HB5873sam002 96TH GENERAL ASSEMBLY

Sen. Terry Link

Filed: 5/5/2010

09600HB5873sam002 LRB096 19254 AMC 41313 a

AMENDMENT TO HOUSE BILL 5873

AMENDMENT NO. ______. Amend House Bill 5873 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Sections 1-113.1, 1A-104, 3-111, 3-111.1, 3-112, 3-125, 3-127, 3-142, 3-143, 4-109, 4-109.1, 4-114, 4-118, 4-134, 5-136.1, 5-167.1, 6-141.1, 6-141.2, 6-164, and 7-142.1 and by adding Sections 1-113.4a, 1-165, 5-167.6, 5-238, and 6-229 as follows:

(40 ILCS 5/1-113.1)

Sec. 1-113.1. Investment authority of pension funds established under Article 3 or 4. The board of trustees of a police pension fund established under Article 3 of this Code or firefighter pension fund established under Article 4 of this Code shall draw pension funds from the treasurer of the municipality and, beginning January 1, 1998, invest any part thereof in the name of the board in the items listed in Sections 1-113.2 through 1-113.4a 1-113.4 according to the limitations and requirements of this Article. These investments shall be made with the care, skill, prudence, and diligence that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character with like aims.

Interest and any other income from the investments shall be credited to the pension fund.

For the purposes of Sections 1-113.2 through 1-113.11, the "net assets" of a pension fund include both the cash and invested assets of the pension fund.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-113.4a new)

Sec. 1-113.4a. List of additional permitted investments for Article 3 and 4 pension funds with net assets of $10,000,000 or more.

(a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $10,000,000 and has appointed an investment adviser, as defined under Sections 1-101.4 and 1-113.5, may, through that investment adviser, invest an additional portion of its assets in common and preferred stocks, mutual funds, and corporate bonds.

(b) The stocks must meet all of the following requirements:

(1) The common stocks must be listed on a national securities exchange or board of trade (as defined in the Federal Securities Exchange Act of 1934 and set forth in paragraph G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System.

(2) The securities must be of a corporation in existence for at least 5 years.

(3) The market value of stock in any one corporation may not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation may not exceed 5% of the total outstanding stock of that corporation.

(4) The straight preferred stocks or convertible preferred stocks must be issued or guaranteed by a corporation whose common stock qualifies for investment by the board.

(c) The mutual funds must meet the following requirements:

(1) The mutual fund must be managed by an investment company registered under the Federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.

(2) The mutual fund must have been in operation for at least 5 years.

(3) The mutual fund must have total net assets of $250,000,000 or more.

(4) The mutual fund must be comprised of a diversified portfolio of common or preferred stocks, bonds, or money market instruments.

(d) Corporate bonds managed through an investment adviser must meet the following requirements:

(1) Be rated as investment grade by one of the 2 largest rating services at the time of purchase.

(2) Securities subsequently downgraded below investment grade shall be liquidated from the portfolio within 90 days after the downgrade by the manager.

(e) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 50% effective July 1, 2011 and 55% effective July 1, 2012 of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Department of Insurance.

(f) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the time and in the format required by the Division.

(40 ILCS 5/1-165 new)

Sec. 1-165. Commission on Government Forecasting and Accountability study. The Commission on Government Forecasting and Accountability shall conduct a study on the feasibility of:

(1) the creation of an investment pool to supplement and enhance the investment opportunities available to boards of trustees of the pension funds organized under Articles 3 and 4 of this Code; the study shall include an analysis on any cost or cost savings associated with establishing the system and transferring assets for management under the investment pool; and

(2) enacting a contribution cost-share component wherein employing municipalities and members of funds established under Articles 3 and 4 of this Code each contribute 50% of the normal cost of the defined-benefit plan.

The Commission shall issue a report on its findings on or before December 31, 2011.

(40 ILCS 5/1A-104)

Sec. 1A-104. Examinations and investigations.

(a) The Division shall make periodic examinations and investigations of all pension funds established under this Code and maintained for the benefit of employees and officers of governmental units in the State of Illinois. However, in lieu of making an examination and investigation, the Division may accept and rely upon a report of audit or examination of any pension fund made by an independent certified public accountant pursuant to the provisions of the Article of this Code governing the pension fund. The acceptance of the report of audit or examination does not bar the Division from making a further audit, examination, and investigation if deemed necessary by the Division.

The Department may implement a flexible system of examinations under which it directs resources as it deems necessary or appropriate. In consultation with the pension fund being examined, the Division may retain attorneys, independent actuaries, independent certified public accountants, and other professionals and specialists as examiners, the cost of which (except in the case of pension funds established under Article 3 or 4) shall be borne by the pension fund that is the subject of the examination.

(b) The Division shall examine or investigate each pension fund established under Article 3 or Article 4 of this Code. The schedule of each examination shall be such that each fund shall be examined once every 3 years.

Each examination shall include the following:

(1) an audit of financial transactions, investment policies, and procedures;

(2) an examination of books, records, documents, files, and other pertinent memoranda relating to financial, statistical, and administrative operations;

(3) a review of policies and procedures maintained for the administration and operation of the pension fund;

(4) a determination of whether or not full effect is being given to the statutory provisions governing the operation of the pension fund;

(5) a determination of whether or not the administrative policies in force are in accord with the purposes of the statutory provisions and effectively protect and preserve the rights and equities of the participants;

(6) a determination of whether or not proper financial and statistical records have been established and adequate documentary evidence is recorded and maintained in support of the several types of annuity and benefit payments being made; and

(7) a determination of whether or not the calculations made by the fund for the payment of all annuities and benefits are accurate.

In addition, the Division may conduct investigations, which shall be identified as such and which may include one or more of the items listed in this subsection.

A copy of the report of examination or investigation as prepared by the Division shall be submitted to the secretary of the board of trustees of the pension fund examined or investigated and to the chief executive officer of the municipality. The Director, upon request, shall grant a hearing to the officers or trustees of the pension fund or their duly appointed representatives, upon any facts contained in the report of examination. The hearing shall be conducted before filing the report or making public any information contained in the report. The Director may withhold the report from public inspection for up to 60 days following the hearing.

(c) With respect to any pension fund established under Article 3 or Article 4 of this Code, the trustees of the pension fund or the corporate authorities of the municipality that establishes the fund may, not more than once every year, request the Division to perform a special examination of the fund. In conducting the special examination, the Division must:

(1) review the most recent audit of the fund under subsection (b), all relevant actuarial reports relating to the fund, all investment information pertaining to the fund's performance, and any comprehensive annual financial report or similar financial reports issued by the municipality;

(2) issue a report detailing the funding level of the fund, the causes of any underfunding, the statutorily required employer annual contribution amount as determined by an enrolled actuary, the actual contribution amount made by employer, and the difference between the statutorily required employer contribution and the actual employer contribution.

