SB1292ham001 96TH GENERAL ASSEMBLY

Personnel and Pensions Committee

Filed: 5/12/2009

09600SB1292ham001 LRB096 08007 AMC 26625 a

AMENDMENT TO SENATE BILL 1292

AMENDMENT NO. ______. Amend Senate Bill 1292 by replacing everything after the enacting clause with the following:

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

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

Sec. 15. Act Takes Precedence.

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

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

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

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

Section 10. The Illinois Pension Code is amended by adding Sections 2-300, 2-305, 2-310, 2-315, 2-320, 2-325, 2-330, 2-335, 2-340, 14-300, 14-305, 14-310, 14-315, 14-320, 14-325, 14-330, 14-335, 14-340, 15-300, 15-305, 15-310, 15-315, 15-320, 15-325, 15-330, 15-335, 15-340, 16-300, 16-305, 16-310, 16-315, 16-320, 16-325, 16-330, 16-335, 16-340, 18-300, 18-305, 18-310, 18-315, 18-320, 18-325, 18-330, 18-335, and 18-340 as follows:

(40 ILCS 5/2-300 new)

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

(a) The provisions of this Article following this Section apply only to members who first become members on or after August 1, 2009, who are referred to as "later entrants".

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to members who first become members on or after August 1, 2009.

(c) The following Sections are also applicable to members who first become members on or after August 1, 2009: Sections 2-101, 2-102, 2-103, 2-104, 2-105, 2-107, 2-108, 2-109, 2-111, 2-112, 2-113, 2-114, 2-116, 2-117, 2-117.1, 2-117.3, and 2-121.2 and Sections 2-124 through 2-162.

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

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

(40 ILCS 5/2-305 new)

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

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

(1) The maximum amount of creditable service a member may establish under this Article is 35 years.

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

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

(b) A member may establish creditable service for up to 2 years of military service, as defined in Section 2-109, before becoming a member under this Article by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at 4% per year from the date of first membership in the System to the date of payment.

(40 ILCS 5/2-310 new)

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

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

The annuity shall begin with the first full calendar month specified in the member's application therefor, the first day of which shall not be before the date of withdrawal as approved by the board. Regardless of the date of withdrawal, the annuity need not begin within one year of application therefor.

(40 ILCS 5/2-315 new)

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

(a) With respect to late entrants:

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

In no event shall the monthly salary used to determined final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less.

The earnings limitations contained in this item (1) apply to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating a proportional annuity under this Article, except in the case of a person who first became a member of this System before August 22, 1994.

(2) "Salary" means:

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

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

However, in the event that federal law results in any participant receiving imputed income based on the value of group term life insurance provided by the State, such imputed income shall not be included in salary for the purposes of this Article.

(b) The retirement life annuity shall be 2% of final average salary for each year of service.

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

(40 ILCS 5/2-320 new)

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

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

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

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

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

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

(40 ILCS 5/2-325 new)

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

(40 ILCS 5/2-330 new)

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

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

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

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

(40 ILCS 5/2-335 new)

Sec. 2-335. Refunds; later entrants. A participant who ceases to be a member, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, per year, not compounded.

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

(40 ILCS 5/2-340 new)

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

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

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

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

(d) A person who re-enters service within 3 years after retiring may qualify to have the retirement annuity computed as though the member had not previously retired by paying to the System, within 5 years after re-entry and prior to subsequent retirement, in a lump-sum or in installment payments, in accordance with rules adopted by the board, an amount equal to all retirement annuity payments received, plus interest at the actuarially assumed rate from the date retirement payments were suspended to the date of repayment.

(40 ILCS 5/14-300 new)

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

(a) The provisions of this Article following this Section apply only to employees who first become employees on or after August 1, 2009, who are referred to as "later entrants".

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to employees who first become employees on or after August 1, 2009.

(c) The following Sections are also applicable to employees who first become employees on or after August 1, 2009: Sections 14-101, 14-102, 14-103.01, 14-103.02, 14-103.03, 14-103.04, 14-103.05, 14-103.06, 14-103.07, 14-103.08, 14-103.09, 14-103.10, 14-103.11, 14-103.13, 14-103.15, 14-103.16, 14-103.17, 14-103.18, 14-103.19, 14-103.22, 14-103.24, 14-103.25, 14-103.26, 14-103.27, 14-103.28, 14-103.29, 14-103.32, 14-103.33, 14-103.34, 14-103.35, 14-103.36, 14-103.37, 14-103.38, 14-103.39, 14-104.7, 14-123, 14-123.1, 14-124, 14-125, 14-125.1, 14-126, 14-127, 14-131, 14-132.2, 14-132.2, and 14-133.1 and Sections 14-134 through 14-152.2.

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

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

(40 ILCS 5/14-305 new)

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

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

(1) The maximum amount of creditable service a member may establish under this Article is 35 years.

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

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

(b) A member may establish creditable service for up to 2 years of military service, as defined in Section 14-103.16, before becoming a member under this Article by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first membership in the System to the date of payment.

