101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3256

 

Introduced , by Rep. Dan Brady

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-135  from Ch. 108 1/2, par. 15-135
40 ILCS 5/15-136  from Ch. 108 1/2, par. 15-136

    Amends the State Universities Article of the Illinois Pension Code. Provides that a Tier 2 member is entitled to a retirement annuity upon written application if he or she has at least 10 years of service credit as a police officer, has attained age 55, and is otherwise eligible under the requirements of the Article. Provides that a Tier 2 member who has attained age 50, has at least 10 years of service credit as a police officer, and is otherwise eligible under the requirements of the Article may elect to receive a retirement annuity that is reduced by 6% for each year that member is under the age of 55. Effective immediately.


LRB101 05193 RPS 50205 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3256LRB101 05193 RPS 50205 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 Illinois Pension Code is amended by changing
5Sections 15-135 and 15-136 as follows:
 
6    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
7    Sec. 15-135. Retirement annuities - Conditions.
8    (a) This subsection (a) applies only to a Tier 1 member. A
9participant who retires in one of the following specified years
10with the specified amount of service is entitled to a
11retirement annuity at any age under the retirement program
12applicable to the participant:
13        35 years if retirement is in 1997 or before;
14        34 years if retirement is in 1998;
15        33 years if retirement is in 1999;
16        32 years if retirement is in 2000;
17        31 years if retirement is in 2001;
18        30 years if retirement is in 2002 or later.
19    A participant with 8 or more years of service after
20September 1, 1941, is entitled to a retirement annuity on or
21after attainment of age 55.
22    A participant with at least 5 but less than 8 years of
23service after September 1, 1941, is entitled to a retirement

 

 

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1annuity on or after attainment of age 62.
2    A participant who has at least 25 years of service in this
3system as a police officer or firefighter is entitled to a
4retirement annuity on or after the attainment of age 50, if
5Rule 4 of Section 15-136 is applicable to the participant.
6    (a-5) A Tier 2 member is entitled to a retirement annuity
7upon written application if he or she has attained age 67 and
8has at least 10 years of service credit and is otherwise
9eligible under the requirements of this Article. A Tier 2
10member who has attained age 62 and has at least 10 years of
11service credit and is otherwise eligible under the requirements
12of this Article may elect to receive the lower retirement
13annuity provided in subsection (b-5) of Section 15-136 of this
14Article.
15    (a-10) A Tier 2 member is entitled to a retirement annuity
16upon written application if he or she has at least 10 years of
17service credit as a police officer, has attained age 55, and is
18otherwise eligible under the requirements of this Article. A
19Tier 2 member who has attained age 50, has at least 10 years of
20service credit as a police officer, and is otherwise eligible
21under the requirements of this Article may elect to receive the
22lower retirement annuity provided in subsection (b-10) of
23Section 15-136.
24    (b) The annuity payment period shall begin on the date
25specified by the participant or the recipient of a disability
26retirement annuity submitting a written application. For a

 

 

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1participant, the date on which the annuity payment period
2begins shall not be prior to termination of employment or more
3than one year before the application is received by the board;
4however, if the participant is not an employee of an employer
5participating in this System or in a participating system as
6defined in Article 20 of this Code on April 1 of the calendar
7year next following the calendar year in which the participant
8attains age 70 1/2, the annuity payment period shall begin on
9that date regardless of whether an application has been filed.
10For a recipient of a disability retirement annuity, the date on
11which the annuity payment period begins shall not be prior to
12the discontinuation of the disability retirement annuity under
13Section 15-153.2.
14    (c) An annuity is not payable if the amount provided under
15Section 15-136 is less than $10 per month.
16(Source: P.A. 100-556, eff. 12-8-17.)
 
17    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 15-136. Retirement annuities - Amount. The provisions
21of this Section 15-136 apply only to those participants who are
22participating in the traditional benefit package or the
23portable benefit package and do not apply to participants who
24are participating in the self-managed plan.
25    (a) The amount of a participant's retirement annuity,

 

 

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1expressed in the form of a single-life annuity, shall be
2determined by whichever of the following rules is applicable
3and provides the largest annuity:
4    Rule 1: The retirement annuity shall be 1.67% of final rate
5of earnings for each of the first 10 years of service, 1.90%
6for each of the next 10 years of service, 2.10% for each year
7of service in excess of 20 but not exceeding 30, and 2.30% for
8each year in excess of 30; or for persons who retire on or
9after January 1, 1998, 2.2% of the final rate of earnings for
10each year of service.
11    Rule 2: The retirement annuity shall be the sum of the
12following, determined from amounts credited to the participant
13in accordance with the actuarial tables and the effective rate
14of interest in effect at the time the retirement annuity
15begins:
16        (i) the normal annuity which can be provided on an
17    actuarially equivalent basis, by the accumulated normal
18    contributions as of the date the annuity begins;
19        (ii) an annuity from employer contributions of an
20    amount equal to that which can be provided on an
21    actuarially equivalent basis from the accumulated normal
22    contributions made by the participant under Section
23    15-113.6 and Section 15-113.7 plus 1.4 times all other
24    accumulated normal contributions made by the participant;
25    and
26        (iii) the annuity that can be provided on an