The Division must begin the special examination within 90 days after receiving the request, and it must issue the report within 180 days after beginning the special examination.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)

Sec. 3-111. Pension.

(a) A police officer age 50 or more with 20 or more years of creditable service, who is not a participant in the self-managed plan under Section 3-109.3 and who is no longer in service as a police officer, shall receive a pension of 1/2 of the salary attached to the rank held by the officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater. The pension shall be increased by 2.5% of such salary for each additional year of service over 20 years of service through 30 years of service, to a maximum of 75% of such salary.

The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(a-5) No pension in effect on or granted after June 30, l973 shall be less than $200 per month. Beginning July 1, 1987, the minimum retirement pension for a police officer having at least 20 years of creditable service shall be $400 per month, without regard to whether or not retirement occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(b) A police officer mandatorily retired from service due to age by operation of law, having at least 8 but less than 20 years of creditable service, shall receive a pension equal to 2 1/2% of the salary attached to the rank he or she held on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service.

A police officer who retires or is separated from service having at least 8 years but less than 20 years of creditable service, who is not mandatorily retired due to age by operation of law, and who does not apply for a refund of contributions at his or her last separation from police service, shall receive a pension upon attaining age 60 equal to 2.5% of the salary attached to the rank held by the police officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service.

(c) A police officer no longer in service who has at least one but less than 8 years of creditable service in a police pension fund but meets the requirements of this subsection (c) shall be eligible to receive a pension from that fund equal to 2.5% of the salary attached to the rank held on the last day of service under that fund or for one year prior to that last day, whichever is greater, for each year of creditable service in that fund. The pension shall begin no earlier than upon attainment of age 60 (or upon mandatory retirement from the fund by operation of law due to age, if that occurs before age 60) and in no event before the effective date of this amendatory Act of 1997.

In order to be eligible for a pension under this subsection (c), the police officer must have at least 8 years of creditable service in a second police pension fund under this Article and be receiving a pension under subsection (a) or (b) of this Section from that second fund. The police officer need not be in service on or after the effective date of this amendatory Act of 1997.

(d) Notwithstanding any other provision of this Article, this subsection (d) applies to a police officer who first becomes a police officer under this Article on or after January 1, 2011.

A police officer age 55 or more with 10 or more years of creditable service, who is not a participant in the self-managed plan under Section 3-109.3 and who is no longer in service as a police officer, shall receive a pension of 2.5% of the police officer's final average salary for each of the first 20 years of service plus 2.2% of final average salary for each additional year of service over 20 years of service through 30 years of service, to a maximum of 72% of such final average salary.

The pension of a police officer who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-fourth of 1% for each month that the police officer's age is under age 55.

The maximum pension under this subsection (d) shall be 72% of final average salary.

For the purposes of this subsection (d), "final average salary" means the average monthly salary obtained by dividing the total salary of the police officer during the 48 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

(Source: P.A. 90-460, eff. 8-17-97; 91-939, eff. 2-1-01.)

(40 ILCS 5/3-111.1) (from Ch. 108 1/2, par. 3-111.1)

Sec. 3-111.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a police officer who retires after July 1, 1971, and prior to January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, by 3% of the originally granted pension and by an additional 3% of the originally granted pension in January of each year thereafter.

(b) The monthly pension of a police officer who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased in January of the year following the year of attaining age 65 or in January of 1972, if then over age 65, by 3% of the originally granted pension for each year the police officer received pension payments. In each January thereafter, he or she shall receive an additional increase of 3% of the original pension.

(c) The monthly pension of a police officer who retires on disability or is retired for disability shall be increased in January of the year following the year of attaining age 60, by 3% of the original grant of pension for each year he or she received pension payments. In each January thereafter, the police officer shall receive an additional increase of 3% of the original pension.

(d) The monthly pension of a police officer who retires after January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, by 1/12 of 3% of the originally granted pension for each full month that has elapsed since the pension began, and by an additional 3% of the originally granted pension in January of each year thereafter.

The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.

(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a police officer who retired on or after January 1, 1977 and on or before January 1, 1986, and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% of the originally granted pension in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).

(f) Notwithstanding the other provisions of this Section, beginning with increases granted on or after July 1, 1993, the second and all subsequent automatic annual increases granted under subsection (a), (b), (d), or (e) of this Section shall be calculated as 3% of the amount of pension payable at the time of the increase, including any increases previously granted under this Section, rather than 3% of the originally granted pension amount. Section 1-103.1 does not apply to this subsection (f).

(g) Notwithstanding any other provision of this Article, the monthly pension of a police officer who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 after the police officer attains age 57 and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the consumer price index-u for the preceding calendar year is zero or there is a decrease, then the pension shall not be increased.

For the purposes of this subsection (g), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-112) (from Ch. 108 1/2, par. 3-112)

Sec. 3-112. Pension to survivors.

(a) Upon the death of a police officer entitled to a pension under Section 3-111, the surviving spouse shall be entitled to the pension to which the police officer was then entitled. Upon the death of the surviving spouse, or upon the remarriage of the surviving spouse if that remarriage terminates the surviving spouse's eligibility under Section 3-121, the police officer's unmarried children who are under age 18 or who are dependent because of physical or mental disability shall be entitled to equal shares of such pension. If there is no eligible surviving spouse and no eligible child, the dependent parent or parents of the officer shall be entitled to receive or share such pension until their death or marriage or remarriage after the death of the police officer.

Notwithstanding any other provision of this Article, for a police officer who first becomes a police officer under this Article on or after January 1, 2011, the pension to which the surviving spouse, children, or parents are entitled under this subsection (a) shall be in the amount of 66 2/3% of the police officer's earned pension at the date of death. Nothing in this subsection (a) shall act to diminish the survivor's benefits described in subsection (e) of this Section.

Notwithstanding any other provision of this Article, the monthly pension of a survivor of a police officer who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the pension shall not be increased.

For the purposes of this subsection (a), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(b) Upon the death of a police officer while in service, having at least 20 years of creditable service, or upon the death of a police officer who retired from service with at least 20 years of creditable service, whether death occurs before or after attainment of age 50, the pension earned by the police officer as of the date of death as provided in Section 3-111 shall be paid to the survivors in the sequence provided in subsection (a) of this Section.

(c) Upon the death of a police officer while in service, having at least 10 but less than 20 years of service, a pension of 1/2 of the salary attached to the rank or ranks held by the officer for one year immediately prior to death shall be payable to the survivors in the sequence provided in subsection (a) of this Section. If death occurs as a result of the performance of duty, the 10 year requirement shall not apply and the pension to survivors shall be payable after any period of service.

