103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5265

 

Introduced 2/9/2024, by Rep. Stephanie A. Kifowit

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/5-167.1  from Ch. 108 1/2, par. 5-167.1
40 ILCS 5/5-238
40 ILCS 5/6-164  from Ch. 108 1/2, par. 6-164
40 ILCS 5/6-229
30 ILCS 805/8.48 new

    Amends the Chicago Police and Chicago Firefighter Articles of the Illinois Pension Code. Provides that the Tier 2 monthly retirement annuity shall be increased on the January 1 occurring either on or after (i) the attainment of age 55 (instead of age 60) or (ii) the first anniversary of the annuity start date, whichever is later. Provides that each annual increase shall be calculated at 3% (instead of 3% or one-half the annual unadjusted percentage increase in the consumer price index-u, whichever is less) of the originally granted retirement annuity. In a provision specifying an annuity reduction factor for each year a retiring Tier 2 policeman or fireman is under the age of 55, provides that the retirement annuity of a policeman or fireman who is retiring after attaining age 50 with 20 or more years of service shall not be reduced. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement.


LRB103 38583 RPS 68719 b

 

 

A BILL FOR

 

HB5265LRB103 38583 RPS 68719 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
5changing Sections 5-167.1, 5-238, 6-229, and 6-164 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
101, 1967 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 or over on that
13anniversary date, or upon the first of the month following his
14attainment of age 55 if it occurs after the first anniversary
15of his retirement date, have his then fixed and payable
16monthly annuity increased by 3% and such first fixed annuity
17as granted at retirement increased by an additional 3% in
18January of each year thereafter.
19    Any policeman born before January 1, 1945 who qualifies
20for a minimum annuity and retires after September 1, 1967 but
21has not received the initial increase under this subsection
22before January 1, 1996 is entitled to receive the initial
23increase under this subsection on (1) January 1, 1996, (2) the

 

 

HB5265- 2 -LRB103 38583 RPS 68719 b

1first anniversary of the date of retirement, or (3) attainment
2of age 55, whichever occurs last. The changes to this Section
3made by Public Act 89-12 apply beginning January 1, 1996 and
4without regard to whether the policeman or annuitant
5terminated service before the effective date of that Act.
6    Any policeman born before January 1, 1950 who qualifies
7for a minimum annuity and retires after September 1, 1967 but
8has not received the initial increase under this subsection
9before January 1, 2000 is entitled to receive the initial
10increase under this subsection on (1) January 1, 2000, (2) the
11first anniversary of the date of retirement, or (3) attainment
12of age 55, whichever occurs last. The changes to this Section
13made by this amendatory Act of the 92nd General Assembly apply
14without regard to whether the policeman or annuitant
15terminated service before the effective date of this
16amendatory Act.
17    Any policeman born before January 1, 1955 who qualifies
18for a minimum annuity and retires after September 1, 1967 but
19has not received the initial increase under this subsection
20before January 1, 2005 is entitled to receive the initial
21increase under this subsection on (1) January 1, 2005, (2) the
22first anniversary of the date of retirement, or (3) attainment
23of age 55, whichever occurs last. The changes to this Section
24made by this amendatory Act of the 94th General Assembly apply
25without regard to whether the policeman or annuitant
26terminated service before the effective date of this

 

 

HB5265- 3 -LRB103 38583 RPS 68719 b

1amendatory Act.
2    Any policeman born before January 1, 1966 who qualifies
3for a minimum annuity and retires after September 1, 1967 but
4has not received the initial increase under this subsection
5before January 1, 2017 is entitled to receive an initial
6increase under this subsection on (1) January 1, 2017, (2) the
7first anniversary of the date of retirement, or (3) attainment
8of age 55, whichever occurs last, in an amount equal to 3% for
9each complete year following the date of retirement or
10attainment of age 55, whichever occurs later. The changes to
11this subsection made by this amendatory Act of the 99th
12General Assembly apply without regard to whether the policeman
13or annuitant terminated service before the effective date of
14this amendatory Act.
15    Any policeman born on or after January 1, 1966 who
16qualifies for a minimum annuity and retires after September 1,
171967 but has not received the initial increase under this
18subsection before January 1, 2023 is entitled to receive the
19initial increase under this subsection on (1) January 1, 2023,
20(2) the first anniversary of the date of retirement, or (3)
21attainment of age 55, whichever occurs last. The changes to
22this Section made by this amendatory Act of the 103rd General
23Assembly apply without regard to whether the policeman or
24annuitant terminated service before the effective date of this
25amendatory Act of the 103rd General Assembly.
26    (b) Subsection (a) of this Section is not applicable to an