(40 ILCS 5/14-310 new)

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

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

The annuity shall begin with the first full calendar month specified in the member's application therefor, the first day of which shall not be before the date of withdrawal as approved by the board. Regardless of the date of withdrawal, the annuity need not begin within one year of application therefor.

(40 ILCS 5/14-315 new)

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

(a) With respect to late entrants:

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

In no event shall the monthly compensation used to determined final average compensation exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less.

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

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

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

(40 ILCS 5/14-320 new)

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

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

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

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

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

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

(40 ILCS 5/14-325 new)

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

(40 ILCS 5/14-330 new)

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

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

(1) Covered employees, 3%.

(2) Noncovered employees, 7%.

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

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

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

(40 ILCS 5/14-335 new)

Sec. 14-335. Refunds; later entrants. An employee who ceases to be a member, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, per year, not compounded.

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

(40 ILCS 5/14-340 new)

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

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

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

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

(d) A person who re-enters service within 3 years after retiring may qualify to have the retirement annuity computed as though the member had not previously retired by paying to the System, within 5 years after re-entry and prior to subsequent retirement, in a lump-sum or in installment payments, in accordance with rules adopted by the board, an amount equal to all retirement annuity payments received, plus interest at the actuarially assumed rate from the date retirement payments were suspended to the date of repayment.

(40 ILCS 5/15-300 new)

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

(a) The provisions of this Article following this Section apply only to employees who first become employees on or after August 1, 2009, who are referred to as "later entrants".

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to employees who first become employees on or after August 1, 2009.

(c) The following Sections are also applicable to employees who first become employees on or after August 1, 2009: Sections 15-101, 15-102, 15-103.2, 15-103.3, 15-104, 15-105, 15-106, 15-107, 15-108, 15-109, 15-110, 15-111, 15-113, 15-113.1, 15-118, 15-119, 15-124, 15-126, 15-126.1, 15-134, 15-136.4, 15-150, 15-151, 15-152, 15-153, 15-153.1, 15-153.2, 15-153.3, 15-155, 15-156, 15-157.1, and 15-158.2 and Sections 15-159 through 15-198.

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

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

(40 ILCS 5/15-305 new)

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

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

(1) The maximum amount of creditable service a participant may establish under this Article is 35 years.

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

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

(b) A participant may establish creditable service for up to 2 years of military service before becoming a participant under this Article by paying to the System (1) employee contributions based upon the participant's salary upon becoming a participant under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first employment in the System to the date of payment.

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

(40 ILCS 5/15-310 new)

Sec. 15-310. Retirement annuity; conditions for eligibility; later entrants. A participant may claim his or her retirement annuity upon attainment of (1) the full (normal) retirement age as provided in the federal Social Security Act with at least 10 years of service credit or (2) age 62 with at least 35 years of service credit.

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

The annuity shall begin with the first full calendar month specified in the participant's application therefor, the first day of which shall not be before the date of withdrawal as approved by the board. Regardless of the date of withdrawal, the annuity need not begin within one year of application therefor.

(40 ILCS 5/15-315 new)

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

(a) With respect to late entrants:

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

In no event shall the monthly rate of earnings used to determined final average rate of earnings exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less.

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

(b) The retirement life annuity shall be 2% of final average rate of earnings for each year of service.

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

(40 ILCS 5/15-320 new)

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

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

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

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

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

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

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

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

(40 ILCS 5/15-325 new)

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

(40 ILCS 5/15-330 new)

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

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

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

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

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

(40 ILCS 5/15-335 new)

Sec. 15-335. Refunds; later entrants. An employee who ceases to be a participant, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, per year, not compounded.

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

(40 ILCS 5/15-340 new)

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

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

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

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

(d) A person who re-enters service within 3 years after retiring may qualify to have the retirement annuity computed as though the participant had not previously retired by paying to the System, within 5 years after re-entry and prior to subsequent retirement, in a lump-sum or in installment payments, in accordance with rules adopted by the board, an amount equal to all retirement annuity payments received, plus interest at the actuarially assumed rate from the date retirement payments were suspended to the date of repayment.

(40 ILCS 5/16-300 new)

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

(a) The provisions of this Article following this Section apply only to teachers who first become teachers on or after August 1, 2009, who are referred to as "later entrants".

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to teachers who first become teachers on or after August 1, 2009.

(c) The following Sections are also applicable to teachers who first become teachers on or after August 1, 2009: Sections 16-101, 16-102, 16-103, 16-104, 16-105, 16-106, 16-106.1, 16-106.2, 16-106.3, 16-107, 16-109, 16-110, 16-111.1, 16-113, 16-114, 16-118, 16-121, 16-123, 16-149, 16-149.1, 16-149.2, 16-149.3, 16-149.4, 16-149.5, 16-149.6, and 16-152.1 and Sections 16-155 through 16-203.

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

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

(40 ILCS 5/16-305 new)

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

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

(1) The maximum amount of creditable service a member may establish under this Article is 35 years.

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

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

(b) A member may establish creditable service for up to 2 years of military service before becoming a member under this Article by paying to the System (1) employee contributions based upon the member's salary upon becoming a member under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first employment in the System to the date of payment.

