HB1758ham001 97TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 2/28/2011

09700HB1758ham001 LRB097 07277 JDS 51536 a

AMENDMENT TO HOUSE BILL 1758

AMENDMENT NO. ______. Amend House Bill 1758 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Section 8-139 and 11-134.2 and adding 8-223.1 and 11-212.1 as follows:

(40 ILCS 5/8-139) (from Ch. 108 1/2, par. 8-139)

Sec. 8-139. Reversionary annuity.

(a) An employee, prior to retirement on annuity, may elect to take a lesser amount of annuity and provide, with the actuarial value of the amount by which his annuity is reduced, a reversionary annuity for a wife, husband, parent, child, brother or sister. The option shall be exercised by filing a written designation with the board prior to retirement, and may be revoked by the employee at any time before retirement. The death of the employee prior to his retirement shall automatically void the option.

(b) The death of the designated reversionary annuitant prior to the employee's retirement shall automatically void the option. If the reversionary annuitant dies after the employee's retirement, and before the death of the employee annuitant, the reduced annuity being paid to the retired employee annuitant shall be increased to the amount of annuity before reduction for the reversionary annuity and no reversionary annuity shall be payable.

The option is subject to the further condition that no reversionary annuity shall be paid to a parent, child, brother, or sister if the employee dies before the expiration of 365 days from the date his written designation was filed with the board, even though he has retired and is receiving a reduced annuity.

(c) The employee exercising this option shall not reduce his retirement annuity by more than $400 a month, or elect to provide a reversionary annuity of less than $50 per month. No option shall be permitted if the reversionary annuity for a widow, when added to the widow's annuity payable under this Article, exceeds 100% of the reduced annuity payable to the employee.

(d) A reversionary annuity shall begin on the day following the death of the annuitant and shall be paid as provided in Section 8-125.

(e) The increases in annuity provided in Section 8-137 of this Article shall, as to an employee so electing a reduced annuity relate to the amount of the original annuity, and such amount shall constitute the annuity on which such automatic increases shall be based.

(f) For annuities elected after June 30, 1983, the amount of the monthly reversionary annuity shall be determined by multiplying the amount of the monthly reduction in the employee's annuity by the factor in the following table based on the age of the employee and the difference in the age of the employee and the age of the reversionary annuitant at the starting date of the employee's annuity:

(g) Beginning on the effective date of this amendatory Act of the 97th General Assembly, an employee annuitant who has elected the reversionary annuity may cancel the election. The cancellation must be in writing with the employee's signature notarized. The cancellation shall be effective upon its being filed with the Board and may not be revoked after it is executed and filed. The reduction in annuity shall be restored with the first annuity payment made at least 30 days after the receipt of the cancellation by the Fund. There shall be no refund of money previously deducted from the employee's annuity to provide the reversionary annuity.

(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)

(40 ILCS 5/8-223.1 new)

Sec. 8-223.1. Indemnification of trustees, staff, and consultants of the pension fund. The Fund established under this Article shall indemnify and protect the trustees, staff, and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff, and consultants shall not be indemnified for wilful misconduct or gross negligence. The board is authorized to insure against loss or liability of the trustees, staff, and consultants that may result from these damage claims. This insurance shall be carried in a company that is licensed to write such coverage in this State.

(40 ILCS 5/11-134.2) (from Ch. 108 1/2, par. 11-134.2)

Sec. 11-134.2. Reversionary annuity.

(a) An employee, prior to retirement on annuity, may elect to take a lesser amount of annuity and provide, with the actuarial value of the amount by which his annuity is reduced, a reversionary annuity for a wife, husband, parent, child, brother or sister. The option shall be exercised by filing a written designation with the board prior to retirement, and may be revoked by the employee at any time before retirement. The death of the employee prior to his retirement shall automatically void the option.

(b) The death of the designated reversionary annuitant prior to the employee's retirement shall automatically void the option. If the reversionary annuitant dies after the employee's retirement, and before the death of the employee annuitant, the reduced annuity being paid to the retired employee annuitant shall be increased to the amount of annuity before reduction for the reversionary annuity and no reversionary annuity shall be payable.

The option is subject to the further condition that no reversionary annuity shall be paid to a parent, child, brother, or sister if the employee dies before the expiration of 365 days from the date his written designation was filed with the board, even though he has retired and is receiving a reduced annuity.

(c) The employee exercising this option shall not reduce his retirement annuity by more than $400 per month, or elect to provide a reversionary annuity of less than $50 per month. No option shall be permitted if the reversionary annuity for a widow or any reversionary annuitant, when added to the widow's annuity payable under this Article, exceeds 100% of the reduced annuity payable to the employee.

(d) A reversionary annuity shall begin on the day following the death of the annuitant and shall be paid as provided in Section 11-124.

(e) The increases in annuity provided in Section 11-134.1 of this Article shall, as to an employee so electing a reduced annuity, relate to the amount of the original annuity, and such amount shall constitute the annuity on which such increases shall be based.

(f) For annuities elected after June 30, 1983, the amount of the monthly reversionary annuity shall be determined by multiplying the amount of the monthly reduction in the employee's annuity by the factor in the following table based on the age of the employee and the difference in the age of the employee and the age of the reversionary annuitant at the starting date of the employee's annuity:

(g) Beginning on the effective date of this amendatory Act of the 97th General Assembly, an employee annuitant who has elected the reversionary annuity may cancel the election. The cancellation must be in writing with the employee's signature notarized. The cancellation shall be effective upon its being filed with the Board and may not be revoked after it is executed and filed. The reduction in annuity shall be restored with the first annuity payment made at least 30 days after the receipt of the cancellation by the Fund. There shall be no refund of money previously deducted from the employee's annuity to provide the reversionary annuity.

(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98; 91-887, 7-6-00.)

(40 ILCS 5/11-212.1 new)

Sec. 11-212.1. Indemnification of trustees, staff, and consultants of the pension fund. The Fund established under this Article shall indemnify and protect the trustees, staff, and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff, and consultants shall not be indemnified for wilful misconduct or gross negligence. The board is authorized to insure against loss or liability of the trustees, staff, and consultants that may result from these damage claims. This insurance shall be carried in a company that is licensed to write such coverage in this State.

Section 90. The State Mandates Act is amended by adding Section 8.35 as follows:

(30 ILCS 805/8.35 new)

Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 97th General Assembly.

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