(d) Beginning July 1, 1987, a minimum pension of $400 per month shall be paid to all surviving spouses, without regard to the fact that the death of the police officer occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(e) The pension of the surviving spouse of a police officer who dies (i) on or after January 1, 2001, (ii) without having begun to receive either a retirement pension payable under Section 3-111 or a disability pension payable under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty shall not be less than 100% of the salary attached to the rank held by the deceased police officer on the last day of service, notwithstanding any provision in this Article to the contrary.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)

Sec. 3-125. Financing.

(a) The city council or the board of trustees of the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of police officers, and revenues available from other sources, will equal a sum sufficient to meet the annual requirements of the police pension fund. The annual requirements to be provided by such tax levy are equal to (1) the normal cost of the pension fund for the year involved, plus (2) the amount necessary to amortize the fund's unfunded accrued liabilities as provided in Section 3-127. The tax shall be levied and collected in the same manner as the general taxes of the municipality, and in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and shall be in addition to the amount authorized to be levied for general purposes as provided by Section 8-3-1 of the Illinois Municipal Code, approved May 29, 1961, as amended. The tax shall be forwarded directly to the treasurer of the board within 30 business days after receipt by the county.

(b) The Commission on Government Financing and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2012. The study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(c) In the absence of a statutory alternative enacted prior to January 1, 2015 to ensure that public employers comply with this Act by making statutorily required pension contributions, if any participating municipality or participating instrumentality fails to transmit to the pension fund contributions required of it under this Article or contributions collected by it from its participating employees for the purposes of this Article within 90 days after the payment of such contributions is due, then the fund, after giving notice to the municipality or instrumentality, may certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller shall deduct the amounts so certified or any part thereof from any grants of State funds to the municipality or instrumentality involved and shall pay the amount so deducted to the pension fund. If State funds from which such deductions may be made are not available, then the pension fund may proceed against the municipality or instrumentality to recover the amounts of such delinquent payments in the appropriate circuit court.

(d) Beginning January 1, 2015, the city council or the board of trustees of any municipality shall not make a contribution to the pension fund under this Article in its jurisdiction less than the amount recommended by the enrolled actuary of the Department of Insurance if the unfunded liability exceeds the assets in the fund as determined by the most recent actuarial valuation.

(e) The police pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality:

(1) All moneys derived from the taxes levied hereunder;

(2) Contributions by police officers under Section 3-125.1;

(3) All moneys accumulated by the municipality under any previous legislation establishing a fund for the benefit of disabled or retired police officers;

(4) Donations, gifts or other transfers authorized by this Article.

(Source: P.A. 95-530, eff. 8-28-07.)

(40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)

Sec. 3-127. Reserves. The board shall establish and maintain a reserve to insure the payment of all obligations incurred under this Article excluding retirement annuities established under Section 3-109.3. The reserve to be accumulated shall be equal to the estimated total actuarial requirements of the fund.

If a pension fund has a reserve of less than the accrued liabilities of the fund, the board of the pension fund, in making its annual report to the city council or board of trustees of the municipality, shall designate the amount, calculated as a level percentage of payroll, needed annually to insure the accumulation of the reserve to the level of the fund's accrued liabilities over a period of 40 years from July 1, 1993 for pension funds then in operation, or from the date of establishment in the case of a fund created thereafter, so that the necessary reserves will be attained over such a period. Any unfunded liability that exists in the fund on July 1, 2010 may be amortized over a period of 30 years from July 1, 2010. Any unfunded liability created after July 1, 2010 may be amortized over a period of 30 years from July 1 of the calendar year in which the unfunded liability is created.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-142) (from Ch. 108 1/2, par. 3-142)

Sec. 3-142. Payment of benefits - funds insufficient. Any police officer and any eligible surviving spouse, child or children, or dependent parent of the officer to whom the board has ordered benefits to be paid, shall receive a yearly benefit payable in 12 equal monthly installments, which shall be the aggregate amount to which they are entitled.

If at any time there is not sufficient money in the fund to pay the benefits under this Article the city council or board of trustees of the municipality shall make every legal effort to replenish the fund so that all beneficiaries may receive the amounts to which they are entitled. If, thereafter, there still remain insufficient funds, the beneficiaries shall be paid pro rata from the available funds, but no allowance or order of the board shall be held to create any liability against the municipality, but only against the pension fund.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-143) (from Ch. 108 1/2, par. 3-143)

Sec. 3-143. Report by pension board.

(a) The pension board shall report annually to the city council or board of trustees of the municipality on the condition of the pension fund at the end of its most recently completed fiscal year. The report shall be made prior to the council or board meeting held for the levying of taxes for the year for which the report is made.

The pension board shall certify and provide the following information to the city council or board of trustees of the municipality:

(1) the total assets of the fund in its custody at the end of the fiscal year and the current market value of those assets;

(2) the estimated receipts during the next succeeding fiscal year from deductions from the salaries of police officers, and from all other sources;

(3) the estimated amount required during the next succeeding fiscal year to (a) pay all pensions and other obligations provided in this Article, and (b) to meet the annual requirements of the fund as provided in Sections 3-125 and 3-127;

(4) the total net income received from investment of assets along with the assumed investment return and actual investment return received by the fund during its most recently completed fiscal year compared to the total net income, assumed investment return, and actual investment return received during the preceding fiscal year;

(5) the total number of active employees who are financially contributing to the fund;

(6) the total amount that was disbursed in benefits during the fiscal year, including the number of and total amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a disability pension, and (iii) survivors and children in receipt of benefits;

(7) the funded ratio of the fund;

(8) the unfunded liability carried by the fund, along with an actuarial explanation of the unfunded liability; and

(9) the investment policy of the pension board under the statutory investment restrictions imposed on the fund.

Before the pension board makes its report, the municipality shall have the assets of the fund and their current market value verified by an independent certified public accountant of its choice.

(b) The municipality is authorized to publish the report submitted under this Section. This publication may be made, without limitation, by publication in a local newspaper of general circulation in the municipality or by publication on the municipality's Internet website. If the municipality publishes the report, then that publication must include all of the information submitted by the pension board under subsection (a).

(c) Upon issuing the report to the municipality, the pension board shall also provide the information described in subsection (a), with the exception of paragraph (9) of subsection (a), to the Department of Insurance in such manner and in such form as prescribed by the Director. The Department shall compile the submitted information on an annual basis into a comprehensive report and shall make this report available to the General Assembly and the Governor on paper or in electronic form before September 1, 2011 and before September 1 of each subsequent year. The Public Pension Division of the Department may adopt rules as necessary for the administration and enforcement of this subsection (c).

