101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3051

 

Introduced 2/5/2020, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/5-167.1  from Ch. 108 1/2, par. 5-167.1
40 ILCS 5/5-238
30 ILCS 805/8.44 new

    Amends the Chicago Police Article of the Illinois Pension Code. Removes a birthdate restriction on eligibility at age 55 for a 3% automatic annual increase in retirement annuity that is not subject to a maximum increase of 30%. Provides that for Tier 2 policemen, "final average salary" is the greater of: (i) the average monthly salary obtained by dividing the total salary of the policeman during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest; or (ii) the average monthly salary obtained by dividing the total salary of the policeman during the 48 consecutive months of service within the last 60 months of service in which the total salary was the highest. Provides that the Tier 2 limitation on salary shall annually be increased by the lesser of 3% or the annual (instead of one-half of the annual) unadjusted percentage increase in the consumer price index-u. Provides that the surviving spouse's annuity for certain Tier 2 policemen shall be 54% of the policeman's monthly salary. Makes changes to the benefits paid to the guardian or surviving spouse of a deceased Tier 2 policeman if the policeman was the parent of a child. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB101 19783 RPS 69294 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

SB3051LRB101 19783 RPS 69294 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 5-167.1 and 5-238 as follows:
 
6    (40 ILCS 5/5-167.1)  (from Ch. 108 1/2, par. 5-167.1)
7    Sec. 5-167.1. Automatic increase in annuity; retirement
8from service after September 1, 1967.
9    (a) A policeman who retires from service after September 1,
101967 with at least 20 years of service credit shall, upon
11either the first of the month following the first anniversary
12of his date of retirement if he is age 55 60 (age 55 if born
13before January 1, 1966) or over on that anniversary date, or
14upon the first of the month following his attainment of age 55
1560 (age 55 if born before January 1, 1966) if it occurs after
16the first anniversary of his retirement date, have his then
17fixed and payable monthly annuity increased by 3% 1 1/2% and
18such first fixed annuity as granted at retirement increased by
19an additional 3% 1 1/2% in January of each year thereafter up
20to a maximum increase of 30%. Beginning January 1, 1983 for
21policemen born before January 1, 1930, and beginning January 1,
221988 for policemen born on or after January 1, 1930 but before
23January 1, 1940, and beginning January 1, 1996 for policemen

 

 

SB3051- 2 -LRB101 19783 RPS 69294 b

1born on or after January 1, 1940 but before January 1, 1945,
2and beginning January 1, 2000 for policemen born on or after
3January 1, 1945 but before January 1, 1950, and beginning
4January 1, 2005 for policemen born on or after January 1, 1950
5but before January 1, 1955, and beginning January 1, 2017 for
6policemen born on or after January 1, 1955 but before January
71, 1966, such increases shall be 3% and such policemen shall
8not be subject to the 30% maximum increase.
9    Any policeman born before January 1, 1945 who qualifies for
10a minimum annuity and retires after September 1, 1967 but has
11not received the initial increase under this subsection before
12January 1, 1996 is entitled to receive the initial increase
13under this subsection on (1) January 1, 1996, (2) the first
14anniversary of the date of retirement, or (3) attainment of age
1555, whichever occurs last. The changes to this Section made by
16Public Act 89-12 apply beginning January 1, 1996 and without
17regard to whether the policeman or annuitant terminated service
18before the effective date of that Act.
19    Any policeman born before January 1, 1950 who qualifies for
20a minimum annuity and retires after September 1, 1967 but has
21not received the initial increase under this subsection before
22January 1, 2000 is entitled to receive the initial increase
23under this subsection on (1) January 1, 2000, (2) the first
24anniversary of the date of retirement, or (3) attainment of age
2555, whichever occurs last. The changes to this Section made by
26this amendatory Act of the 92nd General Assembly apply without

 

 