 

 

HB5265- 4 -LRB103 38583 RPS 68719 b

1employee receiving a term annuity.
2    (c) To help defray the cost of such increases in annuity,
3there shall be deducted, beginning September 1, 1967, from
4each payment of salary to a policeman, 1/2 of 1% of each salary
5payment concurrently with and in addition to the salary
6deductions otherwise made for annuity purposes.
7    The city, in addition to the contributions otherwise made
8by it for annuity purposes under other provisions of this
9Article, shall make matching contributions concurrently with
10such salary deductions.
11    Each such 1/2 of 1% deduction from salary and each such
12contribution by the city of 1/2 of 1% of salary shall be
13credited to the Automatic Increase Reserve, to be used to
14defray the cost of the annuity increase provided by this
15Section. Any balance in such reserve as of the beginning of
16each calendar year shall be credited with interest at the rate
17of 3% per annum.
18    Such deductions from salary and city contributions shall
19continue while the policeman is in service.
20    The salary deductions provided in this Section are not
21subject to refund, except to the policeman himself, in any
22case in which: (i) the policeman withdraws prior to
23qualification for minimum annuity or Tier 2 monthly retirement
24annuity and applies for refund, (ii) the policeman applies for
25an annuity of a type that is not subject to annual increases
26under this Section, or (iii) a term annuity becomes payable.

 

 

HB5265- 5 -LRB103 38583 RPS 68719 b

1In such cases, the total of such salary deductions shall be
2refunded to the policeman, without interest, and charged to
3the Automatic Increase Reserve.
4    (d) Notwithstanding any other provision of this Article,
5the Tier 2 monthly retirement annuity of a person who first
6becomes a policeman under this Article on or after the
7effective date of this amendatory Act of the 97th General
8Assembly shall be increased on the January 1 occurring either
9on or after (i) the attainment of age 55 60 or (ii) the first
10anniversary of the annuity start date, whichever is later.
11Each annual increase shall be calculated at 3% or one-half the
12annual unadjusted percentage increase (but not less than zero)
13in the consumer price index-u for the 12 months ending with the
14September preceding each November 1, whichever is less, of the
15originally granted retirement annuity. If the annual
16unadjusted percentage change in the consumer price index-u for
17a 12-month period ending in September is zero or, when
18compared with the preceding period, decreases, then the
19annuity shall not be increased.
20    For the purposes of this subsection (d), "consumer price
21index-u" means the index published by the Bureau of Labor
22Statistics of the United States Department of Labor that
23measures the average change in prices of goods and services
24purchased by all urban consumers, United States city average,
25all items, 1982-84 = 100. The new amount resulting from each
26annual adjustment shall be determined by the Public Pension

 

 

HB5265- 6 -LRB103 38583 RPS 68719 b

1Division of the Department of Insurance and made available to
2the boards of the pension funds by November 1 of each year.
3(Source: P.A. 103-582, eff. 12-8-23.)
 
4    (40 ILCS 5/5-238)
5    Sec. 5-238. Provisions applicable to new hires; Tier 2.
6    (a) Notwithstanding any other provision of this Article,
7the provisions of this Section apply to a person who first
8becomes a policeman under this Article on or after January 1,
92011, and to certain qualified survivors of such a policeman.
10Such persons, and the benefits and restrictions that apply
11specifically to them under this Article, may be referred to as
12"Tier 2".
13    (b) A policeman who has withdrawn from service, has
14attained age 50 or more, and has 10 or more years, but less
15than 20 years, of service in that capacity shall be entitled,
16upon proper application being received by the Fund, to receive
17a Tier 2 monthly retirement annuity for his service as a police
18officer. The Tier 2 monthly retirement annuity shall be
19computed by multiplying 2.5% for each year of such service by
20his or her final average salary, subject to an annuity
21reduction factor of one-half of 1% for each month that the
22police officer's age at retirement is under age 55. The Tier 2
23monthly retirement annuity of a policeman who is retiring
24after attaining age 50 with 20 or more years of creditable
25service shall not be reduced. The Tier 2 monthly retirement

