Sen. William R. Haine

Filed: 5/16/2018





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2    AMENDMENT NO. ______. Amend House Bill 751 on page 1, line
35, by replacing "16-150.1 and" with "7-141.1, 16-150.1, and";
5on page 1, immediately below line 5, by inserting the
7    "(40 ILCS 5/7-141.1)
8    Sec. 7-141.1. Early retirement incentive.
9    (a) The General Assembly finds and declares that:
10        (1) Units of local government across the State have
11    been functioning under a financial crisis.
12        (2) This financial crisis is expected to continue.
13        (3) Units of local government must depend on additional
14    sources of revenue and, when those sources are not
15    forthcoming, must establish cost-saving programs.
16        (4) An early retirement incentive designed



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1    specifically to target highly-paid senior employees could
2    result in significant annual cost savings.
3        (5) The early retirement incentive should be made
4    available only to those units of local government that
5    determine that an early retirement incentive is in their
6    best interest.
7        (6) A unit of local government adopting a program of
8    early retirement incentives under this Section is
9    encouraged to implement personnel procedures to prohibit,
10    for at least 5 years, the rehiring (whether on payroll or
11    by independent contract) of employees who receive early
12    retirement incentives.
13        (7) A unit of local government adopting a program of
14    early retirement incentives under this Section is also
15    encouraged to replace as few of the participating employees
16    as possible and to hire replacement employees for salaries
17    totaling no more than 80% of the total salaries formerly
18    paid to the employees who participate in the early
19    retirement program.
20    It is the primary purpose of this Section to encourage
21units of local government that can realize true cost savings,
22or have determined that an early retirement program is in their
23best interest, to implement an early retirement program.
24    (b) Until the effective date of this amendatory Act of
251997, this Section does not apply to any employer that is a
26city, village, or incorporated town, nor to the employees of



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1any such employer. Beginning on the effective date of this
2amendatory Act of 1997, any employer under this Article,
3including an employer that is a city, village, or incorporated
4town, may establish an early retirement incentive program for
5its employees under this Section. The decision of a city,
6village, or incorporated town to consider or establish an early
7retirement program is at the sole discretion of that city,
8village, or incorporated town, and nothing in this amendatory
9Act of 1997 limits or otherwise diminishes this discretion.
10Nothing contained in this Section shall be construed to require
11a city, village, or incorporated town to establish an early
12retirement program and no city, village, or incorporated town
13may be compelled to implement such a program.
14    The benefits provided in this Section are available only to
15members employed by a participating employer that has filed
16with the Board of the Fund a resolution or ordinance expressly
17providing for the creation of an early retirement incentive
18program under this Section for its employees and specifying the
19effective date of the early retirement incentive program.
20Subject to the limitation in subsection (h), an employer may
21adopt a resolution or ordinance providing a program of early
22retirement incentives under this Section at any time.
23    The resolution or ordinance shall be in substantially the
24following form:



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4    WHEREAS, Section 7-141.1 of the Illinois Pension Code
5provides that a participating employer may elect to adopt an
6early retirement incentive program offered by the Illinois
7Municipal Retirement Fund by adopting a resolution or
8ordinance; and
9    WHEREAS, The goal of adopting an early retirement program
10is to realize a substantial savings in personnel costs by
11offering early retirement incentives to employees who have
12accumulated many years of service credit; and
13    WHEREAS, Implementation of the early retirement program
14will provide a budgeting tool to aid in controlling payroll
15costs; and
16    WHEREAS, The (name of governing body) has determined that
17the adoption of an early retirement incentive program is in the
18best interests of the (name of participating employer);
19therefore be it
20    RESOLVED (ORDAINED) by the (name of governing body) of
21(name of participating employer) that:
22    (1) The (name of participating employer) does hereby adopt
23the Illinois Municipal Retirement Fund early retirement
24incentive program as provided in Section 7-141.1 of the
25Illinois Pension Code. The early retirement incentive program
26shall take effect on (date).



