HB4045 EngrossedLRB100 12674 RPS 26063 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
 
6    (5 ILCS 375/3)  (from Ch. 127, par. 523)
7    Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13    (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18    (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Articles 2, 14 (including an employee
21who has elected to receive an alternative retirement
22cancellation payment under Section 14-108.5 of the Illinois
23Pension Code in lieu of an annuity or who meets the criteria

 

 

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1for retirement, but in lieu of receiving an annuity under that
2Article has elected to receive an accelerated pension benefit
3payment under Section 14-147.5 of that Article), 15 (including
4an employee who has retired under the optional retirement
5program established under Section 15-158.2 or who meets the
6criteria for retirement but in lieu of receiving an annuity
7under that Article has elected to receive an accelerated
8pension benefit payment under Section 15-185.5 of the Article),
9paragraphs (2), (3), or (5) of Section 16-106 (including an
10employee who meets the criteria for retirement, but in lieu of
11receiving an annuity under that Article has elected to receive
12an accelerated pension benefit payment under Section 16-190.5
13of the Illinois Pension Code), or Article 18 of the Illinois
14Pension Code; (2) any person who was receiving group insurance
15coverage under this Act as of March 31, 1978 by reason of his
16status as an annuitant, even though the annuity in relation to
17which such coverage was provided is a proportional annuity
18based on less than the minimum period of service required for a
19retirement annuity in the system involved; (3) any person not
20otherwise covered by this Act who has retired as a
21participating member under Article 2 of the Illinois Pension
22Code but is ineligible for the retirement annuity under Section
232-119 of the Illinois Pension Code; (4) the spouse of any
24person who is receiving a retirement annuity under Article 18
25of the Illinois Pension Code and who is covered under a group
26health insurance program sponsored by a governmental employer

 

 

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1other than the State of Illinois and who has irrevocably
2elected to waive his or her coverage under this Act and to have
3his or her spouse considered as the "annuitant" under this Act
4and not as a "dependent"; or (5) an employee who retires, or
5has retired, from a qualified position, as determined according
6to rules promulgated by the Director, under a qualified local
7government, a qualified rehabilitation facility, a qualified
8domestic violence shelter or service, or a qualified child
9advocacy center. (For definition of "retired employee", see (p)
10post).
11    (b-5) (Blank).
12    (b-6) (Blank).
13    (b-7) (Blank).
14    (c) "Carrier" means (1) an insurance company, a corporation
15organized under the Limited Health Service Organization Act or
16the Voluntary Health Services Plan Act, a partnership, or other
17nongovernmental organization, which is authorized to do group
18life or group health insurance business in Illinois, or (2) the
19State of Illinois as a self-insurer.
20    (d) "Compensation" means salary or wages payable on a
21regular payroll by the State Treasurer on a warrant of the
22State Comptroller out of any State, trust or federal fund, or
23by the Governor of the State through a disbursing officer of
24the State out of a trust or out of federal funds, or by any
25Department out of State, trust, federal or other funds held by
26the State Treasurer or the Department, to any person for

 

 

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1personal services currently performed, and ordinary or
2accidental disability benefits under Articles 2, 14, 15
3(including ordinary or accidental disability benefits under
4the optional retirement program established under Section
515-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
6Article 18 of the Illinois Pension Code, for disability
7incurred after January 1, 1966, or benefits payable under the
8Workers' Compensation or Occupational Diseases Act or benefits
9payable under a sick pay plan established in accordance with
10Section 36 of the State Finance Act. "Compensation" also means
11salary or wages paid to an employee of any qualified local
12government, qualified rehabilitation facility, qualified
13domestic violence shelter or service, or qualified child
14advocacy center.
15    (e) "Commission" means the State Employees Group Insurance
16Advisory Commission authorized by this Act. Commencing July 1,
171984, "Commission" as used in this Act means the Commission on
18Government Forecasting and Accountability as established by
19the Legislative Commission Reorganization Act of 1984.
20    (f) "Contributory", when referred to as contributory
21coverage, shall mean optional coverages or benefits elected by
22the member toward the cost of which such member makes
23contribution, or which are funded in whole or in part through
24the acceptance of a reduction in earnings or the foregoing of
25an increase in earnings by an employee, as distinguished from
26noncontributory coverage or benefits which are paid entirely by

 

 

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1the State of Illinois without reduction of the member's salary.
2    (g) "Department" means any department, institution, board,
3commission, officer, court or any agency of the State
4government receiving appropriations and having power to
5certify payrolls to the Comptroller authorizing payments of
6salary and wages against such appropriations as are made by the
7General Assembly from any State fund, or against trust funds
8held by the State Treasurer and includes boards of trustees of
9the retirement systems created by Articles 2, 14, 15, 16 and 18
10of the Illinois Pension Code. "Department" also includes the
11Illinois Comprehensive Health Insurance Board, the Board of
12Examiners established under the Illinois Public Accounting
13Act, and the Illinois Finance Authority.
14    (h) "Dependent", when the term is used in the context of
15the health and life plan, means a member's spouse and any child
16(1) from birth to age 26 including an adopted child, a child
17who lives with the member from the time of the filing of a
18petition for adoption until entry of an order of adoption, a
19stepchild or adjudicated child, or a child who lives with the
20member if such member is a court appointed guardian of the
21child or (2) age 19 or over who has a mental or physical
22disability from a cause originating prior to the age of 19 (age
2326 if enrolled as an adult child dependent). For the health
24plan only, the term "dependent" also includes (1) any person
25enrolled prior to the effective date of this Section who is
26dependent upon the member to the extent that the member may

 

 

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1claim such person as a dependent for income tax deduction
2purposes and (2) any person who has received after June 30,
32000 an organ transplant and who is financially dependent upon
4the member and eligible to be claimed as a dependent for income
5tax purposes. A member requesting to cover any dependent must
6provide documentation as requested by the Department of Central
7Management Services and file with the Department any and all
8forms required by the Department.
9    (i) "Director" means the Director of the Illinois
10Department of Central Management Services.
11    (j) "Eligibility period" means the period of time a member
12has to elect enrollment in programs or to select benefits
13without regard to age, sex or health.
14    (k) "Employee" means and includes each officer or employee
15in the service of a department who (1) receives his
16compensation for service rendered to the department on a
17warrant issued pursuant to a payroll certified by a department
18or on a warrant or check issued and drawn by a department upon
19a trust, federal or other fund or on a warrant issued pursuant
20to a payroll certified by an elected or duly appointed officer
21of the State or who receives payment of the performance of
22personal services on a warrant issued pursuant to a payroll
23certified by a Department and drawn by the Comptroller upon the
24State Treasurer against appropriations made by the General
25Assembly from any fund or against trust funds held by the State
26Treasurer, and (2) is employed full-time or part-time in a

 

 

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1position normally requiring actual performance of duty during
2not less than 1/2 of a normal work period, as established by
3the Director in cooperation with each department, except that
4persons elected by popular vote will be considered employees
5during the entire term for which they are elected regardless of
6hours devoted to the service of the State, and (3) except that
7"employee" does not include any person who is not eligible by
8reason of such person's employment to participate in one of the
9State retirement systems under Articles 2, 14, 15 (either the
10regular Article 15 system or the optional retirement program
11established under Section 15-158.2) or 18, or under paragraph
12(2), (3), or (5) of Section 16-106, of the Illinois Pension
13Code, but such term does include persons who are employed
14during the 6 month qualifying period under Article 14 of the
15Illinois Pension Code. Such term also includes any person who
16(1) after January 1, 1966, is receiving ordinary or accidental
17disability benefits under Articles 2, 14, 15 (including
18ordinary or accidental disability benefits under the optional
19retirement program established under Section 15-158.2),
20paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
21the Illinois Pension Code, for disability incurred after
22January 1, 1966, (2) receives total permanent or total
23temporary disability under the Workers' Compensation Act or
24Occupational Disease Act as a result of injuries sustained or
25illness contracted in the course of employment with the State
26of Illinois, or (3) is not otherwise covered under this Act and

 

 

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1has retired as a participating member under Article 2 of the
2Illinois Pension Code but is ineligible for the retirement
3annuity under Section 2-119 of the Illinois Pension Code.
4However, a person who satisfies the criteria of the foregoing
5definition of "employee" except that such person is made
6ineligible to participate in the State Universities Retirement
7System by clause (4) of subsection (a) of Section 15-107 of the
8Illinois Pension Code is also an "employee" for the purposes of
9this Act. "Employee" also includes any person receiving or
10eligible for benefits under a sick pay plan established in
11accordance with Section 36 of the State Finance Act. "Employee"
12also includes (i) each officer or employee in the service of a
13qualified local government, including persons appointed as
14trustees of sanitary districts regardless of hours devoted to
15the service of the sanitary district, (ii) each employee in the
16service of a qualified rehabilitation facility, (iii) each
17full-time employee in the service of a qualified domestic
18violence shelter or service, and (iv) each full-time employee
19in the service of a qualified child advocacy center, as
20determined according to rules promulgated by the Director.
21    (l) "Member" means an employee, annuitant, retired
22employee or survivor. In the case of an annuitant or retired
23employee who first becomes an annuitant or retired employee on
24or after the effective date of this amendatory Act of the 97th
25General Assembly, the individual must meet the minimum vesting
26requirements of the applicable retirement system in order to be

 

 

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1eligible for group insurance benefits under that system. In the
2case of a survivor who first becomes a survivor on or after the
3effective date of this amendatory Act of the 97th General
4Assembly, the deceased employee, annuitant, or retired
5employee upon whom the annuity is based must have been eligible
6to participate in the group insurance system under the
7applicable retirement system in order for the survivor to be
8eligible for group insurance benefits under that system.
9    (m) "Optional coverages or benefits" means those coverages
10or benefits available to the member on his or her voluntary
11election, and at his or her own expense.
12    (n) "Program" means the group life insurance, health
13benefits and other employee benefits designed and contracted
14for by the Director under this Act.
15    (o) "Health plan" means a health benefits program offered
16by the State of Illinois for persons eligible for the plan.
17    (p) "Retired employee" means any person who would be an
18annuitant as that term is defined herein but for the fact that
19such person retired prior to January 1, 1966. Such term also
20includes any person formerly employed by the University of
21Illinois in the Cooperative Extension Service who would be an
22annuitant but for the fact that such person was made ineligible
23to participate in the State Universities Retirement System by
24clause (4) of subsection (a) of Section 15-107 of the Illinois
25Pension Code.
26    (q) "Survivor" means a person receiving an annuity as a

 

 

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1survivor of an employee or of an annuitant. "Survivor" also
2includes: (1) the surviving dependent of a person who satisfies
3the definition of "employee" except that such person is made
4ineligible to participate in the State Universities Retirement
5System by clause (4) of subsection (a) of Section 15-107 of the
6Illinois Pension Code; (2) the surviving dependent of any
7person formerly employed by the University of Illinois in the
8Cooperative Extension Service who would be an annuitant except
9for the fact that such person was made ineligible to
10participate in the State Universities Retirement System by
11clause (4) of subsection (a) of Section 15-107 of the Illinois
12Pension Code; and (3) the surviving dependent of a person who
13was an annuitant under this Act by virtue of receiving an
14alternative retirement cancellation payment under Section
1514-108.5 of the Illinois Pension Code.
16    (q-2) "SERS" means the State Employees' Retirement System
17of Illinois, created under Article 14 of the Illinois Pension
18Code.
19    (q-3) "SURS" means the State Universities Retirement
20System, created under Article 15 of the Illinois Pension Code.
21    (q-4) "TRS" means the Teachers' Retirement System of the
22State of Illinois, created under Article 16 of the Illinois
23Pension Code.
24    (q-5) (Blank).
25    (q-6) (Blank).
26    (q-7) (Blank).

 

 

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1    (r) "Medical services" means the services provided within
2the scope of their licenses by practitioners in all categories
3licensed under the Medical Practice Act of 1987.
4    (s) "Unit of local government" means any county,
5municipality, township, school district (including a
6combination of school districts under the Intergovernmental
7Cooperation Act), special district or other unit, designated as
8a unit of local government by law, which exercises limited
9governmental powers or powers in respect to limited
10governmental subjects, any not-for-profit association with a
11membership that primarily includes townships and township
12officials, that has duties that include provision of research
13service, dissemination of information, and other acts for the
14purpose of improving township government, and that is funded
15wholly or partly in accordance with Section 85-15 of the
16Township Code; any not-for-profit corporation or association,
17with a membership consisting primarily of municipalities, that
18operates its own utility system, and provides research,
19training, dissemination of information, or other acts to
20promote cooperation between and among municipalities that
21provide utility services and for the advancement of the goals
22and purposes of its membership; the Southern Illinois
23Collegiate Common Market, which is a consortium of higher
24education institutions in Southern Illinois; the Illinois
25Association of Park Districts; and any hospital provider that
26is owned by a county that has 100 or fewer hospital beds and

 

 

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1has not already joined the program. "Qualified local
2government" means a unit of local government approved by the
3Director and participating in a program created under
4subsection (i) of Section 10 of this Act.
5    (t) "Qualified rehabilitation facility" means any
6not-for-profit organization that is accredited by the
7Commission on Accreditation of Rehabilitation Facilities or
8certified by the Department of Human Services (as successor to
9the Department of Mental Health and Developmental
10Disabilities) to provide services to persons with disabilities
11and which receives funds from the State of Illinois for
12providing those services, approved by the Director and
13participating in a program created under subsection (j) of
14Section 10 of this Act.
15    (u) "Qualified domestic violence shelter or service" means
16any Illinois domestic violence shelter or service and its
17administrative offices funded by the Department of Human
18Services (as successor to the Illinois Department of Public
19Aid), approved by the Director and participating in a program
20created under subsection (k) of Section 10.
21    (v) "TRS benefit recipient" means a person who:
22        (1) is not a "member" as defined in this Section; and
23        (2) is receiving a monthly benefit or retirement
24    annuity under Article 16 of the Illinois Pension Code; and
25        (3) either (i) has at least 8 years of creditable
26    service under Article 16 of the Illinois Pension Code, or

 

 

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1    (ii) was enrolled in the health insurance program offered
2    under that Article on January 1, 1996, or (iii) is the
3    survivor of a benefit recipient who had at least 8 years of
4    creditable service under Article 16 of the Illinois Pension
5    Code or was enrolled in the health insurance program
6    offered under that Article on the effective date of this
7    amendatory Act of 1995, or (iv) is a recipient or survivor
8    of a recipient of a disability benefit under Article 16 of
9    the Illinois Pension Code.
10    (w) "TRS dependent beneficiary" means a person who:
11        (1) is not a "member" or "dependent" as defined in this
12    Section; and
13        (2) is a TRS benefit recipient's: (A) spouse, (B)
14    dependent parent who is receiving at least half of his or
15    her support from the TRS benefit recipient, or (C) natural,
16    step, adjudicated, or adopted child who is (i) under age
17    26, (ii) was, on January 1, 1996, participating as a
18    dependent beneficiary in the health insurance program
19    offered under Article 16 of the Illinois Pension Code, or
20    (iii) age 19 or over who has a mental or physical
21    disability from a cause originating prior to the age of 19
22    (age 26 if enrolled as an adult child).
23    "TRS dependent beneficiary" does not include, as indicated
24under paragraph (2) of this subsection (w), a dependent of the
25survivor of a TRS benefit recipient who first becomes a
26dependent of a survivor of a TRS benefit recipient on or after

 

 

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1the effective date of this amendatory Act of the 97th General
2Assembly unless that dependent would have been eligible for
3coverage as a dependent of the deceased TRS benefit recipient
4upon whom the survivor benefit is based.
5    (x) "Military leave" refers to individuals in basic
6training for reserves, special/advanced training, annual
7training, emergency call up, activation by the President of the
8United States, or any other training or duty in service to the
9United States Armed Forces.
10    (y) (Blank).
11    (z) "Community college benefit recipient" means a person
12who:
13        (1) is not a "member" as defined in this Section; and
14        (2) is receiving a monthly survivor's annuity or
15    retirement annuity under Article 15 of the Illinois Pension
16    Code; and
17        (3) either (i) was a full-time employee of a community
18    college district or an association of community college
19    boards created under the Public Community College Act
20    (other than an employee whose last employer under Article
21    15 of the Illinois Pension Code was a community college
22    district subject to Article VII of the Public Community
23    College Act) and was eligible to participate in a group
24    health benefit plan as an employee during the time of
25    employment with a community college district (other than a
26    community college district subject to Article VII of the

 

 

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1    Public Community College Act) or an association of
2    community college boards, or (ii) is the survivor of a
3    person described in item (i).
4    (aa) "Community college dependent beneficiary" means a
5person who:
6        (1) is not a "member" or "dependent" as defined in this
7    Section; and
8        (2) is a community college benefit recipient's: (A)
9    spouse, (B) dependent parent who is receiving at least half
10    of his or her support from the community college benefit
11    recipient, or (C) natural, step, adjudicated, or adopted
12    child who is (i) under age 26, or (ii) age 19 or over and
13    has a mental or physical disability from a cause
14    originating prior to the age of 19 (age 26 if enrolled as
15    an adult child).
16    "Community college dependent beneficiary" does not
17include, as indicated under paragraph (2) of this subsection
18(aa), a dependent of the survivor of a community college
19benefit recipient who first becomes a dependent of a survivor
20of a community college benefit recipient on or after the
21effective date of this amendatory Act of the 97th General
22Assembly unless that dependent would have been eligible for
23coverage as a dependent of the deceased community college
24benefit recipient upon whom the survivor annuity is based.
25    (bb) "Qualified child advocacy center" means any Illinois
26child advocacy center and its administrative offices funded by

 

 

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1the Department of Children and Family Services, as defined by
2the Children's Advocacy Center Act (55 ILCS 80/), approved by
3the Director and participating in a program created under
4subsection (n) of Section 10.
5(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
6    (5 ILCS 375/10)  (from Ch. 127, par. 530)
7    Sec. 10. Contributions by the State and members.
8    (a) The State shall pay the cost of basic non-contributory
9group life insurance and, subject to member paid contributions
10set by the Department or required by this Section and except as
11provided in this Section, the basic program of group health
12benefits on each eligible member, except a member, not
13otherwise covered by this Act, who has retired as a
14participating member under Article 2 of the Illinois Pension
15Code but is ineligible for the retirement annuity under Section
162-119 of the Illinois Pension Code, and part of each eligible
17member's and retired member's premiums for health insurance
18coverage for enrolled dependents as provided by Section 9. The
19State shall pay the cost of the basic program of group health
20benefits only after benefits are reduced by the amount of
21benefits covered by Medicare for all members and dependents who
22are eligible for benefits under Social Security or the Railroad
23Retirement system or who had sufficient Medicare-covered
24government employment, except that such reduction in benefits
25shall apply only to those members and dependents who (1) first

 

 

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1become eligible for such Medicare coverage on or after July 1,
21992; or (2) are Medicare-eligible members or dependents of a
3local government unit which began participation in the program
4on or after July 1, 1992; or (3) remain eligible for, but no
5longer receive Medicare coverage which they had been receiving
6on or after July 1, 1992. The Department may determine the
7aggregate level of the State's contribution on the basis of
8actual cost of medical services adjusted for age, sex or
9geographic or other demographic characteristics which affect
10the costs of such programs.
11    The cost of participation in the basic program of group
12health benefits for the dependent or survivor of a living or
13deceased retired employee who was formerly employed by the
14University of Illinois in the Cooperative Extension Service and
15would be an annuitant but for the fact that he or she was made
16ineligible to participate in the State Universities Retirement
17System by clause (4) of subsection (a) of Section 15-107 of the
18Illinois Pension Code shall not be greater than the cost of
19participation that would otherwise apply to that dependent or
20survivor if he or she were the dependent or survivor of an
21annuitant under the State Universities Retirement System.
22    (a-1) (Blank).
23    (a-2) (Blank).
24    (a-3) (Blank).
25    (a-4) (Blank).
26    (a-5) (Blank).

 

 

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1    (a-6) (Blank).
2    (a-7) (Blank).
3    (a-8) Any annuitant, survivor, or retired employee may
4waive or terminate coverage in the program of group health
5benefits. Any such annuitant, survivor, or retired employee who
6has waived or terminated coverage may enroll or re-enroll in
7the program of group health benefits only during the annual
8benefit choice period, as determined by the Director; except
9that in the event of termination of coverage due to nonpayment
10of premiums, the annuitant, survivor, or retired employee may
11not re-enroll in the program.
12    (a-8.5) Beginning on the effective date of this amendatory
13Act of the 97th General Assembly, the Director of Central
14Management Services shall, on an annual basis, determine the
15amount that the State shall contribute toward the basic program
16of group health benefits on behalf of annuitants (including
17individuals who (i) participated in the General Assembly
18Retirement System, the State Employees' Retirement System of
19Illinois, the State Universities Retirement System, the
20Teachers' Retirement System of the State of Illinois, or the
21Judges Retirement System of Illinois and (ii) qualify as
22annuitants under subsection (b) of Section 3 of this Act),
23survivors (including individuals who (i) receive an annuity as
24a survivor of an individual who participated in the General
25Assembly Retirement System, the State Employees' Retirement
26System of Illinois, the State Universities Retirement System,

 

 

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1the Teachers' Retirement System of the State of Illinois, or
2the Judges Retirement System of Illinois and (ii) qualify as
3survivors under subsection (q) of Section 3 of this Act), and
4retired employees (as defined in subsection (p) of Section 3 of
5this Act). The remainder of the cost of coverage for each
6annuitant, survivor, or retired employee, as determined by the
7Director of Central Management Services, shall be the
8responsibility of that annuitant, survivor, or retired
9employee.
10    Contributions required of annuitants, survivors, and
11retired employees shall be the same for all retirement systems
12and shall also be based on whether an individual has made an
13election under Section 15-135.1 of the Illinois Pension Code.
14Contributions may be based on annuitants', survivors', or
15retired employees' Medicare eligibility, but may not be based
16on Social Security eligibility.
17    (a-9) No later than May 1 of each calendar year, the
18Director of Central Management Services shall certify in
19writing to the Executive Secretary of the State Employees'
20Retirement System of Illinois the amounts of the Medicare
21supplement health care premiums and the amounts of the health
22care premiums for all other retirees who are not Medicare
23eligible.
24    A separate calculation of the premiums based upon the
25actual cost of each health care plan shall be so certified.
26    The Director of Central Management Services shall provide

 

 

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1to the Executive Secretary of the State Employees' Retirement
2System of Illinois such information, statistics, and other data
3as he or she may require to review the premium amounts
4certified by the Director of Central Management Services.
5    The Department of Central Management Services, or any
6successor agency designated to procure healthcare contracts
7pursuant to this Act, is authorized to establish funds,
8separate accounts provided by any bank or banks as defined by
9the Illinois Banking Act, or separate accounts provided by any
10savings and loan association or associations as defined by the
11Illinois Savings and Loan Act of 1985 to be held by the
12Director, outside the State treasury, for the purpose of
13receiving the transfer of moneys from the Local Government
14Health Insurance Reserve Fund. The Department may promulgate
15rules further defining the methodology for the transfers. Any
16interest earned by moneys in the funds or accounts shall inure
17to the Local Government Health Insurance Reserve Fund. The
18transferred moneys, and interest accrued thereon, shall be used
19exclusively for transfers to administrative service
20organizations or their financial institutions for payments of
21claims to claimants and providers under the self-insurance
22health plan. The transferred moneys, and interest accrued
23thereon, shall not be used for any other purpose including, but
24not limited to, reimbursement of administration fees due the
25administrative service organization pursuant to its contract
26or contracts with the Department.

 

 

HB4045 Engrossed- 21 -LRB100 12674 RPS 26063 b

1    (a-10) To the extent that participation, benefits, or
2premiums under this Act are based on a person's service credit
3under an Article of the Illinois Pension Code, service credit
4terminated in exchange for an accelerated pension benefit
5payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
6Code shall be included in determining a person's service credit
7for the purposes of this Act.
8    (b) State employees who become eligible for this program on
9or after January 1, 1980 in positions normally requiring actual
10performance of duty not less than 1/2 of a normal work period
11but not equal to that of a normal work period, shall be given
12the option of participating in the available program. If the
13employee elects coverage, the State shall contribute on behalf
14of such employee to the cost of the employee's benefit and any
15applicable dependent supplement, that sum which bears the same
16percentage as that percentage of time the employee regularly
17works when compared to normal work period.
18    (c) The basic non-contributory coverage from the basic
19program of group health benefits shall be continued for each
20employee not in pay status or on active service by reason of
21(1) leave of absence due to illness or injury, (2) authorized
22educational leave of absence or sabbatical leave, or (3)
23military leave. This coverage shall continue until expiration
24of authorized leave and return to active service, but not to
25exceed 24 months for leaves under item (1) or (2). This
2624-month limitation and the requirement of returning to active

 

 

HB4045 Engrossed- 22 -LRB100 12674 RPS 26063 b

1service shall not apply to persons receiving ordinary or
2accidental disability benefits or retirement benefits through
3the appropriate State retirement system or benefits under the
4Workers' Compensation or Occupational Disease Act.
5    (d) The basic group life insurance coverage shall continue,
6with full State contribution, where such person is (1) absent
7from active service by reason of disability arising from any
8cause other than self-inflicted, (2) on authorized educational
9leave of absence or sabbatical leave, or (3) on military leave.
10    (e) Where the person is in non-pay status for a period in
11excess of 30 days or on leave of absence, other than by reason
12of disability, educational or sabbatical leave, or military
13leave, such person may continue coverage only by making
14personal payment equal to the amount normally contributed by
15the State on such person's behalf. Such payments and coverage
16may be continued: (1) until such time as the person returns to
17a status eligible for coverage at State expense, but not to
18exceed 24 months or (2) until such person's employment or
19annuitant status with the State is terminated (exclusive of any
20additional service imposed pursuant to law).
21    (f) The Department shall establish by rule the extent to
22which other employee benefits will continue for persons in
23non-pay status or who are not in active service.
24    (g) The State shall not pay the cost of the basic
25non-contributory group life insurance, program of health
26benefits and other employee benefits for members who are

 

 

HB4045 Engrossed- 23 -LRB100 12674 RPS 26063 b

1survivors as defined by paragraphs (1) and (2) of subsection
2(q) of Section 3 of this Act. The costs of benefits for these
3survivors shall be paid by the survivors or by the University
4of Illinois Cooperative Extension Service, or any combination
5thereof. However, the State shall pay the amount of the
6reduction in the cost of participation, if any, resulting from
7the amendment to subsection (a) made by this amendatory Act of
8the 91st General Assembly.
9    (h) Those persons occupying positions with any department
10as a result of emergency appointments pursuant to Section 8b.8
11of the Personnel Code who are not considered employees under
12this Act shall be given the option of participating in the
13programs of group life insurance, health benefits and other
14employee benefits. Such persons electing coverage may
15participate only by making payment equal to the amount normally
16contributed by the State for similarly situated employees. Such
17amounts shall be determined by the Director. Such payments and
18coverage may be continued until such time as the person becomes
19an employee pursuant to this Act or such person's appointment
20is terminated.
21    (i) Any unit of local government within the State of
22Illinois may apply to the Director to have its employees,
23annuitants, and their dependents provided group health
24coverage under this Act on a non-insured basis. To participate,
25a unit of local government must agree to enroll all of its
26employees, who may select coverage under either the State group

 

 

HB4045 Engrossed- 24 -LRB100 12674 RPS 26063 b

1health benefits plan or a health maintenance organization that
2has contracted with the State to be available as a health care
3provider for employees as defined in this Act. A unit of local
4government must remit the entire cost of providing coverage
5under the State group health benefits plan or, for coverage
6under a health maintenance organization, an amount determined
7by the Director based on an analysis of the sex, age,
8geographic location, or other relevant demographic variables
9for its employees, except that the unit of local government
10shall not be required to enroll those of its employees who are
11covered spouses or dependents under this plan or another group
12policy or plan providing health benefits as long as (1) an
13appropriate official from the unit of local government attests
14that each employee not enrolled is a covered spouse or
15dependent under this plan or another group policy or plan, and
16(2) at least 50% of the employees are enrolled and the unit of
17local government remits the entire cost of providing coverage
18to those employees, except that a participating school district
19must have enrolled at least 50% of its full-time employees who
20have not waived coverage under the district's group health plan
21by participating in a component of the district's cafeteria
22plan. A participating school district is not required to enroll
23a full-time employee who has waived coverage under the
24district's health plan, provided that an appropriate official
25from the participating school district attests that the
26full-time employee has waived coverage by participating in a

 

 

HB4045 Engrossed- 25 -LRB100 12674 RPS 26063 b

1component of the district's cafeteria plan. For the purposes of
2this subsection, "participating school district" includes a
3unit of local government whose primary purpose is education as
4defined by the Department's rules.
5    Employees of a participating unit of local government who
6are not enrolled due to coverage under another group health
7policy or plan may enroll in the event of a qualifying change
8in status, special enrollment, special circumstance as defined
9by the Director, or during the annual Benefit Choice Period. A
10participating unit of local government may also elect to cover
11its annuitants. Dependent coverage shall be offered on an
12optional basis, with the costs paid by the unit of local
13government, its employees, or some combination of the two as
14determined by the unit of local government. The unit of local
15government shall be responsible for timely collection and
16transmission of dependent premiums.
17    The Director shall annually determine monthly rates of
18payment, subject to the following constraints:
19        (1) In the first year of coverage, the rates shall be
20    equal to the amount normally charged to State employees for
21    elected optional coverages or for enrolled dependents
22    coverages or other contributory coverages, or contributed
23    by the State for basic insurance coverages on behalf of its
24    employees, adjusted for differences between State
25    employees and employees of the local government in age,
26    sex, geographic location or other relevant demographic

 

 

HB4045 Engrossed- 26 -LRB100 12674 RPS 26063 b

1    variables, plus an amount sufficient to pay for the
2    additional administrative costs of providing coverage to
3    employees of the unit of local government and their
4    dependents.
5        (2) In subsequent years, a further adjustment shall be
6    made to reflect the actual prior years' claims experience
7    of the employees of the unit of local government.
8    In the case of coverage of local government employees under
9a health maintenance organization, the Director shall annually
10determine for each participating unit of local government the
11maximum monthly amount the unit may contribute toward that
12coverage, based on an analysis of (i) the age, sex, geographic
13location, and other relevant demographic variables of the
14unit's employees and (ii) the cost to cover those employees
15under the State group health benefits plan. The Director may
16similarly determine the maximum monthly amount each unit of
17local government may contribute toward coverage of its
18employees' dependents under a health maintenance organization.
19    Monthly payments by the unit of local government or its
20employees for group health benefits plan or health maintenance
21organization coverage shall be deposited in the Local
22Government Health Insurance Reserve Fund.
23    The Local Government Health Insurance Reserve Fund is
24hereby created as a nonappropriated trust fund to be held
25outside the State Treasury, with the State Treasurer as
26custodian. The Local Government Health Insurance Reserve Fund

 

 