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

(40 ILCS 5/16-310 new)

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

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

The annuity shall begin with the first full calendar month specified in the member's application therefor, the first day of which shall not be before the date of withdrawal as approved by the board. Regardless of the date of withdrawal, the annuity need not begin within one year of application therefor.

(40 ILCS 5/16-315 new)

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

(a) With respect to late entrants:

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

In no event shall the monthly salary used to determined final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less.

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

(b) The retirement life annuity shall be 2% of final average salary for each year of service.

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

(40 ILCS 5/16-320 new)

Sec. 16-320. Alternative forms of annuities for later entrants. A member may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 14-315:

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

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

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

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

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

(40 ILCS 5/16-325 new)

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

(40 ILCS 5/16-330 new)

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

(a) Each teacher shall contribute 8% of each payment of salary received by him or her for service as a teacher toward the cost of his or her retirement annuity.

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

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

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

(40 ILCS 5/16-335 new)

Sec. 16-335. Refunds; later entrants. A teacher who ceases to be a member, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, per year, not compounded.

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

(40 ILCS 5/16-340 new)

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

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

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

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

(d) A person who re-enters service within 3 years after retiring may qualify to have the retirement annuity computed as though the member had not previously retired by paying to the System, within 5 years after re-entry and prior to subsequent retirement, in a lump-sum or in installment payments, in accordance with rules adopted by the board, an amount equal to all retirement annuity payments received, plus interest at the actuarially assumed rate from the date retirement payments were suspended to the date of repayment.

(40 ILCS 5/18-300 new)

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

(a) The provisions of this Article following this Section apply only to judges who first become judges on or after August 1, 2009, who are referred to as "later entrants".

(b) Except as provided in subsection (c) of this Section, the Sections of this Article before this Section do not apply to judges who first become judges on or after August 1, 2009.

(c) The following Sections are also applicable to judges who first become judges on or after August 1, 2009: Sections 18-101, 18-102, 18-103, 18-104, 18-105, 18-106, 18-107, 18-108, 18-109, 18-110, 18-111, 18-112.5, 18-113, 18-114, 18-116, 18-118, 18-119, 18-120, 18-120.1, 18-121, 18-126, 18-126.1, 18-128.2, 18-131, and 18-132 and Sections 18-133.1 through 18-169.

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

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

(40 ILCS 5/18-305 new)

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

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

(1) The maximum amount of creditable service a participant may establish under this Article is 35 years.

(2) A participant may only establish creditable service for his or her service for employment as a judge, as defined in Section 16-106. Except as provided in subsection (b), a participant may not establish creditable service for any other service.

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

(b) A participant may establish creditable service for up to 2 years of military service before becoming a participant under this Article by paying to the System (1) employee contributions based upon the participant's salary upon becoming a participant under this Article, (2) an amount determined by the board to be equal to the employer's normal cost of the benefit, and (3) interest on items (1) and (2) at the actuarially assumed rate from the date of first employment in the System to the date of payment.

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

(40 ILCS 5/18-310 new)

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

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

The annuity shall begin with the first full calendar month specified in the participant's application therefor, the first day of which shall not be before the date of withdrawal as approved by the board. Regardless of the date of withdrawal, the annuity need not begin within one year of application therefor.

(40 ILCS 5/18-315 new)

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

(a) With respect to late entrants:

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

In no event shall the monthly salary used to determined final average salary exceed (i) the Social Security Covered Wage Base for the given month of service or (ii) $12,500, whichever is less.

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

(b) The retirement life annuity shall be 2% of final average salary for each year of service.

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

(40 ILCS 5/18-320 new)

Sec. 18-320. Alternative forms of annuities for later entrants. A participant may choose any of the following types of annuities in lieu of receiving the full annuity provided in Section 14-315:

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

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

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

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

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

(40 ILCS 5/18-325 new)

Sec. 18-325. Automatic annual increases for later entrants. Notwithstanding any other provision of this Article, a person receiving a retirement or survivor annuity under Sections 16-315 or 16-320 shall, on the first anniversary of retirement, but not before attaining age 67, and annually thereafter, have his or her annuity increased by (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, of the originally granted annuity.

(40 ILCS 5/18-330 new)

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

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

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

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

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

(40 ILCS 5/18-335 new)

Sec. 18-335. Refunds; later entrants. A judge who ceases to be a participant, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, plus interest at (1) 3% or (2) one-half of the percentage increase, if any, in the Consumer Price Index for All Urban Consumers measured from the preceding January 1 to the January 1 of the year during which the interest is being credited, whichever is less, per year, not compounded.

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

(40 ILCS 5/18-340 new)

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

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

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

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

(d) A person who re-enters service within 3 years after retiring may qualify to have the retirement annuity computed as though the participant had not previously retired by paying to the System, within 5 years after re-entry and prior to subsequent retirement, in a lump-sum or in installment payments, in accordance with rules adopted by the board, an amount equal to all retirement annuity payments received, plus interest at the actuarially assumed rate from the date retirement payments were suspended to the date of repayment.

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