HB2643sam002 96TH GENERAL ASSEMBLY

Sen. Don Harmon

Filed: 5/26/2009

09600HB2643sam002 LRB096 09343 AMC 27276 a

AMENDMENT TO HOUSE BILL 2643

AMENDMENT NO. ______. Amend House Bill 2643 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Public Labor Relations Act is amended by changing Section 15 and by adding Section 28 as follows:

(5 ILCS 315/15) (from Ch. 48, par. 1615)

Sec. 15. Act Takes Precedence.

(a) In case of any conflict between the provisions of this Act and any other law (other than Section 5 of the State Employees Group Insurance Act of 1971 and other than the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly), executive order or administrative regulation relating to wages, hours and conditions of employment and employment relations, the provisions of this Act or any collective bargaining agreement negotiated thereunder shall prevail and control. Nothing in this Act shall be construed to replace or diminish the rights of employees established by Sections 28 and 28a of the Metropolitan Transit Authority Act, Sections 2.15 through 2.19 of the Regional Transportation Authority Act. The provisions of this Act are subject to Section 5 of the State Employees Group Insurance Act of 1971 and the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly. Nothing in this Act shall be construed to replace the necessity of complaints against a sworn peace officer, as defined in Section 2(a) of the Uniform Peace Officer Disciplinary Act, from having a complaint supported by a sworn affidavit.

(b) Except as provided in subsection (a) above, any collective bargaining contract between a public employer and a labor organization executed pursuant to this Act shall supersede any contrary statutes, charters, ordinances, rules or regulations relating to wages, hours and conditions of employment and employment relations adopted by the public employer or its agents. Any collective bargaining agreement entered into prior to the effective date of this Act shall remain in full force during its duration.

(c) It is the public policy of this State, pursuant to paragraphs (h) and (i) of Section 6 of Article VII of the Illinois Constitution, that the provisions of this Act are the exclusive exercise by the State of powers and functions which might otherwise be exercised by home rule units. Such powers and functions may not be exercised concurrently, either directly or indirectly, by any unit of local government, including any home rule unit, except as otherwise authorized by this Act.

(d) Any disputes that are brought on behalf of any employer or employee or exclusive bargaining representative subject to this Act arising from the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly shall be subject to the exclusive jurisdiction of the Illinois Labor Relations Board, and the Circuit Courts shall have no jurisdiction, except to hear disputes arising directly under the Constitution of the United States of America or the Illinois Constitution.

(Source: P.A. 95-331, eff. 8-21-07.)

(5 ILCS 315/28 new)

Sec. 28. Labor. Notwithstanding the existence of any other provision in this Act or any other law, collective bargaining between any employer whose employees are affected by the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly and the exclusive bargaining representative of such employees may include decisions concerning the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly, including, but not limited to, changes and benefits of retirement systems covered by the Illinois Pension Code. These subjects are permissive subjects of bargaining between an employer and an exclusive representative of its employees and, for the purpose of the this Act, are within the sole discretion of the employer to decide to bargain, provided that the employer is required to bargain over the impact of a decision concerning such subject on the bargaining unit upon request by the exclusive representative. During this bargaining, the employer shall not be precluded from implementing its decision. If, after a reasonable period of bargaining, a dispute or impasse exists between the employer and the exclusive representative, then the dispute or impasse shall be resolved exclusively as set forth in this Act.

Section 10. The State Employees Group Insurance Act of 1971 is amended by changing Section 10 as follows:

(5 ILCS 375/10) (from Ch. 127, par. 530)

Sec. 10. Payments by State; premiums.

(a) The State shall pay the cost of basic non-contributory group life insurance and, subject to member paid contributions set by the Department or required by this Section, the basic program of group health benefits on each eligible member, except a member, not otherwise covered by this Act, who has retired as a participating member under Article 2 of the Illinois Pension Code but is ineligible for the retirement annuity under Section 2-119 of the Illinois Pension Code, and part of each eligible member's and retired member's premiums for health insurance coverage for enrolled dependents as provided by Section 9. The State shall pay the cost of the basic program of group health benefits only after benefits are reduced by the amount of benefits covered by Medicare for all members and dependents who are eligible for benefits under Social Security or the Railroad Retirement system or who had sufficient Medicare-covered government employment, except that such reduction in benefits shall apply only to those members and dependents who (1) first become eligible for such Medicare coverage on or after July 1, 1992; or (2) are Medicare-eligible members or dependents of a local government unit which began participation in the program on or after July 1, 1992; or (3) remain eligible for, but no longer receive Medicare coverage which they had been receiving on or after July 1, 1992. The Department may determine the aggregate level of the State's contribution on the basis of actual cost of medical services adjusted for age, sex or geographic or other demographic characteristics which affect the costs of such programs.

The cost of participation in the basic program of group health benefits for the dependent or survivor of a living or deceased retired employee who was formerly employed by the University of Illinois in the Cooperative Extension Service and would be an annuitant but for the fact that he or she was made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code shall not be greater than the cost of participation that would otherwise apply to that dependent or survivor if he or she were the dependent or survivor of an annuitant under the State Universities Retirement System.

(a-1) Beginning July 1, 2009 January 1, 1998, for each person who becomes a new SERS annuitant who and participates in the basic program of group health benefits, regardless of the date the individual became an annuitant, the State shall contribute toward the cost of the annuitant's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the annuitant is enrolled that cost for each full year of creditable service upon which the annuitant's retirement annuity is based, up to a maximum of 100% for an annuitant with 20 or more years of creditable service. The remainder of the cost of an a new SERS annuitant's coverage under the basic program of group health benefits shall be the responsibility of the SERS annuitant. In the case of a new SERS annuitant who has elected to receive an alternative retirement cancellation payment under Section 14-108.5 of the Illinois Pension Code in lieu of an annuity, for the purposes of this subsection the annuitant shall be deemed to be receiving a retirement annuity based on the number of years of creditable service that the annuitant had established at the time of his or her termination of service under SERS.

(a-2) Beginning July 1, 2009 January 1, 1998, for each person who becomes a new SERS survivor who and participates in the basic program of group health benefits, the State shall contribute toward the cost of the survivor's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the survivor is enrolled that cost for each full year of the deceased employee's or deceased annuitant's creditable service in the State Employees' Retirement System of Illinois on the date of death, up to a maximum of 100% for a survivor of an employee or annuitant with 20 or more years of creditable service. The remainder of the cost of the new SERS survivor's coverage under the basic program of group health benefits shall be the responsibility of the survivor. In the case of a new SERS survivor who was the dependent of an annuitant who elected to receive an alternative retirement cancellation payment under Section 14-108.5 of the Illinois Pension Code in lieu of an annuity, for the purposes of this subsection the deceased annuitant's creditable service shall be determined as of the date of termination of service rather than the date of death.

(a-3) Beginning July 1, 2009 January 1, 1998, for each person who becomes a new SURS annuitant who and participates in the basic program of group health benefits, regardless of the date the individual became an annuitant, the State shall contribute toward the cost of the annuitant's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the annuitant is enrolled that cost for each full year of creditable service upon which the annuitant's retirement annuity is based, up to a maximum of 100% for an annuitant with 20 or more years of creditable service. The remainder of the cost of a new SURS annuitant's coverage under the basic program of group health benefits shall be the responsibility of the annuitant.

(a-4) (Blank).

(a-5) Beginning July 1, 2009 January 1, 1998, for each person who becomes a new SURS survivor who and participates in the basic program of group health benefits, the State shall contribute toward the cost of the survivor's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the survivor is enrolled that cost for each full year of the deceased employee's or deceased annuitant's creditable service in the State Universities Retirement System on the date of death, up to a maximum of 100% for a survivor of an employee or annuitant with 20 or more years of creditable service. The remainder of the cost of the new SURS survivor's coverage under the basic program of group health benefits shall be the responsibility of the survivor.

(a-6) Beginning July 1, 2009 July 1, 1998, for each person who becomes a new TRS State annuitant who and participates in the basic program of group health benefits, regardless of the date the individual became an annuitant, the State shall contribute toward the cost of the annuitant's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the annuitant is enrolled that cost for each full year of creditable service as a teacher as defined in paragraph (2), (3), or (5) of Section 16-106 of the Illinois Pension Code upon which the annuitant's retirement annuity is based, up to a maximum of 100%; except that the State contribution shall be 12.5% per year (rather than 5%) for each full year of creditable service as a regional superintendent or assistant regional superintendent of schools. The remainder of the cost of a new TRS State annuitant's coverage under the basic program of group health benefits shall be the responsibility of the annuitant.

(a-7) Beginning July 1, 2009 July 1, 1998, for each person who becomes a new TRS State survivor who and participates in the basic program of group health benefits, the State shall contribute toward the cost of the survivor's coverage under the basic program of group health benefits an amount equal to 5% of the Medicare rate for the health plan in which the survivor is enrolled that cost for each full year of the deceased employee's or deceased annuitant's creditable service as a teacher as defined in paragraph (2), (3), or (5) of Section 16-106 of the Illinois Pension Code on the date of death, up to a maximum of 100%; except that the State contribution shall be 12.5% per year (rather than 5%) for each full year of the deceased employee's or deceased annuitant's creditable service as a regional superintendent or assistant regional superintendent of schools. The remainder of the cost of the new TRS State survivor's coverage under the basic program of group health benefits shall be the responsibility of the survivor.

(a-8) A new SERS annuitant, new SERS survivor, new SURS annuitant, new SURS survivor, new TRS State annuitant, or new TRS State survivor may waive or terminate coverage in the program of group health benefits. Any such annuitant or survivor who has waived or terminated coverage may enroll or re-enroll in the program of group health benefits only during the annual benefit choice period, as determined by the Director; except that in the event of termination of coverage due to nonpayment of premiums, the annuitant or survivor may not re-enroll in the program.

(a-9) No later than May 1 of each calendar year, the Director of Central Management Services shall certify in writing to the Executive Secretary of the State Employees' Retirement System of Illinois the amounts of the Medicare supplement health care premiums and the amounts of the health care premiums for all other retirees who are not Medicare eligible.

A separate calculation of the premiums based upon the actual cost of each health care plan shall be so certified.

The Director of Central Management Services shall provide to the Executive Secretary of the State Employees' Retirement System of Illinois such information, statistics, and other data as he or she may require to review the premium amounts certified by the Director of Central Management Services.