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1    (2) In order to help achieve a true cost savings, a person
2who retires under the early retirement incentive program shall
3lose those incentives if he or she later accepts employment
4with any IMRF employer in a position for which participation in
5IMRF is required or is elected by the employee.
6    (3) In order to utilize an early retirement incentive as a
7budgeting tool, the (name of participating employer) will use
8its best efforts either to limit the number of employees who
9replace the employees who retire under the early retirement
10program or to limit the salaries paid to the employees who
11replace the employees who retire under the early retirement
13    (4) The effective date of each employee's retirement under
14this early retirement program shall be set by (name of
15employer) and shall be no earlier than the effective date of
16the program and no later than one year after that effective
17date; except that the employee may require that the retirement
18date set by the employer be no later than the June 30 next
19occurring after the effective date of the program and no
20earlier than the date upon which the employee qualifies for
22    (5) To be eligible for the early retirement incentive under
23this Section, the employee must have attained age 50 and have
24at least 20 years of creditable service by his or her
25retirement date.
26    (6) The (clerk or secretary) shall promptly file a



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1certified copy of this resolution (ordinance) with the Board of
2Trustees of the Illinois Municipal Retirement Fund.
4    I, (name), the (clerk or secretary) of the (name of
5participating employer) of the County of (name), State of
6Illinois, do hereby certify that I am the keeper of the books
7and records of the (name of employer) and that the foregoing is
8a true and correct copy of a resolution (ordinance) duly
9adopted by the (governing body) at a meeting duly convened and
10held on (date).
12(Signature of clerk or secretary)
13    (c) To be eligible for the benefits provided under an early
14retirement incentive program adopted under this Section, a
15member must:
16        (1) be a participating employee of this Fund who, on
17    the effective date of the program, (i) is in active payroll
18    status as an employee of a participating employer that has
19    filed the required ordinance or resolution with the Board,
20    (ii) is on layoff status from such a position with a right
21    of re-employment or recall to service, (iii) is on a leave
22    of absence from such a position, or (iv) is on disability
23    but has not been receiving benefits under Section 7-146 or
24    7-150 for a period of more than 2 years from the date of
25    application;



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1        (2) have never previously received a retirement
2    annuity under this Article or under the Retirement Systems
3    Reciprocal Act using service credit established under this
4    Article;
5        (3) (blank);
6        (4) have at least 20 years of creditable service in the
7    Fund by the date of retirement, without the use of any
8    creditable service established under this Section;
9        (5) have attained age 50 by the date of retirement,
10    without the use of any age enhancement received under this
11    Section; and
12        (6) be eligible to receive a retirement annuity under
13    this Article by the date of retirement, for which purpose
14    the age enhancement and creditable service established
15    under this Section may be considered.
16    (d) The employer shall determine the retirement date for
17each employee participating in the early retirement program
18adopted under this Section. The retirement date shall be no
19earlier than the effective date of the program and no later
20than one year after that effective date, except that the
21employee may require that the retirement date set by the
22employer be no later than the June 30 next occurring after the
23effective date of the program and no earlier than the date upon
24which the employee qualifies for retirement. The employer shall
25give each employee participating in the early retirement
26program at least 30 days written notice of the employee's



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1designated retirement date, unless the employee waives this
2notice requirement.
3    (e) An eligible person may establish up to 5 years of
4creditable service under this Section. In addition, for each
5period of creditable service established under this Section, a
6person shall have his or her age at retirement deemed enhanced
7by an equivalent period.
8    The creditable service established under this Section may
9be used for all purposes under this Article and the Retirement
10Systems Reciprocal Act, except for the computation of final
11rate of earnings and the determination of earnings, salary, or
12compensation under this or any other Article of the Code.
13    The age enhancement established under this Section may be
14used for all purposes under this Article (including calculation
15of the reduction imposed under subdivision (a)1b(iv) of Section
167-142), except for purposes of a reversionary annuity under
17Section 7-145 and any distributions required because of age.
18The age enhancement established under this Section may be used
19in calculating a proportionate annuity payable by this Fund
20under the Retirement Systems Reciprocal Act, but shall not be
21used in determining benefits payable under other Articles of
22this Code under the Retirement Systems Reciprocal Act.
23    (f) For all creditable service established under this
24Section, the member must pay to the Fund an employee
25contribution consisting of the total employee contribution
26rate in effect at the time the member purchases the service for