SB3051- 3 -LRB101 19783 RPS 69294 b

1regard to whether the policeman or annuitant terminated service
2before the effective date of this amendatory Act.
3    Any policeman born before January 1, 1955 who qualifies for
4a minimum annuity and retires after September 1, 1967 but has
5not received the initial increase under this subsection before
6January 1, 2005 is entitled to receive the initial increase
7under this subsection on (1) January 1, 2005, (2) the first
8anniversary of the date of retirement, or (3) attainment of age
955, whichever occurs last. The changes to this Section made by
10this amendatory Act of the 94th General Assembly apply without
11regard to whether the policeman or annuitant terminated service
12before the effective date of this amendatory Act.
13    Any policeman born before January 1, 1966 who qualifies for
14a minimum annuity and retires after September 1, 1967 but has
15not received the initial increase under this subsection before
16January 1, 2017 is entitled to receive an initial increase
17under this subsection on (1) January 1, 2017, (2) the first
18anniversary of the date of retirement, or (3) attainment of age
1955, whichever occurs last, in an amount equal to 3% for each
20complete year following the date of retirement or attainment of
21age 55, whichever occurs later. The changes to this subsection
22made by this amendatory Act of the 99th General Assembly apply
23without regard to whether the policeman or annuitant terminated
24service before the effective date of this amendatory Act.
25    Any policeman born after January 1, 1966 who qualifies for
26a minimum annuity and retires after September 1, 1967 but has

 

 

SB3051- 4 -LRB101 19783 RPS 69294 b

1not received the initial increase under this subsection before
2January 1, 2020 is entitled to receive the initial increase
3under this subsection on (1) January 1, 2020, (2) the first
4anniversary of the date of retirement, or (3) attainment of age
555, whichever occurs last. The changes to this Section made by
6this amendatory Act of the 101st General Assembly apply without
7regard to whether the policeman or annuitant terminated service
8before the effective date of this amendatory Act.
9    (b) Subsection (a) of this Section is not applicable to an
10employee receiving a term annuity.
11    (c) To help defray the cost of such increases in annuity,
12there shall be deducted, beginning September 1, 1967, from each
13payment of salary to a policeman, 1/2 of 1% of each salary
14payment concurrently with and in addition to the salary
15deductions otherwise made for annuity purposes.
16    The city, in addition to the contributions otherwise made
17by it for annuity purposes under other provisions of this
18Article, shall make matching contributions concurrently with
19such salary deductions.
20    Each such 1/2 of 1% deduction from salary and each such
21contribution by the city of 1/2 of 1% of salary shall be
22credited to the Automatic Increase Reserve, to be used to
23defray the cost of the annuity increase provided by this
24Section. Any balance in such reserve as of the beginning of
25each calendar year shall be credited with interest at the rate
26of 3% per annum.

 

 

SB3051- 5 -LRB101 19783 RPS 69294 b

1    Such deductions from salary and city contributions shall
2continue while the policeman is in service.
3    The salary deductions provided in this Section are not
4subject to refund, except to the policeman himself, in any case
5in which: (i) the policeman withdraws prior to qualification
6for minimum annuity or Tier 2 monthly retirement annuity and
7applies for refund, (ii) the policeman applies for an annuity
8of a type that is not subject to annual increases under this
9Section, or (iii) a term annuity becomes payable. In such
10cases, the total of such salary deductions shall be refunded to
11the policeman, without interest, and charged to the Automatic
12Increase Reserve.
13    (d) Notwithstanding any other provision of this Article,
14the Tier 2 monthly retirement annuity of a person who first
15becomes a policeman under this Article on or after the
16effective date of this amendatory Act of the 97th General
17Assembly shall be increased on the January 1 occurring either
18on or after (i) the attainment of age 60 or (ii) the first
19anniversary of the annuity start date, whichever is later. Each
20annual increase shall be calculated at 3% or one-half the
21annual unadjusted percentage increase (but not less than zero)
22in the consumer price index-u for the 12 months ending with the
23September preceding each November 1, whichever is less, of the
24originally granted retirement annuity. If the annual
25unadjusted percentage change in the consumer price index-u for
26a 12-month period ending in September is zero or, when compared