The Department of Healthcare and Family Services, or any successor agency designated to procure healthcare contracts pursuant to this Act, is authorized to establish funds, separate accounts provided by any bank or banks as defined by the Illinois Banking Act, or separate accounts provided by any savings and loan association or associations as defined by the Illinois Savings and Loan Act of 1985 to be held by the Director, outside the State treasury, for the purpose of receiving the transfer of moneys from the Local Government Health Insurance Reserve Fund. The Department may promulgate rules further defining the methodology for the transfers. Any interest earned by moneys in the funds or accounts shall inure to the Local Government Health Insurance Reserve Fund. The transferred moneys, and interest accrued thereon, shall be used exclusively for transfers to administrative service organizations or their financial institutions for payments of claims to claimants and providers under the self-insurance health plan. The transferred moneys, and interest accrued thereon, shall not be used for any other purpose including, but not limited to, reimbursement of administration fees due the administrative service organization pursuant to its contract or contracts with the Department.

(b) State employees who become eligible for this program on or after January 1, 1980 in positions normally requiring actual performance of duty not less than 1/2 of a normal work period but not equal to that of a normal work period, shall be given the option of participating in the available program. If the employee elects coverage, the State shall contribute on behalf of such employee to the cost of the employee's benefit and any applicable dependent supplement, that sum which bears the same percentage as that percentage of time the employee regularly works when compared to normal work period.

(c) The basic non-contributory coverage from the basic program of group health benefits shall be continued for each employee not in pay status or on active service by reason of (1) leave of absence due to illness or injury, (2) authorized educational leave of absence or sabbatical leave, or (3) military leave with pay and benefits. This coverage shall continue until expiration of authorized leave and return to active service, but not to exceed 24 months for leaves under item (1) or (2). This 24-month limitation and the requirement of returning to active service shall not apply to persons receiving ordinary or accidental disability benefits or retirement benefits through the appropriate State retirement system or benefits under the Workers' Compensation or Occupational Disease Act.

(d) The basic group life insurance coverage shall continue, with full State contribution, where such person is (1) absent from active service by reason of disability arising from any cause other than self-inflicted, (2) on authorized educational leave of absence or sabbatical leave, or (3) on military leave with pay and benefits.

(e) Where the person is in non-pay status for a period in excess of 30 days or on leave of absence, other than by reason of disability, educational or sabbatical leave, or military leave with pay and benefits, such person may continue coverage only by making personal payment equal to the amount normally contributed by the State on such person's behalf. Such payments and coverage may be continued: (1) until such time as the person returns to a status eligible for coverage at State expense, but not to exceed 24 months, (2) until such person's employment or annuitant status with the State is terminated, or (3) for a maximum period of 4 years for members on military leave with pay and benefits and military leave without pay and benefits (exclusive of any additional service imposed pursuant to law).

(f) The Department shall establish by rule the extent to which other employee benefits will continue for persons in non-pay status or who are not in active service.

(g) The State shall not pay the cost of the basic non-contributory group life insurance, program of health benefits and other employee benefits for members who are survivors as defined by paragraphs (1) and (2) of subsection (q) of Section 3 of this Act. The costs of benefits for these survivors shall be paid by the survivors or by the University of Illinois Cooperative Extension Service, or any combination thereof. However, the State shall pay the amount of the reduction in the cost of participation, if any, resulting from the amendment to subsection (a) made by this amendatory Act of the 91st General Assembly.

(h) Those persons occupying positions with any department as a result of emergency appointments pursuant to Section 8b.8 of the Personnel Code who are not considered employees under this Act shall be given the option of participating in the programs of group life insurance, health benefits and other employee benefits. Such persons electing coverage may participate only by making payment equal to the amount normally contributed by the State for similarly situated employees. Such amounts shall be determined by the Director. Such payments and coverage may be continued until such time as the person becomes an employee pursuant to this Act or such person's appointment is terminated.

(i) Any unit of local government within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a unit of local government must agree to enroll all of its employees, who may select coverage under either the State group health benefits plan or a health maintenance organization that has contracted with the State to be available as a health care provider for employees as defined in this Act. A unit of local government must remit the entire cost of providing coverage under the State group health benefits plan or, for coverage under a health maintenance organization, an amount determined by the Director based on an analysis of the sex, age, geographic location, or other relevant demographic variables for its employees, except that the unit of local government shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the unit of local government attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan, and (2) at least 85% of the employees are enrolled and the unit of local government remits the entire cost of providing coverage to those employees, except that a participating school district must have enrolled at least 85% of its full-time employees who have not waived coverage under the district's group health plan by participating in a component of the district's cafeteria plan. A participating school district is not required to enroll a full-time employee who has waived coverage under the district's health plan, provided that an appropriate official from the participating school district attests that the full-time employee has waived coverage by participating in a component of the district's cafeteria plan. For the purposes of this subsection, "participating school district" includes a unit of local government whose primary purpose is education as defined by the Department's rules.

Employees of a participating unit of local government who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period. A participating unit of local government may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the unit of local government, its employees, or some combination of the two as determined by the unit of local government. The unit of local government shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine monthly rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages, or contributed by the State for basic insurance coverages on behalf of its employees, adjusted for differences between State employees and employees of the local government in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the unit of local government and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the unit of local government.

In the case of coverage of local government employees under a health maintenance organization, the Director shall annually determine for each participating unit of local government the maximum monthly amount the unit may contribute toward that coverage, based on an analysis of (i) the age, sex, geographic location, and other relevant demographic variables of the unit's employees and (ii) the cost to cover those employees under the State group health benefits plan. The Director may similarly determine the maximum monthly amount each unit of local government may contribute toward coverage of its employees' dependents under a health maintenance organization.

Monthly payments by the unit of local government or its employees for group health benefits plan or health maintenance organization coverage shall be deposited in the Local Government Health Insurance Reserve Fund.

The Local Government Health Insurance Reserve Fund is hereby created as a nonappropriated trust fund to be held outside the State Treasury, with the State Treasurer as custodian. The Local Government Health Insurance Reserve Fund shall be a continuing fund not subject to fiscal year limitations. All revenues arising from the administration of the health benefits program established under this Section shall be deposited into the Local Government Health Insurance Reserve Fund. Any interest earned on moneys in the Local Government Health Insurance Reserve Fund shall be deposited into the Fund. All expenditures from this Fund shall be used for payments for health care benefits for local government and rehabilitation facility employees, annuitants, and dependents, and to reimburse the Department or its administrative service organization for all expenses incurred in the administration of benefits. No other State funds may be used for these purposes.

A local government employer's participation or desire to participate in a program created under this subsection shall not limit that employer's duty to bargain with the representative of any collective bargaining unit of its employees.

(j) Any rehabilitation facility within the State of Illinois may apply to the Director to have its employees, annuitants, and their eligible dependents provided group health coverage under this Act on a non-insured basis. To participate, a rehabilitation facility must agree to enroll all of its employees and remit the entire cost of providing such coverage for its employees, except that the rehabilitation facility shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the rehabilitation facility attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan, and (2) at least 85% of the employees are enrolled and the rehabilitation facility remits the entire cost of providing coverage to those employees. Employees of a participating rehabilitation facility who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period. A participating rehabilitation facility may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the rehabilitation facility, its employees, or some combination of the 2 as determined by the rehabilitation facility. The rehabilitation facility shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine quarterly rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the rehabilitation facility in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the rehabilitation facility and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the rehabilitation facility.

Monthly payments by the rehabilitation facility or its employees for group health benefits shall be deposited in the Local Government Health Insurance Reserve Fund.

(k) Any domestic violence shelter or service within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a domestic violence shelter or service must agree to enroll all of its employees and pay the entire cost of providing such coverage for its employees. A participating domestic violence shelter may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with employees, or some combination of the 2 as determined by the domestic violence shelter or service. The domestic violence shelter or service shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the domestic violence shelter or service in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the domestic violence shelter or service and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the domestic violence shelter or service.

Monthly payments by the domestic violence shelter or service or its employees for group health insurance shall be deposited in the Local Government Health Insurance Reserve Fund.

(l) A public community college or entity organized pursuant to the Public Community College Act may apply to the Director initially to have only annuitants not covered prior to July 1, 1992 by the district's health plan provided health coverage under this Act on a non-insured basis. The community college must execute a 2-year contract to participate in the Local Government Health Plan. Any annuitant may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period.

The Director shall annually determine monthly rates of payment subject to the following constraints: for those community colleges with annuitants only enrolled, first year rates shall be equal to the average cost to cover claims for a State member adjusted for demographics, Medicare participation, and other factors; and in the second year, a further adjustment of rates shall be made to reflect the actual first year's claims experience of the covered annuitants.

(l-5) The provisions of subsection (l) become inoperative on July 1, 1999.

(m) The Director shall adopt any rules deemed necessary for implementation of this amendatory Act of 1989 (Public Act 86-978).

(n) Any child advocacy center within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a child advocacy center must agree to enroll all of its employees and pay the entire cost of providing coverage for its employees. A participating child advocacy center may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the child advocacy center, its employees, or some combination of the 2 as determined by the child advocacy center. The child advocacy center shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the child advocacy center in age, sex, geographic location, or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the child advocacy center and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the child advocacy center.

Monthly payments by the child advocacy center or its employees for group health insurance shall be deposited into the Local Government Health Insurance Reserve Fund.

(Source: P.A. 94-839, eff. 6-6-06; 94-860, eff. 6-16-06; 95-331, eff. 8-21-07; 95-632, eff. 9-25-07; 95-707, eff. 1-11-08.)

Section 15. The Illinois Pension Code is amended by changing Sections 2-124, 2-134, 14-131, 14-135.08, 15-155, 15-165, 16-158, 18-131, and 18-140 and by adding Sections 2-300, 2-305, 2-310, 2-315, 2-320, 2-325, 2-330, 2-335, 2-340, 14-300, 14-305, 14-310, 14-315, 14-320, 14-325, 14-330, 14-335, 14-340, 15-300, 15-305, 15-310, 15-315, 15-320, 15-325, 15-330, 15-335, 15-340, 16-300, 16-305, 16-310, 16-315, 16-320, 16-325, 16-330, 16-335, 16-340, 18-300, 18-305, 18-310, 18-315, 18-320, 18-325, 18-330, 18-335, and 18-340 as follows:

(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)

Sec. 2-124. Contributions by State.

(a) The State shall make contributions to the System by appropriations of amounts which, together with the contributions of participants, interest earned on investments, and other income will meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

(b) The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the prescribed rate of interest, using the formula in subsection (c).

(c) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $4,157,000.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $5,220,300.

For each of State fiscal years 2008 and 2009 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is the employer normal cost certified by the Board.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is $4,102,529.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2012 is equal to the total required State contribution for State fiscal year 2011 plus $1,302,529.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2013 is equal to the total required State contribution for State fiscal year 2012 plus an additional amount which, when increased by 5% each year from fiscal year 2014 through fiscal year 2045 and added to the prior fiscal year's total required State contribution, will be sufficient to achieve 90% funding by State fiscal year 2045.