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)

Sec. 4-109. Pension.

(a) A firefighter age 50 or more with 20 or more years of creditable service, who is no longer in service as a firefighter, shall receive a monthly pension of 1/2 the monthly salary attached to the rank held by him or her in the fire service at the date of retirement.

The monthly pension shall be increased by 1/12 of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service, to a maximum of 75% of such monthly salary.

The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(b) A firefighter who retires or is separated from service having at least 10 but less than 20 years of creditable service, who is not entitled to receive a disability pension, and who did not apply for a refund of contributions at his or her last separation from service shall receive a monthly pension upon attainment of age 60 based on the monthly salary attached to his or her rank in the fire service on the date of retirement or separation from service according to the following schedule:

For 10 years of service, 15% of salary;

For 11 years of service, 17.6% of salary;

For 12 years of service, 20.4% of salary;

For 13 years of service, 23.4% of salary;

For 14 years of service, 26.6% of salary;

For 15 years of service, 30% of salary;

For 16 years of service, 33.6% of salary;

For 17 years of service, 37.4% of salary;

For 18 years of service, 41.4% of salary;

For 19 years of service, 45.6% of salary.

(d) Notwithstanding any other provision of this Article, this subsection (d) applies to a firefighter who first becomes a firefighter under this Article on or after January 1, 2011.

A firefighter age 55 or more with 10 or more years of creditable service, who is no longer in service as a firefighter, shall receive a pension of 2.5% of the firefighter's final average salary for each of the first 20 years of service plus 1/12 of 2.2% of final average salary for each additional month over 20 years of service through 30 years of service, to a maximum of 72% of such final average salary.

The pension of a firefighter who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-fourth of 1% for each month that the firefighter's age is under age 55.

The maximum pension under this subsection (d) shall be 72% of final average salary.

For the purposes of this subsection (d), "final average salary" means the average monthly salary obtained by dividing the total salary of the firefighter during the 48 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

(Source: P.A. 91-466, eff. 8-6-99.)

(40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)

Sec. 4-109.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a firefighter who retires after July 1, 1971 and prior to January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, be increased by 2% of the originally granted monthly pension and by an additional 2% in each January thereafter. Effective January 1976, the rate of the annual increase shall be 3% of the originally granted monthly pension.

(b) The monthly pension of a firefighter who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased, in January of the year following the year of attaining age 65 or in January 1972, if then over age 65, by 2% of the originally granted monthly pension, for each year the firefighter received pension payments. In each January thereafter, he or she shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%.

(c) The monthly pension of a firefighter who is receiving a disability pension under this Article shall be increased, in January of the year following the year the firefighter attains age 60, or in January 1974, if then over age 60, by 2% of the originally granted monthly pension for each year he or she received pension payments. In each January thereafter, the firefighter shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%.

(c-1) On January 1, 1998, every child's disability benefit payable on that date under Section 4-110 or 4-110.1 shall be increased by an amount equal to 1/12 of 3% of the amount of the benefit, multiplied by the number of months for which the benefit has been payable. On each January 1 thereafter, every child's disability benefit payable under Section 4-110 or 4-110.1 shall be increased by 3% of the amount of the benefit then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-110 or 4-110.1.

(c-2) On July 1, 2004, every pension payable to or on behalf of a minor or disabled surviving child that is payable on that date under Section 4-114 shall be increased by an amount equal to 1/12 of 3% of the amount of the pension, multiplied by the number of months for which the benefit has been payable. On July 1, 2005, July 1, 2006, July 1, 2007, and July 1, 2008, every pension payable to or on behalf of a minor or disabled surviving child that is payable under Section 4-114 shall be increased by 3% of the amount of the pension then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-114.

(d) The monthly pension of a firefighter who retires after January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, be increased by 1/12 of 3% of the originally granted monthly pension for each full month that has elapsed since the pension began, and by an additional 3% in each January thereafter.

The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.

(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a firefighter who retired on or after January 1, 1977 and on or before January 1, 1986 and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).

(f) In July 2009, the monthly pension of a firefighter who retired before July 1, 1977 shall be recalculated and increased to reflect the amount that the firefighter would have received in July 2009 had the firefighter been receiving a 3% compounded increase for each year he or she received pension payments after January 1, 1986, plus any increases in pension received for each year prior to January 1, 1986. In each January thereafter, he or she shall receive an additional increase of 3% of the amount of the pension then being paid. The changes made to this Section by this amendatory Act of the 96th General Assembly apply without regard to whether the firefighter was in service on or after its effective date.

(g) Notwithstanding any other provision of this Article, the monthly pension of a firefighter who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 after the firefighter attains age 57 and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the consumer price index-u for the preceding calendar year is zero or there is a decrease, then the pension shall not be increased.

For the purposes of this subsection (g), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 96-775, eff. 8-28-09.)

(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)

Sec. 4-114. Pension to survivors. If a firefighter who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, or (2) from any cause while in receipt of a disability pension under this Article, or (3) during retirement after 20 years service, or (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, a pension shall be paid to his or her survivors, based on the monthly salary attached to the firefighter's rank on the last day of service in the fire department, as follows:

(a)(1) To the surviving spouse, a monthly pension of 40% of the monthly salary, and to the guardian of any minor child or children including a child which has been conceived but not yet born, 12% of such monthly salary for each such child until attainment of age 18 or until the child's marriage, whichever occurs first. Beginning July 1, 1993, the monthly pension to the surviving spouse shall be 54% of the monthly salary for all persons receiving a surviving spouse pension under this Article, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993.

(2) Beginning July 1, 2004, unless the amount provided under paragraph (1) of this subsection (a) is greater, the total monthly pension payable under this paragraph (a), including any amount payable on account of children, to the surviving spouse of a firefighter who died (i) while receiving a retirement pension, (ii) while he or she was a deferred pensioner with at least 20 years of creditable service, or (iii) while he or she was in active service having at least 20 years of creditable service, regardless of age, shall be no less than 100% of the monthly retirement pension earned by the deceased firefighter at the time of death, regardless of whether death occurs before or after attainment of age 50, including any increases under Section 4-109.1. This minimum applies to all such surviving spouses who are eligible to receive a surviving spouse pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of the 93rd General Assembly, and notwithstanding any limitation on maximum pension under paragraph (d) or any other provision of this Article.

(3) If the pension paid on and after July 1, 2004 to the surviving spouse of a firefighter who died on or after July 1, 2004 and before the effective date of this amendatory Act of the 93rd General Assembly was less than the minimum pension payable under paragraph (1) or (2) of this subsection (a), the fund shall pay a lump sum equal to the difference within 90 days after the effective date of this amendatory Act of the 93rd General Assembly.