 

 

SB3051- 6 -LRB101 19783 RPS 69294 b

1with the preceding period, decreases, then the annuity shall
2not be increased.
3    For the purposes of this subsection (d), "consumer price
4index-u" means the index published by the Bureau of Labor
5Statistics of the United States Department of Labor that
6measures the average change in prices of goods and services
7purchased by all urban consumers, United States city average,
8all items, 1982-84 = 100. The new amount resulting from each
9annual adjustment shall be determined by the Public Pension
10Division of the Department of Insurance and made available to
11the boards of the pension funds by November 1 of each year.
12(Source: P.A. 99-905, eff. 11-29-16.)
 
13    (40 ILCS 5/5-238)
14    Sec. 5-238. Provisions applicable to new hires; Tier 2.
15    (a) Notwithstanding any other provision of this Article,
16the provisions of this Section apply to a person who first
17becomes a policeman under this Article on or after January 1,
182011, and to certain qualified survivors of such a policeman.
19Such persons, and the benefits and restrictions that apply
20specifically to them under this Article, may be referred to as
21"Tier 2".
22    (b) A policeman who has withdrawn from service, has
23attained age 50 or more, and has 10 or more years of service in
24that capacity shall be entitled, upon proper application being
25received by the Fund, to receive a Tier 2 monthly retirement

 

 

SB3051- 7 -LRB101 19783 RPS 69294 b

1annuity for his service as a police officer. The Tier 2 monthly
2retirement annuity shall be computed by multiplying 2.5% for
3each year of such service by his or her final average salary,
4subject to an annuity reduction factor of one-half of 1% for
5each month that the police officer's age at retirement is under
6age 55. The Tier 2 monthly retirement annuity is in lieu of any
7age and service annuity or other form of retirement annuity
8under this Article.
9    The maximum retirement annuity under this subsection (b)
10shall be 75% of final average salary.
11    For the purposes of this subsection (b), "final average
12salary" means the greater of: (i) the average monthly salary
13obtained by dividing the total salary of the policeman during
14the 96 consecutive months of service within the last 120 months
15of service in which the total salary was the highest by the
16number of months of service in that period; or (ii) the average
17monthly salary obtained by dividing the total salary of the
18policeman during the 48 consecutive months of service within
19the last 60 months of service in which the total salary was the
20highest by the number of months of service in that period.
21    Beginning on January 1, 2011, for all purposes under this
22Code (including without limitation the calculation of benefits
23and employee contributions), the annual salary based on the
24plan year of a member or participant to whom this Section
25applies shall not exceed $106,800; however, that amount shall
26annually thereafter be increased by the lesser of (i) 3% of

 

 

SB3051- 8 -LRB101 19783 RPS 69294 b

1that amount, including all previous adjustments, or (ii)
2one-half the annual unadjusted percentage increase (but not
3less than zero) in the consumer price index-u for the 12 months
4ending with the September preceding each November 1, including
5all previous adjustments.
6    Nothing in this amendatory Act of the 101st General
7Assembly shall cause or otherwise result in any retroactive
8adjustment of any employee contributions.
9    (c) Notwithstanding any other provision of this Article,
10for a person who first becomes a policeman under this Article
11on or after January 1, 2011, eligibility for and the amount of
12the annuity to which the qualified surviving spouse, children,
13and parents are entitled under this subsection (c) shall be
14determined as follows:
15        (1) The surviving spouse of a deceased policeman to
16    whom this Section applies shall be deemed qualified to
17    receive a Tier 2 surviving spouse's annuity under this
18    paragraph (1) if: (i) the deceased policeman meets the
19    requirements specified under subdivision (A), (B), (C), or
20    (D) of this paragraph (1); and (ii) the surviving spouse
21    would not otherwise be excluded from receiving a widow's
22    annuity under the eligibility requirements for a widow's
23    annuity set forth in Section 5-146. The Tier 2 surviving
24    spouse's annuity is in lieu of the widow's annuity
25    determined under any other Section of this Article and is
26    subject to the requirements of Section 5-147.1.