 

 

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1    actuarially equivalent basis from the entire contribution
2    made by the participant under Section 15-113.3.
3    With respect to a police officer or firefighter who retires
4on or after August 14, 1998, the accumulated normal
5contributions taken into account under clauses (i) and (ii) of
6this Rule 2 shall include the additional normal contributions
7made by the police officer or firefighter under Section
815-157(a).
9    The amount of a retirement annuity calculated under this
10Rule 2 shall be computed solely on the basis of the
11participant's accumulated normal contributions, as specified
12in this Rule and defined in Section 15-116. Neither an employee
13or employer contribution for early retirement under Section
1415-136.2 nor any other employer contribution shall be used in
15the calculation of the amount of a retirement annuity under
16this Rule 2.
17    This amendatory Act of the 91st General Assembly is a
18clarification of existing law and applies to every participant
19and annuitant without regard to whether status as an employee
20terminates before the effective date of this amendatory Act.
21    This Rule 2 does not apply to a person who first becomes an
22employee under this Article on or after July 1, 2005.
23    Rule 3: The retirement annuity of a participant who is
24employed at least one-half time during the period on which his
25or her final rate of earnings is based, shall be equal to the
26participant's years of service not to exceed 30, multiplied by

 

 

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1(1) $96 if the participant's final rate of earnings is less
2than $3,500, (2) $108 if the final rate of earnings is at least
3$3,500 but less than $4,500, (3) $120 if the final rate of
4earnings is at least $4,500 but less than $5,500, (4) $132 if
5the final rate of earnings is at least $5,500 but less than
6$6,500, (5) $144 if the final rate of earnings is at least
7$6,500 but less than $7,500, (6) $156 if the final rate of
8earnings is at least $7,500 but less than $8,500, (7) $168 if
9the final rate of earnings is at least $8,500 but less than
10$9,500, and (8) $180 if the final rate of earnings is $9,500 or
11more, except that the annuity for those persons having made an
12election under Section 15-154(a-1) shall be calculated and
13payable under the portable retirement benefit program pursuant
14to the provisions of Section 15-136.4.
15    Rule 4: A participant who is at least age 50 and has 25 or
16more years of service as a police officer or firefighter, and a
17participant who is age 55 or over and has at least 20 but less
18than 25 years of service as a police officer or firefighter,
19shall be entitled to a retirement annuity of 2 1/4% of the
20final rate of earnings for each of the first 10 years of
21service as a police officer or firefighter, 2 1/2% for each of
22the next 10 years of service as a police officer or
23firefighter, and 2 3/4% for each year of service as a police
24officer or firefighter in excess of 20. The retirement annuity
25for all other service shall be computed under Rule 1. A Tier 2
26member is eligible for a retirement annuity calculated under

 

 

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1Rule 4 only if that Tier 2 member meets the service
2requirements for that benefit calculation as prescribed under
3this Rule 4 in addition to the applicable age requirement under
4subsection (a-5) of Section 15-135.
5    For purposes of this Rule 4, a participant's service as a
6firefighter shall also include the following:
7        (i) service that is performed while the person is an
8    employee under subsection (h) of Section 15-107; and
9        (ii) in the case of an individual who was a
10    participating employee employed in the fire department of
11    the University of Illinois's Champaign-Urbana campus
12    immediately prior to the elimination of that fire
13    department and who immediately after the elimination of
14    that fire department transferred to another job with the
15    University of Illinois, service performed as an employee of
16    the University of Illinois in a position other than police
17    officer or firefighter, from the date of that transfer
18    until the employee's next termination of service with the
19    University of Illinois.
20    (b) For a Tier 1 member, the retirement annuity provided
21under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
22month the participant is under age 60 at the time of
23retirement. However, this reduction shall not apply in the
24following cases:
25        (1) For a disabled participant whose disability
26    benefits have been discontinued because he or she has

 

 

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1    exhausted eligibility for disability benefits under clause
2    (6) of Section 15-152;
3        (2) For a participant who has at least the number of
4    years of service required to retire at any age under
5    subsection (a) of Section 15-135; or
6        (3) For that portion of a retirement annuity which has
7    been provided on account of service of the participant
8    during periods when he or she performed the duties of a
9    police officer or firefighter, if these duties were
10    performed for at least 5 years immediately preceding the
11    date the retirement annuity is to begin.
12    (b-5) The retirement annuity of a Tier 2 member who is
13retiring after attaining age 62 with at least 10 years of
14service credit shall be reduced by 1/2 of 1% for each full
15month that the member's age is under age 67.
16    (b-10) The retirement annuity of a Tier 2 member who is
17retiring after attaining age 50 with at least 10 years of
18service credit as a police officer shall be reduced by 6% for
19each year that the member's age is under age 55.
20    (c) The maximum retirement annuity provided under Rules 1,
212, 4, and 5 shall be the lesser of (1) the annual limit of
22benefits as specified in Section 415 of the Internal Revenue
23Code of 1986, as such Section may be amended from time to time
24and as such benefit limits shall be adjusted by the
25Commissioner of Internal Revenue, and (2) 80% of final rate of
26earnings.