The pension to the surviving spouse shall terminate in the event of the surviving spouse's remarriage prior to July 1, 1993; remarriage on or after that date does not affect the surviving spouse's pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993.

The surviving spouse's pension shall be subject to the minimum established in Section 4-109.2.

(b) Upon the death of the surviving spouse leaving one or more minor children, to the duly appointed guardian of each such child, for support and maintenance of each such child until the child reaches age 18 or marries, whichever occurs first, a monthly pension of 20% of the monthly salary.

(c) If a deceased firefighter leaves no surviving spouse or unmarried minor children under age 18, but leaves a dependent father or mother, to each dependent parent a monthly pension of 18% of the monthly salary. To qualify for the pension, a dependent parent must furnish satisfactory proof that the deceased firefighter was at the time of his or her death the sole supporter of the parent or that the parent was the deceased's dependent for federal income tax purposes.

(d) The total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 75% of the monthly salary of the deceased firefighter (1) when paid to the survivor of a firefighter who has attained 20 or more years of service credit and who receives or is eligible to receive a retirement pension under this Article, or (2) when paid to the survivor of a firefighter who dies as a result of illness or accident, or (3) when paid to the survivor of a firefighter who dies from any cause while in receipt of a disability pension under this Article, or (4) when paid to the survivor of a deferred pensioner. For all other survivors of deceased firefighters, the total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 50% of the retirement annuity the firefighter would have received on the date of death.

The maximum pension limitations in this paragraph (d) do not control over any contrary provision of this Article explicitly establishing a minimum amount of pension or granting a one-time or annual increase in pension.

(e) If a firefighter leaves no eligible survivors under paragraphs (a), (b) and (c), the board shall refund to the firefighter's estate the amount of his or her accumulated contributions, less the amount of pension payments, if any, made to the firefighter while living.

(f) (Blank).

(g) If a judgment of dissolution of marriage between a firefighter and spouse is judicially set aside subsequent to the firefighter's death, the surviving spouse is eligible for the pension provided in paragraph (a) only if the judicial proceedings are filed within 2 years after the date of the dissolution of marriage and within one year after the firefighter's death and the board is made a party to the proceedings. In such case the pension shall be payable only from the date of the court's order setting aside the judgment of dissolution of marriage.

(h) Benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child's attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged as a disabled person pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

(i) Beginning January 1, 2000, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1994 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

(j) Beginning July 1, 2004, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1988 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

Notwithstanding any other provision of this Article, if a firefighter who first becomes a firefighter under this Article on or after January 1, 2011 and who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, or (2) from any cause while in receipt of a disability pension under this Article, or (3) during retirement after 20 years service, or (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, then a pension shall be paid to his or her survivors in the amount of 66 2/3% of the firefighter's earned pension at the date of death. Nothing in this Section shall act to diminish the survivor's benefits described in subsection (j) of this Section.

Notwithstanding any other provision of this Article, the monthly pension of a survivor of a firefighter who first becomes a firefighter for any municipality participating under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the pension shall not be increased.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 95-279, eff. 1-1-08.)

(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

Sec. 4-118. Financing.

(a) The city council or the board of trustees of the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of firefighters and revenues available from other sources, will equal a sum sufficient to meet the annual actuarial requirements of the pension fund, as determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality. For the purposes of this Section, the annual actuarial requirements of the pension fund are equal to (1) the normal cost of the pension fund, or 17.5% of the salaries and wages to be paid to firefighters for the year involved, whichever is greater, plus (2) the annual amount necessary to amortize the fund's unfunded accrued liabilities over a period of 40 years from July 1, 1993, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. The amount to be applied towards the amortization of the unfunded accrued liability in any year shall not be less than the annual amount required to amortize the unfunded accrued liability, including interest, as a level percentage of payroll over the number of years remaining in the 40 year amortization period. Any unfunded liability that exists in the fund on July 1, 2010 may be amortized over a period of 30 years from July 1, 2010. Any unfunded liability created after July 1, 2010 may be amortized over a period of 30 years from July 1 of the calendar year in which the unfunded liability is created.

(b) The tax shall be levied and collected in the same manner as the general taxes of the municipality, and shall be in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and in addition to the amount authorized to be levied for general purposes, under Section 8-3-1 of the Illinois Municipal Code or under Section 14 of the Fire Protection District Act. The tax shall be forwarded directly to the treasurer of the board within 30 business days of receipt by the county (or, in the case of amounts added to the tax levy under subsection (f), used by the municipality to pay the employer contributions required under subsection (b-1) of Section 15-155 of this Code).

(b-1) The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2012. The study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(b-2) In the absence of a statutory alternative enacted prior to January 1, 2015 to ensure that public employers comply with this Act by making statutorily required pension contributions, if any participating municipality or participating instrumentality fails to transmit to the pension fund contributions required of it under this Article or contributions collected by it from its participating employees for the purposes of this Article within 90 days after the payment of such contributions is due, then the fund, after giving notice to the municipality or instrumentality, may certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller shall deduct the amounts so certified or any part thereof from any grants of State funds to the municipality or instrumentality involved and shall pay the amount so deducted to the pension fund. If State funds from which such deductions may be made are not available, then the pension fund may proceed against the municipality or instrumentality to recover the amounts of such delinquent payments in the appropriate circuit court.

(b-3) Beginning January 1, 2015, the city council or the board of trustees of any municipality shall not make a contribution to the pension fund under this Article in its jurisdiction less than the amount recommended by the enrolled actuary of the Department of Insurance if the unfunded liability exceeds the assets in the fund as determined by the most recent actuarial valuation.

(c) The board shall make available to the membership and the general public for inspection and copying at reasonable times the most recent Actuarial Valuation Balance Sheet and Tax Levy Requirement issued to the fund by the Department of Insurance.

(d) The firefighters' pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) all moneys derived from the taxes levied hereunder; (2) contributions by firefighters as provided under Section 4-118.1; (3) all rewards in money, fees, gifts, and emoluments that may be paid or given for or on account of extraordinary service by the fire department or any member thereof, except when allowed to be retained by competitive awards; and (4) any money, real estate or personal property received by the board.

(e) For the purposes of this Section, "enrolled actuary" means an actuary: (1) who is a member of the Society of Actuaries or the American Academy of Actuaries; and (2) who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974, or who has been engaged in providing actuarial services to one or more public retirement systems for a period of at least 3 years as of July 1, 1983.

(f) The corporate authorities of a municipality that employs a person who is described in subdivision (d) of Section 4-106 may add to the tax levy otherwise provided for in this Section an amount equal to the projected cost of the employer contributions required to be paid by the municipality to the State Universities Retirement System under subsection (b-1) of Section 15-155 of this Code.