 

 

SB3051- 9 -LRB101 19783 RPS 69294 b

1        As used in this subsection (c), "earned annuity" means
2    a Tier 2 monthly retirement annuity determined under
3    subsection (b) of this Section, including any increases the
4    policeman had received pursuant to Section 5-167.1.
5            (A) If the deceased policeman was receiving an
6        earned annuity at the date of his or her death, the
7        Tier 2 surviving spouse's annuity under this paragraph
8        (1) shall be in the amount of 66 2/3% of the
9        policeman's earned annuity at the date of death.
10            If the deceased policeman was a parent of a child
11        or children, including any child who has been conceived
12        but not yet born, and there is a surviving spouse, 12%
13        of the policeman's earned annuity at the date of death
14        shall be granted to the guardian of any such minor
15        child or children for each such child until attainment
16        of age 18. Upon the death of the surviving spouse
17        leaving one or more children under the age of 18, or
18        upon the death of a policeman leaving one or more
19        children under the age of 18 but no surviving spouse, a
20        monthly pension of 20% of the policeman's monthly
21        salary at the date of death shall be granted to the
22        duly appointed guardian of each such child for the
23        support and maintenance of each such child until the
24        child reaches age 18. The benefit in this paragraph is
25        in lieu of a benefit under paragraph (2) of this
26        subsection (c) but does not apply if the beneficiary is

 

 

SB3051- 10 -LRB101 19783 RPS 69294 b

1        entitled to receive a greater benefit under paragraph
2        (2) of this subsection (c).
3            (B) If the deceased policeman was not receiving an
4        earned annuity but had at least 10 years of service at
5        the time of death, the Tier 2 surviving spouse's
6        annuity under this paragraph (1) shall be the greater
7        of: (i) 30% of the annual maximum salary attached to
8        the classified civil service position of a first class
9        patrolman at the time of his death; (ii) 54% of the
10        policeman's monthly salary at the time of the
11        policeman's death; or (iii) (ii) 66 2/3% of the Tier 2
12        monthly retirement annuity that the deceased policeman
13        would have been eligible to receive under subsection
14        (b) of this Section, based upon the actual service
15        accrued through the day before the policeman's death,
16        but determined as though the policeman was at least age
17        55 on the day before his or her death and retired on
18        that day.
19            If the deceased policeman was a parent of a child
20        or children, including any child who has been conceived
21        but not yet born, and there is a surviving spouse, 12%
22        of the policeman's monthly salary at the date of death
23        shall be granted to the guardian of any such minor
24        child or children for each such child until attainment
25        of age 18. Upon the death of the surviving spouse
26        leaving one or more children under the age of 18, or

 

 

SB3051- 11 -LRB101 19783 RPS 69294 b

1        upon the death of a policeman leaving one or more
2        children under the age of 18 but no surviving spouse, a
3        monthly pension of 20% of the policeman's monthly
4        salary at the date of death shall be granted to the
5        duly appointed guardian of each such child for the
6        support and maintenance of each such child until the
7        child reaches age 18. The benefit in this paragraph is
8        in lieu of a benefit under paragraph (2) of this
9        subsection (c) but does not apply if the beneficiary is
10        entitled to receive a greater benefit under paragraph
11        (2) of this subsection (c).
12            (C) If the deceased policeman was an active
13        policeman with at least 1 1/2 but less than 10 years of
14        service at the time of death, the Tier 2 surviving
15        spouse's annuity under this paragraph (1) shall be the
16        greater of: (i) in the amount of 30% of the annual
17        maximum salary attached to the classified civil
18        service position of a first class patrolman at the time
19        of his death; or (ii) 54% of the policeman's monthly
20        salary at the time of the policeman's death.
21            If the deceased policeman was a parent of a child
22        or children, including any child who has been conceived
23        but not yet born, and there is a surviving spouse, 12%
24        of the policeman's monthly salary at the date of death
25        shall be granted to the guardian of any such minor
26        child or children for each such child until attainment