For each of State fiscal years 2014 through 2045, the State contribution to the System shall be increased in an annual amount equal to the dollar increase from the required State contribution from the preceding fiscal year plus 5%, so that by State fiscal year 2045, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal years year 2008 and 2009 each fiscal year thereafter, as calculated under this Section and certified under Section 2-134, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 and 2009 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950, eff. 8-29-08.)

(40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)

Sec. 2-134. To certify required State contributions and submit vouchers.

(a) The Board shall certify to the Governor on or before December 15 of each year the amount of the required State contribution to the System for the next fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before July 1, 2009, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2010, taking into account the changes in required State contributions made by this amendatory Act of the 96th General Assembly.

(b) Beginning in State fiscal year 1996, on or as soon as possible after the 15th day of each month the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (d) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year. If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this Section, the difference shall be paid from the General Revenue Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(c) The full amount of any annual appropriation for the System for State fiscal year 1995 shall be transferred and made available to the System at the beginning of that fiscal year at the request of the Board. Any excess funds remaining at the end of any fiscal year from appropriations shall be retained by the System as a general reserve to meet the System's accrued liabilities.

(Source: P.A. 94-4, eff. 6-1-05; 94-536, eff. 8-10-05; 95-331, eff. 8-21-07.)

(40 ILCS 5/2-300 new)

Sec. 2-300. Provisions applicable to later entrants.

(a) The provisions of this Article following this Section apply only to members who first become members on or after January 1, 2010, who are referred to as "later entrants" or who are otherwise considered "later entrants" in accordance with the following Sections of this Article.

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to members who first become members on or after January 1, 2010.

(c) The following Sections are also applicable to members who first become members on or after January 1, 2010: Sections 2-101, 2-102, 2-103, 2-104, 2-105, 2-106, 2-109, 2-111, 2-112, 2-113, 2-114, 2-116, 2-117, 2-117.3, 2-121.2, 2-121.3, 2-124 through 2-160, and 2-162.

(d) To the extent that the Sections enumerated in subsection (c) of this Section conflict with the Sections following this Section, the Sections following this Section shall control.

(e) To the extent that the applicable Sections are included under subsection (c) of this Section, later entrants are entitled to disability benefits under this Article.

(f) "Participant" shall include later entrants who elect to participate, but shall not include former members who elect to participate under Section 2-117.1.

(40 ILCS 5/2-305 new)

Sec. 2-305. Creditable service for later entrants.

(a) A member may only establish creditable service for his or her service as a member under this Article. Except as otherwise provided in this Section, a member may not establish creditable service for any other service.

(b) A member may establish creditable service, without making contributions, for periods of military service, as defined in Section 2-109, provided that the person received a discharge other than dishonorable, was a member within 6 months prior to military service, and returned to service as a member under this System within one year after discharge.

A member may purchase up to 2 years of military service not immediately following service as a member under this System, by paying to the System (1) employee contributions based on the member's salary upon the first date as a member after the military service, plus (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, plus (3) interest on items (1) and (2) at the actuarially assumed rate, compounded annually, from the first date as a member after such military service to the date of payment.

The total amount of creditable military service for any member during his or her entire term of service shall not exceed 5 years.

(c) A member may establish service credit for up to 2 years of periods spent on authorized leave of absence from service due to pregnancy or adoption by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first membership in the System to the date of payment.

(40 ILCS 5/2-310 new)

Sec. 2-310. Retirement annuity; conditions for eligibility; later entrants. A member may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit.

A member may claim a reduced retirement annuity under subsection (c) of Section 2-315 if he or she is at least 62 years of age and has at least 10 years of service.

The annuity shall begin with the first full calendar month following the date of withdrawal.

(40 ILCS 5/2-315 new)

Sec. 2-315. Retirement life annuity; amount; later entrants.

(a) With respect to later entrants:

(1) "Final average salary" means the monthly salary obtained by dividing the total salary of a participant during the period of: (A) the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest or (B) the total period of service, if less than 96 months, by the number of months of service in such period; provided that for the purposes of a retirement annuity the average salary for the last 12 months of the 96 months shall not exceed the final average salary by more than 25%.

In no event shall the monthly salary used to determine final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less; provided, however, that the $12,500 maximum shall be adjusted annually after the effective date of this amendatory Act of the 96th General Assembly, by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, whichever is less.

The earnings limitations contained in this item (1) apply to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating a proportional annuity under this Article.

(2) "Salary" means:

(A) For members of the General Assembly, the total salary paid to the member by the State for one year of service, including the additional amounts, if any, paid to the member as an officer, committee chair, or minority spokesperson pursuant to Section 1 of General Assembly Compensation Act. "Salary" shall not include any compensation or allowance for mileage, food, or lodging.

(B) For all other members specified in Section 2-105, the total salary paid to the member for one year of service. "Salary" shall not include any compensation or allowance for mileage, food, or lodging.

However, in the event that federal tax law results in any participant receiving imputed income, such imputed income shall not be included in salary for the purposes of this Article.

(b) The retirement life annuity shall be 2% of final average salary for each year of service, but in no event shall exceed 70% of final average salary.

(c) For a member retiring after attaining age 62 with less than 35 years of service credit, the retirement life annuity shall be reduced by one-half of 1% for each month that the member's age is under the full (normal) retirement age as provided in the federal Social Security Act.

(40 ILCS 5/2-320 new)

Sec. 2-320. Alternative forms of annuities for later entrants. A participant may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 2-315:

(1) Joint and 50% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 50% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(2) Joint and 75% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 75% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(3) Joint and 100% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 100% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(4) Single life annuity with 60, 120, or 180 months of guaranteed payments. Under this option, the participant receives a reduced monthly payment for his or her lifetime. If the participant dies before receiving at least the number of guaranteed monthly payments, then the participant's beneficiary or estate receives the remaining guaranteed number of monthly payments.

The Board must determine the participant's optional form of annuity provided under this Section by taking into account the appropriate actuarial assumptions, including without limitation the participant's and beneficiary's age; applicable mortality tables; and any other factors that the Board determines to be relevant. For this purpose, the participant's joint and survivor annuity should result in no significant increase to the System's unfunded actuarial accrued liability determined as of the most recent actuarial valuation compared to the System's actuarial liability if the participant opted for a retirement life annuity under Section 2-315, based on the same assumptions and methods used to develop and report the System's actuarial accrued liability and actuarial value of assets under Statement No. 25 of Governmental Accounting Standards Board or any subsequent applicable Statement.

(40 ILCS 5/2-325 new)

Sec. 2-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Section 2-315 or 2-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the increase is being granted to the June 30 preceding the year during which the increase is being granted, whichever is less, of the originally granted annuity.

(40 ILCS 5/2-330 new)

Sec. 2-330. Contributions by participants; later entrants.

(a) Each participant shall contribute 7% of each payment of salary received by him or her for service as a member toward the cost of his or her retirement annuity. In no event shall contributions be deducted from salary in excess of (1) the Social Security Covered Wage Base for the given calendar year or (2) $150,000, whichever is less.

(b) Contributions shall be in the form of a deduction from salary and shall be made notwithstanding that the net salary paid to the member shall be reduced thereby below the minimum prescribed by law or regulation. Each member is deemed to consent and agree to the deductions from compensation provided for in this Article.

(c) These contributions shall be picked up in the manner provided in Section 2-126.1.

(40 ILCS 5/2-335 new)

Sec. 2-335. Refunds; later entrants.

(a) A participant who ceases to be a member, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the interest is being credited to the June 30 preceding the year during which the interest is being credited, whichever is less, per year, not compounded.

(b) Upon re-entry into service as a member, a former participant may reestablish any creditable service forfeited by acceptance of a refund by paying to the System the full amount refunded, plus interest at the actuarially assumed rate, not compounded, from the date of payment of the refund to the date of repayment.

(c) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/2-340 new)

Sec. 2-340. Re-entry after retirement; later entrants.

(a) An annuitant who re-enters service as a member shall become a participant on the date of re-entry, unless he or she elects not to participate under Section 2-117, and retirement annuity payments shall cease at that time. The participant shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit.

(b) Upon subsequent retirement, the participant shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service and (2) the amount of additional retirement annuity earned during the additional service.

(c) In computing the retirement annuity under subsection (b) of this Section, the time that the member was on retirement shall not interrupt the continuity of service for the computation of final average compensation and the additional membership service shall be considered, together with service rendered before the previous retirement, in establishing final average compensation.

(d) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/14-131) (from Ch. 108 1/2, par. 14-131)

Sec. 14-131. Contributions by State.

(a) The State shall make contributions to the System by appropriations of amounts which, together with other employer contributions from trust, federal, and other funds, employee contributions, investment income, and other income, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

For the purposes of this Section and Section 14-135.08, references to State contributions refer only to employer contributions and do not include employee contributions that are picked up or otherwise paid by the State or a department on behalf of the employee.

(b) The Board shall determine the total amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board, using the formula in subsection (e).

The Board shall also determine a State contribution rate for each fiscal year, expressed as a percentage of payroll, based on the total required State contribution for that fiscal year (less the amount received by the System from appropriations under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act, if any, for the fiscal year ending on the June 30 immediately preceding the applicable November 15 certification deadline), the estimated payroll (including all forms of compensation) for personal services rendered by eligible employees, and the recommendations of the actuary.

For the purposes of this Section and Section 14.1 of the State Finance Act, the term "eligible employees" includes employees who participate in the System, persons who may elect to participate in the System but have not so elected, persons who are serving a qualifying period that is required for participation, and annuitants employed by a department as described in subdivision (a)(1) or (a)(2) of Section 14-111.

(c) Contributions shall be made by the several departments for each pay period by warrants drawn by the State Comptroller against their respective funds or appropriations based upon vouchers stating the amount to be so contributed. These amounts shall be based on the full rate certified by the Board under Section 14-135.08 for that fiscal year. From the effective date of this amendatory Act of the 93rd General Assembly through the payment of the final payroll from fiscal year 2004 appropriations, the several departments shall not make contributions for the remainder of fiscal year 2004 but shall instead make payments as required under subsection (a-1) of Section 14.1 of the State Finance Act. The several departments shall resume those contributions at the commencement of fiscal year 2005.

(d) If an employee is paid from trust funds or federal funds, the department or other employer shall pay employer contributions from those funds to the System at the certified rate, unless the terms of the trust or the federal-State agreement preclude the use of the funds for that purpose, in which case the required employer contributions shall be paid by the State. From the effective date of this amendatory Act of the 93rd General Assembly through the payment of the final payroll from fiscal year 2004 appropriations, the department or other employer shall not pay contributions for the remainder of fiscal year 2004 but shall instead make payments as required under subsection (a-1) of Section 14.1 of the State Finance Act. The department or other employer shall resume payment of contributions at the commencement of fiscal year 2005.