HB4045 Engrossed- 27 -LRB100 12674 RPS 26063 b

1shall be a continuing fund not subject to fiscal year
2limitations. The Local Government Health Insurance Reserve
3Fund is not subject to administrative charges or charge-backs,
4including but not limited to those authorized under Section 8h
5of the State Finance Act. All revenues arising from the
6administration of the health benefits program established
7under this Section shall be deposited into the Local Government
8Health Insurance Reserve Fund. Any interest earned on moneys in
9the Local Government Health Insurance Reserve Fund shall be
10deposited into the Fund. All expenditures from this Fund shall
11be used for payments for health care benefits for local
12government and rehabilitation facility employees, annuitants,
13and dependents, and to reimburse the Department or its
14administrative service organization for all expenses incurred
15in the administration of benefits. No other State funds may be
16used for these purposes.
17    A local government employer's participation or desire to
18participate in a program created under this subsection shall
19not limit that employer's duty to bargain with the
20representative of any collective bargaining unit of its
21employees.
22    (j) Any rehabilitation facility within the State of
23Illinois may apply to the Director to have its employees,
24annuitants, and their eligible dependents provided group
25health coverage under this Act on a non-insured basis. To
26participate, a rehabilitation facility must agree to enroll all

 

 

HB4045 Engrossed- 28 -LRB100 12674 RPS 26063 b

1of its employees and remit the entire cost of providing such
2coverage for its employees, except that the rehabilitation
3facility shall not be required to enroll those of its employees
4who are covered spouses or dependents under this plan or
5another group policy or plan providing health benefits as long
6as (1) an appropriate official from the rehabilitation facility
7attests that each employee not enrolled is a covered spouse or
8dependent under this plan or another group policy or plan, and
9(2) at least 50% of the employees are enrolled and the
10rehabilitation facility remits the entire cost of providing
11coverage to those employees. Employees of a participating
12rehabilitation facility who are not enrolled due to coverage
13under another group health policy or plan may enroll in the
14event of a qualifying change in status, special enrollment,
15special circumstance as defined by the Director, or during the
16annual Benefit Choice Period. A participating rehabilitation
17facility may also elect to cover its annuitants. Dependent
18coverage shall be offered on an optional basis, with the costs
19paid by the rehabilitation facility, its employees, or some
20combination of the 2 as determined by the rehabilitation
21facility. The rehabilitation facility shall be responsible for
22timely collection and transmission of dependent premiums.
23    The Director shall annually determine quarterly rates of
24payment, subject to the following constraints:
25        (1) In the first year of coverage, the rates shall be
26    equal to the amount normally charged to State employees for

 

 

HB4045 Engrossed- 29 -LRB100 12674 RPS 26063 b

1    elected optional coverages or for enrolled dependents
2    coverages or other contributory coverages on behalf of its
3    employees, adjusted for differences between State
4    employees and employees of the rehabilitation facility in
5    age, sex, geographic location or other relevant
6    demographic variables, plus an amount sufficient to pay for
7    the additional administrative costs of providing coverage
8    to employees of the rehabilitation facility and their
9    dependents.
10        (2) In subsequent years, a further adjustment shall be
11    made to reflect the actual prior years' claims experience
12    of the employees of the rehabilitation facility.
13    Monthly payments by the rehabilitation facility or its
14employees for group health benefits shall be deposited in the
15Local Government Health Insurance Reserve Fund.
16    (k) Any domestic violence shelter or service within the
17State of Illinois may apply to the Director to have its
18employees, annuitants, and their dependents provided group
19health coverage under this Act on a non-insured basis. To
20participate, a domestic violence shelter or service must agree
21to enroll all of its employees and pay the entire cost of
22providing such coverage for its employees. The domestic
23violence shelter shall not be required to enroll those of its
24employees who are covered spouses or dependents under this plan
25or another group policy or plan providing health benefits as
26long as (1) an appropriate official from the domestic violence

 

 

HB4045 Engrossed- 30 -LRB100 12674 RPS 26063 b

1shelter attests that each employee not enrolled is a covered
2spouse or dependent under this plan or another group policy or
3plan and (2) at least 50% of the employees are enrolled and the
4domestic violence shelter remits the entire cost of providing
5coverage to those employees. Employees of a participating
6domestic violence shelter who are not enrolled due to coverage
7under another group health policy or plan may enroll in the
8event of a qualifying change in status, special enrollment, or
9special circumstance as defined by the Director or during the
10annual Benefit Choice Period. A participating domestic
11violence shelter may also elect to cover its annuitants.
12Dependent coverage shall be offered on an optional basis, with
13employees, or some combination of the 2 as determined by the
14domestic violence shelter or service. The domestic violence
15shelter or service shall be responsible for timely collection
16and transmission of dependent premiums.
17    The Director shall annually determine rates of payment,
18subject to the following constraints:
19        (1) In the first year of coverage, the rates shall be
20    equal to the amount normally charged to State employees for
21    elected optional coverages or for enrolled dependents
22    coverages or other contributory coverages on behalf of its
23    employees, adjusted for differences between State
24    employees and employees of the domestic violence shelter or
25    service in age, sex, geographic location or other relevant
26    demographic variables, plus an amount sufficient to pay for

 

 

HB4045 Engrossed- 31 -LRB100 12674 RPS 26063 b

1    the additional administrative costs of providing coverage
2    to employees of the domestic violence shelter or service
3    and their dependents.
4        (2) In subsequent years, a further adjustment shall be
5    made to reflect the actual prior years' claims experience
6    of the employees of the domestic violence shelter or
7    service.
8    Monthly payments by the domestic violence shelter or
9service or its employees for group health insurance shall be
10deposited in the Local Government Health Insurance Reserve
11Fund.
12    (l) A public community college or entity organized pursuant
13to the Public Community College Act may apply to the Director
14initially to have only annuitants not covered prior to July 1,
151992 by the district's health plan provided health coverage
16under this Act on a non-insured basis. The community college
17must execute a 2-year contract to participate in the Local
18Government Health Plan. Any annuitant may enroll in the event
19of a qualifying change in status, special enrollment, special
20circumstance as defined by the Director, or during the annual
21Benefit Choice Period.
22    The Director shall annually determine monthly rates of
23payment subject to the following constraints: for those
24community colleges with annuitants only enrolled, first year
25rates shall be equal to the average cost to cover claims for a
26State member adjusted for demographics, Medicare

 

 

HB4045 Engrossed- 32 -LRB100 12674 RPS 26063 b

1participation, and other factors; and in the second year, a
2further adjustment of rates shall be made to reflect the actual
3first year's claims experience of the covered annuitants.
4    (l-5) The provisions of subsection (l) become inoperative
5on July 1, 1999.
6    (m) The Director shall adopt any rules deemed necessary for
7implementation of this amendatory Act of 1989 (Public Act
886-978).
9    (n) Any child advocacy center within the State of Illinois
10may apply to the Director to have its employees, annuitants,
11and their dependents provided group health coverage under this
12Act on a non-insured basis. To participate, a child advocacy
13center must agree to enroll all of its employees and pay the
14entire cost of providing coverage for its employees. The child
15advocacy center shall not be required to enroll those of its
16employees who are covered spouses or dependents under this plan
17or another group policy or plan providing health benefits as
18long as (1) an appropriate official from the child advocacy
19center attests that each employee not enrolled is a covered
20spouse or dependent under this plan or another group policy or
21plan and (2) at least 50% of the employees are enrolled and the
22child advocacy center remits the entire cost of providing
23coverage to those employees. Employees of a participating child
24advocacy center who are not enrolled due to coverage under
25another group health policy or plan may enroll in the event of
26a qualifying change in status, special enrollment, or special

 

 

HB4045 Engrossed- 33 -LRB100 12674 RPS 26063 b

1circumstance as defined by the Director or during the annual
2Benefit Choice Period. A participating child advocacy center
3may also elect to cover its annuitants. Dependent coverage
4shall be offered on an optional basis, with the costs paid by
5the child advocacy center, its employees, or some combination
6of the 2 as determined by the child advocacy center. The child
7advocacy center shall be responsible for timely collection and
8transmission of dependent premiums.
9    The Director shall annually determine rates of payment,
10subject to the following constraints:
11        (1) In the first year of coverage, the rates shall be
12    equal to the amount normally charged to State employees for
13    elected optional coverages or for enrolled dependents
14    coverages or other contributory coverages on behalf of its
15    employees, adjusted for differences between State
16    employees and employees of the child advocacy center in
17    age, sex, geographic location, or other relevant
18    demographic variables, plus an amount sufficient to pay for
19    the additional administrative costs of providing coverage
20    to employees of the child advocacy center and their
21    dependents.
22        (2) In subsequent years, a further adjustment shall be
23    made to reflect the actual prior years' claims experience
24    of the employees of the child advocacy center.
25    Monthly payments by the child advocacy center or its
26employees for group health insurance shall be deposited into

 

 

HB4045 Engrossed- 34 -LRB100 12674 RPS 26063 b

1the Local Government Health Insurance Reserve Fund.
2(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
 
3    Section 10. The Illinois Pension Code is amended by
4changing Sections 1-160, 1-167 2-108, 2-119.1, 2-126, 2-162,
514-103.10, 14-114, 14-133, 14-152.1, 15-108.1, 15-108.2,
615-111, 15-136, 15-155, 15-157, 15-165, 15-198, 16-121,
716-133.1, 16-136.1, 16-152, 16-158, 16-203, 17-116, 17-130,
820-121, 20-123, 20-124, and 20-125 and by adding 1-161, 1-167,
91-162, 2-105.3, 2-110.3, 2-165.1, 2-166.1, 14-103.41,
1014-106.5, 14-147.5, 14-155.1, 14-155.2, 14-156.1, 15-132.9,
1115-155.2, 15-185.5, 15-200.1, 15-201.1, 16-107.1, 16-122.9,
1216-158.3, 16-190.5, 16-205.1, 16-206.1, 17-106.05, 17-113.4,
1317-115.5, and 17-119.2 as follows:
 
14    (40 ILCS 5/1-160)
15    (Text of Section WITHOUT the changes made by P.A. 98-641,
16which has been held unconstitutional)
17    Sec. 1-160. Provisions applicable to new hires.
18    (a) The provisions of this Section apply to a person who,
19on or after January 1, 2011, first becomes a member or a
20participant under any reciprocal retirement system or pension
21fund established under this Code, other than a retirement
22system or pension fund established under Article 2, 3, 4, 5, 6,
2315 or 18 of this Code, notwithstanding any other provision of
24this Code to the contrary, but do not apply to any self-managed

 

 

HB4045 Engrossed- 35 -LRB100 12674 RPS 26063 b

1plan established under this Code, to any person with respect to
2service as a sheriff's law enforcement employee under Article
37, or to any participant of the retirement plan established
4under Section 22-101. Notwithstanding anything to the contrary
5in this Section, for purposes of this Section, a person who
6participated in a retirement system under Article 15 prior to
7January 1, 2011 shall be deemed a person who first became a
8member or participant prior to January 1, 2011 under any
9retirement system or pension fund subject to this Section. The
10changes made to this Section by Public Act 98-596 this
11amendatory Act of the 98th General Assembly are a clarification
12of existing law and are intended to be retroactive to January
131, 2011 (the effective date of Public Act 96-889),
14notwithstanding the provisions of Section 1-103.1 of this Code.
15    This Section does not apply to a person who, on or after
16July 1, 2018, first becomes a member or participant under
17Article 14 or 16, unless that person (i) is a covered employee
18under Article 14 who has not made the election to participate
19in the defined contribution plan under Section 14-155.2 or (ii)
20elects under subsection (b) of Section 1-161 to receive the
21benefits provided under this Section and the applicable
22provisions of the Article under which he or she is a member or
23participant.
24    This Section does not apply to a person who first becomes a
25member or participant of an affected pension fund on or after 6
26months after the resolution or ordinance date, as defined in

 

 

HB4045 Engrossed- 36 -LRB100 12674 RPS 26063 b

1Section 1-162, unless that person elects under subsection (c)
2of Section 1-162 to receive the benefits provided under this
3Section and the applicable provisions of the Article under
4which he or she is a member or participant.
5    This Section does not apply to a person who elects under
6subsection (c-5) of Section 1-161 to receive the benefits under
7Section 1-161.
8    (b) "Final average salary" means the average monthly (or
9annual) salary obtained by dividing the total salary or
10earnings calculated under the Article applicable to the member
11or participant during the 96 consecutive months (or 8
12consecutive years) of service within the last 120 months (or 10
13years) of service in which the total salary or earnings
14calculated under the applicable Article was the highest by the
15number of months (or years) of service in that period. For the
16purposes of a person who first becomes a member or participant
17of any retirement system or pension fund to which this Section
18applies on or after January 1, 2011, in this Code, "final
19average salary" shall be substituted for the following:
20        (1) In Article 7 (except for service as sheriff's law
21    enforcement employees), "final rate of earnings".
22        (2) In Articles 8, 9, 10, 11, and 12, "highest average
23    annual salary for any 4 consecutive years within the last
24    10 years of service immediately preceding the date of
25    withdrawal".
26        (3) In Article 13, "average final salary".

 

 

HB4045 Engrossed- 37 -LRB100 12674 RPS 26063 b

1        (4) In Article 14, "final average compensation".
2        (5) In Article 17, "average salary".
3        (6) In Section 22-207, "wages or salary received by him
4    at the date of retirement or discharge".
5    (b-5) Beginning on January 1, 2011, for all purposes under
6this Code (including without limitation the calculation of
7benefits and employee contributions), the annual earnings,
8salary, or wages (based on the plan year) of a member or
9participant to whom this Section applies shall not exceed
10$106,800; however, that amount shall annually thereafter be
11increased by the lesser of (i) 3% of that amount, including all
12previous adjustments, or (ii) one-half the annual unadjusted
13percentage increase (but not less than zero) in the consumer
14price index-u for the 12 months ending with the September
15preceding each November 1, including all previous adjustments.
16    For the purposes of this Section, "consumer price index-u"
17means the index published by the Bureau of Labor Statistics of
18the United States Department of Labor that measures the average
19change in prices of goods and services purchased by all urban
20consumers, United States city average, all items, 1982-84 =
21100. The new amount resulting from each annual adjustment shall
22be determined by the Public Pension Division of the Department
23of Insurance and made available to the boards of the retirement
24systems and pension funds by November 1 of each year.
25    (c) A member or participant is entitled to a retirement
26annuity upon written application if he or she has attained age

 

 

HB4045 Engrossed- 38 -LRB100 12674 RPS 26063 b

167 (beginning January 1, 2015, age 65 with respect to service
2under Article 12 of this Code that is subject to this Section)
3and has at least 10 years of service credit and is otherwise
4eligible under the requirements of the applicable Article.
5    A member or participant who has attained age 62 (beginning
6January 1, 2015, age 60 with respect to service under Article
712 of this Code that is subject to this Section) and has at
8least 10 years of service credit and is otherwise eligible
9under the requirements of the applicable Article may elect to
10receive the lower retirement annuity provided in subsection (d)
11of this Section.
12    (d) The retirement annuity of a member or participant who
13is retiring after attaining age 62 (beginning January 1, 2015,
14age 60 with respect to service under Article 12 of this Code
15that is subject to this Section) with at least 10 years of
16service credit shall be reduced by one-half of 1% for each full
17month that the member's age is under age 67 (beginning January
181, 2015, age 65 with respect to service under Article 12 of
19this Code that is subject to this Section).
20    (e) Any retirement annuity or supplemental annuity shall be
21subject to annual increases on the January 1 occurring either
22on or after the attainment of age 67 (beginning January 1,
232015, age 65 with respect to service under Article 12 of this
24Code that is subject to this Section) or the first anniversary
25of the annuity start date, whichever is later. Each annual
26increase shall be calculated at 3% or one-half the annual

 

 

HB4045 Engrossed- 39 -LRB100 12674 RPS 26063 b

1unadjusted percentage increase (but not less than zero) in the
2consumer price index-u for the 12 months ending with the
3September preceding each November 1, whichever is less, of the
4originally granted retirement annuity. If the annual
5unadjusted percentage change in the consumer price index-u for
6the 12 months ending with the September preceding each November
71 is zero or there is a decrease, then the annuity shall not be
8increased.
9    (f) The initial survivor's or widow's annuity of an
10otherwise eligible survivor or widow of a retired member or
11participant who first became a member or participant on or
12after January 1, 2011 shall be in the amount of 66 2/3% of the
13retired member's or participant's retirement annuity at the
14date of death. In the case of the death of a member or
15participant who has not retired and who first became a member
16or participant on or after January 1, 2011, eligibility for a
17survivor's or widow's annuity shall be determined by the
18applicable Article of this Code. The initial benefit shall be
1966 2/3% of the earned annuity without a reduction due to age. A
20child's annuity of an otherwise eligible child shall be in the
21amount prescribed under each Article if applicable. Any
22survivor's or widow's annuity shall be increased (1) on each
23January 1 occurring on or after the commencement of the annuity
24if the deceased member died while receiving a retirement
25annuity or (2) in other cases, on each January 1 occurring
26after the first anniversary of the commencement of the annuity.

 

 

HB4045 Engrossed- 40 -LRB100 12674 RPS 26063 b

1Each annual increase shall be calculated at 3% or one-half the
2annual unadjusted percentage increase (but not less than zero)
3in the consumer price index-u for the 12 months ending with the
4September preceding each November 1, whichever is less, of the
5originally granted survivor's annuity. If the annual
6unadjusted percentage change in the consumer price index-u for
7the 12 months ending with the September preceding each November
81 is zero or there is a decrease, then the annuity shall not be
9increased.
10    (g) The benefits in Section 14-110 apply only if the person
11is a State policeman, a fire fighter in the fire protection
12service of a department, or a security employee of the
13Department of Corrections or the Department of Juvenile
14Justice, as those terms are defined in subsection (b) of
15Section 14-110. A person who meets the requirements of this
16Section is entitled to an annuity calculated under the
17provisions of Section 14-110, in lieu of the regular or minimum
18retirement annuity, only if the person has withdrawn from
19service with not less than 20 years of eligible creditable
20service and has attained age 60, regardless of whether the
21attainment of age 60 occurs while the person is still in
22service.
23    (h) If a person who first becomes a member or a participant
24of a retirement system or pension fund subject to this Section
25on or after January 1, 2011 is receiving a retirement annuity
26or retirement pension under that system or fund and becomes a

 

 

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1member or participant under any other system or fund created by
2this Code and is employed on a full-time basis, except for
3those members or participants exempted from the provisions of
4this Section under subsection (a) of this Section, then the
5person's retirement annuity or retirement pension under that
6system or fund shall be suspended during that employment. Upon
7termination of that employment, the person's retirement
8annuity or retirement pension payments shall resume and be
9recalculated if recalculation is provided for under the
10applicable Article of this Code.
11    If a person who first becomes a member of a retirement
12system or pension fund subject to this Section on or after
13January 1, 2012 and is receiving a retirement annuity or
14retirement pension under that system or fund and accepts on a
15contractual basis a position to provide services to a
16governmental entity from which he or she has retired, then that
17person's annuity or retirement pension earned as an active
18employee of the employer shall be suspended during that
19contractual service. A person receiving an annuity or
20retirement pension under this Code shall notify the pension
21fund or retirement system from which he or she is receiving an
22annuity or retirement pension, as well as his or her
23contractual employer, of his or her retirement status before
24accepting contractual employment. A person who fails to submit
25such notification shall be guilty of a Class A misdemeanor and
26required to pay a fine of $1,000. Upon termination of that

 

 

HB4045 Engrossed- 42 -LRB100 12674 RPS 26063 b

1contractual employment, the person's retirement annuity or
2retirement pension payments shall resume and, if appropriate,
3be recalculated under the applicable provisions of this Code.
4    (i) (Blank).
5    (j) Except for Sections 1-161 and 1-162, in In the case of
6a conflict between the provisions of this Section and any other
7provision of this Code, the provisions of this Section shall
8control.
9(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
10eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
 
11    (40 ILCS 5/1-161 new)
12    Sec. 1-161. Optional benefits for certain Tier 2 members
13under Articles 14, 15, and 16.
14    (a) Notwithstanding any other provision of this Code to the
15contrary, the provisions of this Section apply to a person who
16first becomes a member or a participant under Article 14, 15,
17or 16 on or after July 1, 2018 and who does not make the
18election under subsection (b) or (c), whichever is applicable.
19The provisions of this Section apply to a person who makes the
20election under subsection (c-5). The provisions of this Section
21do not apply to any participant in a self-managed plan or to a
22covered employee under Article 14.
23    (b) In lieu of the benefits provided under this Section, a
24member or participant, except for a participant under Article
2515, may irrevocably elect the benefits under Section 1-160 and

 

 

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1the benefits otherwise applicable to that member or
2participant. The election must be made within 30 days after
3becoming a member or participant. Each retirement system shall
4establish procedures for making this election.
5    (c) A participant under Article 15 may irrevocably elect
6the benefits otherwise provided to a Tier 2 member under
7Article 15. The election must be made within 30 days after
8becoming a member. The retirement system under Article 15 shall
9establish procedures for making this election.
10    (c-5) A non-covered participant under Article 14 to whom
11Section 1-160 applies, a Tier 2 member under Article 15, or a
12participant under Article 16 to whom Section 1-160 applies may
13irrevocably elect to receive the benefits under this Section in
14lieu of the benefits under Section 1-160 or the benefits
15otherwise available to a Tier 2 member under Article 15,
16whichever is applicable. Each retirement System shall
17establish procedures for making this election.
18    (d) "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the total salary or
20earnings calculated under the Article applicable to the member
21or participant during the last 120 months (or 10 years) of
22service in which the total salary or earnings calculated under
23the applicable Article was the highest by the number of months
24(or years) of service in that period. For the purposes of a
25person to whom this Section applies, in this Code, "final
26average salary" shall be substituted for "final average

 

 

HB4045 Engrossed- 44 -LRB100 12674 RPS 26063 b

1compensation" in Article 14.
2    (e) Beginning July 1, 2018, for all purposes under this
3Code (including without limitation the calculation of benefits
4and employee contributions), the annual earnings, salary,
5compensation, or wages (based on the plan year) of a member or
6participant to whom this Section applies shall not at any time
7exceed the federal Social Security Wage Base then in effect.
8    (f) A member or participant is entitled to a retirement
9annuity upon written application if he or she has attained the
10normal retirement age determined by the Social Security
11Administration for that member or participant's year of birth,
12but no earlier than 67 years of age, and has at least 10 years
13of service credit and is otherwise eligible under the
14requirements of the applicable Article.
15    (g) The amount of the retirement annuity to which a member
16or participant is entitled shall be computed by multiplying
171.25% for each year of service credit by his or her final
18average salary.
19    (h) Any retirement annuity or supplemental annuity shall be
20subject to annual increases on the first anniversary of the
21annuity start date. Each annual increase shall be one-half the
22annual unadjusted percentage increase (but not less than zero)
23in the consumer price index-w for the 12 months ending with the
24September preceding each November 1 of the originally granted
25retirement annuity. If the annual unadjusted percentage change
26in the consumer price index-w for the 12 months ending with the

 

 

HB4045 Engrossed- 45 -LRB100 12674 RPS 26063 b

1September preceding each November 1 is zero or there is a
2decrease, then the annuity shall not be increased.
3    For the purposes of this Section, "consumer price index-w"
4means the index published by the Bureau of Labor Statistics of
5the United States Department of Labor that measures the average
6change in prices of goods and services purchased by Urban Wage
7Earners and Clerical Workers, United States city average, all
8items, 1982-84 = 100. The new amount resulting from each annual
9adjustment shall be determined by the Public Pension Division
10of the Department of Insurance and made available to the boards
11of the retirement systems and pension funds by November 1 of
12each year.
13    (i) The initial survivor's or widow's annuity of an
14otherwise eligible survivor or widow of a retired member or
15participant to whom this Section applies shall be in the amount
16of 66 2/3% of the retired member's or participant's retirement
17annuity at the date of death. In the case of the death of a
18member or participant who has not retired and to whom this
19Section applies, eligibility for a survivor's or widow's
20annuity shall be determined by the applicable Article of this
21Code. The benefit shall be 66 2/3% of the earned annuity
22without a reduction due to age. A child's annuity of an
23otherwise eligible child shall be in the amount prescribed
24under each Article if applicable.
25    (j) In lieu of any other employee contributions, except for
26the contribution to the defined contribution plan under

 

 

HB4045 Engrossed- 46 -LRB100 12674 RPS 26063 b

1subsection (k) of this Section, each employee shall contribute
26.2% of his her or salary to the retirement system. However,
3the employee contribution under this subsection shall not
4exceed the amount of the total normal cost of the benefits for
5all members making contributions under this Section (except for
6the defined contribution plan under subsection (k) of this
7Section), expressed as a percentage of payroll and certified on
8or before January 15 of each year by the board of trustees of
9the retirement system. If the board of trustees of the
10retirement system certifies that the 6.2% employee
11contribution rate exceeds the normal cost of the benefits under
12this Section (except for the defined contribution plan under
13subsection (k) of this Section), then on or before December 1
14of that year, the board of trustees shall certify the amount of
15the normal cost of the benefits under this Section (except for
16the defined contribution plan under subsection (k) of this
17Section), expressed as a percentage of payroll, to the State
18Actuary and the Commission on Government Forecasting and
19Accountability, and the employee contribution under this
20subsection shall be reduced to that amount beginning July 1 of
21that year. Thereafter, if the normal cost of the benefits under
22this Section (except for the defined contribution plan under
23subsection (k) of this Section), expressed as a percentage of
24payroll and certified on or before January 1 of each year by
25the board of trustees of the retirement system, exceeds 6.2% of
26salary, then on or before January 15 of that year, the board of

 

 

HB4045 Engrossed- 47 -LRB100 12674 RPS 26063 b

1trustees shall certify the normal cost to the State Actuary and
2the Commission on Government Forecasting and Accountability,
3and the employee contributions shall revert back to 6.2% of
4salary beginning January 1 of the following year.
5    (k) No later than July 1, 2018, each retirement system
6under Article 14, 15, or 16 shall prepare and implement a
7defined contribution plan for members or participants who are
8subject to this Section. The defined contribution plan
9developed under this subsection shall be a plan that aggregates
10employer and employee contributions in individual participant
11accounts which, after meeting any other requirements, are used
12for payouts after retirement in accordance with this subsection
13and any other applicable laws.
14        (1) Each member or participant shall contribute a
15    minimum of 4% of his or her salary to the defined
16    contribution plan.
17        (2) For each participant in the defined contribution
18    plan who has been employed with the same employer for at
19    least one year, employer contributions shall be paid into
20    that participant's accounts at a rate expressed as a
21    percentage of salary. This rate may be set for individual
22    employees, but shall be no higher than 6% of salary and
23    shall be no lower than 2% of salary.
24        (3) Employer contributions shall vest when those
25    contributions are paid into a member's or participant's
26    account.

 

 

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1        (4) The defined contribution plan shall provide a
2    variety of options for investments. These options shall
3    include investments handled by the Illinois State Board of
4    Investment as well as private sector investment options.
5        (5) The defined contribution plan shall provide a
6    variety of options for payouts to retirees and their
7    survivors.
8        (6) To the extent authorized under federal law and as
9    authorized by the retirement system, the defined
10    contribution plan shall allow former participants in the
11    plan to transfer or roll over employee and employer
12    contributions, and the earnings thereon, into other
13    qualified retirement plans.
14        (7) Each retirement system shall reduce the employee
15    contributions credited to the member's defined
16    contribution plan account by an amount determined by that
17    retirement system to cover the cost of offering the
18    benefits under this subsection and any applicable
19    administrative fees.
20        (8) No person shall begin participating in the defined
21    contribution plan until it has attained qualified plan
22    status and received all necessary approvals from the U.S.
23    Internal Revenue Service.
24    (l) In the case of a conflict between the provisions of
25this Section and any other provision of this Code, the
26provisions of this Section shall control.
 