 

 

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1    (d) A Tier 1 member whose status as an employee terminates
2after August 14, 1969 shall receive automatic increases in his
3or her retirement annuity as follows:
4    Effective January 1 immediately following the date the
5retirement annuity begins, the annuitant shall receive an
6increase in his or her monthly retirement annuity of 0.125% of
7the monthly retirement annuity provided under Rule 1, Rule 2,
8Rule 3, or Rule 4 contained in this Section, multiplied by the
9number of full months which elapsed from the date the
10retirement annuity payments began to January 1, 1972, plus
110.1667% of such annuity, multiplied by the number of full
12months which elapsed from January 1, 1972, or the date the
13retirement annuity payments began, whichever is later, to
14January 1, 1978, plus 0.25% of such annuity multiplied by the
15number of full months which elapsed from January 1, 1978, or
16the date the retirement annuity payments began, whichever is
17later, to the effective date of the increase.
18    The annuitant shall receive an increase in his or her
19monthly retirement annuity on each January 1 thereafter during
20the annuitant's life of 3% of the monthly annuity provided
21under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
22Section. The change made under this subsection by P.A. 81-970
23is effective January 1, 1980 and applies to each annuitant
24whose status as an employee terminates before or after that
25date.
26    Beginning January 1, 1990, all automatic annual increases

 

 

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1payable under this Section shall be calculated as a percentage
2of the total annuity payable at the time of the increase,
3including all increases previously granted under this Article.
4    The change made in this subsection by P.A. 85-1008 is
5effective January 26, 1988, and is applicable without regard to
6whether status as an employee terminated before that date.
7    (d-5) A retirement annuity of a Tier 2 member shall receive
8annual increases on the January 1 occurring either on or after
9the attainment of age 67 or the first anniversary of the
10annuity start date, whichever is later. Each annual increase
11shall be calculated at 3% or one half the annual unadjusted
12percentage increase (but not less than zero) in the consumer
13price index-u for the 12 months ending with the September
14preceding each November 1, whichever is less, of the originally
15granted retirement annuity. If the annual unadjusted
16percentage change in the consumer price index-u for the 12
17months ending with the September preceding each November 1 is
18zero or there is a decrease, then the annuity shall not be
19increased.
20    (e) If, on January 1, 1987, or the date the retirement
21annuity payment period begins, whichever is later, the sum of
22the retirement annuity provided under Rule 1 or Rule 2 of this
23Section and the automatic annual increases provided under the
24preceding subsection or Section 15-136.1, amounts to less than
25the retirement annuity which would be provided by Rule 3, the
26retirement annuity shall be increased as of January 1, 1987, or

 

 

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1the date the retirement annuity payment period begins,
2whichever is later, to the amount which would be provided by
3Rule 3 of this Section. Such increased amount shall be
4considered as the retirement annuity in determining benefits
5provided under other Sections of this Article. This paragraph
6applies without regard to whether status as an employee
7terminated before the effective date of this amendatory Act of
81987, provided that the annuitant was employed at least
9one-half time during the period on which the final rate of
10earnings was based.
11    (f) A participant is entitled to such additional annuity as
12may be provided on an actuarially equivalent basis, by any
13accumulated additional contributions to his or her credit.
14However, the additional contributions made by the participant
15toward the automatic increases in annuity provided under this
16Section shall not be taken into account in determining the
17amount of such additional annuity.
18    (g) If, (1) by law, a function of a governmental unit, as
19defined by Section 20-107 of this Code, is transferred in whole
20or in part to an employer, and (2) a participant transfers
21employment from such governmental unit to such employer within
226 months after the transfer of the function, and (3) the sum of
23(A) the annuity payable to the participant under Rule 1, 2, or
243 of this Section (B) all proportional annuities payable to the
25participant by all other retirement systems covered by Article
2620, and (C) the initial primary insurance amount to which the

 

 

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1participant is entitled under the Social Security Act, is less
2than the retirement annuity which would have been payable if
3all of the participant's pension credits validated under
4Section 20-109 had been validated under this system, a
5supplemental annuity equal to the difference in such amounts
6shall be payable to the participant.
7    (h) On January 1, 1981, an annuitant who was receiving a
8retirement annuity on or before January 1, 1971 shall have his
9or her retirement annuity then being paid increased $1 per
10month for each year of creditable service. On January 1, 1982,
11an annuitant whose retirement annuity began on or before
12January 1, 1977, shall have his or her retirement annuity then
13being paid increased $1 per month for each year of creditable
14service.
15    (i) On January 1, 1987, any annuitant whose retirement
16annuity began on or before January 1, 1977, shall have the
17monthly retirement annuity increased by an amount equal to 8¢
18per year of creditable service times the number of years that
19have elapsed since the annuity began.
20(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
2198-92, eff. 7-16-13.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.