(e) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section; except that (i) for State fiscal year 1998, for all purposes of this Code and any other law of this State, the certified percentage of the applicable employee payroll shall be 5.052% for employees earning eligible creditable service under Section 14-110 and 6.500% for all other employees, notwithstanding any contrary certification made under Section 14-135.08 before the effective date of this amendatory Act of 1997, and (ii) in the following specified State fiscal years, the State contribution to the System shall not be less than the following indicated percentages of the applicable employee payroll, even if the indicated percentage will produce a State contribution in excess of the amount otherwise required under this subsection and subsection (a): 9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY 2002; 10.6% in FY 2003; and 10.8% in FY 2004.

Notwithstanding any other provision of this Article, the total required State contribution to the System for State fiscal year 2006 is $203,783,900.

Notwithstanding any other provision of this Article, the total required State contribution to the System for State fiscal year 2007 is $344,164,400.

For each of State fiscal years 2008 and 2009 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is the employer normal cost certified by the Board.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is $514,584,341.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2012 is equal to the total required State contribution for State fiscal year 2011 plus $135,996,060.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2013 is equal to the total required State contribution for State fiscal year 2012 plus an additional amount which, when increased by 5% each year from fiscal year 2014 through fiscal year 2045 and added to the prior fiscal year's total required State contribution, will be sufficient to achieve 90% funding by State fiscal year 2045.

For each of State fiscal years 2014 through 2045, the State contribution to the System shall be increased in an annual amount equal to the dollar increase from the required State contribution from the preceding fiscal year plus 5%, so that by State fiscal year 2045, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal years year 2008 and 2009 each fiscal year thereafter, as calculated under this Section and certified under Section 14-135.08, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 and 2009 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(f) After the submission of all payments for eligible employees from personal services line items in fiscal year 2004 have been made, the Comptroller shall provide to the System a certification of the sum of all fiscal year 2004 expenditures for personal services that would have been covered by payments to the System under this Section if the provisions of this amendatory Act of the 93rd General Assembly had not been enacted. Upon receipt of the certification, the System shall determine the amount due to the System based on the full rate certified by the Board under Section 14-135.08 for fiscal year 2004 in order to meet the State's obligation under this Section. The System shall compare this amount due to the amount received by the System in fiscal year 2004 through payments under this Section and under Section 6z-61 of the State Finance Act. If the amount due is more than the amount received, the difference shall be termed the "Fiscal Year 2004 Shortfall" for purposes of this Section, and the Fiscal Year 2004 Shortfall shall be satisfied under Section 1.2 of the State Pension Funds Continuing Appropriation Act. If the amount due is less than the amount received, the difference shall be termed the "Fiscal Year 2004 Overpayment" for purposes of this Section, and the Fiscal Year 2004 Overpayment shall be repaid by the System to the Pension Contribution Fund as soon as practicable after the certification.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950, eff. 8-29-08.)

(40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)

Sec. 14-135.08. To certify required State contributions.

(a) To certify to the Governor and to each department, on or before November 15 of each year, the required rate for State contributions to the System for the next State fiscal year, as determined under subsection (b) of Section 14-131. The certification to the Governor shall include a copy of the actuarial recommendations upon which the rate is based.

(b) The certification shall include an additional amount necessary to pay all principal of and interest on those general obligation bonds due the next fiscal year authorized by Section 7.2(a) of the General Obligation Bond Act and issued to provide the proceeds deposited by the State with the System in July 2003, representing deposits other than amounts reserved under Section 7.2(c) of the General Obligation Bond Act. For State fiscal year 2005, the Board shall make a supplemental certification of the additional amount necessary to pay all principal of and interest on those general obligation bonds due in State fiscal years 2004 and 2005 authorized by Section 7.2(a) of the General Obligation Bond Act and issued to provide the proceeds deposited by the State with the System in July 2003, representing deposits other than amounts reserved under Section 7.2(c) of the General Obligation Bond Act, as soon as practical after the effective date of this amendatory Act of the 93rd General Assembly.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor and to each department the amount of the required State contribution to the System and the required rates for State contributions to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor and to each department the amount of the required State contribution to the System and the required rates for State contributions to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before July 1, 2009, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2010, taking into account the changes in required State contributions made by this amendatory Act of the 96th General Assembly.

(Source: P.A. 93-2, eff. 4-7-03; 93-839, eff. 7-30-04; 94-4, eff. 6-1-05.)

(40 ILCS 5/14-300 new)

Sec. 14-300. Provisions applicable to later entrants.

(a) The provisions of this Article following this Section apply only to members who first become members on or after January 1, 2010, who are referred to as "later entrants" or who are otherwise considered "later entrants" in accordance with the following Sections of this Article.

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to members who first become members on or after January 1, 2010.

(c) The following Sections are also applicable to employees who first become employees on or after January 1, 2010: Sections 14-101, 14-102, 14-103, 14-103.01, 14-103.02, 14-103.03, 14-103.04, 14-103.05, 14-103.06, 14-103.07, 14-103.08, 14-103.09, 14-103.11, 14-103.13, 14-103.15, 14-103.16, 14-103.17, 14-103.18, 14-103.19, 14-103.21, 14-103.22, 14-103.23, 14-103.24, 14-103.25, 14-103.26, 14-103.27, 14-103.28, 14-103.29, 14-103.32, 14-103.33, 14-103.34, 14-103.35, 14-103.36, 14-103.37, 14-103.38, 14-103.39, 14-104.4, 14-104.7, 14-121.1, 14-123, 14-123.1, 14-124, 14-125, 14-125.1, 14-126, 14-127, 14-128, 14-129, 14-131, 14-132, 14-132.2, and 14-133.1 and Sections 14-134 through 14-152.2.

(d) To the extent that the Sections enumerated in subsection (c) of this Section conflict with the Sections following this Section, the Sections following this Section shall control.

(e) To the extent that the applicable Sections are included under subsection (c) of this Section, later entrants are entitled to disability benefits under this Article.

(40 ILCS 5/14-305 new)

Sec. 14-305. Creditable service for later entrants.

(a) Creditable service under this Article is subject to the following conditions:

(1) A member may only establish creditable service for his or her membership service, as defined in Section 14-103.13. Except as otherwise provided in this Section, a member may not establish creditable service for any other service.

(2) A member may not convert any unused sick leave or vacation into creditable service under this Article.

(b) A member may establish creditable service, without making contributions, for periods of military service, as defined in Section 14-103.16, provided that the person received a discharge other than dishonorable, was a member within 6 months prior to military service, and returned to service as a member under this System within one year after discharge.

A member may purchase up to 2 years of military service not immediately following service as a member under this System, by paying to the System (1) employee contributions based on the member's salary upon the first date as a member after the military service, plus (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, plus (3) interest on items (1) and (2) at the actuarially assumed rate, compounded annually, from the first date as a member after such military service to the date of payment.

The total amount of creditable military service for any member during his or her entire term of service shall not exceed 5 years.

(c) A member may establish service credit for up to 2 years of periods spent on authorized leave of absence from service due to pregnancy or adoption by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first membership in the System to the date of payment.

(40 ILCS 5/14-310 new)

Sec. 14-310. Retirement annuity; conditions for eligibility; later entrants. A member may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit.

A member may claim a reduced retirement annuity under subsection (c) of Section 14-315 if he or she is at least 62 years of age and has at least 10 years of service.

The annuity shall begin with the first full calendar month following the date of withdrawal.

(40 ILCS 5/14-315 new)

Sec. 14-315. Retirement life annuity; amount; later entrants.

(a) With respect to later entrants:

(1) "Final average compensation" means the monthly compensation obtained by dividing the total compensation of an employee during the period of: (A) the 96 consecutive months of service within the last 120 months of service in which the total compensation was the highest or (B) the total period of service, if less than 96 months, by the number of months of service in such period; provided that for the purposes of a retirement annuity the average compensation for the last 12 months of the 96 months shall not exceed the final average compensation by more than 25%.

In no event shall the monthly compensation used to determined final average compensation exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less; provided, however, that the $12,500 maximum shall be adjusted annually after the effective date of this amendatory Act of the 96th General Assembly, by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, whichever is less.

(2) "Compensation" means a member's base compensation for regularly scheduled services rendered for an employer, but does not include bonuses, expense reimbursements, taxable or non-taxable fringe benefits, imputed income, lump-sum payments for cashouts of vacation, unused sick or personal leave, severance pay, deferred compensation, or any other similar amounts.

(b) The retirement life annuity shall be (1) 1.5% of final average compensation for each year of service for covered employees up to a maximum of 52.5% of final average compensation or (2) 2% of final average compensation for each year of service for noncovered employees up to a maximum of 70% of final average compensation.

(c) For a member retiring after attaining age 62 with less than 35 years of service credit, the retirement life annuity shall be reduced by one-half of 1% for each month that the member's age is under the full (normal) retirement age as provided in the federal Social Security Act.

(40 ILCS 5/14-320 new)

Sec. 14-320. Alternative forms of annuities for later entrants. A member may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 14-315:

(1) Joint and 50% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 50% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(2) Joint and 75% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 75% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(3) Joint and 100% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 100% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(4) Single life annuity with 60, 120, or 180 months of guaranteed payments. Under this option, the member receives a reduced monthly payment for his or her lifetime. If the member dies before receiving at least the number of guaranteed monthly payments, then the member's beneficiary or estate receives the remaining guaranteed number of monthly payments.

The Board must determine the participant's optional form of annuity provided under this Section by taking into account the appropriate actuarial assumptions, including without limitation the participant's and beneficiary's age; applicable mortality tables; and any other factors that the Board determines to be relevant. For this purpose, the participant's joint and survivor annuity should result in no significant increase to the System's unfunded actuarial accrued liability determined as of the most recent actuarial valuation compared to the System's actuarial liability if the participant opted for a retirement life annuity under Section 14-315, based on the same assumptions and methods used to develop and report the System's actuarial accrued liability and actuarial value of assets under Statement No. 25 of Governmental Accounting Standards Board or any subsequent applicable Statement.

(40 ILCS 5/14-325 new)

Sec. 14-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Section 14-315 or 14-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the increase is being granted to the June 30 preceding the year during which the increase is being granted, whichever is less, of the originally granted annuity.

(40 ILCS 5/14-330 new)

Sec. 14-330. Contributions by members; later entrants.

(a) Each employee shall contribute the following percentage of each payment of salary received by him or her for service as an employee toward the cost of his or her retirement annuity:

(1) Covered employees, 3%.

(2) Noncovered employees, 7%.

(b) Contributions shall be in the form of a deduction from compensation and shall be made notwithstanding that the net compensation paid to the employee shall be reduced thereby below the minimum prescribed by law or regulation. Each member is deemed to consent and agree to the deductions from compensation provided for in this Article.