 

 

HB4045 Engrossed- 49 -LRB100 12674 RPS 26063 b

1    (40 ILCS 5/1-162 new)
2    Sec. 1-162. Optional benefits for certain Tier 2 members of
3pension funds under Articles 8, 9, 10, 11, 12, and 17.
4    (a) As used in this Section:
5    "Affected pension fund" means a pension fund established
6under Article 8, 9, 10, 11, 12, or 17 that the governing body
7of the unit of local government has designated as an affected
8pension fund by adoption of a resolution or ordinance.
9    "Resolution or ordinance date" means the date on which the
10governing body of the unit of local government designates a
11pension fund under Article 8, 9, 10, 11, 12, or 17 as an
12affected pension fund by adoption of a resolution or ordinance
13or July 1, 2018, whichever is later.
14    (b) Notwithstanding any other provision of this Code to the
15contrary, the provisions of this Section apply to a person who
16first becomes a member or a participant in an affected pension
17fund on or after 6 months after the resolution or ordinance
18date and who does not make the election under subsection (c).
19    (c) In lieu of the benefits provided under this Section, a
20member or participant may irrevocably elect the benefits under
21Section 1-160 and the benefits otherwise applicable to that
22member or participant. The election must be made within 30 days
23after becoming a member or participant. Each affected pension
24fund shall establish procedures for making this election.
25    (d) "Final average salary" means the average monthly (or

 

 

HB4045 Engrossed- 50 -LRB100 12674 RPS 26063 b

1annual) salary obtained by dividing the total salary or
2earnings calculated under the Article applicable to the member
3or participant during the last 120 months (or 10 years) of
4service in which the total salary or earnings calculated under
5the applicable Article was the highest by the number of months
6(or years) of service in that period. For the purposes of a
7person who first becomes a member or participant of an affected
8pension fund on or after 6 months after the ordinance or
9resolution date, in this Code, "final average salary" shall be
10substituted for the following:
11        (1) In Articles 8, 9, 10, 11, and 12, "highest average
12    annual salary for any 4 consecutive years within the last
13    10 years of service immediately preceding the date of
14    withdrawal".
15        (2) In Article 17, "average salary".
16    (e) Beginning 6 months after the resolution or ordinance
17date, for all purposes under this Code (including without
18limitation the calculation of benefits and employee
19contributions), the annual earnings, salary, or wages (based on
20the plan year) of a member or participant to whom this Section
21applies shall not at any time exceed the federal Social
22Security Wage Base then in effect.
23    (f) A member or participant is entitled to a retirement
24annuity upon written application if he or she has attained the
25normal retirement age determined by the Social Security
26Administration for that member or participant's year of birth,

 

 

HB4045 Engrossed- 51 -LRB100 12674 RPS 26063 b

1but no earlier than 67 years of age, and has at least 10 years
2of service credit and is otherwise eligible under the
3requirements of the applicable Article.
4    (g) The amount of the retirement annuity to which a member
5or participant is entitled shall be computed by multiplying
61.25% for each year of service credit by his or her final
7average salary.
8    (h) Any retirement annuity or supplemental annuity shall be
9subject to annual increases on the first anniversary of the
10annuity start date. Each annual increase shall be one-half the
11annual unadjusted percentage increase (but not less than zero)
12in the consumer price index-w for the 12 months ending with the
13September preceding each November 1 of the originally granted
14retirement annuity. If the annual unadjusted percentage change
15in the consumer price index-w for the 12 months ending with the
16September preceding each November 1 is zero or there is a
17decrease, then the annuity shall not be increased.
18    For the purposes of this Section, "consumer price index-w"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by Urban Wage
22Earners and Clerical Workers, United States city average, all
23items, 1982-84 = 100. The new amount resulting from each annual
24adjustment shall be determined by the Public Pension Division
25of the Department of Insurance and made available to the boards
26of the retirement systems and pension funds by November 1 of

 

 

HB4045 Engrossed- 52 -LRB100 12674 RPS 26063 b

1each year.
2    (i) The initial survivor's or widow's annuity of an
3otherwise eligible survivor or widow of a retired member or
4participant who first became a member or participant on or
5after 6 months after the resolution or ordinance date shall be
6in the amount of 66 2/3% of the retired member's or
7participant's retirement annuity at the date of death. In the
8case of the death of a member or participant who has not
9retired and who first became a member or participant on or
10after 6 months after the resolution or ordinance date,
11eligibility for a survivor's or widow's annuity shall be
12determined by the applicable Article of this Code. The benefit
13shall be 66 2/3% of the earned annuity without a reduction due
14to age. A child's annuity of an otherwise eligible child shall
15be in the amount prescribed under each Article if applicable.
16    (j) In lieu of any other employee contributions, except for
17the contribution to the defined contribution plan under
18subsection (k) of this Section, each employee shall contribute
196.2% of his her or salary to the affected pension fund.
20However, the employee contribution under this subsection shall
21not exceed the amount of the normal cost of the benefits under
22this Section (except for the defined contribution plan under
23subsection (k) of this Section), expressed as a percentage of
24payroll and determined on or before November 1 of each year by
25the board of trustees of the affected pension fund. If the
26board of trustees of the affected pension fund determines that

 

 

HB4045 Engrossed- 53 -LRB100 12674 RPS 26063 b

1the 6.2% employee contribution rate exceeds the normal cost of
2the benefits under this Section (except for the defined
3contribution plan under subsection (k) of this Section), then
4on or before December 1 of that year, the board of trustees
5shall certify the amount of the normal cost of the benefits
6under this Section (except for the defined contribution plan
7under subsection (k) of this Section), expressed as a
8percentage of payroll, to the State Actuary and the Commission
9on Government Forecasting and Accountability, and the employee
10contribution under this subsection shall be reduced to that
11amount beginning January 1 of the following year. Thereafter,
12if the normal cost of the benefits under this Section (except
13for the defined contribution plan under subsection (k) of this
14Section), expressed as a percentage of payroll and determined
15on or before November 1 of each year by the board of trustees
16of the affected pension fund, exceeds 6.2% of salary, then on
17or before December 1 of that year, the board of trustees shall
18certify the normal cost to the State Actuary and the Commission
19on Government Forecasting and Accountability, and the employee
20contributions shall revert back to 6.2% of salary beginning
21January 1 of the following year.
22    (k) No later than 5 months after the resolution or
23ordinance date, an affected pension fund shall prepare and
24implement a defined contribution plan for members or
25participants who are subject to this Section. The defined
26contribution plan developed under this subsection shall be a

 

 

HB4045 Engrossed- 54 -LRB100 12674 RPS 26063 b

1plan that aggregates employer and employee contributions in
2individual participant accounts which, after meeting any other
3requirements, are used for payouts after retirement in
4accordance with this subsection and any other applicable laws.
5        (1) Each member or participant shall contribute a
6    minimum of 4% of his or her salary to the defined
7    contribution plan.
8        (2) For each participant in the defined contribution
9    plan who has been employed with the same employer for at
10    least one year, employer contributions shall be paid into
11    that participant's accounts at a rate expressed as a
12    percentage of salary. This rate may be set for individual
13    employees, but shall be no higher than 6% of salary and
14    shall be no lower than 2% of salary.
15        (3) Employer contributions shall vest when those
16    contributions are paid into a member's or participant's
17    account.
18        (4) The defined contribution plan shall provide a
19    variety of options for investments. These options shall
20    include investments handled by the Illinois State Board of
21    Investment as well as private sector investment options.
22        (5) The defined contribution plan shall provide a
23    variety of options for payouts to retirees and their
24    survivors.
25        (6) To the extent authorized under federal law and as
26    authorized by the affected pension fund, the defined

 

 

HB4045 Engrossed- 55 -LRB100 12674 RPS 26063 b

1    contribution plan shall allow former participants in the
2    plan to transfer or roll over employee and employer
3    contributions, and the earnings thereon, into other
4    qualified retirement plans.
5        (7) Each affected pension fund shall reduce the
6    employee contributions credited to the member's defined
7    contribution plan account by an amount determined by that
8    affected pension fund to cover the cost of offering the
9    benefits under this subsection and any applicable
10    administrative fees.
11        (8) No person shall begin participating in the defined
12    contribution plan until it has attained qualified plan
13    status and received all necessary approvals from the U.S.
14    Internal Revenue Service.
15    (l) In the case of a conflict between the provisions of
16this Section and any other provision of this Code, the
17provisions of this Section shall control.
 
18    (40 ILCS 5/1-167 new)
19    Sec. 1-167. Election by Tier 1 employees.
20    (a) The Board of any pension fund or retirement system
21established under this Code may, by resolution, provide Tier 1
22employees with the opportunity to make an irrevocable election
23in accordance with this Section. The fund or system shall adopt
24rules for the administration of the election.
25    (b) If approved by the Board of the applicable pension fund

 

 

HB4045 Engrossed- 56 -LRB100 12674 RPS 26063 b

1or retirement system, an active Tier 1 employee may make an
2irrevocable election to agree to delay his or her eligibility
3for automatic annual increases in retirement annuity and to
4reduce the amount of the automatic annual increases in his or
5her retirement annuity and survivor's annuity as provided in
6subsection (e) of Section 1-160.
7     (c) As adequate and legal consideration provided under
8this amendatory Act of the 100th General Assembly for making an
9election under subsection (b) of this Section, a Tier 1
10employee shall be entitled to receive:
11        (1) a consideration payment equal to 10% of the
12    contributions made by or on behalf of the employee before
13    the effective date of that election; and
14        (2) a 10% reduction in future employee pension
15    contributions under the applicable Article.
16    (d) Each fund or system that conducts the election shall
17make a good faith effort to contact Tier 1 members subject to
18this Section. The fund or system shall describe the election,
19publish the details on its website, and publish those details
20in a regularly published newsletter or other existing public
21forum. Upon request, the fund or system shall offer Tier 1
22employees an opportunity to receive information before making
23the election. The information may be provided through video
24materials, group presentations, individual consultation with a
25member or authorized representative of the fund or system in
26person or by telephone or other electronic means, or any

 

 

HB4045 Engrossed- 57 -LRB100 12674 RPS 26063 b

1combination of those methods. The fund or system shall inform
2Tier 1 members that the member may also wish to obtain
3information and counsel relating to the election under this
4Section from any other available source, including, but not
5limited to, labor organizations and private counsel.
6    (e) The fund or system shall not provide advice or
7counseling with respect to the legal or tax circumstances of or
8consequences of making the election in subsection (b) this
9Section. In no event shall the System, its staff, or the Board
10be held liable for any information given to a member regarding
11the election under this Section.
12    (f) This subsection does not apply to Articles 2, 14, 15,
1316, and 17.
 
14    (40 ILCS 5/2-105.3 new)
15    Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
16participant who first became a participant before January 1,
172011.
 
18    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
19    (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21    Sec. 2-108. Salary. "Salary":
22    (1) For members of the General Assembly, the total
23compensation paid to the member by the State for one year of
24service, including the additional amounts, if any, paid to the

 

 

HB4045 Engrossed- 58 -LRB100 12674 RPS 26063 b

1member as an officer pursuant to Section 1 of "An Act in
2relation to the compensation and emoluments of the members of
3the General Assembly", approved December 6, 1907, as now or
4hereafter amended.
5    (2) For the State executive officers specified in Section
62-105, the total compensation paid to the member for one year
7of service.
8    (3) For members of the System who are participants under
9Section 2-117.1, or who are serving as Clerk or Assistant Clerk
10of the House of Representatives or Secretary or Assistant
11Secretary of the Senate, the total compensation paid to the
12member for one year of service, but not to exceed the salary of
13the highest salaried officer of the General Assembly.
14    However, in the event that federal law results in any
15participant receiving imputed income based on the value of
16group term life insurance provided by the State, such imputed
17income shall not be included in salary for the purposes of this
18Article.
19    Notwithstanding any other provision of this Section,
20"salary" does not include any consideration payment made to a
21Tier 1 employee.
22(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
23    (40 ILCS 5/2-110.3 new)
24    Sec. 2-110.3. Election by Tier 1 employees.
25    (a) If approved by resolution of the Board, an active Tier

 

 

HB4045 Engrossed- 59 -LRB100 12674 RPS 26063 b

11 employee may make an irrevocable election to agree to delay
2his or her eligibility for automatic annual increases in
3retirement annuity as provided in subsection (a-1) of Section
42-119.1 and to have the amount of the automatic annual
5increases in his or her retirement annuity and survivor's
6annuity that are otherwise provided for in this Article
7calculated, instead, as provided in subsection (a-1) of Section
82-119.1.
9    (b) As adequate and legal consideration provided under this
10amendatory Act of the 100th General Assembly for making an
11election under subsection (a) of this Section, each Tier 1
12employee who has made an election under subsection (a) of this
13Section shall receive a consideration payment equal to 10% of
14the contributions made by or on behalf of the employee under
15Section 2-126 before the effective date of that election. The
16System shall pay the amount of the consideration payment.
17    (c) A Tier 1 employee who does not make the election under
18subsection (a) of this Section shall not be subject to the
19benefits of subsection (b) of this Section.
20    (d) The System shall make a good faith effort to contact
21each Tier 1 employee subject to this Section. Such
22correspondence shall describe the election to each Tier 1
23employee. If the Tier 1 employee is not responsive, it is
24sufficient for the System to publish the details of any
25elections on its website or to publish those details in a
26regularly published newsletter or other existing public forum.

 

 

HB4045 Engrossed- 60 -LRB100 12674 RPS 26063 b

1    Tier 1 employees who are subject to this Section shall be
2provided with an election packet containing information
3regarding their options, as well as the forms necessary to make
4the election. Upon request, the System shall offer Tier 1
5employees an opportunity to receive information from the System
6before making the election. The information may be provided
7through video materials, group presentations, individual
8consultation with a member or authorized representative of the
9System in person or by telephone or other electronic means, or
10any combination of those methods. The System shall not provide
11advice or counseling with respect to the legal or tax
12circumstances of or consequences of making the election in
13subsection (a) of this Section.
14    The System shall inform Tier 1 employees in the election
15packet required under this subsection that the Tier 1 employee
16may also wish to obtain information and counsel relating to the
17election under this Section from any other available source,
18including, but not limited to, labor organizations and private
19counsel.
20    In no event shall the System, its staff, or the Board be
21held liable for any information given to a member regarding the
22election under this Section. The System shall coordinate with
23other retirement systems administering an election in
24accordance with this amendatory Act of the 100th General
25Assembly to provide information concerning the impact of the
26election set forth in this Section.

 

 

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1    (d-5) To the extent authorized under federal law and as
2authorized by the retirement system, a Tier 1 employee may
3transfer or roll over the consideration payment into other
4qualified retirement plans.
5    (e) A member's election under this Section is not a
6prohibited election under subdivision (j)(1) of Section 1-119
7of this Code.
8    (f) No provision of this Section shall be interpreted in a
9way that would cause the System to cease to be a qualified plan
10under Section 401(a) of the Internal Revenue Code of 1986. The
11provisions of this Section shall be subject to and implemented
12in a manner that complies with Section 11 of Article IV of the
13Illinois Constitution.
 
14    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
15    (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17    Sec. 2-119.1. Automatic increase in retirement annuity.
18    (a) Except as provided in subsection (a-1), a A participant
19who retires after June 30, 1967, and who has not received an
20initial increase under this Section before the effective date
21of this amendatory Act of 1991, shall, in January or July next
22following the first anniversary of retirement, whichever
23occurs first, and in the same month of each year thereafter,
24but in no event prior to age 60, have the amount of the
25originally granted retirement annuity increased as follows:

 

 

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1for each year through 1971, 1 1/2%; for each year from 1972
2through 1979, 2%; and for 1980 and each year thereafter, 3%.
3Annuitants who have received an initial increase under this
4subsection prior to the effective date of this amendatory Act
5of 1991 shall continue to receive their annual increases in the
6same month as the initial increase.
7    (a-1) Notwithstanding any other provision of this Article,
8for a Tier 1 employee who made the election under subsection
9(a) of Section 2-110.3:
10        (1) The initial increase in retirement annuity under
11    this Section shall occur on the January 1 occurring either
12    on or after the attainment of age 67 or the fifth
13    anniversary of the annuity start date, whichever is
14    earlier.
15        (2) The amount of each automatic annual increase in
16    retirement annuity or survivor's annuity occurring on or
17    after the effective date of that election shall be
18    calculated as a percentage of the originally granted
19    retirement annuity or survivor's annuity, equal to 3% or
20    one-half the annual unadjusted percentage increase (but
21    not less than zero) in the consumer price index-u for the
22    12 months ending with the September preceding each November
23    1, whichever is less. If the annual unadjusted percentage
24    change in the consumer price index-u for the 12 months
25    ending with the September preceding each November 1 is zero
26    or there is a decrease, then the annuity shall not be

 

 

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1    increased.
2    For the purposes of this Section, "consumer price index-u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the board of the retirement
10system by November 1 of each year.
11    (b) Beginning January 1, 1990, for eligible participants
12who remain in service after attaining 20 years of creditable
13service, the 3% increases provided under subsection (a) shall
14begin to accrue on the January 1 next following the date upon
15which the participant (1) attains age 55, or (2) attains 20
16years of creditable service, whichever occurs later, and shall
17continue to accrue while the participant remains in service;
18such increases shall become payable on January 1 or July 1,
19whichever occurs first, next following the first anniversary of
20retirement. For any person who has service credit in the System
21for the entire period from January 15, 1969 through December
2231, 1992, regardless of the date of termination of service, the
23reference to age 55 in clause (1) of this subsection (b) shall
24be deemed to mean age 50.
25    This subsection (b) does not apply to any person who first
26becomes a member of the System after August 8, 2003 (the

 

 

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1effective date of Public Act 93-494) this amendatory Act of the
293rd General Assembly.
3    (b-5) Notwithstanding any other provision of this Article,
4a participant who first becomes a participant on or after
5January 1, 2011 (the effective date of Public Act 96-889)
6shall, in January or July next following the first anniversary
7of retirement, whichever occurs first, and in the same month of
8each year thereafter, but in no event prior to age 67, have the
9amount of the retirement annuity then being paid increased by
103% or the annual unadjusted percentage increase in the Consumer
11Price Index for All Urban Consumers as determined by the Public
12Pension Division of the Department of Insurance under
13subsection (a) of Section 2-108.1, whichever is less.
14    (c) The foregoing provisions relating to automatic
15increases are not applicable to a participant who retires
16before having made contributions (at the rate prescribed in
17Section 2-126) for automatic increases for less than the
18equivalent of one full year. However, in order to be eligible
19for the automatic increases, such a participant may make
20arrangements to pay to the system the amount required to bring
21the total contributions for the automatic increase to the
22equivalent of one year's contributions based upon his or her
23last salary.
24    (d) A participant who terminated service prior to July 1,
251967, with at least 14 years of service is entitled to an
26increase in retirement annuity beginning January, 1976, and to

 

 

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1additional increases in January of each year thereafter.
2    The initial increase shall be 1 1/2% of the originally
3granted retirement annuity multiplied by the number of full
4years that the annuitant was in receipt of such annuity prior
5to January 1, 1972, plus 2% of the originally granted
6retirement annuity for each year after that date. The
7subsequent annual increases shall be at the rate of 2% of the
8originally granted retirement annuity for each year through
91979 and at the rate of 3% for 1980 and thereafter.
10    (e) Beginning January 1, 1990, and except as provided in
11subsection (a-1), all automatic annual increases payable under
12this Section shall be calculated as a percentage of the total
13annuity payable at the time of the increase, including previous
14increases granted under this Article.
15(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
16    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 2-126. Contributions by participants.
20    (a) Each participant shall contribute toward the cost of
21his or her retirement annuity a percentage of each payment of
22salary received by him or her for service as a member as
23follows: for service between October 31, 1947 and January 1,
241959, 5%; for service between January 1, 1959 and June 30,
251969, 6%; for service between July 1, 1969 and January 10,

 

 

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11973, 6 1/2%; for service after January 10, 1973, 7%; for
2service after December 31, 1981, 8 1/2%.
3    (b) Beginning August 2, 1949, each male participant, and
4from July 1, 1971, each female participant shall contribute
5towards the cost of the survivor's annuity 2% of salary.
6    A participant who has no eligible survivor's annuity
7beneficiary may elect to cease making contributions for
8survivor's annuity under this subsection. A survivor's annuity
9shall not be payable upon the death of a person who has made
10this election, unless prior to that death the election has been
11revoked and the amount of the contributions that would have
12been paid under this subsection in the absence of the election
13is paid to the System, together with interest at the rate of 4%
14per year from the date the contributions would have been made
15to the date of payment.
16    (c) Beginning July 1, 1967, each participant shall
17contribute 1% of salary towards the cost of automatic increase
18in annuity provided in Section 2-119.1. These contributions
19shall be made concurrently with contributions for retirement
20annuity purposes.
21    (d) In addition, each participant serving as an officer of
22the General Assembly shall contribute, for the same purposes
23and at the same rates as are required of a regular participant,
24on each additional payment received as an officer. If the
25participant serves as an officer for at least 2 but less than 4
26years, he or she shall contribute an amount equal to the amount

 

 

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1that would have been contributed had the participant served as
2an officer for 4 years. Persons who serve as officers in the
387th General Assembly but cannot receive the additional payment
4to officers because of the ban on increases in salary during
5their terms may nonetheless make contributions based on those
6additional payments for the purpose of having the additional
7payments included in their highest salary for annuity purposes;
8however, persons electing to make these additional
9contributions must also pay an amount representing the
10corresponding employer contributions, as calculated by the
11System.
12    (e) Notwithstanding any other provision of this Article,
13the required contribution of a participant who first becomes a
14participant on or after January 1, 2011 shall not exceed the
15contribution that would be due under this Article if that
16participant's highest salary for annuity purposes were
17$106,800, plus any increases in that amount under Section
182-108.1.
19    (f) As adequate and legal consideration provided under this
20amendatory Act of the 100th General Assembly for making an
21election under subsection (a) of Section 2-110.3, beginning on
22the effective date of the Tier 1 employee's election under
23subsection (a) of Section 2-110.3, in lieu of the contributions
24otherwise required under this Section, each Tier 1 employee who
25made the election under subsection (a) of Section 2-110.3 shall
26contribute 8.5% of each payment of salary toward the cost of

 

 

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1his or her retirement annuity and 1.85% of each payment of
2salary toward the cost of the survivor's annuity.
3    (g) As adequate and legal consideration provided under this
4amendatory Act of the 100th General Assembly for making an
5election under subsection (a) of Section 2-110.3,
6notwithstanding subsection (f) of this Section, beginning on
7the effective date of the Tier 1 employee's election under
8subsection (a) of Section 2-110.3, in lieu of the contributions
9otherwise required under this Section, each Tier 1 employee who
10made the election under subsection (a) of Section 2-110.3 and
11has elected to cease making contributions for survivor's
12annuity under subsection (b) of this Section, shall contribute
138.55% of each payment of salary toward the cost of his or her
14retirement annuity.
15(Source: P.A. 96-1490, eff. 1-1-11.)
 
16    (40 ILCS 5/2-162)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 2-162. Application and expiration of new benefit
20increases.
21    (a) As used in this Section, "new benefit increase" means
22an increase in the amount of any benefit provided under this
23Article, or an expansion of the conditions of eligibility for
24any benefit under this Article, that results from an amendment
25to this Code that takes effect after the effective date of this

 

 

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1amendatory Act of the 94th General Assembly. "New benefit
2increase", however, does not include any benefit increase
3resulting from the changes made to this Article by this
4amendatory Act of the 100th General Assembly.
5    (b) Notwithstanding any other provision of this Code or any
6subsequent amendment to this Code, every new benefit increase
7is subject to this Section and shall be deemed to be granted
8only in conformance with and contingent upon compliance with
9the provisions of this Section.
10    (c) The Public Act enacting a new benefit increase must
11identify and provide for payment to the System of additional
12funding at least sufficient to fund the resulting annual
13increase in cost to the System as it accrues.
14    Every new benefit increase is contingent upon the General
15Assembly providing the additional funding required under this
16subsection. The Commission on Government Forecasting and
17Accountability shall analyze whether adequate additional
18funding has been provided for the new benefit increase and
19shall report its analysis to the Public Pension Division of the
20Department of Insurance Financial and Professional Regulation.
21A new benefit increase created by a Public Act that does not
22include the additional funding required under this subsection
23is null and void. If the Public Pension Division determines
24that the additional funding provided for a new benefit increase
25under this subsection is or has become inadequate, it may so
26certify to the Governor and the State Comptroller and, in the

 

 

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1absence of corrective action by the General Assembly, the new
2benefit increase shall expire at the end of the fiscal year in
3which the certification is made.
4    (d) Every new benefit increase shall expire 5 years after
5its effective date or on such earlier date as may be specified
6in the language enacting the new benefit increase or provided
7under subsection (c). This does not prevent the General
8Assembly from extending or re-creating a new benefit increase
9by law.
10    (e) Except as otherwise provided in the language creating
11the new benefit increase, a new benefit increase that expires
12under this Section continues to apply to persons who applied
13and qualified for the affected benefit while the new benefit
14increase was in effect and to the affected beneficiaries and
15alternate payees of such persons, but does not apply to any
16other person, including without limitation a person who
17continues in service after the expiration date and did not
18apply and qualify for the affected benefit while the new
19benefit increase was in effect.
20(Source: P.A. 94-4, eff. 6-1-05.)
 
21    (40 ILCS 5/2-165.1 new)
22    Sec. 2-165.1. Defined contribution plan.
23    (a) By July 1, 2018, the System shall prepare and implement
24a voluntary defined contribution plan for up to 5% of eligible
25active Tier 1 employees. The System shall determine the 5% cap

 

 

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1by the number of active Tier 1 employees on the effective date
2of this Section. The defined contribution plan developed under
3this Section shall be a plan that aggregates employer and
4employee contributions in individual participant accounts
5which, after meeting any other requirements, are used for
6payouts after retirement in accordance with this Section and
7any other applicable laws.
8    As used in this Section, "defined benefit plan" means the
9retirement plan available under this Article to Tier 1
10employees who have not made the election authorized under this
11Section.
12        (1) Under the defined contribution plan, an active Tier
13    1 employee of this System could elect to cease accruing
14    benefits in the defined benefit plan under this Article and
15    begin accruing benefits for future service in the defined
16    contribution plan. Service credit under the defined
17    contribution plan may be used for determining retirement
18    eligibility under the defined benefit plan.
19        (2) Participants in the defined contribution plan
20    shall pay employee contributions at the same rate as Tier 1
21    employees in this System who do not participate in the
22    defined contribution plan.
23        (3) State contributions shall be paid into the accounts
24    of all participants in the defined contribution plan at a
25    uniform rate, expressed as a percentage of compensation and
26    determined for each year. This rate shall be no higher than

 

 

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1    the employer's normal cost for Tier 1 employees in the
2    defined benefit plan for that year, as determined by the
3    System and expressed as a percentage of compensation, and
4    shall be no lower than 3% of compensation. The State shall
5    adjust this rate annually.
6        (4) The defined contribution plan shall require 5 years
7    of participation in the defined contribution plan before
8    vesting in State contributions. If the participant fails to
9    vest in them, the State contributions, and the earnings
10    thereon, shall be forfeited.
11        (5) The defined contribution plan may provide for
12    participants in the plan to be eligible for defined
13    disability benefits. If it does, the System shall reduce
14    the employee contributions credited to the participant's
15    defined contribution plan account by an amount determined
16    by the System to cover the cost of offering such benefits.
17        (6) The defined contribution plan shall provide a
18    variety of options for investments. These options shall
19    include investments handled by the Illinois State Board of
20    Investment as well as private sector investment options.
21        (7) The defined contribution plan shall provide a
22    variety of options for payouts to retirees and their
23    survivors.
24        (8) To the extent authorized under federal law and as
25    authorized by the System, the plan shall allow former
26    participants in the plan to transfer or roll over employee

 

 

HB4045 Engrossed- 73 -LRB100 12674 RPS 26063 b

1    and vested State contributions, and the earnings thereon,
2    into other qualified retirement plans.
3        (9) The System shall reduce the employee contributions
4    credited to the participant's defined contribution plan
5    account by an amount determined by the System to cover the
6    cost of offering these benefits and any applicable
7    administrative fees.
8    (b) Only persons who are active Tier 1 employees of the
9System on the effective date of this Section are eligible to
10participate in the defined contribution plan. Participation in
11the defined contribution plan shall be limited to the first 5%
12of eligible persons who elect to participate. The election to
13participate in the defined contribution plan is voluntary and
14irrevocable.
15    (c) An eligible active Tier 1 employee may irrevocably
16elect to participate in the defined contribution plan by filing
17with the System a written application to participate that is
18received by the System prior to its determination that 5% of
19eligible persons have elected to participate in the defined
20contribution plan.
21    When the System first determines that 5% of eligible
22persons have elected to participate in the defined contribution
23plan, the System shall provide notice to previously eligible
24employees that the plan is no longer available and shall cease
25accepting applications to participate.
26    (d) The System shall make a good faith effort to contact

 

 

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1each active Tier 1 employee who is eligible to participate in
2the defined contribution plan. Such correspondence shall
3describe the option to join the defined contribution plan to
4each of these employees. If the employee is not responsive to
5other means of contact, it is sufficient for the System to
6publish the details of the option on its website.
7    Upon request for further information describing the
8option, the System shall provide employees with information
9from the System before exercising the option to join the plan,
10including information on the impact to their vested benefits or
11non-vested service. The individual consultation shall include
12projections of the participant's defined benefits at
13retirement or earlier termination of service and the value of
14the participant's account at retirement or earlier termination
15of service. The System shall not provide advice or counseling
16with respect to whether the employee should exercise the
17option. The System shall inform Tier 1 employees who are
18eligible to participate in the defined contribution plan that
19they may also wish to obtain information and counsel relating
20to their option from any other available source, including, but
21not limited to, labor organizations, private counsel, and
22financial advisors.
23    (e) In no event shall the System, its staff, its authorized
24representatives, or the Board be liable for any information
25given to an employee under this Section. The System may
26coordinate with other retirement systems administering a

 

 

HB4045 Engrossed- 75 -LRB100 12674 RPS 26063 b

1defined contribution plan in accordance with this amendatory
2Act of the 100th General Assembly to provide information
3concerning the impact of the option set forth in this Section.
4    (f) Notwithstanding any other provision of this Section, no
5person shall begin participating in the defined contribution
6plan until it has attained qualified plan status and received
7all necessary approvals from the U.S. Internal Revenue Service.
8    (g) The System shall report on its progress under this
9Section, including the available details of the defined
10contribution plan and the System's plans for informing eligible
11Tier 1 employees about the plan, to the Governor and the
12General Assembly.
13    (h) The Illinois State Board of Investments shall be the
14plan sponsor for the defined contribution plan established
15under this Section.
16    (i) The intent of this amendatory Act of the 100th General
17Assembly is to ensure that the State's normal cost of
18participation in the defined contribution plan is similar, and
19if possible equal, to the State's normal cost of participation
20in the defined benefit plan, unless a lower State's normal cost
21is necessary to ensure cost neutrality.
 
22    (40 ILCS 5/2-166.1 new)
23    Sec. 2-166.1. Defined contribution plan; termination. If
24the defined contribution plan is terminated or becomes
25inoperative pursuant to law, then each participant in the plan

 

 

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1shall automatically be deemed to have been a contributing Tier
21 employee in the System's defined benefit plan during the time
3in which he or she participated in the defined contribution
4plan, and for that purpose the System shall be entitled to
5recover the amounts in the participant's defined contribution
6accounts.
 
7    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 14-103.10. Compensation.
11    (a) For periods of service prior to January 1, 1978, the
12full rate of salary or wages payable to an employee for
13personal services performed if he worked the full normal
14working period for his position, subject to the following
15maximum amounts: (1) prior to July 1, 1951, $400 per month or
16$4,800 per year; (2) between July 1, 1951 and June 30, 1957
17inclusive, $625 per month or $7,500 per year; (3) beginning
18July 1, 1957, no limitation.
19    In the case of service of an employee in a position
20involving part-time employment, compensation shall be
21determined according to the employees' earnings record.
22    (b) For periods of service on and after January 1, 1978,
23all remuneration for personal services performed defined as
24"wages" under the Social Security Enabling Act, including that
25part of such remuneration which is in excess of any maximum

 

 

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1limitation provided in such Act, and including any benefits
2received by an employee under a sick pay plan in effect before
3January 1, 1981, but excluding lump sum salary payments:
4        (1) for vacation,
5        (2) for accumulated unused sick leave,
6        (3) upon discharge or dismissal,
7        (4) for approved holidays.
8    (c) For periods of service on or after December 16, 1978,
9compensation also includes any benefits, other than lump sum
10salary payments made at termination of employment, which an
11employee receives or is eligible to receive under a sick pay
12plan authorized by law.
13    (d) For periods of service after September 30, 1985,
14compensation also includes any remuneration for personal
15services not included as "wages" under the Social Security
16Enabling Act, which is deducted for purposes of participation
17in a program established pursuant to Section 125 of the
18Internal Revenue Code or its successor laws.
19    (e) For members for which Section 1-160 applies for periods
20of service on and after January 1, 2011, all remuneration for
21personal services performed defined as "wages" under the Social
22Security Enabling Act, excluding remuneration that is in excess
23of the annual earnings, salary, or wages of a member or
24participant, as provided in subsection (b-5) of Section 1-160,
25but including any benefits received by an employee under a sick
26pay plan in effect before January 1, 1981. Compensation shall

 

 

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1exclude lump sum salary payments:
2        (1) for vacation;
3        (2) for accumulated unused sick leave;
4        (3) upon discharge or dismissal; and
5        (4) for approved holidays.
6    (f) Notwithstanding the other provisions of this Section,
7for service on or after July 1, 2013, "compensation" does not
8include any stipend payable to an employee for service on a
9board or commission.
10    (g) Notwithstanding any other provision of this Section,
11"compensation" does not include any consideration payment made
12to a Tier 1 employee.
13(Source: P.A. 98-449, eff. 8-16-13.)
 