 

 

HB5265- 7 -LRB103 38583 RPS 68719 b

1annuity is in lieu of any age and service annuity or other form
2of retirement annuity under this Article.
3    The maximum retirement annuity under this subsection (b)
4shall be 75% of final average salary.
5    For the purposes of this subsection (b), "final average
6salary" means the average monthly salary obtained by dividing
7the total salary of the policeman during the 96 consecutive
8months of service within the last 120 months of service in
9which the total salary was the highest by the number of months
10of service in that period.
11    Beginning on January 1, 2011, for all purposes under this
12Code (including without limitation the calculation of benefits
13and employee contributions), the annual salary based on the
14plan year of a member or participant to whom this Section
15applies shall not exceed $106,800; however, that amount shall
16annually thereafter be increased by the lesser of (i) 3% of
17that amount, including all previous adjustments, or (ii)
18one-half the annual unadjusted percentage increase (but not
19less than zero) in the consumer price index-u for the 12 months
20ending with the September preceding each November 1, including
21all previous adjustments.
22    (c) Notwithstanding any other provision of this Article,
23for a person who first becomes a policeman under this Article
24on or after January 1, 2011, eligibility for and the amount of
25the annuity to which the qualified surviving spouse, children,
26and parents are entitled under this subsection (c) shall be

 

 

HB5265- 8 -LRB103 38583 RPS 68719 b

1determined as follows:
2        (1) The surviving spouse of a deceased policeman to
3    whom this Section applies shall be deemed qualified to
4    receive a Tier 2 surviving spouse's annuity under this
5    paragraph (1) if: (i) the deceased policeman meets the
6    requirements specified under subdivision (A), (B), (C), or
7    (D) of this paragraph (1); and (ii) the surviving spouse
8    would not otherwise be excluded from receiving a widow's
9    annuity under the eligibility requirements for a widow's
10    annuity set forth in Section 5-146. The Tier 2 surviving
11    spouse's annuity is in lieu of the widow's annuity
12    determined under any other Section of this Article and is
13    subject to the requirements of Section 5-147.1.
14        As used in this subsection (c), "earned annuity" means
15    a Tier 2 monthly retirement annuity determined under
16    subsection (b) of this Section, including any increases
17    the policeman had received pursuant to Section 5-167.1.
18            (A) If the deceased policeman was receiving an
19        earned annuity at the date of his or her death, the
20        Tier 2 surviving spouse's annuity under this paragraph
21        (1) shall be in the amount of 66 2/3% of the
22        policeman's earned annuity at the date of death.
23            (B) If the deceased policeman was not receiving an
24        earned annuity but had at least 10 years of service at
25        the time of death, the Tier 2 surviving spouse's
26        annuity under this paragraph (1) shall be the greater

 

 

HB5265- 9 -LRB103 38583 RPS 68719 b

1        of: (i) 30% of the annual maximum salary attached to
2        the classified civil service position of a first class
3        patrolman at the time of his death; or (ii) 66 2/3% of
4        the Tier 2 monthly retirement annuity that the
5        deceased policeman would have been eligible to receive
6        under subsection (b) of this Section, based upon the
7        actual service accrued through the day before the
8        policeman's death, but determined as though the
9        policeman was at least age 55 on the day before his or
10        her death and retired on that day.
11            (C) If the deceased policeman was an active
12        policeman with at least 1 1/2 but less than 10 years of
13        service at the time of death, the Tier 2 surviving
14        spouse's annuity under this paragraph (1) shall be in
15        the amount of 30% of the annual maximum salary
16        attached to the classified civil service position of a
17        first class patrolman at the time of his death.
18            (D) If the performance of an act or acts of duty
19        results directly in the death of a policeman subject
20        to this Section, or prevents him from subsequently
21        resuming active service in the police department, and
22        if the policeman's Tier 2 surviving spouse would
23        otherwise meet the eligibility requirements for a
24        compensation annuity or supplemental annuity granted
25        under Section 5-144, then in addition to the Tier 2
26        surviving spouse's annuity provided under subdivision

 

 