(c) These contributions shall be picked up in the manner provided in Section 14-133.1.

(d) In no event shall contributions be deducted from salary in excess of (1) the Social Security Covered Wage Base for the given calendar year or (2) $150,000, whichever is less.

(40 ILCS 5/14-335 new)

Sec. 14-335. Refunds; later entrants.

(a) A member who ceases to be an employee, other than an annuitant, shall, upon written request made at least 30 days following withdrawal as an employee, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the interest is being credited to the June 30 preceding the year during which the interest is being credited, whichever is less, per year, not compounded.

(b) Upon re-entry into service as a member and completion of 2 years of creditable service, a former member may reestablish any creditable service forfeited by acceptance of a refund by paying to the System the full amount refunded, plus interest at actuarially assumed rate, not compounded, from the date of payment of the refund to the date of repayment.

(c) Members covered by the provisions of this Section shall be deemed later entrants only if the date of their initial membership was on or after January 1, 2010.

(40 ILCS 5/14-340 new)

Sec. 14-340. Re-entry after retirement; later entrants.

(a) An annuitant who re-enters service as a member shall become a member on the date of re-entry and retirement annuity payments shall cease at that time. The employee shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit.

(b) Upon subsequent retirement, the employee shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service and (2) the amount of additional retirement annuity earned during the additional service.

(c) In computing the retirement annuity under subsection (b) of this Section, the time that the member was on retirement shall not interrupt the continuity of service for the computation of final average compensation and the additional membership service shall be considered, together with service rendered before the previous retirement, in establishing final average compensation.

(d) Members covered by the provisions of this Section shall be deemed later entrants only if the date of their initial membership was on or after January 1, 2010.

(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)

Sec. 15-155. Employer contributions.

(a) The State of Illinois shall make contributions by appropriations of amounts which, together with the other employer contributions from trust, federal, and other funds, employee contributions, income from investments, and other income of this System, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, using the formula in subsection (a-1).

(a-1) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $166,641,900.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $252,064,100.

For each of State fiscal years 2008 and 2009 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is the employer normal cost certified by the Board.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is $430,367,603.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2012 is equal to the total required State contribution for State fiscal year 2011 plus $92,763,612.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2013 is equal to the total required State contribution for State fiscal year 2012 plus an additional amount which, when increased by 5% each year from fiscal year 2014 through fiscal year 2045 and added to the prior fiscal year's total required State contribution, will be sufficient to achieve 90% funding by State fiscal year 2045.

For each of State fiscal years 2014 through 2045, the State contribution to the System shall be increased in an annual amount equal to the dollar increase from the required State contribution from the preceding fiscal year plus 5%, so that by State fiscal year 2045, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal years year 2008 and 2009 each fiscal year thereafter, as calculated under this Section and certified under Section 15-165, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 and 2009 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(b) If an employee is paid from trust or federal funds, the employer shall pay to the Board contributions from those funds which are sufficient to cover the accruing normal costs on behalf of the employee. However, universities having employees who are compensated out of local auxiliary funds, income funds, or service enterprise funds are not required to pay such contributions on behalf of those employees. The local auxiliary funds, income funds, and service enterprise funds of universities shall not be considered trust funds for the purpose of this Article, but funds of alumni associations, foundations, and athletic associations which are affiliated with the universities included as employers under this Article and other employers which do not receive State appropriations are considered to be trust funds for the purpose of this Article.

(b-1) The City of Urbana and the City of Champaign shall each make employer contributions to this System for their respective firefighter employees who participate in this System pursuant to subsection (h) of Section 15-107. The rate of contributions to be made by those municipalities shall be determined annually by the Board on the basis of the actuarial assumptions adopted by the Board and the recommendations of the actuary, and shall be expressed as a percentage of salary for each such employee. The Board shall certify the rate to the affected municipalities as soon as may be practical. The employer contributions required under this subsection shall be remitted by the municipality to the System at the same time and in the same manner as employee contributions.

(c) Through State fiscal year 1995: The total employer contribution shall be apportioned among the various funds of the State and other employers, whether trust, federal, or other funds, in accordance with actuarial procedures approved by the Board. State of Illinois contributions for employers receiving State appropriations for personal services shall be payable from appropriations made to the employers or to the System. The contributions for Class I community colleges covering earnings other than those paid from trust and federal funds, shall be payable solely from appropriations to the Illinois Community College Board or the System for employer contributions.

(d) Beginning in State fiscal year 1996, the required State contributions to the System shall be appropriated directly to the System and shall be payable through vouchers issued in accordance with subsection (c) of Section 15-165, except as provided in subsection (g).

(e) The State Comptroller shall draw warrants payable to the System upon proper certification by the System or by the employer in accordance with the appropriation laws and this Code.

(f) Normal costs under this Section means liability for pensions and other benefits which accrues to the System because of the credits earned for service rendered by the participants during the fiscal year and expenses of administering the System, but shall not include the principal of or any redemption premium or interest on any bonds issued by the Board or any expenses incurred or deposits required in connection therewith.

(g) If the amount of a participant's earnings for any academic year used to determine the final rate of earnings, determined on a full-time equivalent basis, exceeds the amount of his or her earnings with the same employer for the previous academic year, determined on a full-time equivalent basis, by more than 6%, the participant's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. The System may require the employer to provide any pertinent information or documentation.

Whenever it determines that a payment is or may be required under this subsection (g), the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (h) or (i) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of subsection (h) or (i). Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(h) This subsection (h) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases paid to participants under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases paid to a participant at a time when the participant is 10 or more years from retirement eligibility under Section 15-135.

When assessing payment for any amount due under subsection (g), the System shall exclude earnings increases resulting from overload work, including a contract for summer teaching, or overtime when the employer has certified to the System, and the System has approved the certification, that: (i) in the case of overloads (A) the overload work is for the sole purpose of academic instruction in excess of the standard number of instruction hours for a full-time employee occurring during the academic year that the overload is paid and (B) the earnings increases are equal to or less than the rate of pay for academic instruction computed using the participant's current salary rate and work schedule; and (ii) in the case of overtime, the overtime was necessary for the educational mission.

When assessing payment for any amount due under subsection (g), the System shall exclude any earnings increase resulting from (i) a promotion for which the employee moves from one classification to a higher classification under the State Universities Civil Service System, (ii) a promotion in academic rank for a tenured or tenure-track faculty position, or (iii) a promotion that the Illinois Community College Board has recommended in accordance with subsection (k) of this Section. These earnings increases shall be excluded only if the promotion is to a position that has existed and been filled by a member for no less than one complete academic year and the earnings increase as a result of the promotion is an increase that results in an amount no greater than the average salary paid for other similar positions.

(i) When assessing payment for any amount due under subsection (g), the System shall exclude any salary increase described in subsection (h) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (g) of this Section.

(j) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.

(2) The dollar amount by which each employer's contribution to the System was changed due to recalculations required by Public Act 94-1057.

(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.

(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(k) The Illinois Community College Board shall adopt rules for recommending lists of promotional positions submitted to the Board by community colleges and for reviewing the promotional lists on an annual basis. When recommending promotional lists, the Board shall consider the similarity of the positions submitted to those positions recognized for State universities by the State Universities Civil Service System. The Illinois Community College Board shall file a copy of its findings with the System. The System shall consider the findings of the Illinois Community College Board when making determinations under this Section. The System shall not exclude any earnings increases resulting from a promotion when the promotion was not submitted by a community college. Nothing in this subsection (k) shall require any community college to submit any information to the Community College Board.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057, eff. 7-31-06; 95-331, eff. 8-21-07; 95-950, eff. 8-29-08.)

(40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)

Sec. 15-165. To certify amounts and submit vouchers.

(a) The Board shall certify to the Governor on or before November 15 of each year the appropriation required from State funds for the purposes of this System for the following fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before July 1, 2009, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2010, taking into account the changes in required State contributions made by this amendatory Act of the 96th General Assembly.

(b) The Board shall certify to the State Comptroller or employer, as the case may be, from time to time, by its president and secretary, with its seal attached, the amounts payable to the System from the various funds.

(c) Beginning in State fiscal year 1996, on or as soon as possible after the 15th day of each month the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (b) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this Section, the difference shall be paid from the General Revenue Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(d) So long as the payments received are the full amount lawfully vouchered under this Section, payments received by the System under this Section shall be applied first toward the employer contribution to the self-managed plan established under Section 15-158.2. Payments shall be applied second toward the employer's portion of the normal costs of the System, as defined in subsection (f) of Section 15-155. The balance shall be applied toward the unfunded actuarial liabilities of the System.

(e) In the event that the System does not receive, as a result of legislative enactment or otherwise, payments sufficient to fully fund the employer contribution to the self-managed plan established under Section 15-158.2 and to fully fund that portion of the employer's portion of the normal costs of the System, as calculated in accordance with Section 15-155(a-1), then any payments received shall be applied proportionately to the optional retirement program established under Section 15-158.2 and to the employer's portion of the normal costs of the System, as calculated in accordance with Section 15-155(a-1).

(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04; 94-4, eff. 6-1-05.)

(40 ILCS 5/15-300 new)

Sec. 15-300. Provisions applicable to later entrants.

(a) The provisions of this Article following this Section apply only to employees who first become employees on or after January 1, 2010, who are referred to as "later entrants" or who are otherwise considered "later entrants" in accordance with the following Sections of this Article.

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to employees who first become employees on or after January 1, 2010.

(c) The following Sections are also applicable to employees who first become employees on or after January 1, 2010: Sections 15-101, 15-102, 15-103, 15-103.2, 15-103.3, 15-104, 15-105, 15-106, 15-107, 15-108, 15-109, 15-110, 15-111, 15-113, 15-113.1, 15-118, 15-119, 15-120, 15-124, 15-126, 15-126.1, 15-127, 15-129, 15-130, 15-132.2, 15-133, 15-134, 15-134.5, 15-136.4, 15-150, 15-151, 15-152, 15-153, 15-153.1, 15-153.2, 15-153.3, 15-155, 15-156, 15-157.1, 15-158.2, 15-158.3, and 15-158.4 and Sections 15-159 through 15-198.

(d) To the extent that the Sections enumerated in subsection (c) of this Section conflict with the Sections following this Section, the Sections following this Section shall control.

(e) To the extent that the applicable Sections are included under subsection (c) of this Section, later entrants are entitled to disability benefits under this Article.

(40 ILCS 5/15-305 new)

Sec. 15-305. Creditable service for later entrants.

(a) Creditable service under this Article is subject to the following conditions:

(1) A participant may only establish creditable service for his or her service for employment with an employer, as defined in Section 15-106. Except as otherwise provided in this Section, a participant may not establish creditable service for any other service.

(2) A participant may not convert any unused sick leave or vacation into creditable service under this Article.