14    (40 ILCS 5/14-103.41 new)
15    Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
16employee under this Article who first became a member or
17participant before January 1, 2011 under any reciprocal
18retirement system or pension fund established under this Code
19other than a retirement system or pension fund established
20under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/14-106.5 new)
22    Sec. 14-106.5. Election by Tier 1 employees.
23    (a) If approved by resolution of the Board, an active Tier
241 employee may make an irrevocable election to agree to delay

 

 

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1his or her eligibility for automatic annual increases in
2retirement annuity as provided in subsection (a-1) of Section
314-114 and to have the amount of the automatic annual increases
4in his or her retirement annuity and survivors or widow's
5annuity that are otherwise provided for in this Article
6calculated, instead, as provided in subsection (a-1) of Section
714-114.
8    (b) As adequate and legal consideration provided under this
9amendatory Act of the 100th General Assembly for making an
10election under subsection (a) of this Section, each Tier 1
11employee who has made an election under subsection (a) of this
12Section shall receive a consideration payment equal to 10% of
13the contributions made by or on behalf of the employee before
14the effective date of that election. The System shall pay the
15amount of the consideration payment.
16    (c) A Tier 1 employee who does not make the election under
17subsection (a) of this Section shall not be subject to the
18benefits of subsection (b) of this Section.
19    (d) The System shall make a good faith effort to contact
20each Tier 1 employee subject to this Section. Such
21correspondence shall describe the election to each Tier 1
22employee. If the Tier 1 employee is not responsive, it is
23sufficient for the System to publish the details of any
24elections on its website or to publish those details in a
25regularly published newsletter or other existing public forum.
26    Tier 1 employees who are subject to this Section shall be

 

 

HB4045 Engrossed- 80 -LRB100 12674 RPS 26063 b

1provided with an election packet containing information
2regarding their options, as well as the forms necessary to make
3the election. Upon request, the System shall offer Tier 1
4employees an opportunity to receive information from the System
5before making the election. The information may be provided
6through video materials, group presentations, individual
7consultation with a member or authorized representative of the
8System in person or by telephone or other electronic means, or
9any combination of those methods. The System shall not provide
10advice or counseling with respect to the legal or tax
11circumstances of or consequences of making the election in
12subsection (a) of this Section.
13    The System shall inform Tier 1 employees in the election
14packet required under this subsection that the Tier 1 employee
15may also wish to obtain information and counsel relating to the
16election under this Section from any other available source,
17including, but not limited to, labor organizations and private
18counsel.
19    In no event shall the System, its staff, or the Board be
20held liable for any information given to a member regarding the
21election under this Section. The System shall coordinate with
22other retirement systems administering an election in
23accordance with this amendatory Act of the 100th General
24Assembly to provide information concerning the impact of the
25election set forth in this Section.
26    (d-5) To the extent authorized under federal law and as

 

 

HB4045 Engrossed- 81 -LRB100 12674 RPS 26063 b

1authorized by the retirement system, a Tier 1 employee may
2transfer or roll over the consideration payment into other
3qualified retirement plans.
4    (e) A member's election under this Section is not a
5prohibited election under subdivision (j)(1) of Section 1-119
6of this Code.
7    (f) No provision of this Section shall be interpreted in a
8way that would cause the System to cease to be a qualified plan
9under Section 401(a) of the Internal Revenue Code of 1986. The
10provisions of this Section shall be subject to and implemented
11in a manner that complies with Section 21 of Article V of the
12Illinois Constitution.
 
13    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
14    (Text of Section WITHOUT the changes made by P.A. 98-599,
15which has been held unconstitutional)
16    Sec. 14-114. Automatic increase in retirement annuity.
17    (a) Subject to the provisions of subsections (a-1), any Any
18person receiving a retirement annuity under this Article who
19retires having attained age 60, or who retires before age 60
20having at least 35 years of creditable service, or who retires
21on or after January 1, 2001 at an age which, when added to the
22number of years of his or her creditable service, equals at
23least 85, shall, on January 1 next following the first full
24year of retirement, have the amount of the then fixed and
25payable monthly retirement annuity increased 3%. Any person

 

 

HB4045 Engrossed- 82 -LRB100 12674 RPS 26063 b

1receiving a retirement annuity under this Article who retires
2before attainment of age 60 and with less than (i) 35 years of
3creditable service if retirement is before January 1, 2001, or
4(ii) the number of years of creditable service which, when
5added to the member's age, would equal 85, if retirement is on
6or after January 1, 2001, shall have the amount of the fixed
7and payable retirement annuity increased by 3% on the January 1
8occurring on or next following (1) attainment of age 60, or (2)
9the first anniversary of retirement, whichever occurs later.
10However, for persons who receive the alternative retirement
11annuity under Section 14-110, references in this subsection (a)
12to attainment of age 60 shall be deemed to refer to attainment
13of age 55. For a person receiving early retirement incentives
14under Section 14-108.3 whose retirement annuity began after
15January 1, 1992 pursuant to an extension granted under
16subsection (e) of that Section, the first anniversary of
17retirement shall be deemed to be January 1, 1993. For a person
18who retires on or after June 28, 2001 and on or before October
191, 2001, and whose retirement annuity is calculated, in whole
20or in part, under Section 14-110 or subsection (g) or (h) of
21Section 14-108, the first anniversary of retirement shall be
22deemed to be January 1, 2002.
23    On each January 1 following the date of the initial
24increase under this subsection, the employee's monthly
25retirement annuity shall be increased by an additional 3%.
26    Beginning January 1, 1990, and except as provided in

 

 

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1subsection (a-1), all automatic annual increases payable under
2this Section shall be calculated as a percentage of the total
3annuity payable at the time of the increase, including previous
4increases granted under this Article.
5    (a-1) Notwithstanding any other provision of this Article,
6for a Tier 1 employee who made the election under subsection
7(a) of Section 14-106.5:
8        (1) The initial increase in retirement annuity under
9    this Section shall occur on the January 1 occurring either
10    on or after the attainment of age 67 or the fifth
11    anniversary of the annuity start date, whichever is
12    earlier.
13        (2) The amount of each automatic annual increase in
14    retirement annuity or survivors or widow's annuity
15    occurring on or after the effective date of that election
16    shall be calculated as a percentage of the originally
17    granted retirement annuity or survivors or widow's
18    annuity, equal to 3% or one-half the annual unadjusted
19    percentage increase (but not less than zero) in the
20    consumer price index-u for the 12 months ending with the
21    September preceding each November 1, whichever is less. If
22    the annual unadjusted percentage change in the consumer
23    price index-u for the 12 months ending with the September
24    preceding each November 1 is zero or there is a decrease,
25    then the annuity shall not be increased.
26    For the purposes of this Section, "consumer price index-u"

 

 

HB4045 Engrossed- 84 -LRB100 12674 RPS 26063 b

1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the average
3change in prices of goods and services purchased by all urban
4consumers, United States city average, all items, 1982-84 =
5100. The new amount resulting from each annual adjustment shall
6be determined by the Public Pension Division of the Department
7of Insurance and made available to the board of the retirement
8system by November 1 of each year.
9    (b) The provisions of subsection (a) of this Section shall
10be applicable to an employee only if the employee makes the
11additional contributions required after December 31, 1969 for
12the purpose of the automatic increases for not less than the
13equivalent of one full year. If an employee becomes an
14annuitant before his additional contributions equal one full
15year's contributions based on his salary at the date of
16retirement, the employee may pay the necessary balance of the
17contributions to the system, without interest, and be eligible
18for the increasing annuity authorized by this Section.
19    (c) The provisions of subsection (a) of this Section shall
20not be applicable to any annuitant who is on retirement on
21December 31, 1969, and thereafter returns to State service,
22unless the member has established at least one year of
23additional creditable service following reentry into service.
24    (d) In addition to other increases which may be provided by
25this Section, on January 1, 1981 any annuitant who was
26receiving a retirement annuity on or before January 1, 1971

 

 

HB4045 Engrossed- 85 -LRB100 12674 RPS 26063 b

1shall have his retirement annuity then being paid increased $1
2per month for each year of creditable service. On January 1,
31982, any annuitant who began receiving a retirement annuity on
4or before January 1, 1977, shall have his retirement annuity
5then being paid increased $1 per month for each year of
6creditable service.
7    On January 1, 1987, any annuitant who began receiving a
8retirement annuity on or before January 1, 1977, shall have the
9monthly retirement annuity increased by an amount equal to 8¢
10per year of creditable service times the number of years that
11have elapsed since the annuity began.
12    (e) Every person who receives the alternative retirement
13annuity under Section 14-110 and who is eligible to receive the
143% increase under subsection (a) on January 1, 1986, shall also
15receive on that date a one-time increase in retirement annuity
16equal to the difference between (1) his actual retirement
17annuity on that date, including any increases received under
18subsection (a), and (2) the amount of retirement annuity he
19would have received on that date if the amendments to
20subsection (a) made by Public Act 84-162 had been in effect
21since the date of his retirement.
22(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
2392-651, eff. 7-11-02.)
 
24    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
25    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

HB4045 Engrossed- 86 -LRB100 12674 RPS 26063 b

1which has been held unconstitutional)
2    Sec. 14-133. Contributions on behalf of members.
3    (a) Except as provided in subsection (a-5), each Each
4participating employee shall make contributions to the System,
5based on the employee's compensation, as follows:
6        (1) Covered employees, except as indicated below, 3.5%
7    for retirement annuity, and 0.5% for a widow or survivors
8    annuity;
9        (2) Noncovered employees, except as indicated below,
10    7% for retirement annuity and 1% for a widow or survivors
11    annuity;
12        (3) Noncovered employees serving in a position in which
13    "eligible creditable service" as defined in Section 14-110
14    may be earned, 1% for a widow or survivors annuity plus the
15    following amount for retirement annuity: 8.5% through
16    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
17    in 2004 and thereafter;
18        (4) Covered employees serving in a position in which
19    "eligible creditable service" as defined in Section 14-110
20    may be earned, 0.5% for a widow or survivors annuity plus
21    the following amount for retirement annuity: 5% through
22    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
23    and thereafter;
24        (5) Each security employee of the Department of
25    Corrections or of the Department of Human Services who is a
26    covered employee, 0.5% for a widow or survivors annuity

 

 

HB4045 Engrossed- 87 -LRB100 12674 RPS 26063 b

1    plus the following amount for retirement annuity: 5%
2    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
3    in 2004 and thereafter;
4        (6) Each security employee of the Department of
5    Corrections or of the Department of Human Services who is
6    not a covered employee, 1% for a widow or survivors annuity
7    plus the following amount for retirement annuity: 8.5%
8    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
9    11.5% in 2004 and thereafter.
10    (a-5) As adequate and legal consideration provided under
11this amendatory Act of the 100th General Assembly for making an
12election under subsection (a) of Section 14-106.5, beginning on
13the effective date of the Tier 1 employee's election under
14subsection (a) of Section 14-106.5, in lieu of the
15contributions otherwise required under subsection (a), each
16Tier 1 employee who made the election under subsection (a) of
17Section 14-106.5 who is a participating employee shall make
18contributions to the System, based on his or her compensation,
19as follows:
20        (1) Covered employees, except as indicated below,
21    3.15% for retirement annuity, and 0.45% for a widow or
22    survivors annuity;
23        (2) Noncovered employees, except as indicated below,
24    6.3% for retirement annuity and 0.9% for a widow or
25    survivors annuity;
26        (3) Noncovered employees serving in a position in which

 

 

HB4045 Engrossed- 88 -LRB100 12674 RPS 26063 b

1    "eligible creditable service" as defined in Section 14-110
2    may be earned, 10.35% for retirement annuity and 0.9% for a
3    widow or survivors annuity;
4        (4) Covered employees serving in a position in which
5    "eligible creditable service" as defined in Section 14-110
6    may be earned, 7.2% for retirement annuity and 0.45% for a
7    widow or survivors annuity;
8        (5) Each security employee of the Department of
9    Corrections or of the Department of Human Services who is a
10    covered employee, 7.2% for retirement annuity and 0.45% for
11    a widow or survivors annuity;
12        (6) Each security employee of the Department of
13    Corrections or of the Department of Human Services who is
14    not a covered employee, 10.35% for retirement annuity and
15    0.9% for a widow or survivors annuity.
16    (b) Contributions shall be in the form of a deduction from
17compensation and shall be made notwithstanding that the
18compensation paid in cash to the employee shall be reduced
19thereby below the minimum prescribed by law or regulation. Each
20member is deemed to consent and agree to the deductions from
21compensation provided for in this Article, and shall receipt in
22full for salary or compensation.
23(Source: P.A. 92-14, eff. 6-28-01.)
 
24    (40 ILCS 5/14-147.5 new)
25    Sec. 14-147.5. Accelerated pension benefit payment.

 

 

HB4045 Engrossed- 89 -LRB100 12674 RPS 26063 b

1    (a) As used in this Section:
2    "Eligible person" means a person who:
3        (1) has terminated service;
4        (2) has accrued sufficient service credit to be
5    eligible to receive a retirement annuity under this
6    Article;
7        (3) has not received any retirement annuity under this
8    Article; and
9        (4) is not a party to a pending divorce proceeding and
10    does not have a QILDRO in effect against him or her under
11    this Article.
12    "Pension benefit" means the benefits under this Article, or
13Article 1 as it relates to those benefits, including any
14anticipated annual increases, that an eligible person is
15entitled to upon attainment of the applicable retirement age.
16"Pension benefit" also includes applicable survivor's or
17disability benefits.
18    (b) If approved by resolution of the Board in any year, the
19System shall calculate, using actuarial tables and other
20assumptions adopted by the Board, the net present value of
21pension benefits for each eligible person and shall offer each
22eligible person the opportunity to irrevocably elect to receive
23an amount determined by the System to be equal to 70% of the
24net present value of his or her pension benefits in lieu of
25receiving any pension benefit. The offer shall specify the
26dollar amount that the eligible person will receive if he or

 

 

HB4045 Engrossed- 90 -LRB100 12674 RPS 26063 b

1she so elects and shall expire when a subsequent offer is made
2to an eligible person. The System shall make a good faith
3effort to contact every eligible person to notify him or her of
4the election and of the amount of the accelerated pension
5benefit payment.
6    During a period of 3 months determined by the Board, an
7eligible person may irrevocably elect to receive an accelerated
8pension benefit payment in the amount that the System offers
9under this subsection in lieu of receiving any pension benefit.
10A person who elects to receive an accelerated pension benefit
11payment under this Section may not elect to proceed under the
12Retirement Systems Reciprocal Act with respect to service under
13this Article. The accelerated pension benefit payment shall be
14paid by the System.
15    (c) A person's credits and creditable service under this
16Article shall be terminated upon the person's receipt of an
17accelerated pension benefit payment under this Section, and no
18other benefit shall be paid under this Article based on those
19terminated credits and creditable service, including any
20retirement, survivor, or other benefit; except that to the
21extent that participation, benefits, or premiums under the
22State Employees Group Insurance Act of 1971 are based on the
23amount of service credit, the terminated service credit shall
24be used for that purpose.
25    (d) If a person who has received an accelerated pension
26benefit payment under this Section returns to active service

 

 

HB4045 Engrossed- 91 -LRB100 12674 RPS 26063 b

1under this Article, then:
2        (1) Any benefits under the System earned as a result of
3    that return to active service shall be based solely on the
4    person's credits and creditable service arising from the
5    return to active service.
6        (2) The accelerated pension benefit payment may not be
7    repaid to the System, and the terminated credits and
8    creditable service may not under any circumstances be
9    reinstated.
10    (e) As a condition of receiving an accelerated pension
11benefit payment, an eligible person must have another
12retirement plan or account qualified under the Internal Revenue
13Code of 1986, as amended, for the accelerated pension benefit
14payment to be rolled into. The accelerated pension benefit
15payment under this Section may be subject to withholding or
16payment of applicable taxes, but to the extent permitted by
17federal law, a person who receives an accelerated pension
18benefit payment under this Section must direct the System to
19pay all of that payment as a rollover into another retirement
20plan or account qualified under the Internal Revenue Code of
211986, as amended.
22    (f) The Board may adopt any rules necessary to implement
23this Section.
24    (g) No provision of this Section shall be interpreted in a
25way that would cause the applicable System to cease to be a
26qualified plan under the Internal Revenue Code of 1986.
 

 

 

HB4045 Engrossed- 92 -LRB100 12674 RPS 26063 b

1    (40 ILCS 5/14-152.1)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 14-152.1. Application and expiration of new benefit
5increases.
6    (a) As used in this Section, "new benefit increase" means
7an increase in the amount of any benefit provided under this
8Article, or an expansion of the conditions of eligibility for
9any benefit under this Article, that results from an amendment
10to this Code that takes effect after June 1, 2005 (the
11effective date of Public Act 94-4). "New benefit increase",
12however, does not include any benefit increase resulting from
13the changes made to this Article by Public Act 96-37 or by this
14amendatory Act of the 100th General Assembly this amendatory
15Act of the 96th General Assembly.
16    (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21    (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25    Every new benefit increase is contingent upon the General

 

 

HB4045 Engrossed- 93 -LRB100 12674 RPS 26063 b

1Assembly providing the additional funding required under this
2subsection. The Commission on Government Forecasting and
3Accountability shall analyze whether adequate additional
4funding has been provided for the new benefit increase and
5shall report its analysis to the Public Pension Division of the
6Department of Insurance Financial and Professional Regulation.
7A new benefit increase created by a Public Act that does not
8include the additional funding required under this subsection
9is null and void. If the Public Pension Division determines
10that the additional funding provided for a new benefit increase
11under this subsection is or has become inadequate, it may so
12certify to the Governor and the State Comptroller and, in the
13absence of corrective action by the General Assembly, the new
14benefit increase shall expire at the end of the fiscal year in
15which the certification is made.
16    (d) Every new benefit increase shall expire 5 years after
17its effective date or on such earlier date as may be specified
18in the language enacting the new benefit increase or provided
19under subsection (c). This does not prevent the General
20Assembly from extending or re-creating a new benefit increase
21by law.
22    (e) Except as otherwise provided in the language creating
23the new benefit increase, a new benefit increase that expires
24under this Section continues to apply to persons who applied
25and qualified for the affected benefit while the new benefit
26increase was in effect and to the affected beneficiaries and

 

 

HB4045 Engrossed- 94 -LRB100 12674 RPS 26063 b

1alternate payees of such persons, but does not apply to any
2other person, including without limitation a person who
3continues in service after the expiration date and did not
4apply and qualify for the affected benefit while the new
5benefit increase was in effect.
6(Source: P.A. 96-37, eff. 7-13-09.)
 
7    (40 ILCS 5/14-155.1 new)
8    Sec. 14-155.1. Defined contribution plan.
9    (a) By July 1, 2018, the System shall prepare and implement
10a voluntary defined contribution plan for up to 5% of eligible
11active Tier 1 employees. The System shall determine the 5% cap
12by the number of active Tier 1 employees on the effective date
13of this Section. The defined contribution plan developed under
14this Section shall be a plan that aggregates employer and
15employee contributions in individual participant accounts
16which, after meeting any other requirements, are used for
17payouts after retirement in accordance with this Section and
18any other applicable laws.
19    As used in this Section, "defined benefit plan" means the
20retirement plan available under this Article to Tier 1
21employees who have not made the election authorized under this
22Section.
23        (1) Under the defined contribution plan, an active Tier
24    1 employee of this System could elect to cease accruing
25    benefits in the defined benefit plan under this Article and

 

 

HB4045 Engrossed- 95 -LRB100 12674 RPS 26063 b

1    begin accruing benefits for future service in the defined
2    contribution plan. Service credit under the defined
3    contribution plan may be used for determining retirement
4    eligibility under the defined benefit plan.
5        (2) Participants in the defined contribution plan
6    shall pay employee contributions at the same rate as Tier 1
7    employees in this System who do not participate in the
8    defined contribution plan.
9        (3) State contributions shall be paid into the accounts
10    of all participants in the defined contribution plan at a
11    uniform rate, expressed as a percentage of compensation and
12    determined for each year. This rate shall be no higher than
13    the employer's normal cost for Tier 1 employees in the
14    defined benefit plan for that year, as determined by the
15    System and expressed as a percentage of compensation, and
16    shall be no lower than 3% of compensation. The State shall
17    adjust this rate annually.
18        (4) The defined contribution plan shall require 5 years
19    of participation in the defined contribution plan before
20    vesting in State contributions. If the participant fails to
21    vest in them, the State contributions, and the earnings
22    thereon, shall be forfeited.
23        (5) The defined contribution plan may provide for
24    participants in the plan to be eligible for the defined
25    disability benefits available to other participants under
26    this Article. If it does, the System shall reduce the

 

 

HB4045 Engrossed- 96 -LRB100 12674 RPS 26063 b

1    employee contributions credited to the member's defined
2    contribution plan account by an amount determined by the
3    System to cover the cost of offering such benefits.
4        (6) The defined contribution plan shall provide a
5    variety of options for investments. These options shall
6    include investments handled by the Illinois State Board of
7    Investment as well as private sector investment options.
8        (7) The defined contribution plan shall provide a
9    variety of options for payouts to retirees and their
10    survivors.
11        (8) To the extent authorized under federal law and as
12    authorized by the System, the plan shall allow former
13    participants in the plan to transfer or roll over employee
14    and vested State contributions, and the earnings thereon,
15    into other qualified retirement plans.
16        (9) The System shall reduce the employee contributions
17    credited to the member's defined contribution plan account
18    by an amount determined by the System to cover the cost of
19    offering these benefits and any applicable administrative
20    fees.
21    (b) Only persons who are active Tier 1 employees of the
22System on the effective date of this Section are eligible to
23participate in the defined contribution plan. Participation in
24the defined contribution plan shall be limited to the first 5%
25of eligible persons who elect to participate. The election to
26participate in the defined contribution plan is voluntary and

 

 

HB4045 Engrossed- 97 -LRB100 12674 RPS 26063 b

1irrevocable.
2    (c) An eligible Tier 1 employee may irrevocably elect to
3participate in the defined contribution plan by filing with the
4System a written application to participate that is received by
5the System prior to its determination that 5% of eligible
6persons have elected to participate in the defined contribution
7plan.
8    When the System first determines that 5% of eligible
9persons have elected to participate in the defined contribution
10plan, the System shall provide notice to previously eligible
11employees that the plan is no longer available and shall cease
12accepting applications to participate.
13    (d) The System shall make a good faith effort to contact
14each active Tier 1 employee who is eligible to participate in
15the defined contribution plan. Such correspondence shall
16describe the option to join the defined contribution plan to
17each of these employees. If the employee is not responsive to
18other means of contact, it is sufficient for the System to
19publish the details of the option on its website.
20    Upon request for further information describing the
21option, the System shall provide employees with information
22from the System before exercising the option to join the plan,
23including information on the impact to their vested benefits or
24non-vested service. The individual consultation shall include
25projections of the member's defined benefits at retirement or
26earlier termination of service and the value of the member's

 

 

HB4045 Engrossed- 98 -LRB100 12674 RPS 26063 b

1account at retirement or earlier termination of service. The
2System shall not provide advice or counseling with respect to
3whether the employee should exercise the option. The System
4shall inform Tier 1 employees who are eligible to participate
5in the defined contribution plan that they may also wish to
6obtain information and counsel relating to their option from
7any other available source, including, but not limited to,
8labor organizations, private counsel, and financial advisors.
9    (e) In no event shall the System, its staff, its authorized
10representatives, or the Board be liable for any information
11given to an employee under this Section. The System may
12coordinate with the other retirement systems administering a
13defined contribution plan in accordance with this amendatory
14Act of the 100th General Assembly to provide information
15concerning the impact of the option set forth in this Section.
16    (f) Notwithstanding any other provision of this Section, no
17person shall begin participating in the defined contribution
18plan until it has attained qualified plan status and received
19all necessary approvals from the U.S. Internal Revenue Service.
20    (g) The System shall report on its progress under this
21Section, including the available details of the defined
22contribution plan and the System's plans for informing eligible
23Tier 1 employees about the plan, to the Governor and the
24General Assembly.
25    (h) The Illinois State Board of Investment shall be the
26plan sponsor for the defined contribution plan established

 

 

HB4045 Engrossed- 99 -LRB100 12674 RPS 26063 b

1under this Section.
2    (i) The intent of this amendatory Act of the 100th General
3Assembly is to ensure that the State's normal cost of
4participation in the defined contribution plan is similar, and
5if possible equal, to the State's normal cost of participation
6in the defined benefit plan, unless a lower State's normal cost
7is necessary to ensure cost neutrality.
 
8    (40 ILCS 5/14-155.2 new)
9    Sec. 14-155.2. Defined contribution plan for certain
10covered employees.
11    (a) As used in this Section:
12    "Defined benefit plan" means the retirement plan available
13under this Article and Section 1-160 to eligible covered
14employees who do not make the election authorized under this
15Section.
16    "Eligible covered employee" means a covered employee who
17first becomes a participant under this Article on or after July
181, 2018.
19    (b) In lieu of the defined benefit plan, an eligible
20covered employee may irrevocably elect to participate in the
21defined contribution plan under this Section. The election to
22participate in the defined contribution plan must be made
23within 30 days after becoming an eligible covered employee. The
24election to participate in the defined contribution plan under
25this Section is voluntary and irrevocable.

 

 

HB4045 Engrossed- 100 -LRB100 12674 RPS 26063 b

1    (c) No later than July 1, 2018, the System shall prepare
2and implement a voluntary defined contribution plan for
3eligible covered employees. The defined contribution plan
4developed under this Section shall be a plan that aggregates
5employer and employee contributions in individual participant
6accounts which, after meeting any other requirements, are used
7for payouts after retirement in accordance with this Section
8and any other applicable laws.
9        (1) A participant in the defined contribution plan
10    shall contribute a minimum of 3% of his or her compensation
11    to the defined contribution plan.
12        (2) For persons who participate in the defined
13    contribution plan for at least one year, employer
14    contributions shall be paid into the accounts of those
15    participants at a rate of 3% of compensation.
16        (3) Employer contributions shall vest when those
17    contributions are paid into a participant's account.
18        (4) The defined contribution plan shall provide a
19    variety of options for investments. These options shall
20    include investments handled by the Illinois State Board of
21    Investment as well as private sector investment options.
22        (5) The defined contribution plan shall provide a
23    variety of options for payouts to retirees and their
24    survivors.
25        (6) To the extent authorized under federal law and as
26    authorized by the affected pension fund, the defined

 

 

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1    contribution plan shall allow former participants in the
2    plan to transfer or roll over employee and employer
3    contributions, and the earnings thereon, into other
4    qualified retirement plans.
5        (7) The System shall reduce the employee contributions
6    credited to the participant's defined contribution plan
7    account by an amount determined by the System to cover the
8    cost of offering the benefits under this Section and any
9    applicable administrative fees.
 
10    (40 ILCS 5/14-156.1 new)
11    Sec. 14-156.1. Defined contribution plan; termination. If
12the defined contribution plan under Section 14-155.1 is
13terminated or becomes inoperative pursuant to law, then each
14participant in the plan shall automatically be deemed to have
15been a contributing Tier 1 employee in the System's defined
16benefit plan during the time in which he or she participated in
17the defined contribution plan, and for that purpose the System
18shall be entitled to recover the amounts in the participant's
19defined contribution accounts.
 
20    (40 ILCS 5/15-108.1)
21    Sec. 15-108.1. Tier 1 member; Tier 1 employee.
22    "Tier 1 member": A participant or an annuitant of a
23retirement annuity under this Article, other than a participant
24in the self-managed plan under Section 15-158.2, who first

 

 

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1became a participant or member before January 1, 2011 under any
2reciprocal retirement system or pension fund established under
3this Code, other than a retirement system or pension fund
4established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
5"Tier 1 member" includes a person who first became a
6participant under this System before January 1, 2011 and who
7accepts a refund and is subsequently reemployed by an employer
8on or after January 1, 2011.
9    "Tier 1 employee": A Tier 1 member who is a participating
10employee, unless he or she is a disability benefit recipient
11under Section 15-150. However, for the purposes of the election
12under Section 15-132.9, "Tier 1 employee" does not include an
13individual who has made an irrevocable election on or before
14June 1, 2017 to retire from service pursuant to the terms of an
15employment contract or a collective bargaining agreement in
16effect on June 1, 2017, excluding any extension, amendment, or
17renewal of that agreement on or after that date, and has
18notified the System of that election.
19(Source: P.A. 98-92, eff. 7-16-13.)
 
20    (40 ILCS 5/15-108.2)
21    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
22first becomes a participant under this Article on or after
23January 1, 2011 and before July 1, 2018, other than a person in
24the self-managed plan established under Section 15-158.2 or a
25person who makes the election under subsection (c) of Section

 

 

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11-161, unless the person is otherwise a Tier 1 member. "Tier 2
2member" does not include a person who makes the election under
3subsection (c-5) of Section 1-161. The changes made to this
4Section by this amendatory Act of the 98th General Assembly are
5a correction of existing law and are intended to be retroactive
6to the effective date of Public Act 96-889, notwithstanding the
7provisions of Section 1-103.1 of this Code.
8(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 
9    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
10    Sec. 15-111. Earnings.
11    (a) "Earnings": Subject to Section 15-111.5, an amount paid
12for personal services equal to the sum of the basic
13compensation plus extra compensation for summer teaching,
14overtime or other extra service. For periods for which an
15employee receives service credit under subsection (c) of
16Section 15-113.1 or Section 15-113.2, earnings are equal to the
17basic compensation on which contributions are paid by the
18employee during such periods. Compensation for employment
19which is irregular, intermittent and temporary shall not be
20considered earnings, unless the participant is also receiving
21earnings from the employer as an employee under Section 15-107.
22    With respect to transition pay paid by the University of
23Illinois to a person who was a participating employee employed
24in the fire department of the University of Illinois's
25Champaign-Urbana campus immediately prior to the elimination

 

 

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1of that fire department:
2        (1) "Earnings" includes transition pay paid to the
3    employee on or after the effective date of this amendatory
4    Act of the 91st General Assembly.
5        (2) "Earnings" includes transition pay paid to the
6    employee before the effective date of this amendatory Act
7    of the 91st General Assembly only if (i) employee
8    contributions under Section 15-157 have been withheld from
9    that transition pay or (ii) the employee pays to the System
10    before January 1, 2001 an amount representing employee
11    contributions under Section 15-157 on that transition pay.
12    Employee contributions under item (ii) may be paid in a
13    lump sum, by withholding from additional transition pay
14    accruing before January 1, 2001, or in any other manner
15    approved by the System. Upon payment of the employee
16    contributions on transition pay, the corresponding
17    employer contributions become an obligation of the State.
18    (a-10) Notwithstanding any other provision of this
19Section, "earnings" does not include any consideration payment
20made to a Tier 1 employee.
21    (b) For a Tier 2 member, the annual earnings shall not
22exceed $106,800; however, that amount shall annually
23thereafter be increased by the lesser of (i) 3% of that amount,
24including all previous adjustments, or (ii) one half the annual
25unadjusted percentage increase (but not less than zero) in the
26consumer price index-u for the 12 months ending with the

 

 

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1September preceding each November 1, including all previous
2adjustments.
3    For the purposes of this Section, "consumer price index u"
4means the index published by the Bureau of Labor Statistics of
5the United States Department of Labor that measures the average
6change in prices of goods and services purchased by all urban
7consumers, United States city average, all items, 1982-84 =
8100. The new amount resulting from each annual adjustment shall
9be determined by the Public Pension Division of the Department
10of Insurance and made available to the boards of the retirement
11systems and pension funds by November 1 of each year.
12    (c) With each submission of payroll information in the
13manner prescribed by the System, the employer shall certify
14that the payroll information is correct and complies with all
15applicable State and federal laws.
16(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
 
17    (40 ILCS 5/15-132.9 new)
18    Sec. 15-132.9. Election by Tier 1 employees.
19    (a) If approved by resolution of the Board, an active Tier
201 employee may make an irrevocable election to agree to delay
21his or her eligibility for automatic annual increases in
22retirement annuity as provided in subsection (d-1) of Section
2315-136 and to have the amount of the automatic annual increases
24in his or her retirement annuity and survivors or widow's
25annuity that are otherwise provided for in this Article

 

 

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1calculated, instead, as provided in subsection (d-1) of Section
215-136.
3    (b) As adequate and legal consideration provided under this
4amendatory Act of the 100th General Assembly for making an
5election under subsection (a) of this Section, each Tier 1
6employee who has made an election under subsection (a) of this
7Section shall receive a consideration payment equal to 10% of
8the contributions made by or on behalf of the employee under
9Section 15-157 before the effective date of that election. The
10System shall pay the amount of the consideration payment.
11    (c) A Tier 1 employee who does not make the election under
12subsection (a) of this Section shall not be subject to the
13benefits of subsection (b) of this Section.
14    (d) The System shall make a good faith effort to contact
15each Tier 1 employee subject to this Section. Such
16correspondence shall describe the election to each Tier 1
17employee. If the Tier 1 employee is not responsive, it is
18sufficient for the System to publish the details of any
19elections on its website or to publish those details in a
20regularly published newsletter or other existing public forum.
21    Tier 1 employees who are subject to this Section shall be
22provided with an election packet containing information
23regarding their options, as well as the forms necessary to make
24the election. Upon request, the System shall offer Tier 1
25employees an opportunity to receive information from the System
26before making the election. The information may consist of

 

 

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1video materials, benefit estimators, group presentations,
2individual consultation with a member or authorized
3representative of the System in person or by telephone or other
4electronic means, or any combination of these methods. The
5System shall not provide advice or counseling with respect to
6the legal or tax circumstances of or consequences of making the
7election in subsection (a) of this Section.
8    The System shall inform Tier 1 employees in the election
9packet required under this subsection that the Tier 1 employee
10may also wish to obtain information and counsel relating to the
11election under this Section from any other available source,
12including, but not limited to, labor organizations and private
13counsel.
14    In no event shall the System, its staff, or the Board be
15held liable for any information given to a member regarding the
16election under this Section. The System shall coordinate with
17other retirement systems administering an election in
18accordance with this amendatory Act of the 100th General
19Assembly to provide information concerning the impact of the
20election set forth in this Section.
21    (d-5) To the extent authorized under federal law and as
22authorized by the retirement system, a Tier 1 employee may
23transfer or roll over the consideration payment into other
24qualified retirement plans.
25    (e) A member's election under this Section is not a
26prohibited election under subdivision (j)(1) of Section 1-119

 

 

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1of this Code.
2    (f) No provision of this Section shall be interpreted in a
3way that would cause the System to cease to be a qualified plan
4under Section 401(a) of the Internal Revenue Code of 1986.
 