HB5265- 10 -LRB103 38583 RPS 68719 b

1        (A), (B), or (C) of this paragraph (1), whichever
2        applies, the Tier 2 surviving spouse shall be
3        qualified to receive compensation annuity or
4        supplemental annuity, as would be provided under
5        Section 5-144, in order to bring the total benefit up
6        to the applicable 75% salary limitation provided in
7        that Section, but subject to the Tier 2 salary cap
8        provided under subsection (b) of this Section; except
9        that no such annuity shall be paid to the surviving
10        spouse of a policeman who dies while in receipt of
11        disability benefits when the policeman's death was
12        caused by an intervening illness or injury unrelated
13        to the illness or injury that had prevented him from
14        subsequently resuming active service in the police
15        department.
16            (E) Notwithstanding any other provision of this
17        Article, the monthly Tier 2 surviving spouse's annuity
18        under subdivision (A) or (B) of this paragraph (1)
19        shall be increased on the January 1 next occurring
20        after (i) attainment of age 60 by the recipient of the
21        Tier 2 surviving spouse's annuity or (ii) the first
22        anniversary of the Tier 2 surviving spouse's annuity
23        start date, whichever is later, and on each January 1
24        thereafter, by 3% or one-half the annual unadjusted
25        percentage increase (but not less than zero) in the
26        consumer price index-u for the 12 months ending with

 

 

HB5265- 11 -LRB103 38583 RPS 68719 b

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

 

 

HB5265- 12 -LRB103 38583 RPS 68719 b

1    requirements for a child's annuity set forth in Sections
2    5-151 and 5-152 shall be deemed qualified to receive a
3    Tier 2 child's annuity under this subsection (c), which
4    shall be in lieu of, but in the same amount and paid in the
5    same manner as, the child's annuity provided under those
6    Sections; except that any salary used for computing a Tier
7    2 child's annuity shall be subject to the Tier 2 salary cap
8    provided under subsection (b) of this Section. For
9    purposes of determining any pro rata reduction in child's
10    annuities under this subsection (c), references in Section
11    5-152 to the combined annuities of the family shall be
12    deemed to refer to the combined Tier 2 surviving spouse's
13    annuity, if any, and the Tier 2 child's annuities payable
14    under this subsection (c).
15        (3) Surviving parents of a deceased policeman subject
16    to this Section who would otherwise meet the eligibility
17    requirements for a parent's annuity set forth in Section
18    5-152 shall be deemed qualified to receive a Tier 2
19    parent's annuity under this subsection (c), which shall be
20    in lieu of, but in the same amount and paid in the same
21    manner as, the parent's annuity provided under Section
22    5-152.1; except that any salary used for computing a Tier
23    2 parent's annuity shall be subject to the Tier 2 salary
24    cap provided under subsection (b) of this Section. For the
25    purposes of this Section, a reference to "annuity" in
26    Section 5-152.1 includes: (i) in the context of a widow, a

 

 

HB5265- 13 -LRB103 38583 RPS 68719 b

1    Tier 2 surviving spouse's annuity and (ii) in the context
2    of a child, a Tier 2 child's annuity.
3    (d) The General Assembly finds and declares that the
4provisions of this Section, as enacted by Public Act 96-1495,
5require clarification relating to necessary eligibility
6standards and the manner of determining and paying the
7intended Tier 2 benefits and contributions in order to enable
8the Fund to unambiguously implement and administer benefits
9for Tier 2 members. The changes to this Section and the
10conforming changes to Sections 5-153, 5-155, 5-163, 5-167.1
11(except for the changes to subsection (a) of that Section),
125-169, and 5-170 made by this amendatory Act of the 99th
13General Assembly are enacted to clarify the provisions of this
14Section as enacted by Public Act 96-1495, and are hereby
15declared to represent and be consistent with the original and
16continuing intent of this Section and Public Act 96-1495.
17    (e) The changes to Sections 5-153, 5-155, 5-163, 5-167.1
18(except for the changes to subsection (a) of that Section),
195-169, and 5-170 made by this amendatory Act of the 99th
20General Assembly are intended to be retroactive to January 1,
212011 (the effective date of Public Act 96-1495) and, for the
22purposes of Section 1-103.1 of this Code, they apply without
23regard to whether the relevant policeman was in service on or
24after the effective date of this amendatory Act of the 99th
25General Assembly.
26(Source: P.A. 99-905, eff. 11-29-16.)
 