(Source: P.A. 94-859, eff. 6-15-06.)

(40 ILCS 5/4-134) (from Ch. 108 1/2, par. 4-134)

Sec. 4-134. Report for tax levy.

(a) The board shall report to the city council or board of trustees of the municipality on the condition of the pension fund at the end of its most recently completed fiscal year. The report shall be made prior to the council or board meeting held for appropriating and levying taxes for the year for which the report is made.

The pension board in the report shall certify and provide the following information to the city council or board of trustees of the municipality:

(1) the total assets of the fund and their current market value of those assets;

(2) the estimated receipts during the next succeeding fiscal year from deductions from the salaries or wages of firefighters, and from all other sources;

(3) the estimated amount necessary during the fiscal year to meet the annual actuarial requirements of the pension fund as provided in Sections 4-118 and 4-120;

(4) the total net income received from investment of assets along with the assumed investment return and actual investment return received by the fund during its most recently completed fiscal year compared to the total net income, assumed investment return, and actual investment return received during the preceding fiscal year;

(5) the increase in employer pension contributions that results from the implementation of the provisions of this amendatory Act of the 93rd General Assembly;

(6) the total number of active employees who are financially contributing to the fund;

(7) the total amount that was disbursed in benefits during the fiscal year, including the number of and total amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a disability pension, and (iii) survivors and children in receipt of benefits;

(8) the funded ratio of the fund;

(9) the unfunded liability carried by the fund, along with an actuarial explanation of the unfunded liability; and

(10) the investment policy of the pension board under the statutory investment restrictions imposed on the fund.

Before the pension board makes its report, the municipality shall have the assets of the fund and their current market value verified by an independent certified public accountant of its choice.

(b) The municipality is authorized to publish the report submitted under this Section. This publication may be made, without limitation, by publication in a local newspaper of general circulation in the municipality or by publication on the municipality's Internet website. If the municipality publishes the report, then that publication must include all of the information submitted by the pension board under subsection (a).

(c) Upon issuing the report to the municipality, the pension board shall also provide the information described in subsection (a), with the exception of paragraph (10) of subsection (a), to the Department of Insurance in such manner and in such form as prescribed by the Director. The Department shall compile the submitted information on an annual basis into a comprehensive report and shall make this report available to the General Assembly and the Governor on paper or in electronic form before September 1, 2011 and before September 1 of each subsequent year. The Public Pension Division of the Department may adopt rules as necessary for the administration and enforcement of this subsection (c).

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/5-136.1) (from Ch. 108 1/2, par. 5-136.1)

Sec. 5-136.1. (a) Notwithstanding the other provisions of this Article, the widow of a policeman (1) who retires on or after January 1, 1986, and subsequently dies while receiving a retirement annuity, or (2) dies on or after January 1, 1991 while receiving a retirement annuity without regard to the date of retirement, or (3) dies after December 31, 1985, while an active policeman with at least 1 1/2 years of creditable service, may in lieu of any other widow's annuity have the amount of widow's annuity calculated in accordance with this Section.

(b) If the deceased policeman was an active policeman at the time of his death and had at least 1 1/2 years of creditable service, the widow's annuity shall be 30% of the annual maximum salary attached to the classified civil service position of a first class patrolman at the time of his death. If such policeman dies on or after January 1, 1991, the widow's annuity shall be the greater of (1) 30% of the annual maximum salary attached to the classified civil service position of a first class patrolman at the time of his death, or (2) 50% of the retirement annuity the deceased policeman would have been eligible to receive if he had retired from service on the day before his death. This annuity is fixed at the time of the policeman's death and does not increase. This annuity shall not be limited to the maximum dollar amount in effect for widows' annuities at the time of the policeman's death.

(b-1) If the deceased policeman was an active policeman at the time of his death and had at least 1 1/2 years of creditable service as of January 1, 2011, the widow's annuity shall be the greater of (1) 30% of the annual maximum salary attached to the classified civil service position of a first class patrolman at the time of his death, or (2) 66 2/3% of the retirement annuity the deceased policeman would have been eligible to receive if he had retired from service on the day before his death. This annuity is fixed at the time of the policeman's death and does not increase. This annuity shall not be limited to the maximum dollar amount in effect for widows' annuities at the time of the policeman's death.

(c) If the deceased policeman was receiving a retirement annuity at the time of his death, the widow's annuity shall be equal to 40% of the policeman's annuity at the time of the policeman's death until December 31, 1987, and 50% of such policeman's annuity thereafter. The increase in widow's annuity provided by this amendatory Act of 1987 shall apply to all annuities calculated under this subsection (c). This annuity shall not be limited to the maximum dollar amount in effect for widows' annuities at the time of the policeman's death or retirement.

(d) This Section shall in no way limit any annuity otherwise payable under this Article.

(e) The widow's annuity of any widow of a policeman who retired on or after January 1, 1986 and died while receiving a retirement annuity, which was not calculated under this Section because the deceased policeman had reached age 63 prior to January 1, 1986, shall be recalculated, effective January 1, 1991, in accordance with the provisions of this Section, notwithstanding Section 1-103.1.

(Source: P.A. 85-964; 86-1488.)

(40 ILCS 5/5-167.1) (from Ch. 108 1/2, par. 5-167.1)

Sec. 5-167.1. Automatic increase in annuity; retirement from service after September 1, 1967.

(a) A policeman who retires from service after September 1, 1967 with at least 20 years of service credit shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1955) if it occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2% and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning January 1, 1983 for policemen born before January 1, 1930, and beginning January 1, 1988 for policemen born on or after January 1, 1930 but before January 1, 1940, and beginning January 1, 1996 for policemen born on or after January 1, 1940 but before January 1, 1945, and beginning January 1, 2000 for policemen born on or after January 1, 1945 but before January 1, 1950, and beginning January 1, 2005 for policemen born on or after January 1, 1950 but before January 1, 1955, and beginning January 1, 2011 for policemen born on or after January 1, 1955, such increases shall be 3% and such policemen shall not be subject to the 30% maximum increase.

Any policeman born before January 1, 1945 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 1996 is entitled to receive the initial increase under this subsection on (1) January 1, 1996, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by Public Act 89-12 apply beginning January 1, 1996 and without regard to whether the policeman or annuitant terminated service before the effective date of that Act.

Any policeman born before January 1, 1950 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2000 is entitled to receive the initial increase under this subsection on (1) January 1, 2000, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 92nd General Assembly apply without regard to whether the policeman or annuitant terminated service before the effective date of this amendatory Act.