5    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 15-136. Retirement annuities - Amount. The provisions
9of this Section 15-136 apply only to those participants who are
10participating in the traditional benefit package or the
11portable benefit package and do not apply to participants who
12are participating in the self-managed plan.
13    (a) The amount of a participant's retirement annuity,
14expressed in the form of a single-life annuity, shall be
15determined by whichever of the following rules is applicable
16and provides the largest annuity:
17    Rule 1: The retirement annuity shall be 1.67% of final rate
18of earnings for each of the first 10 years of service, 1.90%
19for each of the next 10 years of service, 2.10% for each year
20of service in excess of 20 but not exceeding 30, and 2.30% for
21each year in excess of 30; or for persons who retire on or
22after January 1, 1998, 2.2% of the final rate of earnings for
23each year of service.
24    Rule 2: The retirement annuity shall be the sum of the
25following, determined from amounts credited to the participant

 

 

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1in accordance with the actuarial tables and the effective rate
2of interest in effect at the time the retirement annuity
3begins:
4        (i) the normal annuity which can be provided on an
5    actuarially equivalent basis, by the accumulated normal
6    contributions as of the date the annuity begins;
7        (ii) an annuity from employer contributions of an
8    amount equal to that which can be provided on an
9    actuarially equivalent basis from the accumulated normal
10    contributions made by the participant under Section
11    15-113.6 and Section 15-113.7 plus 1.4 times all other
12    accumulated normal contributions made by the participant;
13    and
14        (iii) the annuity that can be provided on an
15    actuarially equivalent basis from the entire contribution
16    made by the participant under Section 15-113.3.
17    With respect to a police officer or firefighter who retires
18on or after August 14, 1998, the accumulated normal
19contributions taken into account under clauses (i) and (ii) of
20this Rule 2 shall include the additional normal contributions
21made by the police officer or firefighter under Section
2215-157(a).
23    The amount of a retirement annuity calculated under this
24Rule 2 shall be computed solely on the basis of the
25participant's accumulated normal contributions, as specified
26in this Rule and defined in Section 15-116. Neither an employee

 

 

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1or employer contribution for early retirement under Section
215-136.2 nor any other employer contribution shall be used in
3the calculation of the amount of a retirement annuity under
4this Rule 2.
5    This amendatory Act of the 91st General Assembly is a
6clarification of existing law and applies to every participant
7and annuitant without regard to whether status as an employee
8terminates before the effective date of this amendatory Act.
9    This Rule 2 does not apply to a person who first becomes an
10employee under this Article on or after July 1, 2005.
11    Rule 3: The retirement annuity of a participant who is
12employed at least one-half time during the period on which his
13or her final rate of earnings is based, shall be equal to the
14participant's years of service not to exceed 30, multiplied by
15(1) $96 if the participant's final rate of earnings is less
16than $3,500, (2) $108 if the final rate of earnings is at least
17$3,500 but less than $4,500, (3) $120 if the final rate of
18earnings is at least $4,500 but less than $5,500, (4) $132 if
19the final rate of earnings is at least $5,500 but less than
20$6,500, (5) $144 if the final rate of earnings is at least
21$6,500 but less than $7,500, (6) $156 if the final rate of
22earnings is at least $7,500 but less than $8,500, (7) $168 if
23the final rate of earnings is at least $8,500 but less than
24$9,500, and (8) $180 if the final rate of earnings is $9,500 or
25more, except that the annuity for those persons having made an
26election under Section 15-154(a-1) shall be calculated and

 

 

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1payable under the portable retirement benefit program pursuant
2to the provisions of Section 15-136.4.
3    Rule 4: A participant who is at least age 50 and has 25 or
4more years of service as a police officer or firefighter, and a
5participant who is age 55 or over and has at least 20 but less
6than 25 years of service as a police officer or firefighter,
7shall be entitled to a retirement annuity of 2 1/4% of the
8final rate of earnings for each of the first 10 years of
9service as a police officer or firefighter, 2 1/2% for each of
10the next 10 years of service as a police officer or
11firefighter, and 2 3/4% for each year of service as a police
12officer or firefighter in excess of 20. The retirement annuity
13for all other service shall be computed under Rule 1. A Tier 2
14member is eligible for a retirement annuity calculated under
15Rule 4 only if that Tier 2 member meets the service
16requirements for that benefit calculation as prescribed under
17this Rule 4 in addition to the applicable age requirement under
18subsection (a-5) of Section 15-135.
19    For purposes of this Rule 4, a participant's service as a
20firefighter shall also include the following:
21        (i) service that is performed while the person is an
22    employee under subsection (h) of Section 15-107; and
23        (ii) in the case of an individual who was a
24    participating employee employed in the fire department of
25    the University of Illinois's Champaign-Urbana campus
26    immediately prior to the elimination of that fire

 

 

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1    department and who immediately after the elimination of
2    that fire department transferred to another job with the
3    University of Illinois, service performed as an employee of
4    the University of Illinois in a position other than police
5    officer or firefighter, from the date of that transfer
6    until the employee's next termination of service with the
7    University of Illinois.
8    (b) For a Tier 1 member, the retirement annuity provided
9under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
10month the participant is under age 60 at the time of
11retirement. However, this reduction shall not apply in the
12following cases:
13        (1) For a disabled participant whose disability
14    benefits have been discontinued because he or she has
15    exhausted eligibility for disability benefits under clause
16    (6) of Section 15-152;
17        (2) For a participant who has at least the number of
18    years of service required to retire at any age under
19    subsection (a) of Section 15-135; or
20        (3) For that portion of a retirement annuity which has
21    been provided on account of service of the participant
22    during periods when he or she performed the duties of a
23    police officer or firefighter, if these duties were
24    performed for at least 5 years immediately preceding the
25    date the retirement annuity is to begin.
26    (b-5) The retirement annuity of a Tier 2 member who is

 

 

HB4045 Engrossed- 113 -LRB100 12674 RPS 26063 b

1retiring after attaining age 62 with at least 10 years of
2service credit shall be reduced by 1/2 of 1% for each full
3month that the member's age is under age 67.
4    (c) The maximum retirement annuity provided under Rules 1,
52, 4, and 5 shall be the lesser of (1) the annual limit of
6benefits as specified in Section 415 of the Internal Revenue
7Code of 1986, as such Section may be amended from time to time
8and as such benefit limits shall be adjusted by the
9Commissioner of Internal Revenue, and (2) 80% of final rate of
10earnings.
11    (d) Subject to the provisions of subsection (d-1), a A Tier
121 member whose status as an employee terminates after August
1314, 1969 shall receive automatic increases in his or her
14retirement annuity as follows:
15    Effective January 1 immediately following the date the
16retirement annuity begins, the annuitant shall receive an
17increase in his or her monthly retirement annuity of 0.125% of
18the monthly retirement annuity provided under Rule 1, Rule 2,
19Rule 3, or Rule 4 contained in this Section, multiplied by the
20number of full months which elapsed from the date the
21retirement annuity payments began to January 1, 1972, plus
220.1667% of such annuity, multiplied by the number of full
23months which elapsed from January 1, 1972, or the date the
24retirement annuity payments began, whichever is later, to
25January 1, 1978, plus 0.25% of such annuity multiplied by the
26number of full months which elapsed from January 1, 1978, or

 

 

HB4045 Engrossed- 114 -LRB100 12674 RPS 26063 b

1the date the retirement annuity payments began, whichever is
2later, to the effective date of the increase.
3    The annuitant shall receive an increase in his or her
4monthly retirement annuity on each January 1 thereafter during
5the annuitant's life of 3% of the monthly annuity provided
6under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
7Section. The change made under this subsection by P.A. 81-970
8is effective January 1, 1980 and applies to each annuitant
9whose status as an employee terminates before or after that
10date.
11    Beginning January 1, 1990, and except as provided in
12subsection (d-1), all automatic annual increases payable under
13this Section shall be calculated as a percentage of the total
14annuity payable at the time of the increase, including all
15increases previously granted under this Article.
16    The change made in this subsection by P.A. 85-1008 is
17effective January 26, 1988, and is applicable without regard to
18whether status as an employee terminated before that date.
19    (d-1) Notwithstanding any other provision of this Article,
20for a Tier 1 employee who made the election under subsection
21(a) of Section 15-132.9:
22        (1) The initial increase in retirement annuity under
23    this Section shall occur on the January 1 occurring either
24    on or after the attainment of age 67 or the fifth
25    anniversary of the annuity start date, whichever is
26    earlier.

 

 

HB4045 Engrossed- 115 -LRB100 12674 RPS 26063 b

1        (2) The amount of each automatic annual increase in
2    retirement annuity or survivor annuity occurring on or
3    after the effective date of that election shall be
4    calculated as a percentage of the originally granted
5    retirement annuity or survivor annuity, equal to 3% or
6    one-half the annual unadjusted percentage increase (but
7    not less than zero) in the consumer price index-u for the
8    12 months ending with the September preceding each November
9    1, whichever is less. If the annual unadjusted percentage
10    change in the consumer price index-u for the 12 months
11    ending with the September preceding each November 1 is zero
12    or there is a decrease, then the annuity shall not be
13    increased.
14    For the purposes of this Section, "consumer price index-u"
15means the index published by the Bureau of Labor Statistics of
16the United States Department of Labor that measures the average
17change in prices of goods and services purchased by all urban
18consumers, United States city average, all items, 1982-84 =
19100. The new amount resulting from each annual adjustment shall
20be determined by the Public Pension Division of the Department
21of Insurance and made available to the board of the retirement
22system by November 1 of each year.
23    (d-5) A retirement annuity of a Tier 2 member shall receive
24annual increases on the January 1 occurring either on or after
25the attainment of age 67 or the first anniversary of the
26annuity start date, whichever is later. Each annual increase

 

 

HB4045 Engrossed- 116 -LRB100 12674 RPS 26063 b

1shall be calculated at 3% or one half the annual unadjusted
2percentage increase (but not less than zero) in the consumer
3price index-u for the 12 months ending with the September
4preceding each November 1, whichever is less, of the originally
5granted retirement annuity. If the annual unadjusted
6percentage change in the consumer price index-u for the 12
7months ending with the September preceding each November 1 is
8zero or there is a decrease, then the annuity shall not be
9increased.
10    (e) If, on January 1, 1987, or the date the retirement
11annuity payment period begins, whichever is later, the sum of
12the retirement annuity provided under Rule 1 or Rule 2 of this
13Section and the automatic annual increases provided under the
14preceding subsection or Section 15-136.1, amounts to less than
15the retirement annuity which would be provided by Rule 3, the
16retirement annuity shall be increased as of January 1, 1987, or
17the date the retirement annuity payment period begins,
18whichever is later, to the amount which would be provided by
19Rule 3 of this Section. Such increased amount shall be
20considered as the retirement annuity in determining benefits
21provided under other Sections of this Article. This paragraph
22applies without regard to whether status as an employee
23terminated before the effective date of this amendatory Act of
241987, provided that the annuitant was employed at least
25one-half time during the period on which the final rate of
26earnings was based.

 

 

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1    (f) A participant is entitled to such additional annuity as
2may be provided on an actuarially equivalent basis, by any
3accumulated additional contributions to his or her credit.
4However, the additional contributions made by the participant
5toward the automatic increases in annuity provided under this
6Section shall not be taken into account in determining the
7amount of such additional annuity.
8    (g) If, (1) by law, a function of a governmental unit, as
9defined by Section 20-107 of this Code, is transferred in whole
10or in part to an employer, and (2) a participant transfers
11employment from such governmental unit to such employer within
126 months after the transfer of the function, and (3) the sum of
13(A) the annuity payable to the participant under Rule 1, 2, or
143 of this Section (B) all proportional annuities payable to the
15participant by all other retirement systems covered by Article
1620, and (C) the initial primary insurance amount to which the
17participant is entitled under the Social Security Act, is less
18than the retirement annuity which would have been payable if
19all of the participant's pension credits validated under
20Section 20-109 had been validated under this system, a
21supplemental annuity equal to the difference in such amounts
22shall be payable to the participant.
23    (h) On January 1, 1981, an annuitant who was receiving a
24retirement annuity on or before January 1, 1971 shall have his
25or her retirement annuity then being paid increased $1 per
26month for each year of creditable service. On January 1, 1982,

 

 

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1an annuitant whose retirement annuity began on or before
2January 1, 1977, shall have his or her retirement annuity then
3being paid increased $1 per month for each year of creditable
4service.
5    (i) On January 1, 1987, any annuitant whose retirement
6annuity began on or before January 1, 1977, shall have the
7monthly retirement annuity increased by an amount equal to 8¢
8per year of creditable service times the number of years that
9have elapsed since the annuity began.
10(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
1198-92, eff. 7-16-13.)
 
12    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
13    Sec. 15-155. Employer contributions.
14    (a) The State of Illinois shall make contributions by
15appropriations of amounts which, together with the other
16employer contributions from trust, federal, and other funds,
17employee contributions, income from investments, and other
18income of this System, will be sufficient to meet the cost of
19maintaining and administering the System on a 90% funded basis
20in accordance with actuarial recommendations.
21    The Board shall determine the amount of State contributions
22required for each fiscal year on the basis of the actuarial
23tables and other assumptions adopted by the Board and the
24recommendations of the actuary, using the formula in subsection
25(a-1).

 

 

HB4045 Engrossed- 119 -LRB100 12674 RPS 26063 b

1    (a-1) For State fiscal years 2012 through 2045, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11    For each of State fiscal years 2019 and 2020, the State
12shall make an additional contribution to the System equal to 2%
13of the total payroll of each employee who is deemed to have
14elected the benefits under Section 1-161 or who has made the
15election under subsection (c) of Section 1-161.
16    For State fiscal years 1996 through 2005, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19so that by State fiscal year 2011, the State is contributing at
20the rate required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2006 is
23$166,641,900.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2007 is
26$252,064,100.

 

 

HB4045 Engrossed- 120 -LRB100 12674 RPS 26063 b

1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$702,514,000 and shall be made from the State Pensions Fund and
10proceeds of bonds sold in fiscal year 2010 pursuant to Section
117.2 of the General Obligation Bond Act, less (i) the pro rata
12share of bond sale expenses determined by the System's share of
13total bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2010, (iii) any reduction in bond
15proceeds due to the issuance of discounted bonds, if
16applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to Section 15-165 and shall be made from the State
21Pensions Fund and proceeds of bonds sold in fiscal year 2011
22pursuant to Section 7.2 of the General Obligation Bond Act,
23less (i) the pro rata share of bond sale expenses determined by
24the System's share of total bond proceeds, (ii) any amounts
25received from the General Revenue Fund in fiscal year 2011, and
26(iii) any reduction in bond proceeds due to the issuance of

 

 

HB4045 Engrossed- 121 -LRB100 12674 RPS 26063 b

1discounted bonds, if applicable.
2    Beginning in State fiscal year 2046, the minimum State
3contribution for each fiscal year shall be the amount needed to
4maintain the total assets of the System at 90% of the total
5actuarial liabilities of the System.
6    Amounts received by the System pursuant to Section 25 of
7the Budget Stabilization Act or Section 8.12 of the State
8Finance Act in any fiscal year do not reduce and do not
9constitute payment of any portion of the minimum State
10contribution required under this Article in that fiscal year.
11Such amounts shall not reduce, and shall not be included in the
12calculation of, the required State contributions under this
13Article in any future year until the System has reached a
14funding ratio of at least 90%. A reference in this Article to
15the "required State contribution" or any substantially similar
16term does not include or apply to any amounts payable to the
17System under Section 25 of the Budget Stabilization Act.
18    Notwithstanding any other provision of this Section, the
19required State contribution for State fiscal year 2005 and for
20fiscal year 2008 and each fiscal year thereafter, as calculated
21under this Section and certified under Section 15-165, shall
22not exceed an amount equal to (i) the amount of the required
23State contribution that would have been calculated under this
24Section for that fiscal year if the System had not received any
25payments under subsection (d) of Section 7.2 of the General
26Obligation Bond Act, minus (ii) the portion of the State's

 

 

HB4045 Engrossed- 122 -LRB100 12674 RPS 26063 b

1total debt service payments for that fiscal year on the bonds
2issued in fiscal year 2003 for the purposes of that Section
37.2, as determined and certified by the Comptroller, that is
4the same as the System's portion of the total moneys
5distributed under subsection (d) of Section 7.2 of the General
6Obligation Bond Act. In determining this maximum for State
7fiscal years 2008 through 2010, however, the amount referred to
8in item (i) shall be increased, as a percentage of the
9applicable employee payroll, in equal increments calculated
10from the sum of the required State contribution for State
11fiscal year 2007 plus the applicable portion of the State's
12total debt service payments for fiscal year 2007 on the bonds
13issued in fiscal year 2003 for the purposes of Section 7.2 of
14the General Obligation Bond Act, so that, by State fiscal year
152011, the State is contributing at the rate otherwise required
16under this Section.
17    (a-2) Beginning in fiscal year 2019, each employer under
18this Article shall pay to the System a required contribution
19determined as a percentage of projected payroll and sufficient
20to produce an annual amount equal to:
21        (i) for each of fiscal year 2019 and 2020, the defined
22    benefit normal cost of the defined benefit plan, less the
23    employee contribution, for each employee of that employer
24    who has elected or who is deemed to have elected the
25    benefits under Section 1-161 or who has made the election
26    under subsection (c) of Section 1-161; for fiscal year 2021

 

 

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1    and each fiscal year thereafter, the defined benefit normal
2    cost of the defined benefit plan, less the employee
3    contribution, plus 2%, for each employee of that employer
4    who has elected or who is deemed to have elected the
5    benefits under Section 1-161 or who has made the election
6    under subsection (c) of Section 1-161; plus
7        (ii) the amount required for that fiscal year to
8    amortize any unfunded actuarial accrued liability
9    associated with the present value of liabilities
10    attributable to the employer's account under Section
11    15-155.2, determined as a level percentage of payroll over
12    a 30-year rolling amortization period.
13    In determining contributions required under item (i) of
14this subsection, the System shall determine an aggregate rate
15for all employers, expressed as a percentage of projected
16payroll.
17    In determining the contributions required under item (ii)
18of this subsection, the amount shall be computed by the System
19on the basis of the actuarial assumptions and tables used in
20the most recent actuarial valuation of the System that is
21available at the time of the computation.
22    The contributions required under this subsection (a-2)
23shall be paid by an employer concurrently with that employer's
24payroll payment period. The State, as the actual employer of an
25employee, shall make the required contributions under this
26subsection.

 

 

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1    As used in this subsection, "academic year" means the
212-month period beginning September 1.
3    (b) If an employee is paid from trust or federal funds, the
4employer shall pay to the Board contributions from those funds
5which are sufficient to cover the accruing normal costs on
6behalf of the employee. However, universities having employees
7who are compensated out of local auxiliary funds, income funds,
8or service enterprise funds are not required to pay such
9contributions on behalf of those employees. The local auxiliary
10funds, income funds, and service enterprise funds of
11universities shall not be considered trust funds for the
12purpose of this Article, but funds of alumni associations,
13foundations, and athletic associations which are affiliated
14with the universities included as employers under this Article
15and other employers which do not receive State appropriations
16are considered to be trust funds for the purpose of this
17Article.
18    (b-1) The City of Urbana and the City of Champaign shall
19each make employer contributions to this System for their
20respective firefighter employees who participate in this
21System pursuant to subsection (h) of Section 15-107. The rate
22of contributions to be made by those municipalities shall be
23determined annually by the Board on the basis of the actuarial
24assumptions adopted by the Board and the recommendations of the
25actuary, and shall be expressed as a percentage of salary for
26each such employee. The Board shall certify the rate to the

 

 

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1affected municipalities as soon as may be practical. The
2employer contributions required under this subsection shall be
3remitted by the municipality to the System at the same time and
4in the same manner as employee contributions.
5    (c) Through State fiscal year 1995: The total employer
6contribution shall be apportioned among the various funds of
7the State and other employers, whether trust, federal, or other
8funds, in accordance with actuarial procedures approved by the
9Board. State of Illinois contributions for employers receiving
10State appropriations for personal services shall be payable
11from appropriations made to the employers or to the System. The
12contributions for Class I community colleges covering earnings
13other than those paid from trust and federal funds, shall be
14payable solely from appropriations to the Illinois Community
15College Board or the System for employer contributions.
16    (d) Beginning in State fiscal year 1996, the required State
17contributions to the System shall be appropriated directly to
18the System and shall be payable through vouchers issued in
19accordance with subsection (c) of Section 15-165, except as
20provided in subsection (g).
21    (e) The State Comptroller shall draw warrants payable to
22the System upon proper certification by the System or by the
23employer in accordance with the appropriation laws and this
24Code.
25    (f) Normal costs under this Section means liability for
26pensions and other benefits which accrues to the System because

 

 

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1of the credits earned for service rendered by the participants
2during the fiscal year and expenses of administering the
3System, but shall not include the principal of or any
4redemption premium or interest on any bonds issued by the Board
5or any expenses incurred or deposits required in connection
6therewith.
7    (g) If the amount of a participant's earnings for any
8academic year used to determine the final rate of earnings,
9determined on a full-time equivalent basis, exceeds the amount
10of his or her earnings with the same employer for the previous
11academic year, determined on a full-time equivalent basis, by
12more than 6%, the participant's employer shall pay to the
13System, in addition to all other payments required under this
14Section and in accordance with guidelines established by the
15System, the present value of the increase in benefits resulting
16from the portion of the increase in earnings that is in excess
17of 6%. This present value shall be computed by the System on
18the basis of the actuarial assumptions and tables used in the
19most recent actuarial valuation of the System that is available
20at the time of the computation. The System may require the
21employer to provide any pertinent information or
22documentation.
23    Whenever it determines that a payment is or may be required
24under this subsection (g), the System shall calculate the
25amount of the payment and bill the employer for that amount.
26The bill shall specify the calculations used to determine the

 

 

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1amount due. If the employer disputes the amount of the bill, it
2may, within 30 days after receipt of the bill, apply to the
3System in writing for a recalculation. The application must
4specify in detail the grounds of the dispute and, if the
5employer asserts that the calculation is subject to subsection
6(h) or (i) of this Section, must include an affidavit setting
7forth and attesting to all facts within the employer's
8knowledge that are pertinent to the applicability of subsection
9(h) or (i). Upon receiving a timely application for
10recalculation, the System shall review the application and, if
11appropriate, recalculate the amount due.
12    The employer contributions required under this subsection
13(g) may be paid in the form of a lump sum within 90 days after
14receipt of the bill. If the employer contributions are not paid
15within 90 days after receipt of the bill, then interest will be
16charged at a rate equal to the System's annual actuarially
17assumed rate of return on investment compounded annually from
18the 91st day after receipt of the bill. Payments must be
19concluded within 3 years after the employer's receipt of the
20bill.
21    When assessing payment for any amount due under this
22subsection (g), the System shall include earnings, to the
23extent not established by a participant under Section 15-113.11
24or 15-113.12, that would have been paid to the participant had
25the participant not taken (i) periods of voluntary or
26involuntary furlough occurring on or after July 1, 2015 and on

 

 

HB4045 Engrossed- 128 -LRB100 12674 RPS 26063 b

1or before June 30, 2017 or (ii) periods of voluntary pay
2reduction in lieu of furlough occurring on or after July 1,
32015 and on or before June 30, 2017. Determining earnings that
4would have been paid to a participant had the participant not
5taken periods of voluntary or involuntary furlough or periods
6of voluntary pay reduction shall be the responsibility of the
7employer, and shall be reported in a manner prescribed by the
8System.
9    (h) This subsection (h) applies only to payments made or
10salary increases given on or after June 1, 2005 but before July
111, 2011. The changes made by Public Act 94-1057 shall not
12require the System to refund any payments received before July
1331, 2006 (the effective date of Public Act 94-1057).
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude earnings increases paid to
16participants under contracts or collective bargaining
17agreements entered into, amended, or renewed before June 1,
182005.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases paid to a
21participant at a time when the participant is 10 or more years
22from retirement eligibility under Section 15-135.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases resulting from
25overload work, including a contract for summer teaching, or
26overtime when the employer has certified to the System, and the

 

 

HB4045 Engrossed- 129 -LRB100 12674 RPS 26063 b

1System has approved the certification, that: (i) in the case of
2overloads (A) the overload work is for the sole purpose of
3academic instruction in excess of the standard number of
4instruction hours for a full-time employee occurring during the
5academic year that the overload is paid and (B) the earnings
6increases are equal to or less than the rate of pay for
7academic instruction computed using the participant's current
8salary rate and work schedule; and (ii) in the case of
9overtime, the overtime was necessary for the educational
10mission.
11    When assessing payment for any amount due under subsection
12(g), the System shall exclude any earnings increase resulting
13from (i) a promotion for which the employee moves from one
14classification to a higher classification under the State
15Universities Civil Service System, (ii) a promotion in academic
16rank for a tenured or tenure-track faculty position, or (iii) a
17promotion that the Illinois Community College Board has
18recommended in accordance with subsection (k) of this Section.
19These earnings increases shall be excluded only if the
20promotion is to a position that has existed and been filled by
21a member for no less than one complete academic year and the
22earnings increase as a result of the promotion is an increase
23that results in an amount no greater than the average salary
24paid for other similar positions.
25    (i) When assessing payment for any amount due under
26subsection (g), the System shall exclude any salary increase

 

 

HB4045 Engrossed- 130 -LRB100 12674 RPS 26063 b

1described in subsection (h) of this Section given on or after
2July 1, 2011 but before July 1, 2014 under a contract or
3collective bargaining agreement entered into, amended, or
4renewed on or after June 1, 2005 but before July 1, 2011.
5Notwithstanding any other provision of this Section, any
6payments made or salary increases given after June 30, 2014
7shall be used in assessing payment for any amount due under
8subsection (g) of this Section.
9    (j) The System shall prepare a report and file copies of
10the report with the Governor and the General Assembly by
11January 1, 2007 that contains all of the following information:
12        (1) The number of recalculations required by the
13    changes made to this Section by Public Act 94-1057 for each
14    employer.
15        (2) The dollar amount by which each employer's
16    contribution to the System was changed due to
17    recalculations required by Public Act 94-1057.
18        (3) The total amount the System received from each
19    employer as a result of the changes made to this Section by
20    Public Act 94-4.
21        (4) The increase in the required State contribution
22    resulting from the changes made to this Section by Public
23    Act 94-1057.
24    (k) The Illinois Community College Board shall adopt rules
25for recommending lists of promotional positions submitted to
26the Board by community colleges and for reviewing the

 

 

HB4045 Engrossed- 131 -LRB100 12674 RPS 26063 b

1promotional lists on an annual basis. When recommending
2promotional lists, the Board shall consider the similarity of
3the positions submitted to those positions recognized for State
4universities by the State Universities Civil Service System.
5The Illinois Community College Board shall file a copy of its
6findings with the System. The System shall consider the
7findings of the Illinois Community College Board when making
8determinations under this Section. The System shall not exclude
9any earnings increases resulting from a promotion when the
10promotion was not submitted by a community college. Nothing in
11this subsection (k) shall require any community college to
12submit any information to the Community College Board.
13    (l) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (m) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

HB4045 Engrossed- 132 -LRB100 12674 RPS 26063 b

1to the system's actuarially assumed rate of return.
2(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
399-897, eff. 1-1-17.)
 
4    (40 ILCS 5/15-155.2 new)
5    Sec. 15-155.2. Individual employer accounts.
6    (a) The System shall create and maintain an individual
7account for each employer for the purposes of determining
8employer contributions under subsection (a-2) of Section
915-155. Each employer's account shall be notionally charged
10with the liabilities attributable to that employer and credited
11with the assets attributable to that employer.
12    (b) Beginning in fiscal year 2019, the System shall assign
13notional liabilities to each employer's account, equal to the
14amount of employer contributions required to be made by the
15employer pursuant to items (i) and (ii) of subsection (a-2) of
16Section 15-155, plus any unfunded actuarial accrued liability
17associated with the defined benefits attributable to the
18employer's employees who first became participants on or after
19July 1, 2018 and the employer's employees who made the election
20under subsection (c-5) of Section 1-161.
21    (c) Beginning in fiscal year 2019, the System shall assign
22notional assets to each employer's account equal to the amounts
23of employer contributions made pursuant to items (i) and (ii)
24of subsection (a-2) of Section 15-155.
 