 

 

HB5265- 14 -LRB103 38583 RPS 68719 b

1    (40 ILCS 5/6-164)  (from Ch. 108 1/2, par. 6-164)
2    Sec. 6-164. Automatic annual increase; retirement after
3September 1, 1959.
4    (a) A fireman qualifying for a minimum annuity who retires
5from service after September 1, 1959 shall, upon either the
6first of the month following the first anniversary of his date
7of retirement if he is age 55 or over on that anniversary date,
8or upon the first of the month following his attainment of age
955 if that occurs after the first anniversary of his
10retirement date, have his then fixed and payable monthly
11annuity increased by 1 1/2%, and such first fixed annuity as
12granted at retirement increased by an additional 1 1/2% in
13January of each year thereafter up to a maximum increase of
1430%. Beginning July 1, 1982 for firemen born before January 1,
151930, and beginning January 1, 1990 for firemen born after
16December 31, 1929 and before January 1, 1940, and beginning
17January 1, 1996 for firemen born after December 31, 1939 but
18before January 1, 1945, and beginning January 1, 2004, for
19firemen born after December 31, 1944 but before January 1,
201955, and beginning January 1, 2017, for firemen born after
21December 31, 1954, such increases shall be 3% and such firemen
22shall not be subject to the 30% maximum increase.
23    Any fireman born before January 1, 1945 who qualifies for
24a minimum annuity and retires after September 1, 1967 but has
25not received the initial increase under this subsection before

 

 

HB5265- 15 -LRB103 38583 RPS 68719 b

1January 1, 1996 is entitled to receive the initial increase
2under this subsection on (1) January 1, 1996, (2) the first
3anniversary of the date of retirement, or (3) attainment of
4age 55, whichever occurs last. The changes to this Section
5made by this amendatory Act of 1995 apply beginning January 1,
61996 and apply without regard to whether the fireman or
7annuitant terminated service before the effective date of this
8amendatory Act of 1995.
9    Any fireman born before January 1, 1955 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, 2004 is entitled to receive the initial increase
13under this subsection on (1) January 1, 2004, (2) the first
14anniversary of the date of retirement, or (3) attainment of
15age 55, whichever occurs last. The changes to this Section
16made by this amendatory Act of the 93rd General Assembly apply
17without regard to whether the fireman or annuitant terminated
18service before the effective date of this amendatory Act.
19    Any fireman born after December 31, 1954 but before
20January 1, 1966 who qualifies for a minimum annuity and
21retires after September 1, 1967 is entitled to receive an
22increase under this subsection on (1) January 1, 2017, (2) the
23first anniversary of the date of retirement, or (3) attainment
24of age 55, whichever occurs last, in an amount equal to an
25increase of 3% of his then fixed and payable monthly annuity
26upon the first of the month following the first anniversary of

 

 

HB5265- 16 -LRB103 38583 RPS 68719 b

1his date of retirement if he is age 55 or over on that
2anniversary date or upon the first of the month following his
3attainment of age 55 if that date occurs after the first
4anniversary of his retirement date and such first fixed
5annuity as granted at retirement shall be increased by an
6additional 3% in January of each year thereafter. In the case
7of a fireman born after December 31, 1954 but before January 1,
81966 who received an increase in any year of 1.5%, that fireman
9shall receive an increase for any such year so that the total
10increase is equal to 3% for each year the fireman would have
11been otherwise eligible had the fireman not received any
12increase. The changes to this subsection made by this
13amendatory Act of the 99th General Assembly apply without
14regard to whether the fireman or annuitant terminated service
15before the effective date of this amendatory Act. The changes
16to this subsection made by this amendatory Act of the 100th
17General Assembly are a declaration of existing law and shall
18not be construed as a new enactment.
19    Any fireman who qualifies for a minimum annuity and
20retires after September 1, 1967 is entitled to receive an
21increase under this subsection on (1) January 1, 2020, (2) the
22first anniversary of the date of retirement, or (3) attainment
23of age 55, whichever occurs last, in an amount equal to an
24increase of 3% of his or her then fixed and payable monthly
25annuity upon the first of the month following the first
26anniversary of his or her date of retirement if he or she is

 

 

