from beginning to receive a retirement pension on the 
15
earliest date upon which the person is otherwise eligible under 
16
this Article.
17
    (f) For a member who receives notice that he or she has 
18
been declared a reserve teacher pursuant to a collective 
19
bargaining agreement after January 15, 2010, but before 
20
September 15, 2010: (1) the March 1, 2010 application deadline 
21
in subdivision (a)(4) of this Section is extended to a date 15 
22
days after the date of notification of the reserve teacher 
23
declaration, (2) the June 30, 2010 deadline in subdivision 
24
(a)(5) of this Section is extended to October 1, 2010, and (3) 
25
the member shall not be included in the calculation of the 30% 
26
under subsection (e) and is not subject to delay in retirement 
 


 






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1
under that subsection.
2
    (g) A member who receives any early retirement incentive 
3
under Section 17-116.3, 17-116.4,  17-116.5, 17-116.6, or 
4
17-116.8 may not receive any early retirement incentive under 
5
this Section.

 
6
    (40 ILCS 5/17-116.8 new)

7
    Sec. 17-116.8. Early retirement incentives.

8
    (a) To be eligible for the benefits provided in this 
9
Section, a person must:
10
        (1) be a member of this Fund who, on November 1,
     2010, 
11
    is (i) in active payroll status as a teacher, or (ii) on 
12
    layoff status from such a position with a right of 
13
    re-employment or recall to service, or (iii) on leave of 
14
    absence from such a position, but only if the member on 
15
    leave has not been receiving a disability benefit under 
16
    this Article for a continuous period of 2 years or more as 
17
    of the date of application;
18
        (2) be a member of this Fund who, on or after May 1,
     
19
    2010, is (i) in active payroll status as a teacher, or (ii) 
20
    on layoff status from such a position with a right of 
21
    re-employment or recall to service, or (iii) on leave of 
22
    absence from such a position, but only if the member on 
23
    leave has not been receiving a disability benefit under 
24
    this Article for a continuous period of 2 years or more as 
25
    of the date of application;
 


 






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1
        (3) have not previously received a retirement
     pension 
2
    under this Article;
3
        (4) file with the Board and the Board of Education,
     
4
    before March 1, 2011, a written application requesting the 
5
    benefits provided in this Section and a notice of 
6
    resignation from employment, which resignation must take 
7
    effect no earlier than February 1, 2011 and no later than 
8
    June 30, 2011, unless the applicant's retirement is delayed 
9
    under subsection (e) or (f) of this Section;
10
        (5) be eligible to receive a retirement pension
     under 
11
    this Article (for which purpose any age enhancement or 
12
    creditable service received under this Section may be used) 
13
    and elect to receive the retirement pension beginning no 
14
    earlier than February 1, 2011 and no later than June 30, 
15
    2011 or the date established under subsection (e) or (f) of 
16
    this Section, if applicable;
17
        (6) have attained age 50 (without the use of any age
     
18
    enhancement or creditable service received under this 
19
    Section) by the effective date of the retirement pension;
20
        (7) have at least 5 years of creditable service
     under 
21
    this Fund or any of the participating systems under the 
22
    Retirement Systems Reciprocal Act (without the use of any 
23
    creditable service received under this Section) by the 
24
    effective date of the retirement pension.

25
    (b) An eligible person may establish up to 5 years of 
26
creditable service under this Section. In addition, for each 
 


 






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1
period of creditable service established under this Section, a 
2
person's age at retirement shall be deemed to be increased by 
3
an equal period.
4
    (c) For all creditable service established under this 
5
Section, the employer must pay to the Fund an employer 
6
contribution consisting of 12% of the member's highest annual 
7
full-time rate of compensation for each year of creditable 
8
service granted under this Section.
9
    The employer contribution shall be paid to the Fund in one 
10
of the following ways: (i) in a single sum at the time of the 
11
member's retirement, (ii) in equal quarterly installments over 
12
a period of 5 years from the date of retirement, or (iii) 
13
subject to the approval of the Board of the Fund, in unequal 
14
installments over a period of no more than 5 years from the 
15
date of retirement, as provided in a payment plan designed by 
16
the Fund to accommodate the needs of the employer. The 
17
employer's failure to make the required contributions in a 
18
timely manner shall not affect the payment of the retirement 
19
pension.
20
    For all creditable service established under this Section, 
21
the employee must pay to the Fund an employee contribution 
22
consisting of 4% of the member's highest annual salary rate 
23
used in the determination of the retirement pension for each 
24
year of creditable service granted under this Section. The 
25
employee contribution shall be deducted from the retirement 
26
annuity in 24 monthly installments.
 


 






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1
    (d) An annuitant who has received any age enhancement or 
2
creditable service under this Section and whose pension is 
3
suspended or cancelled under Section 17-149 or 17-150 shall 
4
thereby forfeit the age enhancement and creditable service. The 
5
forfeiture of creditable service under this subsection shall 
6
not entitle the employer to a refund of the employer 
7
contribution paid under this Section, nor to forgiveness of any 
8
part of that contribution that remains unpaid. The forfeiture 
9
of creditable service under this subsection shall not entitle 
10
the employee to a refund of the employee contribution paid 
11
under this Section.
12
    (e) If the number of employees of an employer that apply 
13
for early retirement under this Section exceeds 30% of those 
14
eligible, the employer may require that, for any or all of the 
15
number of applicants in excess of that 30%, the starting date 
16
of the retirement pension enhanced under this Section be no 
17
earlier than June 1, 2011 and no later than September 1, 2011. 
18
The right to have the retirement pension begin before June 1, 
19
2011 shall be allocated among the applicants on the basis of 
20
seniority in the service of that employer.
    This delay applies 
21
only to persons who are applying for early retirement 
22
incentives under this Section, and does not prevent a person 
23
whose application for early retirement incentives has been 
24
withdrawn from beginning to receive a retirement pension on the 
25
earliest date upon which the person is otherwise eligible under 
26
this Article.
 


 






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1
    (f) For a member who receives notice that he or she has 
2
been declared a reserve teacher pursuant to a collective 
3
bargaining agreement after January 15, 2011, but before 
4
September 15, 2011: (1) the March 1, 2011 application deadline 
5
in subdivision (a)(4) of this Section is extended to a date 15 
6
days after the date of notification of the reserve teacher 
7
declaration, (2) the June 30, 2011 deadline in subdivision 
8
(a)(5) of this Section is extended to October 1, 2011, and (3) 
9
the member shall not be included in the calculation of the 30% 
10
under subsection (e) and is not subject to delay in retirement 
11
under that subsection.
12
    (g) A member who receives any early retirement incentive 
13
under Section 17-116.3, 17-116.4,  17-116.5, 17-116.6, or 
14
17-116.7 may not receive any early retirement incentive under 
15
this Section.


 
16
    Section 90. The State Mandates Act is amended by adding 
17
Section 8.33 as follows:
 
18
    (30 ILCS 805/8.33 new)
19
    Sec. 8.33. Exempt mandate. Notwithstanding Sections 6 and 8 
20
of this Act, no reimbursement by the State is required for the 
21
implementation of any mandate created by this amendatory Act of 
22
the 96th General Assembly.
 

23
    Section 99. Effective date. This Act takes effect upon 
24
becoming law.