 

 

HB4045 Engrossed- 133 -LRB100 12674 RPS 26063 b

1    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
2    Sec. 15-157. Employee Contributions.
3    (a) Each participating employee shall make contributions
4towards the retirement benefits payable under the retirement
5program applicable to the employee from each payment of
6earnings applicable to employment under this system on and
7after the date of becoming a participant as follows: Prior to
8September 1, 1949, 3 1/2% of earnings; from September 1, 1949
9to August 31, 1955, 5%; from September 1, 1955 to August 31,
101969, 6%; from September 1, 1969, 6 1/2%. These contributions
11are to be considered as normal contributions for purposes of
12this Article.
13    Each participant who is a police officer or firefighter
14shall make normal contributions of 8% of each payment of
15earnings applicable to employment as a police officer or
16firefighter under this system on or after September 1, 1981,
17unless he or she files with the board within 60 days after the
18effective date of this amendatory Act of 1991 or 60 days after
19the board receives notice that he or she is employed as a
20police officer or firefighter, whichever is later, a written
21notice waiving the retirement formula provided by Rule 4 of
22Section 15-136. This waiver shall be irrevocable. If a
23participant had met the conditions set forth in Section
2415-132.1 prior to the effective date of this amendatory Act of
251991 but failed to make the additional normal contributions
26required by this paragraph, he or she may elect to pay the

 

 

HB4045 Engrossed- 134 -LRB100 12674 RPS 26063 b

1additional contributions plus compound interest at the
2effective rate. If such payment is received by the board, the
3service shall be considered as police officer service in
4calculating the retirement annuity under Rule 4 of Section
515-136. While performing service described in clause (i) or
6(ii) of Rule 4 of Section 15-136, a participating employee
7shall be deemed to be employed as a firefighter for the purpose
8of determining the rate of employee contributions under this
9Section.
10    (b) Starting September 1, 1969, each participating
11employee shall make additional contributions of 1/2 of 1% of
12earnings to finance a portion of the cost of the annual
13increases in retirement annuity provided under Section 15-136,
14except that with respect to participants in the self-managed
15plan this additional contribution shall be used to finance the
16benefits obtained under that retirement program. Beginning on
17the effective date of the Tier 1 employee's election under
18subsection (a) of Section 15-132.9, each Tier 1 employee who
19made the election under subsection (a) of Section 15-132.9 is
20no longer required to make contributions under this subsection.
21    (c) Except as provided in subsection (c-5), in In addition
22to the amounts described in subsections (a) and (b) of this
23Section, each participating employee shall make contributions
24of 1% of earnings applicable under this system on and after
25August 1, 1959. The contributions made under this subsection
26(c) shall be considered as survivor's insurance contributions

 

 

HB4045 Engrossed- 135 -LRB100 12674 RPS 26063 b

1for purposes of this Article if the employee is covered under
2the traditional benefit package, and such contributions shall
3be considered as additional contributions for purposes of this
4Article if the employee is participating in the self-managed
5plan or has elected to participate in the portable benefit
6package and has completed the applicable one-year waiting
7period. Contributions in excess of $80 during any fiscal year
8beginning before August 31, 1969 and in excess of $120 during
9any fiscal year thereafter until September 1, 1971 shall be
10considered as additional contributions for purposes of this
11Article.
12    (c-5) As adequate and legal consideration provided under
13this amendatory Act of the 100th General Assembly for making an
14election under subsection (a) of Section 15-132.9, beginning on
15the effective date of the Tier 1 employee's election under
16subsection (a) of Section 15-132.9, in lieu of the
17contributions otherwise required under subsection (c), each
18Tier 1 employee who made the election under subsection (a) of
19Section 15-132.9 shall make contributions of 0.7% of earnings
20applicable under this System and each Tier 1 employee who is a
21police officer or firefighter who makes normal contributions of
228% of each payment of earnings applicable to employment as a
23police officer or firefighter under this System and who made
24the election under subsection (a) of Section 15-132.9 shall
25make contributions of 0.55% of earnings applicable under this
26System. The contributions made under this subsection (c-5)

 

 

HB4045 Engrossed- 136 -LRB100 12674 RPS 26063 b

1shall be considered as survivor's insurance contributions for
2purposes of this Article and such contributions shall be
3considered as additional contributions for purposes of this
4Article if the employee has elected to participate in the
5portable benefit package and has completed the applicable
6one-year waiting period.
7    (d) If the board by board rule so permits and subject to
8such conditions and limitations as may be specified in its
9rules, a participant may make other additional contributions of
10such percentage of earnings or amounts as the participant shall
11elect in a written notice thereof received by the board.
12    (e) That fraction of a participant's total accumulated
13normal contributions, the numerator of which is equal to the
14number of years of service in excess of that which is required
15to qualify for the maximum retirement annuity, and the
16denominator of which is equal to the total service of the
17participant, shall be considered as accumulated additional
18contributions. The determination of the applicable maximum
19annuity and the adjustment in contributions required by this
20provision shall be made as of the date of the participant's
21retirement.
22    (f) Notwithstanding the foregoing, a participating
23employee shall not be required to make contributions under this
24Section after the date upon which continuance of such
25contributions would otherwise cause his or her retirement
26annuity to exceed the maximum retirement annuity as specified

 

 

HB4045 Engrossed- 137 -LRB100 12674 RPS 26063 b

1in clause (1) of subsection (c) of Section 15-136.
2    (g) A participant may make contributions for the purchase
3of service credit under this Article; however, only a
4participating employee may make optional contributions under
5subsection (b) of Section 15-157.1 of this Article.
6    (h) A Tier 2 member shall not make contributions on
7earnings that exceed the limitation as prescribed under
8subsection (b) of Section 15-111 of this Article.
9(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
10    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
11    (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13    Sec. 15-165. To certify amounts and submit vouchers.
14    (a) The Board shall certify to the Governor on or before
15November 15 of each year until November 15, 2011 the
16appropriation required from State funds for the purposes of
17this System for the following fiscal year. The certification
18under this subsection (a) shall include a copy of the actuarial
19recommendations upon which it is based and shall specifically
20identify the System's projected State normal cost for that
21fiscal year and the projected State cost for the self-managed
22plan for that fiscal year.
23    On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking

 

 

HB4045 Engrossed- 138 -LRB100 12674 RPS 26063 b

1into account the amounts appropriated to and received by the
2System under subsection (d) of Section 7.2 of the General
3Obligation Bond Act.
4    On or before July 1, 2005, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2006, taking
7into account the changes in required State contributions made
8by this amendatory Act of the 94th General Assembly.
9    On or before April 1, 2011, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2011, applying
12the changes made by Public Act 96-889 to the System's assets
13and liabilities as of June 30, 2009 as though Public Act 96-889
14was approved on that date.
15    (a-5) On or before November 1 of each year, beginning
16November 1, 2012, the Board shall submit to the State Actuary,
17the Governor, and the General Assembly a proposed certification
18of the amount of the required State contribution to the System
19for the next fiscal year, along with all of the actuarial
20assumptions, calculations, and data upon which that proposed
21certification is based. On or before January 1 of each year,
22beginning January 1, 2013, the State Actuary shall issue a
23preliminary report concerning the proposed certification and
24identifying, if necessary, recommended changes in actuarial
25assumptions that the Board must consider before finalizing its
26certification of the required State contributions. On or before

 

 

HB4045 Engrossed- 139 -LRB100 12674 RPS 26063 b

1January 15, 2013 and each January 15 thereafter, the Board
2shall certify to the Governor and the General Assembly the
3amount of the required State contribution for the next fiscal
4year. The Board's certification must note, in a written
5response to the State Actuary, any deviations from the State
6Actuary's recommended changes, the reason or reasons for not
7following the State Actuary's recommended changes, and the
8fiscal impact of not following the State Actuary's recommended
9changes on the required State contribution.
10    If necessary the Board shall recalculate and recertify to
11the Governor the amount of the required State contribution to
12the System for State fiscal year 2019, taking into
13consideration the changes made by this amendatory Act of the
14100th General Assembly.
15    (b) The Board shall certify to the State Comptroller or
16employer, as the case may be, from time to time, by its
17chairperson and secretary, with its seal attached, the amounts
18payable to the System from the various funds.
19    (c) Beginning in State fiscal year 1996, on or as soon as
20possible after the 15th day of each month the Board shall
21submit vouchers for payment of State contributions to the
22System, in a total monthly amount of one-twelfth of the
23required annual State contribution certified under subsection
24(a). From the effective date of this amendatory Act of the 93rd
25General Assembly through June 30, 2004, the Board shall not
26submit vouchers for the remainder of fiscal year 2004 in excess

 

 

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1of the fiscal year 2004 certified contribution amount
2determined under this Section after taking into consideration
3the transfer to the System under subsection (b) of Section
46z-61 of the State Finance Act. These vouchers shall be paid by
5the State Comptroller and Treasurer by warrants drawn on the
6funds appropriated to the System for that fiscal year.
7    If in any month the amount remaining unexpended from all
8other appropriations to the System for the applicable fiscal
9year (including the appropriations to the System under Section
108.12 of the State Finance Act and Section 1 of the State
11Pension Funds Continuing Appropriation Act) is less than the
12amount lawfully vouchered under this Section, the difference
13shall be paid from the General Revenue Fund under the
14continuing appropriation authority provided in Section 1.1 of
15the State Pension Funds Continuing Appropriation Act.
16    (d) So long as the payments received are the full amount
17lawfully vouchered under this Section, payments received by the
18System under this Section shall be applied first toward the
19employer contribution to the self-managed plan established
20under Section 15-158.2. Payments shall be applied second toward
21the employer's portion of the normal costs of the System, as
22defined in subsection (f) of Section 15-155. The balance shall
23be applied toward the unfunded actuarial liabilities of the
24System.
25    (e) In the event that the System does not receive, as a
26result of legislative enactment or otherwise, payments

 

 

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1sufficient to fully fund the employer contribution to the
2self-managed plan established under Section 15-158.2 and to
3fully fund that portion of the employer's portion of the normal
4costs of the System, as calculated in accordance with Section
515-155(a-1), then any payments received shall be applied
6proportionately to the optional retirement program established
7under Section 15-158.2 and to the employer's portion of the
8normal costs of the System, as calculated in accordance with
9Section 15-155(a-1).
10(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
 
11    (40 ILCS 5/15-185.5 new)
12    Sec. 15-185.5. Accelerated pension benefit payment.
13    (a) As used in this Section:
14    "Eligible participant" means a participant who:
15        (1) is no longer a participating employee;
16        (2) has accrued sufficient service credit to be
17    eligible to receive a retirement annuity under this
18    Article;
19        (3) has not received any retirement annuity under this
20    Article;
21        (4) is not a party to a pending divorce proceeding and
22    does not have a QILDRO in effect against him or her under
23    this Article; and
24        (5) is not a participant in the self-managed plan under
25    Section 15-158.2.

 

 

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1    "Pension benefit" means the benefits under this Article, or
2Article 1 as it relates to those benefits, including any
3anticipated annual increases, that an eligible participant is
4entitled to upon attainment of the applicable retirement age.
5"Pension benefit" also includes applicable survivor's or
6disability benefits.
7    (b) If approved by resolution of the Board in any year, the
8System shall calculate, using actuarial tables and other
9assumptions adopted by the Board, the net present value of
10pension benefits for each eligible person and shall offer each
11eligible person the opportunity to irrevocably elect to receive
12an amount determined by the System to be equal to 70% of the
13net present value of his or her pension benefits in lieu of
14receiving any pension benefit. The offer shall specify the
15dollar amount that the eligible person will receive if he or
16she so elects and shall expire when a subsequent offer is made
17to an eligible person. The System shall make a good faith
18effort to contact every eligible person to notify him or her of
19the election and of the amount of the accelerated pension
20benefit payment.
21    During a period of 3 months determined by the Board, an
22eligible person may irrevocably elect to receive an accelerated
23pension benefit payment in the amount that the System offers
24under this subsection in lieu of receiving any pension benefit.
25A person who elects to receive an accelerated pension benefit
26payment under this Section may not elect to proceed under the

 

 

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1Retirement Systems Reciprocal Act with respect to service under
2this Article. The accelerated pension benefit payment shall be
3paid by the System.
4    (c) Upon acceptance of an accelerated pension benefit
5payment under this Section, the participant forfeits all
6accrued rights and credits in the System and no other benefit
7shall be paid under this Article based on those terminated
8credits and creditable service, including any retirement,
9survivor, or other benefit; except that to the extent that
10participation, benefits, or premiums under the State Employees
11Group Insurance Act of 1971 are based on the amount of service
12credit, the terminated service credit shall be used for that
13purpose.
14    (d) If a person who has received an accelerated pension
15benefit payment under this Section returns to active service
16under this Article, then:
17        (1) Any benefits under the System earned as a result of
18    that return to active service shall be based solely on the
19    person's credits and creditable service arising from the
20    return to active service.
21        (2) The accelerated pension benefit payment may not be
22    repaid to the System, and the terminated credits and
23    creditable service may not under any circumstances be
24    reinstated.
25    (e) As a condition of receiving an accelerated pension
26benefit payment, an eligible participant must have another

 

 

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1retirement plan or account qualified under the Internal Revenue
2Code of 1986, as amended, for the accelerated pension benefit
3payment to be rolled into. The accelerated pension benefit
4payment under this Section may be subject to withholding or
5payment of applicable taxes, but to the extent permitted by
6federal law, a person who accepts an accelerated pension
7benefit payment under this Section must direct the System to
8pay all of that payment as a rollover into another retirement
9plan or account qualified under the Internal Revenue Code of
101986, as amended.
11    (f) The Board shall adopt any rules necessary to implement
12this Section.
13    (g) No provision of this Section shall be interpreted in a
14way that would cause the applicable System to cease to be a
15qualified plan under the Internal Revenue Code of 1986.
 
16    (40 ILCS 5/15-198)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 15-198. Application and expiration of new benefit
20increases.
21    (a) As used in this Section, "new benefit increase" means
22an increase in the amount of any benefit provided under this
23Article, or an expansion of the conditions of eligibility for
24any benefit under this Article, that results from an amendment
25to this Code that takes effect after the effective date of this

 

 

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1amendatory Act of the 94th General Assembly. "New benefit
2increase", however, does not include any benefit increase
3resulting from the changes made to this Article by this
4amendatory Act of the 100th General Assembly.
5    (b) Notwithstanding any other provision of this Code or any
6subsequent amendment to this Code, every new benefit increase
7is subject to this Section and shall be deemed to be granted
8only in conformance with and contingent upon compliance with
9the provisions of this Section.
10    (c) The Public Act enacting a new benefit increase must
11identify and provide for payment to the System of additional
12funding at least sufficient to fund the resulting annual
13increase in cost to the System as it accrues.
14    Every new benefit increase is contingent upon the General
15Assembly providing the additional funding required under this
16subsection. The Commission on Government Forecasting and
17Accountability shall analyze whether adequate additional
18funding has been provided for the new benefit increase and
19shall report its analysis to the Public Pension Division of the
20Department of Insurance Financial and Professional Regulation.
21A new benefit increase created by a Public Act that does not
22include the additional funding required under this subsection
23is null and void. If the Public Pension Division determines
24that the additional funding provided for a new benefit increase
25under this subsection is or has become inadequate, it may so
26certify to the Governor and the State Comptroller and, in the

 

 

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1absence of corrective action by the General Assembly, the new
2benefit increase shall expire at the end of the fiscal year in
3which the certification is made.
4    (d) Every new benefit increase shall expire 5 years after
5its effective date or on such earlier date as may be specified
6in the language enacting the new benefit increase or provided
7under subsection (c). This does not prevent the General
8Assembly from extending or re-creating a new benefit increase
9by law.
10    (e) Except as otherwise provided in the language creating
11the new benefit increase, a new benefit increase that expires
12under this Section continues to apply to persons who applied
13and qualified for the affected benefit while the new benefit
14increase was in effect and to the affected beneficiaries and
15alternate payees of such persons, but does not apply to any
16other person, including without limitation a person who
17continues in service after the expiration date and did not
18apply and qualify for the affected benefit while the new
19benefit increase was in effect.
20(Source: P.A. 94-4, eff. 6-1-05.)
 
21    (40 ILCS 5/15-200.1 new)
22    Sec. 15-200.1. Defined contribution plan.
23    (a) By July 1, 2018, the System shall prepare and implement
24a voluntary defined contribution plan for up to 5% of eligible
25Tier 1 employees. The System shall determine the 5% cap by the

 

 

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1number of Tier 1 employees on the effective date of this
2Section. The defined contribution plan developed under this
3Section shall be a plan that aggregates employer and employee
4contributions in individual participant accounts which, after
5meeting any other requirements, are used for payouts after
6retirement in accordance with this Section and any other
7applicable laws.
8    As used in this Section, "defined benefit plan" means the
9retirement plan available under this Article to Tier 1
10employees who have not made the election authorized under this
11Section.
12        (1) Under the defined contribution plan, a Tier 1
13    employee of this System could elect to cease accruing
14    benefits in the defined benefit plan under this Article and
15    begin accruing benefits for future service in the defined
16    contribution plan. Service credit under the defined
17    contribution plan may be used for determining retirement
18    eligibility under the defined benefit plan. A Tier 1
19    employee who elects to cease accruing benefits in his or
20    her defined benefit plan shall be prohibited from
21    purchasing service credit on or after the date of his or
22    her election. A Tier 1 employee making the irrevocable
23    election provided under this Section shall not receive
24    interest accruals to his or her Rule 2 benefit on or after
25    the date of his or her election.
26        (2) Participants in the defined contribution plan

 

 

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1    shall pay employee contributions at the same rate as other
2    participants under this Article as determined by the
3    System.
4        (3) State contributions shall be paid into the accounts
5    of all participants in the defined contribution plan at a
6    uniform rate, expressed as a percentage of earnings and
7    determined for each year. This rate shall be no higher than
8    the employer's normal cost for Tier 1 employees in the
9    defined benefit plan for that year, as determined by the
10    System and expressed as a percentage of earnings, and shall
11    be no lower than 3% of earnings. The State shall adjust
12    this rate annually.
13        (4) The defined contribution plan shall require 5 years
14    of participation in the defined contribution plan before
15    vesting in State contributions. If the participant fails to
16    vest in them, the State contributions, and the earnings
17    thereon, shall be forfeited.
18        (5) The defined contribution plan may provide for
19    participants in the plan to be eligible for the defined
20    disability benefits available to other participants under
21    this Article. If it does, the System shall reduce the
22    employee contributions credited to the member's defined
23    contribution plan account by an amount determined by the
24    System to cover the cost of offering such benefits.
25        (6) The defined contribution plan shall provide a
26    variety of options for investments. These options shall

 

 

HB4045 Engrossed- 149 -LRB100 12674 RPS 26063 b

1    include investments handled by the System as well as
2    private sector investment options.
3        (7) The defined contribution plan shall provide a
4    variety of options for payouts to retirees and their
5    survivors.
6        (8) To the extent authorized under federal law and as
7    authorized by the System, the plan shall allow former
8    participants in the plan to transfer or roll over employee
9    and vested State contributions, and the earnings thereon,
10    into other qualified retirement plans.
11        (9) The System shall reduce the employee contributions
12    credited to the member's defined contribution plan account
13    by an amount determined by the System to cover the cost of
14    offering these benefits and any applicable administrative
15    fees.
16    (b) Only persons who are Tier 1 employees of the System on
17the effective date of this Section are eligible to participate
18in the defined contribution plan. Participation in the defined
19contribution plan shall be limited to the first 5% of eligible
20persons who elect to participate. The election to participate
21in the defined contribution plan is voluntary and irrevocable.
22    (c) An eligible Tier 1 employee may irrevocably elect to
23participate in the defined contribution plan by filing with the
24System a written application to participate that is received by
25the System prior to its determination that 5% of eligible
26persons have elected to participate in the defined contribution

 

 

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1plan.
2    When the System first determines that 5% of eligible
3persons have elected to participate in the defined contribution
4plan, the System shall provide notice to previously eligible
5employees that the plan is no longer available and shall cease
6accepting applications to participate.
7    (d) The System shall make a good faith effort to contact
8each Tier 1 employee who is eligible to participate in the
9defined contribution plan. Such correspondence shall describe
10the option to join the defined contribution plan to each of
11these employees. If the employee is not responsive to other
12means of contact, it is sufficient for the System to publish
13the details of the option on its website.
14    Upon request for further information describing the
15option, the System shall provide employees with information
16from the System before exercising the option to join the plan,
17including information on the impact to their vested benefits or
18non-vested service. The individual consultation shall include
19projections of the member's defined benefits at retirement or
20earlier termination of service and the value of the member's
21account at retirement or earlier termination of service. The
22System shall not provide advice or counseling with respect to
23whether the employee should exercise the option. The System
24shall inform Tier 1 employees who are eligible to participate
25in the defined contribution plan that they may also wish to
26obtain information and counsel relating to their option from

 

 

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1any other available source, including, but not limited to,
2labor organizations, private counsel, and financial advisors.
3    (e) In no event shall the System, its staff, its authorized
4representatives, or the Board be liable for any information
5given to an employee under this Section. The System may
6coordinate with other retirement systems administering a
7defined contribution plan in accordance with this amendatory
8Act of the 100th General Assembly to provide information
9concerning the impact of the option set forth in this Section.
10    (f) Notwithstanding any other provision of this Section, no
11person shall begin participating in the defined contribution
12plan until it has attained qualified plan status and received
13all necessary approvals from the U.S. Internal Revenue Service.
14    (g) The System shall report on its progress under this
15Section, including the available details of the defined
16contribution plan and the System's plans for informing eligible
17Tier 1 employees about the plan, to the Governor and the
18General Assembly.
19    (h) If a Tier 1 employee has not made an election under
20Section 15-134.5 of this Code, then the plan prescribed under
21this Section shall not apply to that Tier 1 employee and that
22Tier 1 employee shall remain eligible to make the election
23prescribed under Section 15-134.5.
24    (i) The intent of this amendatory Act of the 100th General
25Assembly is to ensure that the State's normal cost of
26participation in the defined contribution plan is similar, and

 

 

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1if possible equal, to the State's normal cost of participation
2in the defined benefit plan, unless a lower State's normal cost
3is necessary to ensure cost neutrality.
 
4    (40 ILCS 5/15-201.1 new)
5    Sec. 15-201.1. Defined contribution plan; termination. If
6the defined contribution plan is terminated or becomes
7inoperative pursuant to law, then each participant in the plan
8shall automatically be deemed to have been a contributing Tier
91 employee participating in the System's defined benefit plan
10during the time in which he or she participated in the defined
11contribution plan, and for that purpose the System shall be
12entitled to recover the amounts in the participant's defined
13contribution accounts.
 
14    (40 ILCS 5/16-107.1 new)
15    Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
16teacher under this Article who first became a member or
17participant before January 1, 2011 under any reciprocal
18retirement system or pension fund established under this Code
19other than a retirement system or pension fund established
20under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
21the purposes of the election under Section 16-122.9, "Tier 1
22employee" does not include a teacher under this Article who
23would qualify as a Tier 1 employee but who has made an
24irrevocable election on or before June 1, 2017 to retire from

 

 

HB4045 Engrossed- 153 -LRB100 12674 RPS 26063 b

1service pursuant to the terms of an employment contract or a
2collective bargaining agreement in effect on June 1, 2017,
3excluding any extension, amendment, or renewal of that
4agreement after that date, and has notified the System of that
5election.
 
6    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 16-121. Salary. "Salary": The actual compensation
10received by a teacher during any school year and recognized by
11the system in accordance with rules of the board. For purposes
12of this Section, "school year" includes the regular school term
13plus any additional period for which a teacher is compensated
14and such compensation is recognized by the rules of the board.
15    Notwithstanding any other provision of this Section,
16"salary" does not include any consideration payment made to a
17Tier 1 employee.
18(Source: P.A. 84-1028.)
 
19    (40 ILCS 5/16-122.9 new)
20    Sec. 16-122.9. Election by Tier 1 employees.
21    (a) If approved by resolution of the Board, an active Tier
221 employee may make an irrevocable election to agree to delay
23his or her eligibility for automatic annual increases in
24retirement annuity as provided in subsection (a-1) of Section

 

 

HB4045 Engrossed- 154 -LRB100 12674 RPS 26063 b

116-133.1 or subsection (b-1) of Section 16-136.1, whichever is
2applicable, and to have the amount of the automatic annual
3increases in his or her retirement annuity and survivor benefit
4that are otherwise provided for in this Article calculated,
5instead, as provided in subsection (a-1) of Section 16-133.1 or
6subsection (b-1) of Section 16-136.1, whichever is applicable.
7    (b) As adequate and legal consideration provided under this
8amendatory Act of the 100th General Assembly for making an
9election under subsection (a) of this Section, each Tier 1
10employee who has made an election under subsection (a) of this
11Section shall receive a consideration payment equal to 10% of
12the contributions made by or on behalf of the employee under
13paragraphs (1), (2), and (3) of subsection (a) of Section
1416-152 before the effective date of that election. The System
15shall pay the amount of the consideration payment.
16    (c) A Tier 1 employee who does not make the election under
17subsection (a) of this Section shall not be subject to the
18benefits of subsection (b) of this Section.
19    (d) The System shall make a good faith effort to contact
20each Tier 1 employee subject to this Section. Such
21correspondence shall describe the election to each Tier 1
22employee. If the Tier 1 employee is not responsive, it is
23sufficient for the System to publish the details of any
24elections on its website or to publish those details in a
25regularly published newsletter or other existing public forum.
26    Tier 1 employees who are subject to this Section shall be

 

 

HB4045 Engrossed- 155 -LRB100 12674 RPS 26063 b

1provided with an election packet containing information
2regarding their options, as well as the forms necessary to make
3the election. Upon request, the System shall offer Tier 1
4employees an opportunity to receive information from the System
5before making the election. The information may be provided
6through video materials, group presentations, individual
7consultation with a member or authorized representative of the
8System in person or by telephone or other electronic means, or
9any combination of those methods. The System shall not provide
10advice or counseling with respect to the legal or tax
11circumstances of or consequences of making the election in
12subsection (a) of this Section.
13    The System shall inform Tier 1 employees in the election
14packet required under this subsection that the Tier 1 employee
15may also wish to obtain information and counsel relating to the
16election under this Section from any other available source,
17including, but not limited to, labor organizations and private
18counsel.
19    In no event shall the System, its staff, or the Board be
20held liable for any information given to a member regarding the
21election under this Section. The System shall coordinate with
22other retirement systems administering an election in
23accordance with this amendatory Act of the 100th General
24Assembly to provide information concerning the impact of the
25election set forth in this Section.
26    (d-5) To the extent authorized under federal law and as

 

 

HB4045 Engrossed- 156 -LRB100 12674 RPS 26063 b

1authorized by the retirement system, a Tier 1 employee may
2transfer or roll over the consideration payment into other
3qualified retirement plans.
4    (e) A member's election under this Section is not a
5prohibited election under subdivision (j)(1) of Section 1-119
6of this Code.
7    (f) No provision of this Section shall be interpreted in a
8way that would cause the System to cease to be a qualified plan
9under Section 401(a) of the Internal Revenue Code of 1986.
 
10    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
11    (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13    Sec. 16-133.1. Automatic annual increase in annuity.
14    (a) Each member with creditable service and retiring on or
15after August 26, 1969 is entitled to the automatic annual
16increases in annuity provided under this Section while
17receiving a retirement annuity or disability retirement
18annuity from the system.
19    Except as otherwise provided in subsection (a-1), an An
20annuitant shall first be entitled to an initial increase under
21this Section on the January 1 next following the first
22anniversary of retirement, or January 1 of the year next
23following attainment of age 61, whichever is later. At such
24time, the system shall pay an initial increase determined as
25follows:

 

 

HB4045 Engrossed- 157 -LRB100 12674 RPS 26063 b

1        (1) 1.5% of the originally granted retirement annuity
2    or disability retirement annuity multiplied by the number
3    of years elapsed, if any, from the date of retirement until
4    January 1, 1972, plus
5        (2) 2% of the originally granted annuity multiplied by
6    the number of years elapsed, if any, from the date of
7    retirement or January 1, 1972, whichever is later, until
8    January 1, 1978, plus
9        (3) 3% of the originally granted annuity multiplied by
10    the number of years elapsed from the date of retirement or
11    January 1, 1978, whichever is later, until the effective
12    date of the initial increase.
13However, the initial annual increase calculated under this
14Section for the recipient of a disability retirement annuity
15granted under Section 16-149.2 shall be reduced by an amount
16equal to the total of all increases in that annuity received
17under Section 16-149.5 (but not exceeding 100% of the amount of
18the initial increase otherwise provided under this Section).
19    Except as otherwise provided in subsection (a-1),
20following Following the initial increase, automatic annual
21increases in annuity shall be payable on each January 1
22thereafter during the lifetime of the annuitant, determined as
23a percentage of the originally granted retirement annuity or
24disability retirement annuity for increases granted prior to
25January 1, 1990, and calculated as a percentage of the total
26amount of annuity, including previous increases under this

 

 

HB4045 Engrossed- 158 -LRB100 12674 RPS 26063 b

1Section, for increases granted on or after January 1, 1990, as
2follows: 1.5% for periods prior to January 1, 1972, 2% for
3periods after December 31, 1971 and prior to January 1, 1978,
4and 3% for periods after December 31, 1977.
5    (a-1) Notwithstanding any other provision of this Article,
6for a Tier 1 employee who made the election under subsection
7(a) of Section 16-122.9:
8        (1) The initial increase in retirement annuity under
9    this Section shall occur on the January 1 occurring either
10    on or after the attainment of age 67 or the fifth
11    anniversary of the annuity start date, whichever is
12    earlier.
13        (2) The amount of each automatic annual increase in
14    retirement annuity and survivor benefit occurring on or
15    after the effective date of that election shall be
16    calculated as a percentage of the originally granted
17    retirement annuity or survivor benefit, equal to 3% or
18    one-half the annual unadjusted percentage increase (but
19    not less than zero) in the consumer price index-u for the
20    12 months ending with the September preceding each November
21    1, whichever is less. If the annual unadjusted percentage
22    change in the consumer price index-u for the 12 months
23    ending with the September preceding each November 1 is zero
24    or there is a decrease, then the annuity shall not be
25    increased.
26    For the purposes of this Section, "consumer price index-u"

 

 

HB4045 Engrossed- 159 -LRB100 12674 RPS 26063 b

1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the average
3change in prices of goods and services purchased by all urban
4consumers, United States city average, all items, 1982-84 =
5100. The new amount resulting from each annual adjustment shall
6be determined by the Public Pension Division of the Department
7of Insurance and made available to the board of the retirement
8system by November 1 of each year.
9    (b) The automatic annual increases in annuity provided
10under this Section shall not be applicable unless a member has
11made contributions toward such increases for a period
12equivalent to one full year of creditable service. If a member
13contributes for service performed after August 26, 1969 but the
14member becomes an annuitant before such contributions amount to
15one full year's contributions based on the salary at the date
16of retirement, he or she may pay the necessary balance of the
17contributions to the system and be eligible for the automatic
18annual increases in annuity provided under this Section.
19    (c) Each member shall make contributions toward the cost of
20the automatic annual increases in annuity as provided under
21Section 16-152.
22    (d) An annuitant receiving a retirement annuity or
23disability retirement annuity on July 1, 1969, who subsequently
24re-enters service as a teacher is eligible for the automatic
25annual increases in annuity provided under this Section if he
26or she renders at least one year of creditable service

 

 

HB4045 Engrossed- 160 -LRB100 12674 RPS 26063 b

1following the latest re-entry.
2    (e) In addition to the automatic annual increases in
3annuity provided under this Section, an annuitant who meets the
4service requirements of this Section and whose retirement
5annuity or disability retirement annuity began on or before
6January 1, 1971 shall receive, on January 1, 1981, an increase
7in the annuity then being paid of one dollar per month for each
8year of creditable service. On January 1, 1982, an annuitant
9whose retirement annuity or disability retirement annuity
10began on or before January 1, 1977 shall receive an increase in
11the annuity then being paid of one dollar per month for each
12year of creditable service.
13    On January 1, 1987, any annuitant whose retirement annuity
14began on or before January 1, 1977, shall receive an increase
15in the monthly retirement annuity equal to 8¢ per year of
16creditable service times the number of years that have elapsed
17since the annuity began.
18(Source: P.A. 91-927, eff. 12-14-00.)
 