 

 

SB3051- 12 -LRB101 19783 RPS 69294 b

1        of age 18. Upon the death of the surviving spouse
2        leaving one or more children under the age of 18, or
3        upon the death of a policeman leaving one or more
4        children under the age of 18 but no surviving spouse, a
5        monthly pension of 20% of the policeman's monthly
6        salary at the date of death shall be granted to the
7        duly appointed guardian of each such child for the
8        support and maintenance of each such child until the
9        child reaches age 18. The benefit in this paragraph is
10        in lieu of a benefit under paragraph (2) of this
11        subsection (c) but does not apply if the beneficiary is
12        entitled to receive a greater benefit under paragraph
13        (2) of this subsection (c).
14            (D) If the performance of an act or acts of duty
15        results directly in the death of a policeman subject to
16        this Section, or prevents him from subsequently
17        resuming active service in the police department, and
18        if the policeman's Tier 2 surviving spouse would
19        otherwise meet the eligibility requirements for a
20        compensation annuity or supplemental annuity granted
21        under Section 5-144, then in addition to the Tier 2
22        surviving spouse's annuity provided under subdivision
23        (A), (B), or (C) of this paragraph (1), whichever
24        applies, the Tier 2 surviving spouse shall be qualified
25        to receive compensation annuity or supplemental
26        annuity, as would be provided under Section 5-144, in

 

 

SB3051- 13 -LRB101 19783 RPS 69294 b

1        order to bring the total benefit up to the applicable
2        75% salary limitation provided in that Section, but
3        subject to the Tier 2 salary cap provided under
4        subsection (b) of this Section; except that no such
5        annuity shall be paid to the surviving spouse of a
6        policeman who dies while in receipt of disability
7        benefits when the policeman's death was caused by an
8        intervening illness or injury unrelated to the illness
9        or injury that had prevented him from subsequently
10        resuming active service in the police department.
11            (E) Notwithstanding any other provision of this
12        Article, the monthly Tier 2 surviving spouse's annuity
13        under subdivision (A) or (B) of this paragraph (1)
14        shall be increased on the January 1 next occurring
15        after (i) attainment of age 60 by the recipient of the
16        Tier 2 surviving spouse's annuity or (ii) the first
17        anniversary of the Tier 2 surviving spouse's annuity
18        start date, whichever is later, and on each January 1
19        thereafter, by 3% or one-half the annual unadjusted
20        percentage increase (but not less than zero) in the
21        consumer price index-u for the 12 months ending with
22        the September preceding each November 1, whichever is
23        less, of the originally granted Tier 2 surviving
24        spouse's annuity. If the unadjusted percentage change
25        in the consumer price index-u for a 12-month period
26        ending in September is zero or, when compared with the

 

 

SB3051- 14 -LRB101 19783 RPS 69294 b

1        preceding period, decreases, then the annuity shall
2        not be increased.
3            For the purposes of this Section, "consumer price
4        index-u" means the index published by the Bureau of
5        Labor Statistics of the United States Department of
6        Labor that measures the average change in prices of
7        goods and services purchased by all urban consumers,
8        United States city average, all items, 1982-84 = 100.
9        The new amount resulting from each annual adjustment
10        shall be determined by the Public Pension Division of
11        the Department of Insurance and made available to the
12        boards of the pension funds.
13            (F) Notwithstanding the other provisions of this
14        paragraph (1), for a qualified surviving spouse who is
15        entitled to a Tier 2 surviving spouse's annuity under
16        subdivision (A), (B), (C), or (D) of this paragraph
17        (1), that Tier 2 surviving spouse's annuity shall not
18        be less than the amount of the minimum widow's annuity
19        established from time to time under Section 5-167.4.
20        (2) Surviving children of a deceased policeman subject
21    to this Section who would otherwise meet the eligibility
22    requirements for a child's annuity set forth in Sections
23    5-151 and 5-152 shall be deemed qualified to receive a Tier
24    2 child's annuity under this subsection (c), which shall be
25    in lieu of, but in the same amount and paid in the same
26    manner as, the child's annuity provided under those