(3) Creditable service shall not include periods during which a person was employed less than one-half time with an employer, as defined in Section 15-106.

(b) A participant may establish creditable service, without making contributions, for periods of military service, provided that the person received a discharge other than dishonorable, was a participant within 6 months prior to military service, and returned to service as a participant under this System within one year after discharge.

A participant may purchase up to 2 years of military service not immediately following service as a participant under this System, by paying to the System (1) employee contributions based on the participant's salary upon the first date as a participant after the military service, plus (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, plus (3) interest on items (1) and (2) at the actuarially assumed rate, compounded annually, from the first date as a participant after such military service to the date of payment.

The total amount of creditable military service for any participant during his or her entire term of service shall not exceed 5 years.

For the purposes of this subsection (b), "military service" means periods during which a person served in the armed forces of the United States for which the person received a discharge other than dishonorable.

(c) A participant may establish service credit for up to 2 years of periods spent on authorized leave of absence from service due to pregnancy or adoption by paying to the System (1) employee contributions based upon the participant's salary upon becoming a participant under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first participation in the System to the date of payment.

(40 ILCS 5/15-310 new)

Sec. 15-310. Retirement annuity; conditions for eligibility; later entrants. A participant may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit. If the participant who has not yet claimed his or her annuity is not an employee of an employer participating in this System or in a participating System as defined in Article 20 of this Code on April 1 of the calendar year next following the calendar year in which the participant attains age 70 1/2, then the annuity payment period shall begin on that date.

A participant may claim a reduced retirement annuity under subsection (c) of Section 15-315 if he or she is at least 62 years of age and has at least 10 years of service.

The annuity shall begin with the first full calendar month following the date of withdrawal.

(40 ILCS 5/15-315 new)

Sec. 15-315. Retirement life annuity; amount; employer contribution; later entrants.

(a) With respect to later entrants:

(1) "Final average rate of earnings" means the monthly rate of earnings obtained by dividing the total rate of earnings of an employee during the period of: (A) the 96 consecutive months of service within the last 120 months of service in which the total rate of earnings was the highest or (B) the total period of service, if less than 96 months, by the number of months of service in such period; provided that for the purposes of a retirement annuity the average rate of earnings for the last 12 months of the 96 months shall not exceed the final average rate of earnings by more than 25%.

In no event shall the monthly rate of earnings used to determined final average rate of earnings exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less; provided, however, that the $12,500 maximum shall be adjusted annually after the effective date of this amendatory Act of the 96th General Assembly, by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, whichever is less.

(2) "Earnings" means a participant's base earnings and does not include any overtime or bonuses.

(b) The retirement life annuity shall be 2% of final average rate of earnings for each year of service, but in no event shall exceed 70% of final average rate of earnings.

(c) For a participant retiring after attaining age 62 with less than 35 years of service credit, the retirement life annuity shall be reduced by one-half of 1% for each month that the participant's age is under the full (normal) retirement age as provided in the federal Social Security Act.

(40 ILCS 5/15-320 new)

Sec. 15-320. Alternative forms of annuities for later entrants.

(a) A participant may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 15-315:

(1) Joint and 50% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 50% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(2) Joint and 75% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 75% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(3) Joint and 100% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 100% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(4) Single life annuity with 60, 120, or 180 months of guaranteed payments. Under this option, the participant receives a reduced monthly payment for his or her lifetime. If the participant dies before receiving at least the number of guaranteed monthly payments, then the participant's beneficiary or estate receives the remaining guaranteed number of monthly payments.

(b) In lieu of the annuities under Section 15-315 and subsection (a) of this Section, a participant may choose the portable benefit package under Section 15-136.4 or the self-managed plan under Section 15-158.2.

(c) The Board must determine the participant's optional form of annuity provided under this Section by taking into account the appropriate actuarial assumptions, including without limitation the participant's and beneficiary's age; applicable mortality tables; and any other factors that the Board determines to be relevant. For this purpose, the participant's joint and survivor annuity should result in no significant increase to the System's unfunded actuarial accrued liability determined as of the most recent actuarial valuation compared to the System's actuarial liability if the participant opted for a retirement life annuity under Section 15-315, based on the same assumptions and methods used to develop and report the System's actuarial accrued liability and actuarial value of assets under Statement No. 25 of Governmental Accounting Standards Board or any subsequent applicable Statement.

(40 ILCS 5/15-325 new)

Sec. 15-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Section 15-315 or 15-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the increase is being granted to the June 30 preceding the year during which the increase is being granted, whichever is less, of the originally granted annuity.

(40 ILCS 5/15-330 new)

Sec. 15-330. Contributions by participants; later entrants.

(a) Each employee shall contribute 7% of each payment of salary received by him or her for service as an employee toward the cost of his or her retirement annuity.

(b) Contributions shall be in the form of a deduction from earnings and shall be made notwithstanding that the net earnings paid to the employee shall be reduced thereby below the minimum prescribed by law or regulation. Each participant is deemed to consent and agree to the deductions from earnings provided for in this Article.

(c) These contributions shall be picked up in the manner provided in Section 15-157.1.

(d) In no event shall contributions be deducted from salary in excess of (1) the Social Security Covered Wage Base for the given calendar year or (2) $150,000, whichever is less.

(40 ILCS 5/15-335 new)

Sec. 15-335. Refunds; later entrants.

(a) A participant who ceases to be an employee, other than an annuitant, shall, upon written request made at least 120 days following withdrawal as a member, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the interest is being credited to the June 30 preceding the year during which the interest is being credited, whichever is less, per year, not compounded, except that not more than one such refund application may be made during any academic year.

(b) Upon re-entry into service as an employee and completion of 2 years of creditable service, a former participant may reestablish any creditable service forfeited by acceptance of a refund by paying to the System the full amount refunded, plus interest at the actuarially assumed rate, not compounded, from the date of payment of the refund to the date of repayment.

(c) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/15-340 new)

Sec. 15-340. Re-entry after retirement; later entrants.

(a) An annuitant who re-enters service as an employee shall become a participant on the date of re-entry and retirement annuity payments shall cease at that time. The employee shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit.

(b) Upon subsequent retirement, the employee shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service and (2) the amount of additional retirement annuity earned during the additional service.

(c) In computing the retirement annuity under subsection (b) of this Section, the time that the employee was on retirement shall not interrupt the continuity of service for the computation of final average rate of earnings and the additional service shall be considered, together with service rendered before the previous retirement, in establishing final average rate of earnings.

(d) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)

Sec. 16-158. Contributions by State and other employing units.

(a) The State shall make contributions to the System by means of appropriations from the Common School Fund and other State funds of amounts which, together with other employer contributions, employee contributions, investment income, and other income, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, using the formula in subsection (b-3).

(a-1) Annually, on or before November 15, the Board shall certify to the Governor the amount of the required State contribution for the coming fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before July 1, 2009, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2010, taking into account the changes in required State contributions made by this amendatory Act of the 96th General Assembly.

(b) Through State fiscal year 1995, the State contributions shall be paid to the System in accordance with Section 18-7 of the School Code.

(b-1) Beginning in State fiscal year 1996, on the 15th day of each month, or as soon thereafter as may be practicable, the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a-1). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (a) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this subsection, the difference shall be paid from the Common School Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(b-2) Allocations from the Common School Fund apportioned to school districts not coming under this System shall not be diminished or affected by the provisions of this Article.

(b-3) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section; except that in the following specified State fiscal years, the State contribution to the System shall not be less than the following indicated percentages of the applicable employee payroll, even if the indicated percentage will produce a State contribution in excess of the amount otherwise required under this subsection and subsection (a), and notwithstanding any contrary certification made under subsection (a-1) before the effective date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY 2003; and 13.56% in FY 2004.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $534,627,700.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $738,014,500.

For each of State fiscal years 2008 and 2009 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is the employer normal cost certified by the Board.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is $1,090,909,342.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2012 is equal to the total required State contribution for State fiscal year 2011 plus $260,115,629.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2013 is equal to the total required State contribution for State fiscal year 2012 plus an additional amount which, when increased by 5% each year from fiscal year 2014 through fiscal year 2045 and added to the prior fiscal year's total required State contribution, will be sufficient to achieve 90% funding by State fiscal year 2045.

For each of State fiscal years 2014 through 2045, the State contribution to the System shall be increased in an annual amount equal to the dollar increase from the required State contribution from the preceding fiscal year plus 5%, so that by State fiscal year 2045, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal years year 2008 and 2009 each fiscal year thereafter, as calculated under this Section and certified under subsection (a-1), shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 and 2009 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(c) Payment of the required State contributions and of all pensions, retirement annuities, death benefits, refunds, and other benefits granted under or assumed by this System, and all expenses in connection with the administration and operation thereof, are obligations of the State.

If members are paid from special trust or federal funds which are administered by the employing unit, whether school district or other unit, the employing unit shall pay to the System from such funds the full accruing retirement costs based upon that service, as determined by the System. Employer contributions, based on salary paid to members from federal funds, may be forwarded by the distributing agency of the State of Illinois to the System prior to allocation, in an amount determined in accordance with guidelines established by such agency and the System.

(d) Effective July 1, 1986, any employer of a teacher as defined in paragraph (8) of Section 16-106 shall pay the employer's normal cost of benefits based upon the teacher's service, in addition to employee contributions, as determined by the System. Such employer contributions shall be forwarded monthly in accordance with guidelines established by the System.

However, with respect to benefits granted under Section 16-133.4 or 16-133.5 to a teacher as defined in paragraph (8) of Section 16-106, the employer's contribution shall be 12% (rather than 20%) of the member's highest annual salary rate for each year of creditable service granted, and the employer shall also pay the required employee contribution on behalf of the teacher. For the purposes of Sections 16-133.4 and 16-133.5, a teacher as defined in paragraph (8) of Section 16-106 who is serving in that capacity while on leave of absence from another employer under this Article shall not be considered an employee of the employer from which the teacher is on leave.

(e) Beginning July 1, 1998, every employer of a teacher shall pay to the System an employer contribution computed as follows:

(1) Beginning July 1, 1998 through June 30, 1999, the employer contribution shall be equal to 0.3% of each teacher's salary.

(2) Beginning July 1, 1999 and thereafter, the employer contribution shall be equal to 0.58% of each teacher's salary.

The school district or other employing unit may pay these employer contributions out of any source of funding available for that purpose and shall forward the contributions to the System on the schedule established for the payment of member contributions.

These employer contributions are intended to offset a portion of the cost to the System of the increases in retirement benefits resulting from this amendatory Act of 1998.

Each employer of teachers is entitled to a credit against the contributions required under this subsection (e) with respect to salaries paid to teachers for the period January 1, 2002 through June 30, 2003, equal to the amount paid by that employer under subsection (a-5) of Section 6.6 of the State Employees Group Insurance Act of 1971 with respect to salaries paid to teachers for that period.