19    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 16-136.1. Annual increase for certain annuitants.
23    (a) Any annuitant receiving a retirement annuity on June
2430, 1969 and any member retiring after June 30, 1969 shall be
25eligible for the annual increases provided under this Section

 

 

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1provided the annuitant is ineligible for the automatic annual
2increase in annuity provided under Section 16-133.1, and
3provided further that (1) retirement occurred at age 55 or over
4and was based on 5 or more years of creditable service or (2)
5if retirement occurred prior to age 55, the retirement annuity
6was based on 20 or more years of creditable service.
7    (b) Except as otherwise provided in subsection (b-1), an An
8annuitant entitled to increases under this Section shall be
9entitled to the initial increase as of the later of: (1)
10January 1 following attainment of age 65, (2) January 1
11following the first anniversary of retirement, or (3) the first
12day of the month following receipt of the required qualifying
13contribution from the annuitant. The initial monthly increase
14shall be computed on the basis of the period elapsed between
15the later of the date of last retirement or attainment of age
1650 and the date of qualification for the initial increase, at
17the rate of 1 1/2% of the original monthly retirement annuity
18per year for periods prior to September 1, 1971, and at the
19rate of 2% per year for periods between September 1, 1971 and
20September 1, 1978, and at the rate of 3% per year for periods
21thereafter.
22    Except as otherwise provided in subsection (b-1), if
23applicable, an An annuitant who has received an initial
24increase under this Section, shall be entitled, on each January
251 following the granting of the initial increase, to an
26increase of 3% of the original monthly retirement annuity for

 

 

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1increases granted prior to January 1, 1990, and equal to 3% of
2the total annuity, including previous increases under this
3Section, for increases granted on or after January 1, 1990. The
4original monthly retirement annuity for computations under
5this subsection (b) shall be considered to be $83.34 for any
6annuitant entitled to benefits under Section 16-134. The
7minimum original disability retirement annuity for
8computations under this subsection (b) shall be considered to
9be $33.34 per month for any annuitant retired on account of
10disability.
11    (b-1) Notwithstanding any other provision of this Article,
12for a Tier 1 employee who made the election under subsection
13(a) of Section 16-122.9:
14        (1) The initial increase in retirement annuity under
15    this Section shall occur on the January 1 occurring either
16    on or after the attainment of age 67 or the fifth
17    anniversary of the annuity start date, whichever is
18    earlier.
19        (2) The amount of each automatic annual increase in
20    retirement annuity or survivor benefit occurring on or
21    after the effective date of that election shall be
22    calculated as a percentage of the originally granted
23    retirement annuity or survivor benefit, equal to 3% or
24    one-half the annual unadjusted percentage increase (but
25    not less than zero) in the consumer price index-u for the
26    12 months ending with the September preceding each November

 

 

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1    1, whichever is less. If the annual unadjusted percentage
2    change in the consumer price index-u for the 12 months
3    ending with the September preceding each November 1 is zero
4    or there is a decrease, then the annuity shall not be
5    increased.
6    For the purposes of this Section, "consumer price index-u"
7means the index published by the Bureau of Labor Statistics of
8the United States Department of Labor that measures the average
9change in prices of goods and services purchased by all urban
10consumers, United States city average, all items, 1982-84 =
11100. The new amount resulting from each annual adjustment shall
12be determined by the Public Pension Division of the Department
13of Insurance and made available to the board of the retirement
14system by November 1 of each year.
15    (c) An annuitant who otherwise qualifies for annual
16increases under this Section must make a one-time payment of 1%
17of the monthly final average salary for each full year of the
18creditable service forming the basis of the retirement annuity
19or, if the retirement annuity was not computed using final
20average salary, 1% of the original monthly retirement annuity
21for each full year of service forming the basis of the
22retirement annuity.
23    (d) In addition to other increases which may be provided by
24this Section, regardless of creditable service, annuitants not
25meeting the service requirements of Section 16-133.1 and whose
26retirement annuity began on or before January 1, 1971 shall

 

 

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1receive, on January 1, 1981, an increase in the retirement
2annuity then being paid of one dollar per month for each year
3of creditable service forming the basis of the retirement
4allowance. On January 1, 1982, annuitants whose retirement
5annuity began on or before January 1, 1977, shall receive an
6increase in the retirement annuity then being paid of one
7dollar per month for each year of creditable service.
8    On January 1, 1987, any annuitant whose retirement annuity
9began on or before January 1, 1977, shall receive an increase
10in the monthly retirement annuity equal to 8¢ per year of
11creditable service times the number of years that have elapsed
12since the annuity began.
13(Source: P.A. 86-273.)
 
14    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
15    (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17    Sec. 16-152. Contributions by members.
18    (a) Except as otherwise provided in subsection (a-5), each
19Each member shall make contributions for membership service to
20this System as follows:
21        (1) Effective July 1, 1998, contributions of 7.50% of
22    salary towards the cost of the retirement annuity. Such
23    contributions shall be deemed "normal contributions".
24        (2) Effective July 1, 1969, contributions of 1/2 of 1%
25    of salary toward the cost of the automatic annual increase

 

 

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1    in retirement annuity provided under Section 16-133.1.
2        (3) Effective July 24, 1959, contributions of 1% of
3    salary towards the cost of survivor benefits. Such
4    contributions shall not be credited to the individual
5    account of the member and shall not be subject to refund
6    except as provided under Section 16-143.2.
7        (4) Effective July 1, 2005, contributions of 0.40% of
8    salary toward the cost of the early retirement without
9    discount option provided under Section 16-133.2. This
10    contribution shall cease upon termination of the early
11    retirement without discount option as provided in Section
12    16-133.2.
13    (a-5) As adequate and legal consideration provided under
14this amendatory Act of the 100th General Assembly for making an
15election under subsection (a) of Section 16-122.9, beginning on
16the effective date of the Tier 1 employee's election under
17subsection (a) of Section 16-122.9, in lieu of the
18contributions otherwise required under subsection (a), each
19Tier 1 employee who made the election under subsection (a) of
20Section 16-122.9 shall make contributions as follows:
21        (1) Contributions of 7.50% of salary towards the cost
22    of the retirement annuity. Such contributions shall be
23    deemed "normal contributions".
24        (2) Contributions of 0.60% towards the cost of survivor
25    benefits. Such contributions shall not be credited to the
26    individual account of the member and shall not be subject

 

 

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1    to refund except as provided in Section 16-143.2.
2        (3) Contributions of 0.40% of salary toward the cost of
3    the early retirement without discount option provided
4    under Section 16-133.2. This contribution shall cease upon
5    termination of the early retirement without discount
6    option as provided in Section 16-133.2.
7    (b) The minimum required contribution for any year of
8full-time teaching service shall be $192.
9    (c) Contributions shall not be required of any annuitant
10receiving a retirement annuity who is given employment as
11permitted under Section 16-118 or 16-150.1.
12    (d) A person who (i) was a member before July 1, 1998, (ii)
13retires with more than 34 years of creditable service, and
14(iii) does not elect to qualify for the augmented rate under
15Section 16-129.1 shall be entitled, at the time of retirement,
16to receive a partial refund of contributions made under this
17Section for service occurring after the later of June 30, 1998
18or attainment of 34 years of creditable service, in an amount
19equal to 1.00% of the salary upon which those contributions
20were based.
21    (e) A member's contributions toward the cost of early
22retirement without discount made under item (a)(4) of this
23Section shall not be refunded if the member has elected early
24retirement without discount under Section 16-133.2 and has
25begun to receive a retirement annuity under this Article
26calculated in accordance with that election. Otherwise, a

 

 

HB4045 Engrossed- 167 -LRB100 12674 RPS 26063 b

1member's contributions toward the cost of early retirement
2without discount made under item (a)(4) of this Section shall
3be refunded according to whichever one of the following
4circumstances occurs first:
5        (1) The contributions shall be refunded to the member,
6    without interest, within 120 days after the member's
7    retirement annuity commences, if the member does not elect
8    early retirement without discount under Section 16-133.2.
9        (2) The contributions shall be included, without
10    interest, in any refund claimed by the member under Section
11    16-151.
12        (3) The contributions shall be refunded to the member's
13    designated beneficiary (or if there is no beneficiary, to
14    the member's estate), without interest, if the member dies
15    without having begun to receive a retirement annuity under
16    this Article.
17        (4) The contributions shall be refunded to the member,
18    without interest, if the early retirement without discount
19    option provided under subsection (d) of Section 16-133.2 is
20    terminated. In that event, the System shall provide to the
21    member, within 120 days after the option is terminated, an
22    application for a refund of those contributions.
23(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642,
24eff. 7-28-16.)
 
25    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)

 

 

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1    (Text of Section WITHOUT the changes made by P.A. 98-599,
2which has been held unconstitutional)
3    Sec. 16-158. Contributions by State and other employing
4units.
5    (a) The State shall make contributions to the System by
6means of appropriations from the Common School Fund and other
7State funds of amounts which, together with other employer
8contributions, employee contributions, investment income, and
9other income, will be sufficient to meet the cost of
10maintaining and administering the System on a 90% funded basis
11in accordance with actuarial recommendations.
12    The Board shall determine the amount of State contributions
13required for each fiscal year on the basis of the actuarial
14tables and other assumptions adopted by the Board and the
15recommendations of the actuary, using the formula in subsection
16(b-3).
17    (a-1) Annually, on or before November 15 until November 15,
182011, the Board shall certify to the Governor the amount of the
19required State contribution for the coming fiscal year. The
20certification under this subsection (a-1) shall include a copy
21of the actuarial recommendations upon which it is based and
22shall specifically identify the System's projected State
23normal cost for that fiscal year.
24    On or before May 1, 2004, the Board shall recalculate and
25recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2005, taking

 

 

HB4045 Engrossed- 169 -LRB100 12674 RPS 26063 b

1into account the amounts appropriated to and received by the
2System under subsection (d) of Section 7.2 of the General
3Obligation Bond Act.
4    On or before July 1, 2005, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2006, taking
7into account the changes in required State contributions made
8by this amendatory Act of the 94th General Assembly.
9    On or before April 1, 2011, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2011, applying
12the changes made by Public Act 96-889 to the System's assets
13and liabilities as of June 30, 2009 as though Public Act 96-889
14was approved on that date.
15    (a-5) On or before November 1 of each year, beginning
16November 1, 2012, the Board shall submit to the State Actuary,
17the Governor, and the General Assembly a proposed certification
18of the amount of the required State contribution to the System
19for the next fiscal year, along with all of the actuarial
20assumptions, calculations, and data upon which that proposed
21certification is based. On or before January 1 of each year,
22beginning January 1, 2013, the State Actuary shall issue a
23preliminary report concerning the proposed certification and
24identifying, if necessary, recommended changes in actuarial
25assumptions that the Board must consider before finalizing its
26certification of the required State contributions. On or before

 

 

HB4045 Engrossed- 170 -LRB100 12674 RPS 26063 b

1January 15, 2013 and each January 15 thereafter, the Board
2shall certify to the Governor and the General Assembly the
3amount of the required State contribution for the next fiscal
4year. The Board's certification must note any deviations from
5the State Actuary's recommended changes, the reason or reasons
6for not following the State Actuary's recommended changes, and
7the fiscal impact of not following the State Actuary's
8recommended changes on the required State contribution.
9    If necessary, the Board shall recalculate and recertify to
10the Governor the amount of the required State contribution to
11the System for State fiscal year 2019, applying the changes
12made by this amendatory Act of the 100th General Assembly.
13    (b) Through State fiscal year 1995, the State contributions
14shall be paid to the System in accordance with Section 18-7 of
15the School Code.
16    (b-1) Beginning in State fiscal year 1996, on the 15th day
17of each month, or as soon thereafter as may be practicable, the
18Board shall submit vouchers for payment of State contributions
19to the System, in a total monthly amount of one-twelfth of the
20required annual State contribution certified under subsection
21(a-1). From the effective date of this amendatory Act of the
2293rd General Assembly through June 30, 2004, the Board shall
23not submit vouchers for the remainder of fiscal year 2004 in
24excess of the fiscal year 2004 certified contribution amount
25determined under this Section after taking into consideration
26the transfer to the System under subsection (a) of Section

 

 

HB4045 Engrossed- 171 -LRB100 12674 RPS 26063 b

16z-61 of the State Finance Act. These vouchers shall be paid by
2the State Comptroller and Treasurer by warrants drawn on the
3funds appropriated to the System for that fiscal year.
4    If in any month the amount remaining unexpended from all
5other appropriations to the System for the applicable fiscal
6year (including the appropriations to the System under Section
78.12 of the State Finance Act and Section 1 of the State
8Pension Funds Continuing Appropriation Act) is less than the
9amount lawfully vouchered under this subsection, the
10difference shall be paid from the Common School Fund under the
11continuing appropriation authority provided in Section 1.1 of
12the State Pension Funds Continuing Appropriation Act.
13    (b-2) Allocations from the Common School Fund apportioned
14to school districts not coming under this System shall not be
15diminished or affected by the provisions of this Article.
16    (b-3) For State fiscal years 2012 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2045 and shall be determined under the
25projected unit credit actuarial cost method.
26    For each of State fiscal years 2019 and 2020, the State

 

 

HB4045 Engrossed- 172 -LRB100 12674 RPS 26063 b

1shall make an additional contribution to the System equal to 2%
2of the total payroll of each employee who is deemed to have
3elected the benefits under Section 1-161 or who has made the
4election under subsection (c) of Section 1-161.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section; except that in the
10following specified State fiscal years, the State contribution
11to the System shall not be less than the following indicated
12percentages of the applicable employee payroll, even if the
13indicated percentage will produce a State contribution in
14excess of the amount otherwise required under this subsection
15and subsection (a), and notwithstanding any contrary
16certification made under subsection (a-1) before the effective
17date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
18in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
192003; and 13.56% in FY 2004.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2006 is
22$534,627,700.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2007 is
25$738,014,500.
26    For each of State fiscal years 2008 through 2009, the State

 

 

HB4045 Engrossed- 173 -LRB100 12674 RPS 26063 b

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3from the required State contribution for State fiscal year
42007, so that by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2010 is
8$2,089,268,000 and shall be made from the proceeds of bonds
9sold in fiscal year 2010 pursuant to Section 7.2 of the General
10Obligation Bond Act, less (i) the pro rata share of bond sale
11expenses determined by the System's share of total bond
12proceeds, (ii) any amounts received from the Common School Fund
13in fiscal year 2010, and (iii) any reduction in bond proceeds
14due to the issuance of discounted bonds, if applicable.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2011 is
17the amount recertified by the System on or before April 1, 2011
18pursuant to subsection (a-1) of this Section and shall be made
19from the proceeds of bonds sold in fiscal year 2011 pursuant to
20Section 7.2 of the General Obligation Bond Act, less (i) the
21pro rata share of bond sale expenses determined by the System's
22share of total bond proceeds, (ii) any amounts received from
23the Common School Fund in fiscal year 2011, and (iii) any
24reduction in bond proceeds due to the issuance of discounted
25bonds, if applicable. This amount shall include, in addition to
26the amount certified by the System, an amount necessary to meet

 

 

HB4045 Engrossed- 174 -LRB100 12674 RPS 26063 b

1employer contributions required by the State as an employer
2under paragraph (e) of this Section, which may also be used by
3the System for contributions required by paragraph (a) of
4Section 16-127.
5    Beginning in State fiscal year 2046, the minimum State
6contribution for each fiscal year shall be the amount needed to
7maintain the total assets of the System at 90% of the total
8actuarial liabilities of the System.
9    Amounts received by the System pursuant to Section 25 of
10the Budget Stabilization Act or Section 8.12 of the State
11Finance Act in any fiscal year do not reduce and do not
12constitute payment of any portion of the minimum State
13contribution required under this Article in that fiscal year.
14Such amounts shall not reduce, and shall not be included in the
15calculation of, the required State contributions under this
16Article in any future year until the System has reached a
17funding ratio of at least 90%. A reference in this Article to
18the "required State contribution" or any substantially similar
19term does not include or apply to any amounts payable to the
20System under Section 25 of the Budget Stabilization Act.
21    Notwithstanding any other provision of this Section, the
22required State contribution for State fiscal year 2005 and for
23fiscal year 2008 and each fiscal year thereafter, as calculated
24under this Section and certified under subsection (a-1), shall
25not exceed an amount equal to (i) the amount of the required
26State contribution that would have been calculated under this

 

 

HB4045 Engrossed- 175 -LRB100 12674 RPS 26063 b

1Section for that fiscal year if the System had not received any
2payments under subsection (d) of Section 7.2 of the General
3Obligation Bond Act, minus (ii) the portion of the State's
4total debt service payments for that fiscal year on the bonds
5issued in fiscal year 2003 for the purposes of that Section
67.2, as determined and certified by the Comptroller, that is
7the same as the System's portion of the total moneys
8distributed under subsection (d) of Section 7.2 of the General
9Obligation Bond Act. In determining this maximum for State
10fiscal years 2008 through 2010, however, the amount referred to
11in item (i) shall be increased, as a percentage of the
12applicable employee payroll, in equal increments calculated
13from the sum of the required State contribution for State
14fiscal year 2007 plus the applicable portion of the State's
15total debt service payments for fiscal year 2007 on the bonds
16issued in fiscal year 2003 for the purposes of Section 7.2 of
17the General Obligation Bond Act, so that, by State fiscal year
182011, the State is contributing at the rate otherwise required
19under this Section.
20    (b-4) Beginning in fiscal year 2019, each employer under
21this Article shall pay to the System a required contribution
22determined as a percentage of projected payroll and sufficient
23to produce an annual amount equal to:
24        (i) for each of fiscal years 2019 and 2020, the defined
25    benefit normal cost of the defined benefit plan, less the
26    employee contribution, for each employee of that employer

 

 

HB4045 Engrossed- 176 -LRB100 12674 RPS 26063 b

1    who has elected or who is deemed to have elected the
2    benefits under Section 1-161 or who has made the election
3    under subsection (b) of Section 1-161; for fiscal year 2021
4    and each fiscal year thereafter, the defined benefit normal
5    cost of the defined benefit plan, less the employee
6    contribution, plus 2%, for each employee of that employer
7    who has elected or who is deemed to have elected the
8    benefits under Section 1-161 or who has made the election
9    under subsection (b) of Section 1-161; plus
10        (ii) the amount required for that fiscal year to
11    amortize any unfunded actuarial accrued liability
12    associated with the present value of liabilities
13    attributable to the employer's account under Section
14    16-158.3, determined as a level percentage of payroll over
15    a 30-year rolling amortization period.
16    In determining contributions required under item (i) of
17this subsection, the System shall determine an aggregate rate
18for all employers, expressed as a percentage of projected
19payroll.
20    In determining the contributions required under item (ii)
21of this subsection, the amount shall be computed by the System
22on the basis of the actuarial assumptions and tables used in
23the most recent actuarial valuation of the System that is
24available at the time of the computation.
25    The contributions required under this subsection (b-4)
26shall be paid by an employer concurrently with that employer's

 

 

HB4045 Engrossed- 177 -LRB100 12674 RPS 26063 b

1payroll payment period. The State, as the actual employer of an
2employee, shall make the required contributions under this
3subsection.
4    (c) Payment of the required State contributions and of all
5pensions, retirement annuities, death benefits, refunds, and
6other benefits granted under or assumed by this System, and all
7expenses in connection with the administration and operation
8thereof, are obligations of the State.
9    If members are paid from special trust or federal funds
10which are administered by the employing unit, whether school
11district or other unit, the employing unit shall pay to the
12System from such funds the full accruing retirement costs based
13upon that service, which, beginning July 1, 2014, shall be at a
14rate, expressed as a percentage of salary, equal to the total
15minimum contribution to the System to be made by the State for
16that fiscal year, including both normal cost and unfunded
17liability components, expressed as a percentage of payroll, as
18determined by the System under subsection (b-3) of this
19Section. Employer contributions, based on salary paid to
20members from federal funds, may be forwarded by the
21distributing agency of the State of Illinois to the System
22prior to allocation, in an amount determined in accordance with
23guidelines established by such agency and the System. Any
24contribution for fiscal year 2015 collected as a result of the
25change made by this amendatory Act of the 98th General Assembly
26shall be considered a State contribution under subsection (b-3)

 

 

HB4045 Engrossed- 178 -LRB100 12674 RPS 26063 b

1of this Section.
2    (d) Effective July 1, 1986, any employer of a teacher as
3defined in paragraph (8) of Section 16-106 shall pay the
4employer's normal cost of benefits based upon the teacher's
5service, in addition to employee contributions, as determined
6by the System. Such employer contributions shall be forwarded
7monthly in accordance with guidelines established by the
8System.
9    However, with respect to benefits granted under Section
1016-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
11of Section 16-106, the employer's contribution shall be 12%
12(rather than 20%) of the member's highest annual salary rate
13for each year of creditable service granted, and the employer
14shall also pay the required employee contribution on behalf of
15the teacher. For the purposes of Sections 16-133.4 and
1616-133.5, a teacher as defined in paragraph (8) of Section
1716-106 who is serving in that capacity while on leave of
18absence from another employer under this Article shall not be
19considered an employee of the employer from which the teacher
20is on leave.
21    (e) Beginning July 1, 1998, every employer of a teacher
22shall pay to the System an employer contribution computed as
23follows:
24        (1) Beginning July 1, 1998 through June 30, 1999, the
25    employer contribution shall be equal to 0.3% of each
26    teacher's salary.

 

 

HB4045 Engrossed- 179 -LRB100 12674 RPS 26063 b

1        (2) Beginning July 1, 1999 and thereafter, the employer
2    contribution shall be equal to 0.58% of each teacher's
3    salary.
4The school district or other employing unit may pay these
5employer contributions out of any source of funding available
6for that purpose and shall forward the contributions to the
7System on the schedule established for the payment of member
8contributions.
9    These employer contributions are intended to offset a
10portion of the cost to the System of the increases in
11retirement benefits resulting from this amendatory Act of 1998.
12    Each employer of teachers is entitled to a credit against
13the contributions required under this subsection (e) with
14respect to salaries paid to teachers for the period January 1,
152002 through June 30, 2003, equal to the amount paid by that
16employer under subsection (a-5) of Section 6.6 of the State
17Employees Group Insurance Act of 1971 with respect to salaries
18paid to teachers for that period.
19    The additional 1% employee contribution required under
20Section 16-152 by this amendatory Act of 1998 is the
21responsibility of the teacher and not the teacher's employer,
22unless the employer agrees, through collective bargaining or
23otherwise, to make the contribution on behalf of the teacher.
24    If an employer is required by a contract in effect on May
251, 1998 between the employer and an employee organization to
26pay, on behalf of all its full-time employees covered by this

 

 

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1Article, all mandatory employee contributions required under
2this Article, then the employer shall be excused from paying
3the employer contribution required under this subsection (e)
4for the balance of the term of that contract. The employer and
5the employee organization shall jointly certify to the System
6the existence of the contractual requirement, in such form as
7the System may prescribe. This exclusion shall cease upon the
8termination, extension, or renewal of the contract at any time
9after May 1, 1998.
10    (f) If the amount of a teacher's salary for any school year
11used to determine final average salary exceeds the member's
12annual full-time salary rate with the same employer for the
13previous school year by more than 6%, the teacher's employer
14shall pay to the System, in addition to all other payments
15required under this Section and in accordance with guidelines
16established by the System, the present value of the increase in
17benefits resulting from the portion of the increase in salary
18that is in excess of 6%. This present value shall be computed
19by the System on the basis of the actuarial assumptions and
20tables used in the most recent actuarial valuation of the
21System that is available at the time of the computation. If a
22teacher's salary for the 2005-2006 school year is used to
23determine final average salary under this subsection (f), then
24the changes made to this subsection (f) by Public Act 94-1057
25shall apply in calculating whether the increase in his or her
26salary is in excess of 6%. For the purposes of this Section,

 

 

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1change in employment under Section 10-21.12 of the School Code
2on or after June 1, 2005 shall constitute a change in employer.
3The System may require the employer to provide any pertinent
4information or documentation. The changes made to this
5subsection (f) by this amendatory Act of the 94th General
6Assembly apply without regard to whether the teacher was in
7service on or after its effective date.
8    Whenever it determines that a payment is or may be required
9under this subsection, the System shall calculate the amount of
10the payment and bill the employer for that amount. The bill
11shall specify the calculations used to determine the amount
12due. If the employer disputes the amount of the bill, it may,
13within 30 days after receipt of the bill, apply to the System
14in writing for a recalculation. The application must specify in
15detail the grounds of the dispute and, if the employer asserts
16that the calculation is subject to subsection (g) or (h) of
17this Section, must include an affidavit setting forth and
18attesting to all facts within the employer's knowledge that are
19pertinent to the applicability of that subsection. Upon
20receiving a timely application for recalculation, the System
21shall review the application and, if appropriate, recalculate
22the amount due.
23    The employer contributions required under this subsection
24(f) may be paid in the form of a lump sum within 90 days after
25receipt of the bill. If the employer contributions are not paid
26within 90 days after receipt of the bill, then interest will be

 

 

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1charged at a rate equal to the System's annual actuarially
2assumed rate of return on investment compounded annually from
3the 91st day after receipt of the bill. Payments must be
4concluded within 3 years after the employer's receipt of the
5bill.
6    (g) This subsection (g) applies only to payments made or
7salary increases given on or after June 1, 2005 but before July
81, 2011. The changes made by Public Act 94-1057 shall not
9require the System to refund any payments received before July
1031, 2006 (the effective date of Public Act 94-1057).
11    When assessing payment for any amount due under subsection
12(f), the System shall exclude salary increases paid to teachers
13under contracts or collective bargaining agreements entered
14into, amended, or renewed before June 1, 2005.
15    When assessing payment for any amount due under subsection
16(f), the System shall exclude salary increases paid to a
17teacher at a time when the teacher is 10 or more years from
18retirement eligibility under Section 16-132 or 16-133.2.
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude salary increases resulting from
21overload work, including summer school, when the school
22district has certified to the System, and the System has
23approved the certification, that (i) the overload work is for
24the sole purpose of classroom instruction in excess of the
25standard number of classes for a full-time teacher in a school
26district during a school year and (ii) the salary increases are

 

 

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1equal to or less than the rate of pay for classroom instruction
2computed on the teacher's current salary and work schedule.
3    When assessing payment for any amount due under subsection
4(f), the System shall exclude a salary increase resulting from
5a promotion (i) for which the employee is required to hold a
6certificate or supervisory endorsement issued by the State
7Teacher Certification Board that is a different certification
8or supervisory endorsement than is required for the teacher's
9previous position and (ii) to a position that has existed and
10been filled by a member for no less than one complete academic
11year and the salary increase from the promotion is an increase
12that results in an amount no greater than the lesser of the
13average salary paid for other similar positions in the district
14requiring the same certification or the amount stipulated in
15the collective bargaining agreement for a similar position
16requiring the same certification.
17    When assessing payment for any amount due under subsection
18(f), the System shall exclude any payment to the teacher from
19the State of Illinois or the State Board of Education over
20which the employer does not have discretion, notwithstanding
21that the payment is included in the computation of final
22average salary.
23    (h) When assessing payment for any amount due under
24subsection (f), the System shall exclude any salary increase
25described in subsection (g) of this Section given on or after
26July 1, 2011 but before July 1, 2014 under a contract or

 

 

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1collective bargaining agreement entered into, amended, or
2renewed on or after June 1, 2005 but before July 1, 2011.
3Notwithstanding any other provision of this Section, any
4payments made or salary increases given after June 30, 2014
5shall be used in assessing payment for any amount due under
6subsection (f) of this Section.
7    (i) The System shall prepare a report and file copies of
8the report with the Governor and the General Assembly by
9January 1, 2007 that contains all of the following information:
10        (1) The number of recalculations required by the
11    changes made to this Section by Public Act 94-1057 for each
12    employer.
13        (2) The dollar amount by which each employer's
14    contribution to the System was changed due to
15    recalculations required by Public Act 94-1057.
16        (3) The total amount the System received from each
17    employer as a result of the changes made to this Section by
18    Public Act 94-4.
19        (4) The increase in the required State contribution
20    resulting from the changes made to this Section by Public
21    Act 94-1057.
22    (j) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

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1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (k) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
136-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
 
14    (40 ILCS 5/16-158.3 new)
15    Sec. 16-158.3. Individual employer accounts.
16    (a) The System shall create and maintain an individual
17account for each employer for the purposes of determining
18employer contributions under subsection (b-4) of Section
1916-158. Each employer's account shall be notionally charged
20with the liabilities attributable to that employer and credited
21with the assets attributable to that employer.
22    (b) Beginning in fiscal year 2019, the System shall assign
23notional liabilities to each employer's account, equal to the
24amount of the employer contributions required to be made by the
25employer pursuant to items (i) and (ii) of subsection (b-4) of

 

 

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1Section 16-158, plus any unfunded actuarial accrued liability
2associated with the defined benefits attributable to the
3employer's employees who first became members on or after July
41, 2018 and the employer's employees who made the election
5under subsection (c-5) of Section 1-161.
6    (c) Beginning in fiscal year 2019, the System shall assign
7notional assets to each employer's account equal to the amounts
8of employer contributions made pursuant to items (i) and (ii)
9of subsection (b-4) of Section 16-158.
 
10    (40 ILCS 5/16-190.5 new)
11    Sec. 16-190.5. Accelerated pension benefit payment.
12    (a) As used in this Section:
13    "Eligible person" means a person who:
14        (1) has terminated service;
15        (2) has accrued sufficient service credit to be
16    eligible to receive a retirement annuity under this
17    Article;
18        (3) is not a party to a pending divorce proceeding and
19    does not have a QILDRO in effect against him or her under
20    this Article; and
21        (4) does not have a QILDRO in effect against him or her
22    under this Article.
23    "Pension benefit" means the benefits under this Article, or
24Article 1 as it relates to those benefits, including any
25anticipated annual increases, that an eligible person is

 

 

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1entitled to upon attainment of the applicable retirement age.
2"Pension benefit" also includes applicable survivor's or
3disability benefits.
4    (b) If approved by resolution of the Board in any year, the
5System shall calculate, using actuarial tables and other
6assumptions adopted by the Board, the net present value of
7pension benefits for each eligible person and shall offer each
8eligible person the opportunity to irrevocably elect to receive
9an amount determined by the System to be equal to 70% of the
10net present value of his or her pension benefits in lieu of
11receiving any pension benefit. The offer shall specify the
12dollar amount that the eligible person will receive if he or
13she so elects and shall expire when a subsequent offer is made
14to an eligible person. The System shall make a good faith
15effort to contact every eligible person to notify him or her of
16the election and of the amount of the accelerated pension
17benefit payment.
18    During a period of 3 months determined by the Board, an
19eligible person may irrevocably elect to receive an accelerated
20pension benefit payment in the amount that the System offers
21under this subsection in lieu of receiving any pension benefit.
22A person who elects to receive an accelerated pension benefit
23payment under this Section may not elect to proceed under the
24Retirement Systems Reciprocal Act with respect to service under
25this Article. The accelerated pension benefit payment shall be
26paid by the System.