Any policeman born before January 1, 1955 who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2005 is entitled to receive the initial increase under this subsection on (1) January 1, 2005, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 94th General Assembly apply without regard to whether the policeman or annuitant terminated service before the effective date of this amendatory Act.

Any policeman who qualifies for a minimum annuity and retires after September 1, 1967 but has not received the initial increase under this subsection before January 1, 2011 is entitled to receive the initial increase under this subsection on (1) January 1, 2011, (2) the first anniversary of the date of retirement, or (3) attainment of age 55, whichever occurs last. The changes to this Section made by this amendatory Act of the 96th General Assembly apply without regard to whether the policeman or annuitant terminated service before the effective date of this amendatory Act.

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

(c) To help defray the cost of such increases in annuity, there shall be deducted, beginning September 1, 1967, from each payment of salary to a policeman, 1/2 of 1% of each salary payment concurrently with and in addition to the salary deductions otherwise made for annuity purposes.

The city, in addition to the contributions otherwise made by it for annuity purposes under other provisions of this Article, shall make matching contributions concurrently with such salary deductions.

Each such 1/2 of 1% deduction from salary and each such contribution by the city of 1/2 of 1% of salary shall be credited to the Automatic Increase Reserve, to be used to defray the cost of the 1 1/2% annuity increase provided by this Section. Any balance in such reserve as of the beginning of each calendar year shall be credited with interest at the rate of 3% per annum.

Such deductions from salary and city contributions shall continue while the policeman is in service.

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

(d) Notwithstanding any other provision of this Article, for a policeman who first becomes a policeman under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (d) shall be in the amount of 66 2/3% of the policeman's earned annuity at the date of death. Nothing in this subsection (d) shall act to diminish the survivor's benefits described in this Section.

Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a policeman who first becomes a policeman for any municipality participating under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted annuity. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the annuity shall not be increased.

For the purposes of this subsection (d), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 94-719, eff. 1-6-06.)

(40 ILCS 5/5-167.6 new)

Sec. 5-167.6. Minimum annuity for certain widows. Notwithstanding any other provision of this Article, the widow's annuity payable to the widow of a policeman who dies on or after July 1, 1997 while an active policeman with at least 10 years of creditable service shall be no less than 66 2/3% of the retirement annuity that the deceased policeman would have been eligible to receive if he had attained age 55 and 20 years of service on the day before his death and retired on that day. In the case of a widow's annuity that is payable on the effective date of this amendatory Act of the 96th General Assembly, the increase provided by this Section, if any, shall begin to accrue on the first annuity payment date following the effective date.

(40 ILCS 5/5-238 new)

Sec. 5-238. Provisions applicable to new hires.

(a) Notwithstanding any other provision of this Article, the provisions of this Section apply to a person who first becomes a policeman under this Article on or after January 1, 2011.

(b) A policeman who withdraws from service at age 55 or more with 20 or more years of creditable service, shall receive an annuity of 2.5% of the policeman's final average salary for each of the first 20 years of service plus 2.2% of final average salary for each completed year of service or fraction thereof over 20.

The annuity of a policeman who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-fourth of 1% for each month that the policeman's age is under age 55.

The maximum pension under this subsection (b) shall be 72% of final average salary.

For the purposes of this subsection (b), "final average salary" means the average monthly salary obtained by dividing the total salary of the policeman during the 48 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

(c) The automatic annual increases authorized under Section 5-167.1 shall be granted on the January 1 after the policeman attains age 57 and each January 1 thereafter.

(d) Notwithstanding any other provision of this Article, for a policeman who first becomes a policeman under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (d) shall be in the amount of 66 2/3% of the policeman's earned annuity at the date of death. Nothing in this subsection (d) shall act to diminish the survivor's benefits described in this Section.

Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a policeman who first becomes a policeman for any municipality participating under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the annuity shall not be increased.

For the purposes of this subsection (d), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(40 ILCS 5/6-141.1) (from Ch. 108 1/2, par. 6-141.1)

Sec. 6-141.1. (a) Notwithstanding the other provisions of this Article, the widow of a fireman who dies on or after June 30, 1984, while receiving a retirement annuity or while an active fireman with at least 1 1/2 years of creditable service, shall, as of January 1, 2011, may elect to have the amount of widow's annuity calculated in accordance with this Section.

(b) If the deceased fireman was an active fireman at the time of his death and had at least 1 1/2 years of creditable service, the widow's annuity shall be the greater of (1) 30% of the salary attached to the rank of first class firefighter in the classified career service at the time of the fireman's death, or (2) 66 2/3% 50% of the retirement annuity the deceased fireman would have been eligible to receive if he had retired from service on the day before his death.

(c) If the deceased fireman was receiving a retirement annuity at the time of his death, the widow's annuity shall be equal to 66 2/3% 50% of the amount of such retirement annuity at the time of the fireman's death.

(Source: P.A. 84-11.)

(40 ILCS 5/6-141.2)

Sec. 6-141.2. Minimum annuity for certain widows.

Notwithstanding the other provisions of this Article, the widow's annuity payable to the widow of a fireman who dies on or after July 1, 1997 while an active fireman with at least 10 years of creditable service shall be no less than 66 2/3% 50% of the retirement annuity that the deceased fireman would have been eligible to receive if he had attained age 55 50 and 20 years of service on the day before his death and retired on that day. In the case of a widow's annuity that is payable on the effective date of this amendatory Act of the 93rd General Assembly, the increase provided by this Section, if any, shall begin to accrue on the first annuity payment date following that effective date.

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

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

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

(a) A fireman qualifying for a minimum annuity who retires from service after September 1, 1959 shall, upon either the first of the month following the first anniversary of his date of retirement if he is age 60 (age 55 if born before January 1, 1955) or over on that anniversary date, or upon the first of the month following his attainment of age 60 (age 55 if born before January 1, 1955) if that occurs after the first anniversary of his retirement date, have his then fixed and payable monthly annuity increased by 1 1/2%, and such first fixed annuity as granted at retirement increased by an additional 1 1/2% in January of each year thereafter up to a maximum increase of 30%. Beginning July 1, 1982 for firemen born before January 1, 1930, and beginning January 1, 1990 for firemen born after December 31, 1929 and before January 1, 1940, and beginning January 1, 1996 for firemen born after December 31, 1939 but before January 1, 1945, and beginning January 1, 2004, for firemen born after December 31, 1944 but before January 1, 1955, such increases shall be 3% and such firemen shall not be subject to the 30% maximum increase.

Beginning January 1, 2011, for a fireman who first becomes a fireman under this Article before January 1, 2011 such automatic annual increases shall be 3% payable upon either the first of the month following the first anniversary of his or her date of retirement if he is age 55 or over on that anniversary date or the first of the month following the month of his or her 55th birthday.