 

 

SB3051- 15 -LRB101 19783 RPS 69294 b

1    Sections; except that any salary used for computing a Tier
2    2 child's annuity shall be subject to the Tier 2 salary cap
3    provided under subsection (b) of this Section. For purposes
4    of determining any pro rata reduction in child's annuities
5    under this subsection (c), references in Section 5-152 to
6    the combined annuities of the family shall be deemed to
7    refer to the combined Tier 2 surviving spouse's annuity, if
8    any, and the Tier 2 child's annuities payable under this
9    subsection (c).
10        (3) Surviving parents of a deceased policeman subject
11    to this Section who would otherwise meet the eligibility
12    requirements for a parent's annuity set forth in Section
13    5-152 shall be deemed qualified to receive a Tier 2
14    parent's annuity under this subsection (c), which shall be
15    in lieu of, but in the same amount and paid in the same
16    manner as, the parent's annuity provided under Section
17    5-152.1; except that any salary used for computing a Tier 2
18    parent's annuity shall be subject to the Tier 2 salary cap
19    provided under subsection (b) of this Section. For the
20    purposes of this Section, a reference to "annuity" in
21    Section 5-152.1 includes: (i) in the context of a widow, a
22    Tier 2 surviving spouse's annuity and (ii) in the context
23    of a child, a Tier 2 child's annuity.
24    Notwithstanding Section 1-103.1, the changes made to this
25subsection by this amendatory Act of the 101st General Assembly
26apply without regard to whether the deceased policeman was in

 

 

SB3051- 16 -LRB101 19783 RPS 69294 b

1service on or after the effective date of this amendatory Act
2of the 101st General Assembly. The changes made by this
3amendatory Act of the 101st General Assembly shall not diminish
4the survivor's benefits described in this Section.
5    (d) The General Assembly finds and declares that the
6provisions of this Section, as enacted by Public Act 96-1495,
7require clarification relating to necessary eligibility
8standards and the manner of determining and paying the intended
9Tier 2 benefits and contributions in order to enable the Fund
10to unambiguously implement and administer benefits for Tier 2
11members. The changes to this Section and the conforming changes
12to Sections 5-153, 5-155, 5-163, 5-167.1 (except for the
13changes to subsection (a) of that Section), 5-169, and 5-170
14made by this amendatory Act of the 99th General Assembly are
15enacted to clarify the provisions of this Section as enacted by
16Public Act 96-1495, and are hereby declared to represent and be
17consistent with the original and continuing intent of this
18Section and Public Act 96-1495.
19    (e) The changes to Sections 5-153, 5-155, 5-163, 5-167.1
20(except for the changes to subsection (a) of that Section),
215-169, and 5-170 made by this amendatory Act of the 99th
22General Assembly are intended to be retroactive to January 1,
232011 (the effective date of Public Act 96-1495) and, for the
24purposes of Section 1-103.1 of this Code, they apply without
25regard to whether the relevant policeman was in service on or
26after the effective date of this amendatory Act of the 99th

 

 

SB3051- 17 -LRB101 19783 RPS 69294 b

1General Assembly.
2(Source: P.A. 99-905, eff. 11-29-16.)
 
3    Section 90. The State Mandates Act is amended by adding
4Section 8.44 as follows:
 
5    (30 ILCS 805/8.44 new)
6    Sec. 8.44. Exempt mandate. Notwithstanding Sections 6 and 8
7of this Act, no reimbursement by the State is required for the
8implementation of any mandate created by this amendatory Act of
9the 101st General Assembly.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.