 

 

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1    (c) A person's credits and creditable service under this
2Article shall be terminated upon the person's receipt of an
3accelerated pension benefit payment under this Section, and no
4other benefit shall be paid under this Article based on those
5terminated credits and creditable service, including any
6retirement, survivor, or other benefit; except that to the
7extent that participation, benefits, or premiums under the
8State Employees Group Insurance Act of 1971 are based on the
9amount of service credit, the terminated service credit shall
10be used for that purpose.
11    (d) If a person who has received an accelerated pension
12benefit payment under this Section returns to active service
13under this Article, then:
14        (1) Any benefits under the System earned as a result of
15    that return to active service shall be based solely on the
16    person's credits and creditable service arising from the
17    return to active service.
18        (2) The accelerated pension benefit payment may not be
19    repaid to the System, and the terminated credits and
20    creditable service may not under any circumstances be
21    reinstated.
22    (e) As a condition of receiving an accelerated pension
23benefit payment, an eligible person must have another
24retirement plan or account qualified under the Internal Revenue
25Code of 1986, as amended, for the accelerated pension benefit
26payment to be rolled into. The accelerated pension benefit

 

 

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1payment under this Section may be subject to withholding or
2payment of applicable taxes, but to the extent permitted by
3federal law, a person who receives an accelerated pension
4benefit payment under this Section must direct the System to
5pay all of that payment as a rollover into another retirement
6plan or account qualified under the Internal Revenue Code of
71986, as amended.
8    (f) The Board shall adopt any rules necessary to implement
9this Section.
10    (g) No provision of this Section shall be interpreted in a
11way that would cause the applicable System to cease to be a
12qualified plan under the Internal Revenue Code of 1986.
 
13    (40 ILCS 5/16-203)
14    (Text of Section WITHOUT the changes made by P.A. 98-599,
15which has been held unconstitutional)
16    Sec. 16-203. Application and expiration of new benefit
17increases.
18    (a) As used in this Section, "new benefit increase" means
19an increase in the amount of any benefit provided under this
20Article, or an expansion of the conditions of eligibility for
21any benefit under this Article, that results from an amendment
22to this Code that takes effect after June 1, 2005 (the
23effective date of Public Act 94-4). "New benefit increase",
24however, does not include any benefit increase resulting from
25the changes made to this Article by Public Act 95-910 or this

 

 

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1amendatory Act of the 100th General Assembly this amendatory
2Act of the 95th General Assembly.
3    (b) Notwithstanding any other provision of this Code or any
4subsequent amendment to this Code, every new benefit increase
5is subject to this Section and shall be deemed to be granted
6only in conformance with and contingent upon compliance with
7the provisions of this Section.
8    (c) The Public Act enacting a new benefit increase must
9identify and provide for payment to the System of additional
10funding at least sufficient to fund the resulting annual
11increase in cost to the System as it accrues.
12    Every new benefit increase is contingent upon the General
13Assembly providing the additional funding required under this
14subsection. The Commission on Government Forecasting and
15Accountability shall analyze whether adequate additional
16funding has been provided for the new benefit increase and
17shall report its analysis to the Public Pension Division of the
18Department of Insurance Financial and Professional Regulation.
19A new benefit increase created by a Public Act that does not
20include the additional funding required under this subsection
21is null and void. If the Public Pension Division determines
22that the additional funding provided for a new benefit increase
23under this subsection is or has become inadequate, it may so
24certify to the Governor and the State Comptroller and, in the
25absence of corrective action by the General Assembly, the new
26benefit increase shall expire at the end of the fiscal year in

 

 

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1which the certification is made.
2    (d) Every new benefit increase shall expire 5 years after
3its effective date or on such earlier date as may be specified
4in the language enacting the new benefit increase or provided
5under subsection (c). This does not prevent the General
6Assembly from extending or re-creating a new benefit increase
7by law.
8    (e) Except as otherwise provided in the language creating
9the new benefit increase, a new benefit increase that expires
10under this Section continues to apply to persons who applied
11and qualified for the affected benefit while the new benefit
12increase was in effect and to the affected beneficiaries and
13alternate payees of such persons, but does not apply to any
14other person, including without limitation a person who
15continues in service after the expiration date and did not
16apply and qualify for the affected benefit while the new
17benefit increase was in effect.
18(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
19    (40 ILCS 5/16-205.1 new)
20    Sec. 16-205.1. Defined contribution plan.
21    (a) By July 1, 2018, the System shall prepare and implement
22a voluntary defined contribution plan for up to 5% of eligible
23active Tier 1 employees. The System shall determine the 5% cap
24by the number of active Tier 1 employees on the effective date
25of this Section. The defined contribution plan developed under

 

 

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1this Section shall be a plan that aggregates employer and
2employee contributions in individual participant accounts
3which, after meeting any other requirements, are used for
4payouts after retirement in accordance with this Section and
5any other applicable laws.
6    As used in this Section, "defined benefit plan" means the
7retirement plan available under this Article to Tier 1
8employees who have not made the election authorized under this
9Section.
10        (1) Under the defined contribution plan, an active Tier
11    1 employee of this System could elect to cease accruing
12    benefits in the defined benefit plan under this Article and
13    begin accruing benefits for future service in the defined
14    contribution plan. Service credit under the defined
15    contribution plan may be used for determining retirement
16    eligibility under the defined benefit plan. An active Tier
17    1 employee who elects to cease accruing benefits in his or
18    her defined benefit plan shall be prohibited from
19    purchasing service credit on or after the date of his or
20    her election. A Tier 1 employee making the irrevocable
21    election provided under this Section shall not receive
22    interest accruals to his or her benefit under paragraph (A)
23    of subsection (a) of Section 16-133 on or after the date of
24    his or her election.
25        (2) Participants in the defined contribution plan
26    shall pay employee contributions at the same rate as Tier 1

 

 

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1    employees in this System who do not participate in the
2    defined contribution plan.
3        (3) State contributions shall be paid into the accounts
4    of all participants in the defined contribution plan at a
5    uniform rate, expressed as a percentage of salary and
6    determined for each year. This rate shall be no higher than
7    the employer's normal cost for Tier 1 employees in the
8    defined benefit plan for that year, as determined by the
9    System and expressed as a percentage of salary, and shall
10    be no lower than 0% of salary. The State shall adjust this
11    rate annually.
12        (4) The defined contribution plan shall require 5 years
13    of participation in the defined contribution plan before
14    vesting in State contributions. If the participant fails to
15    vest in them, the State contributions, and the earnings
16    thereon, shall be forfeited.
17        (5) The defined contribution plan may provide for
18    participants in the plan to be eligible for the defined
19    disability benefits available to other participants under
20    this Article. If it does, the System shall reduce the
21    employee contributions credited to the member's defined
22    contribution plan account by an amount determined by the
23    System to cover the cost of offering such benefits.
24        (6) The defined contribution plan shall provide a
25    variety of options for investments. These options shall
26    include investments in a fund created by the System and

 

 

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1    managed in accordance with legal and fiduciary standards,
2    as well as investment options otherwise available.
3        (7) The defined contribution plan shall provide a
4    variety of options for payouts to retirees and their
5    survivors.
6        (8) To the extent authorized under federal law and as
7    authorized by the System, the plan shall allow former
8    participants in the plan to transfer or roll over employee
9    and vested State contributions, and the earnings thereon,
10    into other qualified retirement plans.
11        (9) The System shall reduce the employee contributions
12    credited to the member's defined contribution plan account
13    by an amount determined by the System to cover the cost of
14    offering these benefits and any applicable administrative
15    fees.
16    (b) Only persons who are active Tier 1 employees of the
17System on the effective date of this Section are eligible to
18participate in the defined contribution plan. Participation in
19the defined contribution plan shall be limited to the first 5%
20of eligible persons who elect to participate. The election to
21participate in the defined contribution plan is voluntary and
22irrevocable.
23    (c) An eligible Tier 1 employee may irrevocably elect to
24participate in the defined contribution plan by filing with the
25System a written application to participate that is received by
26the System prior to its determination that 5% of eligible

 

 

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1persons have elected to participate in the defined contribution
2plan.
3    When the System first determines that 5% of eligible
4persons have elected to participate in the defined contribution
5plan, the System shall provide notice to previously eligible
6employees that the plan is no longer available and shall cease
7accepting applications to participate.
8    (d) The System shall make a good faith effort to contact
9each active Tier 1 employee who is eligible to participate in
10the defined contribution plan. Such correspondence shall
11describe the option to join the defined contribution plan to
12each of these employees. If the employee is not responsive to
13other means of contact, it is sufficient for the System to
14publish the details of the option on its website.
15    Upon request for further information describing the
16option, the System shall provide employees with information
17from the System before exercising the option to join the plan,
18including information on the impact to their vested benefits or
19non-vested service. The individual consultation shall include
20projections of the member's defined benefits at retirement or
21earlier termination of service and the value of the member's
22account at retirement or earlier termination of service. The
23System shall not provide advice or counseling with respect to
24whether the employee should exercise the option. The System
25shall inform Tier 1 employees who are eligible to participate
26in the defined contribution plan that they may also wish to

 

 

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1obtain information and counsel relating to their option from
2any other available source, including, but not limited to,
3labor organizations, private counsel, and financial advisors.
4    (e) In no event shall the System, its staff, its authorized
5representatives, or the Board be liable for any information
6given to an employee under this Section. The System may
7coordinate with other retirement systems administering a
8defined contribution plan in accordance with this amendatory
9Act of the 100th General Assembly to provide information
10concerning the impact of the option set forth in this Section.
11    (f) Notwithstanding any other provision of this Section, no
12person shall begin participating in the defined contribution
13plan until it has attained qualified plan status and received
14all necessary approvals from the U.S. Internal Revenue Service.
15    (g) The System shall report on its progress under this
16Section, including the available details of the defined
17contribution plan and the System's plans for informing eligible
18Tier 1 employees about the plan, to the Governor and the
19General Assembly.
20    (h) The intent of this amendatory Act of the 100th General
21Assembly is to ensure that the State's normal cost of
22participation in the defined contribution plan is similar, and
23if possible equal, to the State's normal cost of participation
24in the defined benefit plan, unless a lower State's normal cost
25is necessary to ensure cost neutrality.
 

 

 

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1    (40 ILCS 5/16-206.1 new)
2    Sec. 16-206.1. Defined contribution plan; termination. If
3the defined contribution plan is terminated or becomes
4inoperative pursuant to law, then each participant in the plan
5shall automatically be deemed to have been a contributing Tier
61 employee in the System's defined benefit plan during the time
7in which he or she participated in the defined contribution
8plan, and for that purpose the System shall be entitled to
9recover the amounts in the participant's defined contribution
10accounts.
 
11    (40 ILCS 5/17-106.05 new)
12    Sec. 17-106.05. Tier 1 employee. "Tier 1 employee": A
13teacher under this Article who first became a member or
14participant before January 1, 2011 under any reciprocal
15retirement system or pension fund established under this Code
16other than a retirement system or pension fund established
17under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
18the purposes of the election under Section 17-115.5, "Tier 1
19employee" does not include a teacher under this Article who
20would qualify as a Tier 1 employee but who has made an
21irrevocable election on or before June 1, 2017 to retire from
22service pursuant to the terms of an employment contract or a
23collective bargaining agreement in effect on June 1, 2017,
24excluding any extension, amendment, or renewal of that
25agreement after that date, and has notified the Fund of that

 

 

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1election.
 
2    (40 ILCS 5/17-113.4 new)
3    Sec. 17-113.4. Salary. "Salary" means any income in any
4form that qualifies as "average salary" or "annual rate of
5salary" for purposes of paragraph (1) of subsection (c) of
6Section 17-116 and "salary" for payroll deduction purposes
7under Sections 17-130, 17-131, and 17-132.
 
8    (40 ILCS 5/17-115.5 new)
9    Sec. 17-115.5. Election by Tier 1 employees.
10    (a) If approved by resolution of the Board, an active Tier
111 employee may make an irrevocable election to agree to delay
12his or her eligibility for automatic annual increases in
13service retirement pension as provided in Section 17-119.2 and
14to have the amount of the automatic annual increases in his or
15her service retirement pension and survivor's pension that are
16otherwise provided for in this Article calculated, instead, as
17provided in Section 17-119.2.
18    (b) As adequate and legal consideration provided under this
19amendatory Act of the 100th General Assembly for making an
20election under subsection (a) of this Section, each Tier 1
21employee who has made an election under subsection (a) of this
22Section shall receive a consideration payment equal to 10% of
23the contributions made by or on behalf of the employee under
24Section 17-130 before the effective date of that election. The

 

 

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1Fund shall pay the amount of the consideration payment.
2    (c) A Tier 1 employee who does not make the election under
3subsection (a) of this Section shall not be subject to the
4benefits of subsection (b) of this Section.
5    (d) The Fund shall make a good faith effort to contact each
6Tier 1 employee subject to this Section. Such correspondence
7shall describe the election to each Tier 1 employee. If the
8Tier 1 employee is not responsive, it is sufficient for the
9Fund to publish the details of any elections on its website or
10to publish those details in a regularly published newsletter or
11other existing public forum.
12    Tier 1 employees who are subject to this Section shall be
13provided with an election packet containing information
14regarding their options, as well as the forms necessary to make
15the election. Upon request, the Fund shall offer Tier 1
16employees an opportunity to receive information from the Fund
17before making the election. The information may be provided
18through video materials, group presentations, individual
19consultation with a member or authorized representative of the
20Fund in person or by telephone or other electronic means, or
21any combination of those methods. The Fund shall not provide
22advice or counseling with respect to the legal or tax
23circumstances of or consequences of making the election in
24subsection (a) of this Section.
25    The Fund shall inform Tier 1 employees in the election
26packet required under this subsection that the Tier 1 employee

 

 

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1may also wish to obtain information and counsel relating to the
2election under this Section from any other available source,
3including, but not limited to, labor organizations and private
4counsel.
5    In no event shall the Fund, its staff, or the Board be held
6liable for any information given to a member regarding the
7election under this Section. The Fund shall coordinate with
8other retirement systems administering an election in
9accordance with this amendatory Act of the 100th General
10Assembly to provide information concerning the impact of the
11election set forth in this Section.
12    (d-5) To the extent authorized under federal law and as
13authorized by the Fund, a Tier 1 employee may transfer or roll
14over the consideration payment into other qualified retirement
15plans.
16    (e) A member's election under this Section is not a
17prohibited election under subdivision (j)(1) of Section 1-119
18of this Code.
19    (f) No provision of this Section shall be interpreted in a
20way that would cause the Fund to cease to be a qualified plan
21under Section 401(a) of the Internal Revenue Code of 1986.
 
22    (40 ILCS 5/17-116)  (from Ch. 108 1/2, par. 17-116)
23    Sec. 17-116. Service retirement pension.
24    (a) Each teacher having 20 years of service upon attainment
25of age 55, or who thereafter attains age 55 shall be entitled

 

 

HB4045 Engrossed- 201 -LRB100 12674 RPS 26063 b

1to a service retirement pension upon or after attainment of age
255; and each teacher in service on or after July 1, 1971, with
35 or more but less than 20 years of service shall be entitled
4to receive a service retirement pension upon or after
5attainment of age 62.
6    (b) The service retirement pension for a teacher who
7retires on or after June 25, 1971, at age 60 or over, shall be
8calculated as follows:
9        (1) For creditable service earned before July 1, 1998
10    that has not been augmented under Section 17-119.1: 1.67%
11    for each of the first 10 years of service; 1.90% for each
12    of the next 10 years of service; 2.10% for each year of
13    service in excess of 20 but not exceeding 30; and 2.30% for
14    each year of service in excess of 30, based upon average
15    salary as herein defined.
16        (2) For creditable service earned on or after July 1,
17    1998 by a member who has at least 30 years of creditable
18    service on July 1, 1998 and who does not elect to augment
19    service under Section 17-119.1: 2.3% of average salary for
20    each year of creditable service earned on or after July 1,
21    1998.
22        (3) For all other creditable service: 2.2% of average
23    salary for each year of creditable service.
24    (c) When computing such service retirement pensions, the
25following conditions shall apply:
26        1. Average salary shall consist of the average annual

 

 

HB4045 Engrossed- 202 -LRB100 12674 RPS 26063 b

1    rate of salary for the 4 consecutive years of validated
2    service within the last 10 years of service when such
3    average annual rate was highest. In the determination of
4    average salary for retirement allowance purposes, for
5    members who commenced employment after August 31, 1979,
6    that part of the salary for any year shall be excluded
7    which exceeds the annual full-time salary rate for the
8    preceding year by more than 20%. In the case of a member
9    who commenced employment before August 31, 1979 and who
10    receives salary during any year after September 1, 1983
11    which exceeds the annual full time salary rate for the
12    preceding year by more than 20%, an Employer and other
13    employers of eligible contributors as defined in Section
14    17-106 shall pay to the Fund an amount equal to the present
15    value of the additional service retirement pension
16    resulting from such excess salary. The present value of the
17    additional service retirement pension shall be computed by
18    the Board on the basis of actuarial tables adopted by the
19    Board. If a member elects to receive a pension from this
20    Fund provided by Section 20-121, his salary under the State
21    Universities Retirement System and the Teachers'
22    Retirement System of the State of Illinois shall be
23    considered in determining such average salary. Amounts
24    paid after the effective date of this amendatory Act of
25    1991 for unused vacation time earned after that effective
26    date shall not under any circumstances be included in the

 

 

HB4045 Engrossed- 203 -LRB100 12674 RPS 26063 b

1    calculation of average salary or the annual rate of salary
2    for the purposes of this Article.
3        2. Proportionate credit shall be given for validated
4    service of less than one year.
5        3. For retirement at age 60 or over the pension shall
6    be payable at the full rate.
7        4. For separation from service below age 60 to a
8    minimum age of 55, the pension shall be discounted at the
9    rate of 1/2 of one per cent for each month that the age of
10    the contributor is less than 60, but a teacher may elect to
11    defer the effective date of pension in order to eliminate
12    or reduce this discount. This discount shall not be
13    applicable to any participant who has at least 34 years of
14    service or a retirement pension of at least 74.6% of
15    average salary on the date the retirement annuity begins.
16        5. No additional pension shall be granted for service
17    exceeding 45 years. Beginning June 26, 1971 no pension
18    shall exceed the greater of $1,500 per month or 75% of
19    average salary as herein defined.
20        6. Service retirement pensions shall begin on the
21    effective date of resignation, retirement, the day
22    following the close of the payroll period for which service
23    credit was validated, or the time the person resigning or
24    retiring attains age 55, or on a date elected by the
25    teacher, whichever shall be latest; provided that, for a
26    person who first becomes a member after the effective date

 

 

HB4045 Engrossed- 204 -LRB100 12674 RPS 26063 b

1    of this amendatory Act of the 99th General Assembly, the
2    benefit shall not commence more than one year prior to the
3    date of the Fund's receipt of an application for the
4    benefit.
5        7. A member who is eligible to receive a retirement
6    pension of at least 74.6% of average salary and will attain
7    age 55 on or before December 31 during the year which
8    commences on July 1 shall be deemed to attain age 55 on the
9    preceding June 1.
10        8. A member retiring after the effective date of this
11    amendatory Act of 1998 shall receive a pension equal to 75%
12    of average salary if the member is qualified to receive a
13    retirement pension equal to at least 74.6% of average
14    salary under this Article or as proportional annuities
15    under Article 20 of this Code.
16    (d) Notwithstanding any other provision of this Section,
17annual salary does not include any consideration payment made
18to a Tier 1 employee.
19(Source: P.A. 99-702, eff. 7-29-16.)
 
20    (40 ILCS 5/17-119.2 new)
21    Sec. 17-119.2. Automatic annual increases in service
22retirement pension and survivor's pension for certain Tier 1
23employees. Notwithstanding any other provision of this
24Article, for a Tier 1 employee who made the election under
25subsection (a) of Section 17-115.5:

 

 

HB4045 Engrossed- 205 -LRB100 12674 RPS 26063 b

1        (1) The initial increase in service retirement pension
2    shall occur on the January 1 occurring either on or after
3    the attainment of age 67 or the fifth anniversary of the
4    pension start date, whichever is earlier.
5        (2) The amount of each automatic annual increase in
6    service retirement pension or survivor's pension occurring
7    on or after the effective date of that election shall be
8    calculated as a percentage of the originally granted
9    service retirement pension or survivor's pension, equal to
10    3% or one-half the annual unadjusted percentage increase
11    (but not less than zero) in the consumer price index-u for
12    the 12 months ending with the September preceding each
13    November 1, whichever is less. If the annual unadjusted
14    percentage change in the consumer price index-u for the 12
15    months ending with the September preceding each November 1
16    is zero or there is a decrease, then the annuity shall not
17    be increased.
18    For the purposes of this Section, "consumer price index-u"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by all urban
22consumers, United States city average, all items, 1982-84 =
23100. The new amount resulting from each annual adjustment shall
24be determined by the Public Pension Division of the Department
25of Insurance and made available to the Board by November 1 of
26each year.
 

 

 

HB4045 Engrossed- 206 -LRB100 12674 RPS 26063 b

1    (40 ILCS 5/17-130)  (from Ch. 108 1/2, par. 17-130)
2    Sec. 17-130. Participants' contributions by payroll
3deductions.
4    (a) Except as provided in subsection (a-5), there There
5shall be deducted from the salary of each teacher 7.50% of his
6salary for service or disability retirement pension and 0.5% of
7salary for the annual increase in base pension.
8    In addition, there shall be deducted from the salary of
9each teacher 1% of his salary for survivors' and children's
10pensions.
11    (a-5) As adequate and legal consideration provided under
12this amendatory Act of the 100th General Assembly for making an
13election under subsection (a) of Section 17-115.5, beginning on
14the effective date of the Tier 1 employee's election under
15subsection (a) of Section 17-115.5, in lieu of the
16contributions otherwise required under subsection (a), each
17Tier 1 employee who made the election under paragraph (1) of
18Section 17-115.5 shall make contributions of 7.50% of salary
19for service or disability retirement pension and 0.6% of salary
20for survivors' and children's pensions.
21    (b) An Employer and any employer of eligible contributors
22as defined in Section 17-106 is authorized to make the
23necessary deductions from the salaries of its teachers. Such
24amounts shall be included as a part of the Fund. An Employer
25and any employer of eligible contributors as defined in Section

 

 

HB4045 Engrossed- 207 -LRB100 12674 RPS 26063 b

117-106 shall formulate such rules and regulations as may be
2necessary to give effect to the provisions of this Section.
3    (c) All persons employed as teachers shall, by such
4employment, accept the provisions of this Article and of
5Sections 34-83 to 34-85, inclusive, of "The School Code",
6approved March 18, 1961, as amended, and thereupon become
7contributors to the Fund in accordance with the terms thereof.
8The provisions of this Article and of those Sections shall
9become a part of the contract of employment.
10    (d) A person who (i) was a member before July 1, 1998, (ii)
11retires with more than 34 years of creditable service, and
12(iii) does not elect to qualify for the augmented rate under
13Section 17-119.1 shall be entitled, at the time of retirement,
14to receive a partial refund of contributions made under this
15Section for service occurring after the later of June 30, 1998
16or attainment of 34 years of creditable service, in an amount
17equal to 1.00% of the salary upon which those contributions
18were based.
19(Source: P.A. 97-8, eff. 6-13-11.)
 
20    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
21    (Text of Section WITHOUT the changes made by P.A. 98-599,
22which has been held unconstitutional)
23    Sec. 20-121. Calculation of proportional retirement
24annuities.
25    (a) Upon retirement of the employee, a proportional

 

 

HB4045 Engrossed- 208 -LRB100 12674 RPS 26063 b

1retirement annuity shall be computed by each participating
2system in which pension credit has been established on the
3basis of pension credits under each system. The computation
4shall be in accordance with the formula or method prescribed by
5each participating system which is in effect at the date of the
6employee's latest withdrawal from service covered by any of the
7systems in which he has pension credits which he elects to have
8considered under this Article. However, the amount of any
9retirement annuity payable under the self-managed plan
10established under Section 15-158.2 of this Code or under the
11defined contribution plan established under Article 2, 14, 15,
12or 16 of this Code depends solely on the value of the
13participant's vested account balances and is not subject to any
14proportional adjustment under this Section.
15    (a-5) For persons who participate in a defined contribution
16plan established under Article 2, 14, 15, or 16 of this Code to
17whom the provisions of this Article apply, the pension credits
18established under the defined contribution plan may be
19considered in determining eligibility for or the amount of the
20defined benefit retirement annuity that is payable by any other
21participating system.
22    (b) Combined pension credit under all retirement systems
23subject to this Article shall be considered in determining
24whether the minimum qualification has been met and the formula
25or method of computation which shall be applied, except as may
26be otherwise provided with respect to vesting in State or

 

 

HB4045 Engrossed- 209 -LRB100 12674 RPS 26063 b

1employer contributions in a defined contribution plan. If a
2system has a step-rate formula for calculation of the
3retirement annuity, pension credits covering previous service
4which have been established under another system shall be
5considered in determining which range or ranges of the
6step-rate formula are to be applicable to the employee.
7    (c) Interest on pension credit shall continue to accumulate
8in accordance with the provisions of the law governing the
9retirement system in which the same has been established during
10the time an employee is in the service of another employer, on
11the assumption such employee, for interest purposes for pension
12credit, is continuing in the service covered by such retirement
13system.
14(Source: P.A. 91-887, eff. 7-6-00.)
 
15    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
16    (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18    Sec. 20-123. Survivor's annuity. The provisions governing
19a retirement annuity shall be applicable to a survivor's
20annuity. Appropriate credits shall be established for
21survivor's annuity purposes in those participating systems
22which provide survivor's annuities, according to the same
23conditions and subject to the same limitations and restrictions
24herein prescribed for a retirement annuity. If a participating
25system has no survivor's annuity benefit, or if the survivor's

 

 

HB4045 Engrossed- 210 -LRB100 12674 RPS 26063 b

1annuity benefit under that system is waived, pension credit
2established in that system shall not be considered in
3determining eligibility for or the amount of the survivor's
4annuity which may be payable by any other participating system.
5    For persons who participate in the self-managed plan
6established under Section 15-158.2 or the portable benefit
7package established under Section 15-136.4, pension credit
8established under Article 15 may be considered in determining
9eligibility for or the amount of the survivor's annuity that is
10payable by any other participating system, but pension credit
11established in any other system shall not result in any right
12to a survivor's annuity under the Article 15 system.
13    For persons who participate in a defined contribution plan
14established under Article 2, 14, 15, or 16 of this Code to whom
15the provisions of this Article apply, the pension credits
16established under the defined contribution plan may be
17considered in determining eligibility for or the amount of the
18defined benefit survivor's annuity that is payable by any other
19participating system, but pension credits established in any
20other system shall not result in any right to or increase in
21the value of a survivor's annuity under the defined
22contribution plan, which depends solely on the options chosen
23and the value of the participant's vested account balances and
24is not subject to any proportional adjustment under this
25Section.
26(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

HB4045 Engrossed- 211 -LRB100 12674 RPS 26063 b

1    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 20-124. Maximum benefits.
5    (a) In no event shall the combined retirement or survivors
6annuities exceed the highest annuity which would have been
7payable by any participating system in which the employee has
8pension credits, if all of his pension credits had been
9validated in that system.
10    If the combined annuities should exceed the highest maximum
11as determined in accordance with this Section, the respective
12annuities shall be reduced proportionately according to the
13ratio which the amount of each proportional annuity bears to
14the aggregate of all such annuities.
15    (b) In the case of a participant in the self-managed plan
16established under Section 15-158.2 of this Code to whom the
17provisions of this Article apply:
18        (i) For purposes of calculating the combined
19    retirement annuity and the proportionate reduction, if
20    any, in a retirement annuity other than one payable under
21    the self-managed plan, the amount of the Article 15
22    retirement annuity shall be deemed to be the highest
23    annuity to which the annuitant would have been entitled if
24    he or she had participated in the traditional benefit
25    package as defined in Section 15-103.1 rather than the

 

 

HB4045 Engrossed- 212 -LRB100 12674 RPS 26063 b

1    self-managed plan.
2        (ii) For purposes of calculating the combined
3    survivor's annuity and the proportionate reduction, if
4    any, in a survivor's annuity other than one payable under
5    the self-managed plan, the amount of the Article 15
6    survivor's annuity shall be deemed to be the highest
7    survivor's annuity to which the survivor would have been
8    entitled if the deceased employee had participated in the
9    traditional benefit package as defined in Section 15-103.1
10    rather than the self-managed plan.
11        (iii) Benefits payable under the self-managed plan are
12    not subject to proportionate reduction under this Section.
13    (c) In the case of a participant in a defined contribution
14plan established under Article 2, 14, 15, or 16 of this Code to
15whom the provisions of this Article apply:
16        (i) For purposes of calculating the combined
17    retirement annuity and the proportionate reduction, if
18    any, in a defined benefit retirement annuity, any benefit
19    payable under the defined contribution plan shall not be
20    considered.
21        (ii) For purposes of calculating the combined
22    survivor's annuity and the proportionate reduction, if
23    any, in a defined benefit survivor's annuity, any benefit
24    payable under the defined contribution plan shall not be
25    considered.
26        (iii) Benefits payable under a defined contribution

 

 

HB4045 Engrossed- 213 -LRB100 12674 RPS 26063 b

1    plan established under Article 2, 14, 15, or 16 of this
2    Code are not subject to proportionate reduction under this
3    Section.
4(Source: P.A. 91-887, eff. 7-6-00.)
 
5    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 20-125. Return to employment - suspension of benefits.
9If a retired employee returns to employment which is covered by
10a system from which he is receiving a proportional annuity
11under this Article, his proportional annuity from all
12participating systems shall be suspended during the period of
13re-employment, except that this suspension does not apply to
14any distributions payable under the self-managed plan
15established under Section 15-158.2 or under a defined
16contribution plan established under Article 2, 14, 15, or 16 of
17this Code.
18    The provisions of the Article under which such employment
19would be covered shall govern the determination of whether the
20employee has returned to employment, and if applicable the
21exemption of temporary employment or employment not exceeding a
22specified duration or frequency, for all participating systems
23from which the retired employee is receiving a proportional
24annuity under this Article, notwithstanding any contrary
25provisions in the other Articles governing such systems.

 

 

HB4045 Engrossed- 214 -LRB100 12674 RPS 26063 b

1(Source: P.A. 91-887, eff. 7-6-00.)
 
2    (40 ILCS 5/2-165 rep.)
3    (40 ILCS 5/2-166 rep.)
4    (40 ILCS 5/14-155 rep.)
5    (40 ILCS 5/14-156 rep.)
6    (40 ILCS 5/15-200 rep.)
7    (40 ILCS 5/15-201 rep.)
8    (40 ILCS 5/16-205 rep.)
9    (40 ILCS 5/16-206 rep.)
10    Section 15. The Illinois Pension Code is amended by
11repealing Sections 2-165, 2-166, 14-155, 14-156, 15-200,
1215-201, 16-205, and 16-206.
 
13    Section 900. The State Mandates Act is amended by adding
14Section 8.41 as follows:
 
15    (30 ILCS 805/8.41 new)
16    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
17of this Act, no reimbursement by the State is required for the
18implementation of any mandate created by this amendatory Act of
19the 100th General Assembly.
 
20    Section 970. Severability. The provisions of this Act are
21severable under Section 1.31 of the Statute on Statutes.