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

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

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

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

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

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

(d) Notwithstanding any other provision of this Article, the monthly pension of a fireman who first becomes a fireman under this Article on or after January 1, 2011 shall be increased on the January 1 after the fireman attains age 57 and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the consumer price index-u for the preceding calendar year is zero or there is a decrease, then the pension shall not be increased.

For the purposes of this subsection (d), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

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

(40 ILCS 5/6-229 new)

Sec. 6-229. Provisions applicable to new hires.

(a) Notwithstanding any other provision of this Article, the provisions of this Section apply to a person who first becomes a fireman under this Article on or after January 1, 2011.

(b) A fireman who withdraws from service at age 55 or more with 20 or more years of creditable service, shall receive an annuity of 2.5% of the fireman's final average salary for each of the first 20 years of service plus 2.2% of final average salary for each completed year of service or fraction thereof over 20.

The annuity of a fireman who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-fourth of 1% for each month that the fireman's age is under age 55.

The maximum pension under this subsection (b) shall be 72% of final average salary.

For the purposes of this subsection (b), "final average salary" means the average monthly salary obtained by dividing the total salary of the fireman during the 48 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

(c) The automatic annual increases authorized under Section 6-164 shall be granted on the January 1 after the fireman attains age 57 and each January 1 thereafter.

(d) Notwithstanding any other provision of this Article, for a fireman who first becomes a fireman under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (d) shall be in the amount of 66 2/3% of the fireman's earned pension at the date of death. Nothing in this subsection (d) shall act to diminish the survivor's benefits described in this Section.

Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a fireman who first becomes a fireman for any municipality participating under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the annuity shall not be increased.

(40 ILCS 5/7-142.1) (from Ch. 108 1/2, par. 7-142.1)

Sec. 7-142.1. Sheriff's law enforcement employees.

(a) In lieu of the retirement annuity provided by subparagraph 1 of paragraph (a) of Section 7-142:

Any sheriff's law enforcement employee who has 20 or more years of service in that capacity and who terminates service prior to January 1, 1988 shall be entitled at his option to receive a monthly retirement annuity for his service as a sheriff's law enforcement employee computed by multiplying 2% for each year of such service up to 10 years, 2 1/4% for each year of such service above 10 years and up to 20 years, and 2 1/2% for each year of such service above 20 years, by his annual final rate of earnings and dividing by 12.

Any sheriff's law enforcement employee who has 20 or more years of service in that capacity and who terminates service on or after January 1, 1988 and before July 1, 2004 shall be entitled at his option to receive a monthly retirement annuity for his service as a sheriff's law enforcement employee computed by multiplying 2.5% for each year of such service up to 20 years, 2% for each year of such service above 20 years and up to 30 years, and 1% for each year of such service above 30 years, by his annual final rate of earnings and dividing by 12.

Any sheriff's law enforcement employee who has 20 or more years of service in that capacity and who terminates service on or after July 1, 2004 shall be entitled at his or her option to receive a monthly retirement annuity for service as a sheriff's law enforcement employee computed by multiplying 2.5% for each year of such service by his annual final rate of earnings and dividing by 12.

If a sheriff's law enforcement employee has service in any other capacity, his retirement annuity for service as a sheriff's law enforcement employee may be computed under this Section and the retirement annuity for his other service under Section 7-142.

In no case shall the total monthly retirement annuity for persons who retire before July 1, 2004 exceed 75% of the monthly final rate of earnings. In no case shall the total monthly retirement annuity for persons who retire on or after July 1, 2004 exceed 80% of the monthly final rate of earnings.

(b) Whenever continued group insurance coverage is elected in accordance with the provisions of Section 367h of the Illinois Insurance Code, as now or hereafter amended, the total monthly premium for such continued group insurance coverage or such portion thereof as is not paid by the municipality shall, upon request of the person electing such continued group insurance coverage, be deducted from any monthly pension benefit otherwise payable to such person pursuant to this Section, to be remitted by the Fund to the insurance company or other entity providing the group insurance coverage.

(c) A sheriff's law enforcement employee who has service in any other capacity may convert up to 10 years of that service into service as a sheriff's law enforcement employee by paying to the Fund an amount equal to (1) the additional employee contribution required under Section 7-173.1, plus (2) the additional employer contribution required under Section 7-172, plus (3) interest on items (1) and (2) at the prescribed rate from the date of the service to the date of payment.

(d) The changes to subsections (a) and (b) of this Section made by this amendatory Act of the 94th General Assembly apply only to persons in service on or after July 1, 2004. In the case of such a person who begins to receive a retirement annuity before the effective date of this amendatory Act of the 94th General Assembly, the annuity shall be recalculated prospectively to reflect those changes, with the resulting increase beginning to accrue on the first annuity payment date following the effective date of this amendatory Act.

(e) Notwithstanding any other provision of this Article, the provisions of this subsection apply to a person who first becomes a sheriff's law enforcement employee under this Article on or after January 1, 2011.

In lieu of the retirement annuity provided by subparagraph 1 of paragraph (a) of Section 7-142, a sheriff's law enforcement employee age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly retirement annuity for his service as a sheriff's law enforcement employee computed by multiplying 2.4% for each year of such service by his or her final rate of earnings.

The annuity of a sheriff's law enforcement employee who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-fourth of 1% for each month that the sheriff's law enforcement employee's age is under age 55.

A sheriff's law enforcement employee who withdraws from service at age 55 or more with 20 or more years of creditable service, shall receive an annuity of 2.5% of the sheriff's law enforcement employee's final average salary for each of the first 20 years of service plus 2.2% of final average salary for each completed year of service or fraction thereof over 20.

The maximum pension under this subsection (e) shall be 72% of final average salary.

(f) Notwithstanding any other provision of this Article, for a sheriff's law enforcement employee who first becomes a sheriff's law enforcement employee under this Article on or after January 1, 2011, the annuity to which the surviving spouse, children, or parents are entitled under this subsection (f) shall be in the amount of 66 2/3% of the sheriff's law enforcement employee's earned annuity at the date of death. Nothing in this subsection (f) shall act to diminish the survivor's benefits described in this Section.

Notwithstanding any other provision of this Article, the monthly annuity of a survivor of a sheriff's law enforcement employee who first becomes a sheriff's law enforcement employee for any municipality participating under this Article on or after January 1, 2011 shall be increased on the January 1 after commencement of the annuity and each January 1 thereafter by 3% or the annual increase in the consumer price index-u for the preceding calendar year, whichever is less, of the originally granted pension. If the increase in the cpi-u for the preceding calendar year is zero or there is a decrease, then the annuity shall not be increased.

For the purposes of this subsection (f), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 94-712, eff. 6-1-06.)

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