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1the plan in which the member was participating with the
2employer at that time multiplied by the member's highest annual
3salary rate used in the determination of the final rate of
4earnings for retirement annuity purposes for each year of
5creditable service granted under this Section. Contributions
6for fractions of a year of service shall be prorated. Any
7amounts that are disregarded in determining the final rate of
8earnings under subdivision (d)(5) of Section 7-116 (the 125%
9rule) shall also be disregarded in determining the required
10contribution under this subsection (f).
11    The employee contribution shall be paid to the Fund as
12follows: If the member is entitled to a lump sum payment for
13accumulated vacation, sick leave, or personal leave upon
14withdrawal from service, the employer shall deduct the employee
15contribution from that lump sum and pay the deducted amount
16directly to the Fund. If there is no such lump sum payment or
17the required employee contribution exceeds the net amount of
18the lump sum payment, then the remaining amount due, at the
19option of the employee, may either be paid to the Fund before
20the annuity commences or deducted from the retirement annuity
21in 24 equal monthly installments.
22    (g) An annuitant who has received any age enhancement or
23creditable service under this Section and thereafter accepts
24employment with or enters into a personal services contract
25with an employer under this Article thereby forfeits that age
26enhancement and creditable service; except that this



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1restriction does not apply to (1) service in an elective
2office, so long as the annuitant does not participate in this
3Fund with respect to that office, (2) a person appointed as an
4officer under subsection (f) of Section 3-109 of this Code, and
5(3) a person appointed as an auxiliary police officer pursuant
6to Section 3.1-30-5 of the Illinois Municipal Code, (4) a
7person who, on or after the effective date of this amendatory
8Act of the 100th General Assembly and before July 1, 2020,
9participates in the system under Article 16 of this Code as a
10substitute teacher, as defined under Section 16-106.3, and (5)
11a person who returns to work for a participating employer for
12less than 600 hours in any 12-month period on or after the
13effective date of this amendatory Act of the 100th General
14Assembly and before July 1, 2020. A person forfeiting early
15retirement incentives under this subsection (i) must repay to
16the Fund that portion of the retirement annuity already
17received which is attributable to the early retirement
18incentives that are being forfeited, (ii) shall not be eligible
19to participate in any future early retirement program adopted
20under this Section, and (iii) is entitled to a refund of the
21employee contribution paid under subsection (f). The Board
22shall deduct the required repayment from the refund and may
23impose a reasonable payment schedule for repaying the amount,
24if any, by which the required repayment exceeds the refund
26    (h) The additional unfunded liability accruing as a result



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1of the adoption of a program of early retirement incentives
2under this Section by an employer shall be amortized over a
3period of 10 years beginning on January 1 of the second
4calendar year following the calendar year in which the latest
5date for beginning to receive a retirement annuity under the
6program (as determined by the employer under subsection (d) of
7this Section) occurs; except that the employer may provide for
8a shorter amortization period (of no less than 5 years) by
9adopting an ordinance or resolution specifying the length of
10the amortization period and submitting a certified copy of the
11ordinance or resolution to the Fund no later than 6 months
12after the effective date of the program. An employer, at its
13discretion, may accelerate payments to the Fund.
14    An employer may provide more than one early retirement
15incentive program for its employees under this Section.
16However, an employer that has provided an early retirement
17incentive program for its employees under this Section may not
18provide another early retirement incentive program under this
19Section until the liability arising from the earlier program
20has been fully paid to the Fund.
21(Source: P.A. 99-382, eff. 8-17-15.)".