The additional 1% employee contribution required under Section 16-152 by this amendatory Act of 1998 is the responsibility of the teacher and not the teacher's employer, unless the employer agrees, through collective bargaining or otherwise, to make the contribution on behalf of the teacher.

If an employer is required by a contract in effect on May 1, 1998 between the employer and an employee organization to pay, on behalf of all its full-time employees covered by this Article, all mandatory employee contributions required under this Article, then the employer shall be excused from paying the employer contribution required under this subsection (e) for the balance of the term of that contract. The employer and the employee organization shall jointly certify to the System the existence of the contractual requirement, in such form as the System may prescribe. This exclusion shall cease upon the termination, extension, or renewal of the contract at any time after May 1, 1998.

(f) If the amount of a teacher's salary for any school year used to determine final average salary exceeds the member's annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. If a teacher's salary for the 2005-2006 school year is used to determine final average salary under this subsection (f), then the changes made to this subsection (f) by Public Act 94-1057 shall apply in calculating whether the increase in his or her salary is in excess of 6%. For the purposes of this Section, change in employment under Section 10-21.12 of the School Code on or after June 1, 2005 shall constitute a change in employer. The System may require the employer to provide any pertinent information or documentation. The changes made to this subsection (f) by this amendatory Act of the 94th General Assembly apply without regard to whether the teacher was in service on or after its effective date.

Whenever it determines that a payment is or may be required under this subsection, the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (g) or (h) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of that subsection. Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(g) This subsection (g) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to a teacher at a time when the teacher is 10 or more years from retirement eligibility under Section 16-132 or 16-133.2.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload work, including summer school, when the school district has certified to the System, and the System has approved the certification, that (i) the overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full-time teacher in a school district during a school year and (ii) the salary increases are equal to or less than the rate of pay for classroom instruction computed on the teacher's current salary and work schedule.

When assessing payment for any amount due under subsection (f), the System shall exclude a salary increase resulting from a promotion (i) for which the employee is required to hold a certificate or supervisory endorsement issued by the State Teacher Certification Board that is a different certification or supervisory endorsement than is required for the teacher's previous position and (ii) to a position that has existed and been filled by a member for no less than one complete academic year and the salary increase from the promotion is an increase that results in an amount no greater than the lesser of the average salary paid for other similar positions in the district requiring the same certification or the amount stipulated in the collective bargaining agreement for a similar position requiring the same certification.

When assessing payment for any amount due under subsection (f), the System shall exclude any payment to the teacher from the State of Illinois or the State Board of Education over which the employer does not have discretion, notwithstanding that the payment is included in the computation of final average salary.

(h) When assessing payment for any amount due under subsection (f), the System shall exclude any salary increase described in subsection (g) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (f) of this Section.

(i) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.

(2) The dollar amount by which each employer's contribution to the System was changed due to recalculations required by Public Act 94-1057.

(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.

(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057, eff. 7-31-06; 94-1111, eff. 2-27-07; 95-331, eff. 8-21-07; 95-950, eff. 8-29-08.)

(40 ILCS 5/16-300 new)

Sec. 16-300. Provisions applicable to later entrants.

(a) The provisions of this Article following this Section apply only to teachers who first become teachers on or after January 1, 2010, who are referred to as "later entrants" or who are otherwise considered "later entrants" in accordance with the following Sections of this Article..

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to teachers who first become teachers on or after January 1, 2010.

(c) The following Sections are also applicable to teachers who first become teachers on or after January 1, 2010: Sections 16-101, 16-102, 16-103, 16-104, 16-105, 16-106, 16-106.1, 16-106.2, 16-106.3, 16-107, 16-109, 16-110, 16-111.1, 16-113, 16-114, 16-118, 16-121, 16-122, 16-122.1, 16-123, 16-130, 16-142.3, 16-149, 16-149.1, 16-149.2, 16-149.3, 16-149.4, 16-149.5, 16-149.6, 16-150.1, and 16-152.1 and Sections 16-153.5 through 16-203.

(d) To the extent that the Sections enumerated in subsection (c) of this Section conflict with the Sections following this Section, the Sections following this Section shall control.

(e) To the extent that the applicable Sections are included under subsection (c) of this Section, later entrants are entitled to disability benefits under this Article.

(40 ILCS 5/16-305 new)

Sec. 16-305. Creditable service for later entrants.

(a) Creditable service under this Article is subject to the following conditions:

(1) A member may only establish creditable service for his or her service for employment as a teacher, as defined in Section 16-106. Except as otherwise provided in this Section, a member may not establish creditable service for any other service.

(2) A member may not convert any unused sick leave or vacation into creditable service under this Article.

(b) A member may establish creditable service, without making contributions, for periods of military service, provided that the person received a discharge other than dishonorable, was a member within 6 months prior to military service, and returned to service as a member under this System within one year after discharge.

A member may purchase up to 2 years of military service not immediately following service as a member under this System, by paying to the System (1) employee contributions based on the member's salary upon the first date as a member after the military service, plus (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, plus (3) interest on items (1) and (2) at the actuarially assumed rate, compounded annually, from the first date as a member after such military service to the date of payment.

The total amount of creditable military service for any member during his or her entire term of service shall not exceed 5 years.

For the purposes of this subsection (b), "military service" means periods a person spent in active service with the military forces of the United States for which the person received a discharge other than dishonorable.

(c) A member may establish service credit for up to 2 years of periods spent on authorized leave of absence from service due to pregnancy or adoption by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first membership in the System to the date of payment.

(40 ILCS 5/16-310 new)

Sec. 16-310. Retirement annuity; conditions for eligibility; later entrants. A member may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit.

A member may claim a reduced retirement annuity under subsection (c) of Section 16-315 if he or she is at least 62 years of age and has at least 10 years of service.

The annuity shall begin with the first full calendar month following the date of withdrawal.

(40 ILCS 5/16-315 new)

Sec. 16-315. Retirement life annuity; amount; employer contribution; later entrants.

(a) With respect to later entrants:

(1) "Final average salary" means the monthly salary obtained by dividing the total salary of a member during the period of: (A) the 8 years of service within the last 10 years of service in which the total salary was the highest or (B) the total period of service, if less than 8 years, by the number of months of service in such period; provided that for the purposes of a retirement annuity the average salary for the last year of the 8 years shall not exceed the final average salary by more than 25%.

In no event shall the monthly salary used to determine final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less; provided, however, that the $12,500 maximum shall be adjusted annually after the effective date of this amendatory Act of the 96th General Assembly, by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, whichever is less.

(2) "Salary" means a member's base salary and does not include any overtime or bonuses.

(b) The retirement life annuity shall be 2% of final average salary for each year of service, but in no event shall exceed 70% of final average salary.

(c) For a member retiring after attaining age 62 with less than 35 years of service credit, the retirement life annuity shall be reduced by one-half of 1% for each month that the member's age is under the full (normal) retirement age as provided in the federal Social Security Act.

(40 ILCS 5/16-320 new)

Sec. 16-320. Alternative forms of annuities for later entrants. A member may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 16-315:

(1) Joint and 50% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 50% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(2) Joint and 75% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 75% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(3) Joint and 100% survivor annuity. Under this form of payment, the member receives a reduced monthly payment for his or her lifetime with a payment equal to 100% of the reduced amount payable to the member paid to the member's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the member.

(4) Single life annuity with 60, 120, or 180 months of guaranteed payments. Under this option, the member receives a reduced monthly payment for his or her lifetime. If the member dies before receiving at least the number of guaranteed monthly payments, then the member's beneficiary or estate receives the remaining guaranteed number of monthly payments.

The Board must determine the participant's optional form of annuity provided under this Section by taking into account the appropriate actuarial assumptions, including without limitation the participant's and beneficiary's age and applicable mortality tables. For this purpose, the participant's joint and survivor annuity should result in no significant increase to the System's unfunded actuarial accrued liability determined as of the most recent actuarial valuation compared to the System's actuarial liability if the participant opted for a retirement life annuity under Section 16-315, based on the same assumptions and methods used to develop and report the System's actuarial accrued liability and actuarial value of assets under Statement No. 25 of Governmental Accounting Standards Board or any subsequent applicable Statement.

(40 ILCS 5/16-325 new)

Sec. 16-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Section 16-315 or 16-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the increase is being granted to the June 30 preceding the year during which the increase is being granted, whichever is less, of the originally granted annuity.

(40 ILCS 5/16-330 new)

Sec. 16-330. Contributions by teachers; later entrants.

(a) Each teacher shall contribute 7% of each payment of salary received by him or her for service as a teacher toward the cost of his or her retirement annuity.

(b) Contributions shall be in the form of a deduction from salary and shall be made notwithstanding that the net salary paid to the teacher shall be reduced thereby below the minimum prescribed by law or regulation. Each member is deemed to consent and agree to the deductions from salary provided for in this Article.

(c) These contributions shall be picked up in the manner provided in Section 16-152.1.

(d) In no event shall contributions be deducted from salary in excess of (1) the Social Security Covered Wage Base for the given calendar year or (2) $150,000, whichever is less.

(40 ILCS 5/16-335 new)

Sec. 16-335. Refunds; later entrants.

(a) A member who ceases to be a teacher, other than an annuitant, shall, upon written request made at least 4 months after ceasing to teach, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the interest is being credited to the June 30 preceding the year during which the interest is being credited, whichever is less, per year, not compounded.

(b) Upon re-entry into service as a teacher and completion of one year of creditable service, a former member may reestablish any creditable service forfeited by acceptance of a refund by paying to the System the full amount refunded, plus interest at the actuarially assumed rate, not compounded, from the date of payment of the refund to the date of repayment.

(c) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/16-340 new)

Sec. 16-340. Re-entry after retirement; later entrants.

(a) An annuitant who re-enters service as a teacher shall become a member on the date of re-entry and retirement annuity payments shall cease at that time. The teacher shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit.

(b) Upon subsequent retirement, the teacher shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service and (2) the amount of additional retirement annuity earned during the additional service.

(c) In computing the retirement annuity under subsection (b) of this Section, the time that the teacher was on retirement shall not interrupt the continuity of service for the computation of final average salary and the additional service shall be considered, together with service rendered before the previous retirement, in establishing final average salary.

(d) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/18-131) (from Ch. 108 1/2, par. 18-131)

Sec. 18-131. Financing; employer contributions.

(a) The State of Illinois shall make contributions to this System by appropriations of the amounts which, together with the contributions of participants, net earnings on investments, and other income, will meet the costs of maintaining and administering this System on a 90% funded basis in accordance with actuarial recommendations.

(b) The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the prescribed rate of interest, using the formula in subsection (c).