HB5265- 17 -LRB103 38583 RPS 68719 b

1age 55 or over on that anniversary date or upon the first of
2the month following his or her attainment of age 55 if that
3date occurs after the first anniversary of his or her
4retirement date and such first fixed annuity as granted at
5retirement shall be increased by an additional 3% in January
6of each year thereafter. In the case of a fireman who received
7an increase in any year of 1.5%, that fireman shall receive an
8increase for any such year so that the total increase is equal
9to 3% for each year the fireman would have been otherwise
10eligible had the fireman not received any increase. The
11changes to this subsection made by this amendatory Act of the
12101st General Assembly apply without regard to whether the
13fireman or annuitant terminated service before the effective
14date of this amendatory Act of the 101st General Assembly.
15    (b) Subsection (a) of this Section is not applicable to an
16employee receiving a term annuity.
17    (c) To help defray the cost of such increases in annuity,
18there shall be deducted, beginning September 1, 1959, from
19each payment of salary to a fireman, 1/8 of 1% of each such
20salary payment and an additional 1/8 of 1% beginning on
21September 1, 1961, and September 1, 1963, respectively,
22concurrently with and in addition to the salary deductions
23otherwise made for annuity purposes.
24    Each such additional 1/8 of 1% deduction from salary which
25shall, on September 1, 1963, result in a total increase of 3/8
26of 1% of salary, shall be credited to the Automatic Increase

 

 

HB5265- 18 -LRB103 38583 RPS 68719 b

1Reserve, to be used, together with city contributions as
2provided in this Article, to defray the cost of the annuity
3increments specified in this Section. Any balance in such
4reserve as of the beginning of each calendar year shall be
5credited with interest at the rate of 3% per annum.
6    The salary deductions provided in this Section are not
7subject to refund, except to the fireman himself in any case in
8which: (i) the fireman withdraws prior to qualification for
9minimum annuity or Tier 2 monthly retirement annuity and
10applies for refund, (ii) the fireman applies for an annuity of
11a type that is not subject to annual increases under this
12Section, or (iii) a term annuity becomes payable. In such
13cases, the total of such salary deductions shall be refunded
14to the fireman, without interest, and charged to the
15aforementioned reserve.
16    (d) Notwithstanding any other provision of this Article,
17the Tier 2 monthly retirement annuity of a person who first
18becomes a fireman under this Article on or after January 1,
192011 shall be increased on the January 1 occurring either on or
20after (i) the attainment of age 55 60 or (ii) the first
21anniversary of the annuity start date, whichever is later.
22Each annual increase shall be calculated at 3% or one-half the
23annual unadjusted percentage increase (but not less than zero)
24in the consumer price index-u for the 12 months ending with the
25September preceding each November 1, whichever is less, of the
26originally granted retirement annuity. If the annual

 

 

HB5265- 19 -LRB103 38583 RPS 68719 b

1unadjusted percentage change in the consumer price index-u for
2a 12-month period ending in September is zero or, when
3compared with the preceding period, decreases, then the
4annuity shall not be increased.
5    For the purposes of this subsection (d), "consumer price
6index-u" means the index published by the Bureau of Labor
7Statistics of the United States Department of Labor that
8measures the average change in prices of goods and services
9purchased by all urban consumers, United States city average,
10all items, 1982-84 = 100. The new amount resulting from each
11annual adjustment shall be determined by the Public Pension
12Division of the Department of Insurance and made available to
13the boards of the pension funds by November 1 of each year.
14(Source: P.A. 100-23, eff. 7-6-17; 100-539, eff. 11-7-17;
15101-673, eff. 4-5-21.)
 
16    (40 ILCS 5/6-229)
17    Sec. 6-229. Provisions applicable to new hires; Tier 2.
18    (a) Notwithstanding any other provision of this Article,
19the provisions of this Section apply to a person who first
20becomes a fireman under this Article on or after January 1,
212011, and to certain qualified survivors of such a fireman.
22Such persons, and the benefits and restrictions that apply
23specifically to them under this Article, may be referred to as
24"Tier 2".
25    (b) A fireman who has withdrawn from service, has attained

 

 