(c) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $29,189,400.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $35,236,800.

For each of State fiscal years 2008 and 2009 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is the employer normal cost certified by the Board.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is $47,747,015.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2012 is equal to the total required State contribution for State fiscal year 2011 plus $9,822,170.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2013 is equal to the total required State contribution for State fiscal year 2012 plus an additional amount which, when increased by 5% each year from fiscal year 2014 through fiscal year 2045 and added to the prior fiscal year's total required State contribution, will be sufficient to achieve 90% funding by State fiscal year 2045.

For each of State fiscal years 2014 through 2045, the State contribution to the System shall be increased in an annual amount equal to the dollar increase from the required State contribution from the preceding fiscal year plus 5%, so that by State fiscal year 2045, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal years year 2008 and 2009 each fiscal year thereafter, as calculated under this Section and certified under Section 18-140, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2009 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950, eff. 8-29-08.)

(40 ILCS 5/18-140) (from Ch. 108 1/2, par. 18-140)

Sec. 18-140. To certify required State contributions and submit vouchers.

(a) The Board shall certify to the Governor, on or before November 15 of each year, the amount of the required State contribution to the System for the following fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before July 1, 2009, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2010, taking into account the changes in required State contributions made by this amendatory Act of the 96th General Assembly.

(b) Beginning in State fiscal year 1996, on or as soon as possible after the 15th day of each month the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (c) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this Section, the difference shall be paid from the General Revenue Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04; 94-4, eff. 6-1-05.)

(40 ILCS 5/18-300 new)

Sec. 18-300. Provisions applicable to later entrants.

(a) The provisions of this Article following this Section apply only to judges who first become judges on or after January 1, 2010, who are referred to as "later entrants" or who are otherwise considered "later entrants" in accordance with the following Sections of this Article.

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to judges who first become judges on or after January 1, 2010.

(c) The following Sections are also applicable to judges who first become judges on or after January 1, 2010: Sections 18-101, 18-102, 18-103, 18-104, 18-105, 18-106, 18-107, 18-108, 18-109, 18-110, 18-111, 18-112, 18-112.5, 18-113, 18-114, 18-115, 18-116, 18-118, 18-119, 18-120, 18-120.1, 18-121, 18-126, 18-126.1, 18-127, 18-128.2, 18-128.3, 18-131, and 18-132 and Sections 18-133.1 through 18-169.

(d) To the extent that the Sections enumerated in subsection (c) of this Section conflict with the Sections following this Section, the Sections following this Section shall control.

(e) To the extent that the applicable Sections are included under subsection (c) of this Section, later entrants are entitled to disability benefits under this Article.

(40 ILCS 5/18-305 new)

Sec. 18-305. Creditable service for later entrants.

(a) A participant may only establish creditable service for his or her service for employment as a judge, as defined in Section 18-108. Except as otherwise provided in this Section, a participant may not establish creditable service for any other service.

(b) A participant may establish creditable service, without making contributions, for periods of military service, provided that the person received a discharge other than dishonorable, was a participant within 6 months prior to military service, and returned to service as a participant under this System within one year after discharge.

A participant may purchase up to 2 years of military service not immediately following service as a participant under this System, by paying to the System (1) employee contributions based on the participant's salary upon the first date as a participant after the military service, plus (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, plus (3) interest on items (1) and (2) at the actuarially assumed rate, compounded annually, from the first date as a participant after such military service to the date of payment.

The total amount of creditable military service for any participant during his or her entire term of service shall not exceed 5 years.

For the purposes of this subsection (b), "military service" means periods a person spent in active service with the military forces of the United States for which the person received a discharge other than dishonorable.

(c) A participant may establish service credit for up to 2 years of periods spent on authorized leave of absence from service due to pregnancy or adoption by paying to the System (1) employee contributions based upon the participant's salary upon becoming a participant under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first participation in the System to the date of payment.

(40 ILCS 5/18-310 new)

Sec. 18-310. Retirement annuity; conditions for eligibility; later entrants. A participant may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit.

A participant may claim a reduced retirement annuity under subsection (c) of Section 18-315 if he or she is at least 62 years of age and has at least 10 years of service.

The annuity shall begin with the first full calendar month following the date of withdrawal.

(40 ILCS 5/18-315 new)

Sec. 18-315. Retirement life annuity; amount; employer contribution; later entrants.

(a) With respect to later entrants:

(1) "Final average salary" means the monthly salary obtained by dividing the total salary of a participant during the period of: (A) the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest or (B) the total period of service, if less than 96 months, by the number of months of service in such period; provided that for the purposes of a retirement annuity the average salary for the last 12 months of the 96 months shall not exceed the final average salary by more than 25%.

In no event shall the monthly salary used to determine final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less; provided, however, that the $12,500 maximum shall be adjusted annually after the effective date of this amendatory Act of the 96th General Assembly, by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, whichever is less.

(2) "Salary" means a participant's base salary and does not include any overtime or bonuses.

(b) The retirement life annuity shall be 2% of final average salary for each year of service, but in no event shall exceed 70% of final average salary.

(c) For a participant retiring after attaining age 62 with less than 35 years of service credit, the retirement life annuity shall be reduced by one-half of 1% for each month that the participant's age is under the full (normal) retirement age as provided in the federal Social Security Act.

(40 ILCS 5/18-320 new)

Sec. 18-320. Alternative forms of annuities for later entrants. A participant may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 18-315:

(1) Joint and 50% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 50% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(2) Joint and 75% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 75% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(3) Joint and 100% survivor annuity. Under this form of payment, the participant receives a reduced monthly payment for his or her lifetime with a payment equal to 100% of the reduced amount payable to the participant paid to the participant's designated beneficiary for the beneficiary's lifetime if the beneficiary survives the participant.

(4) Single life annuity with 60, 120, or 180 months of guaranteed payments. Under this option, the participant receives a reduced monthly payment for his or her lifetime. If the participant dies before receiving at least the number of guaranteed monthly payments, then the participant's beneficiary or estate receives the remaining guaranteed number of monthly payments.

The Board must determine the participant's optional form of annuity provided under this Section by taking into account the appropriate actuarial assumptions, including without limitation the participant's and beneficiary's age; applicable mortality tables; and any other factors that the Board determines to be relevant. For this purpose, the participant's joint and survivor annuity should result in no significant increase to the System's unfunded actuarial accrued liability determined as of the most recent actuarial valuation compared to the System's actuarial liability if the participant opted for a retirement life annuity under Section 18-315, based on the same assumptions and methods used to develop and report the System's actuarial accrued liability and actuarial value of assets under Statement No. 25 of Governmental Accounting Standards Board or any subsequent applicable Statement.

(40 ILCS 5/18-325 new)

Sec. 18-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Section 18-315 or 18-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the increase is being granted to the June 30 preceding the year during which the increase is being granted, whichever is less, of the originally granted annuity.

(40 ILCS 5/18-330 new)

Sec. 18-330. Contributions by judges; later entrants.

(a) Each judge shall contribute 7% of each payment of salary received by him or her for service as a judge toward the cost of his or her retirement annuity.

(b) Contributions shall be in the form of a deduction from salary and shall be made notwithstanding that the net salary paid to the judge shall be reduced thereby below the minimum prescribed by law or regulation. Each participant is deemed to consent and agree to the deductions from salary provided for in this Article.

(c) These contributions shall be picked up in the manner provided in Section 18-133.1.

(d) In no event shall contributions be deducted from salary in excess of (1) the Social Security Covered Wage Base for the given calendar year or (2) $150,000, whichever is less.

(40 ILCS 5/18-335 new)

Sec. 18-335. Refunds; later entrants.

(a) A participant who ceases to be a judge, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the July 1 two years prior to the January 1 of the year during which the interest is being credited to the June 30 preceding the year during which the interest is being credited, whichever is less, per year, not compounded.

(b) Upon re-entry into service as a judge, a former participant may reestablish any creditable service forfeited by acceptance of a refund by paying to the System the full amount refunded, plus interest at the actuarially assumed rate, not compounded, from the date of payment of the refund to the date of repayment.

(c) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

(40 ILCS 5/18-340 new)

Sec. 18-340. Re-entry after retirement; later entrants.

(a) An annuitant who re-enters service as a judge shall become a participant on the date of re-entry and retirement annuity payments shall cease at that time. The judge shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit.

(b) Upon subsequent retirement, the judge shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service and (2) the amount of additional retirement annuity earned during the additional service.

(c) In computing the retirement annuity under subsection (b) of this Section, the time that the judge was on retirement shall not interrupt the continuity of service for the computation of final average salary and the additional service shall be considered, together with service rendered before the previous retirement, in establishing final average salary.

(d) Participants covered by the provisions of this Section shall be deemed later entrants only if the date of their initial participation was on or after January 1, 2010.

Section 20. The Illinois Educational Labor Relations Act is amended by changing Section 17 and by adding Section 22 as follows:

(115 ILCS 5/17) (from Ch. 48, par. 1717)

Sec. 17. Effect on other laws. Except as provided in this Section, in In case of any conflict between the provisions of this Act and any other law, executive order or administrative regulation, the provisions of this Act shall prevail and control.

However, the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly shall prevail and control over any conflicting provision in this Act and any collective bargaining agreement negotiated pursuant thereto, and any other law, executive order, or administrative regulation. Any disputes that are brought on behalf of any employer or employee or exclusive bargaining representative subject to this Act arising from the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly shall be subject to the exclusive jurisdiction of the Illinois Educational Labor Relations Board, and the Circuit Courts shall have no jurisdiction, except to hear disputes arising directly under the Constitution of the United States of America or the Illinois Constitution.

Nothing in this Act shall be construed to replace or diminish the rights of employees established by Section 36d of "An Act to create the State Universities Civil Service System", approved May 11, 1905, as amended or modified.

(Source: P.A. 83-1014.)

(115 ILCS 5/22 new)

Sec. 22. Illinois Pension Code. Notwithstanding the existence of any other provision in this Act or any other law, collective bargaining between any employer whose employees are affected by the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly and the exclusive bargaining representative of such employees may include decisions concerning the changes made to the Illinois Pension Code by this amendatory Act of the 96th General Assembly, including, but not limited to, changes and benefits of retirement systems covered by the Illinois Pension Code. These subjects are permissive subjects of bargaining between an employer and an exclusive representative of its employees and, for the purpose of this Act, are within the sole discretion of the employer to decide to bargain, provided that the employer is required to bargain over the impact of a decision concerning such subject on the bargaining unit upon request by the exclusive representative. During this bargaining, the employer shall not be precluded from implementing its decision. If, after a reasonable period of bargaining, a dispute or impasse exists between the employer and the exclusive representative, then the dispute or impasse shall be resolved exclusively as set forth in this Act.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

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