HB5265- 20 -LRB103 38583 RPS 68719 b

1age 50 or more, and has 10 or more years, but less than 20
2years, of service in that capacity shall be entitled, upon
3proper application being received by the Fund, to receive a
4Tier 2 monthly retirement annuity for his service as a
5fireman. The Tier 2 monthly retirement annuity shall be
6computed by multiplying 2.5% for each year of such service by
7his or her final average salary, subject to an annuity
8reduction factor of one-half of 1% for each month that the
9fireman's age at retirement is under age 55. The Tier 2 monthly
10retirement annuity of a fireman who is retiring after
11attaining age 50 with 20 or more years of creditable service
12shall not be reduced. The Tier 2 monthly retirement annuity is
13in lieu of any age and service annuity or other form of
14retirement annuity under this Article.
15    The maximum retirement annuity under this subsection (b)
16shall be 75% of final average salary.
17    For the purposes of this subsection (b), "final average
18salary" means the greater of (1) the average monthly salary
19obtained by dividing the total salary of the fireman during
20the 96 consecutive months of service within the last 120
21months of service in which the total salary was the highest by
22the number of months of service in that period or (2) the
23average monthly salary obtained by dividing the total salary
24of the fireman during the 48 consecutive months of service
25within the last 60 months of service in which the total salary
26was the highest by the number of months of service in that

 

 

HB5265- 21 -LRB103 38583 RPS 68719 b

1period.
2    Beginning on January 1, 2011, for all purposes under this
3Code (including without limitation the calculation of benefits
4and employee contributions), the annual salary based on the
5plan year of a member or participant to whom this Section
6applies shall not exceed $106,800; however, that amount shall
7annually thereafter be increased by the lesser of (i) 3% of
8that amount, including all previous adjustments, or (ii)
9one-half the annual unadjusted percentage increase (but not
10less than zero) in the consumer price index-u for the 12 months
11ending with the September preceding each November 1, including
12all previous adjustments.
13    (b-5) For the purposes of this Section, "consumer price
14index-u" means the index published by the Bureau of Labor
15Statistics of the United States Department of Labor that
16measures the average change in prices of goods and services
17purchased by all urban consumers, United States city average,
18all items, 1982-84 = 100. The new amount resulting from each
19annual adjustment shall be determined by the Public Pension
20Division of the Department of Insurance and made available to
21the boards of the retirement systems and pension funds by
22November 1 of each year.
23    (c) Notwithstanding any other provision of this Article,
24for a person who first becomes a fireman under this Article on
25or after January 1, 2011, eligibility for and the amount of the
26annuity to which the qualified surviving spouse, children, and

 

 

HB5265- 22 -LRB103 38583 RPS 68719 b

1parents of the fireman are entitled under this subsection (c)
2shall be determined as follows:
3        (1) The surviving spouse of a deceased fireman to whom
4    this Section applies shall be deemed qualified to receive
5    a Tier 2 surviving spouse's annuity under this paragraph
6    (1) if: (i) the deceased fireman meets the requirements
7    specified under subdivision (A), (B), (C), or (D) of this
8    paragraph (1); and (ii) the surviving spouse would not
9    otherwise be excluded from receiving a widow's annuity
10    under the eligibility requirements for a widow's annuity
11    set forth in Section 6-142. The Tier 2 surviving spouse's
12    annuity is in lieu of the widow's annuity determined under
13    any other Section of this Article and is subject to the
14    requirements of Section 6-143.2.
15        As used in this subsection (c), "earned pension" means
16    a Tier 2 monthly retirement annuity determined under
17    subsection (b) of this Section, including any increases
18    the fireman had received pursuant to Section 6-164.
19            (A) If the deceased fireman was receiving an
20        earned pension at the date of his or her death, the
21        Tier 2 surviving spouse's annuity under this paragraph
22        (1) shall be in the amount of 66 2/3% of the fireman's
23        earned pension at the date of death.
24            (B) If the deceased fireman was not receiving an
25        earned pension but had at least 10 years of service at
26        the time of death, the Tier 2 surviving spouse's

 

 

HB5265- 23 -LRB103 38583 RPS 68719 b

1        annuity under this paragraph (1) shall be the greater
2        of: (i) 30% of the salary attached to the rank of first
3        class firefighter in the classified career service at
4        the time of the fireman's death; or (ii) 66 2/3% of the
5        Tier 2 monthly retirement annuity that the deceased
6        fireman would have been eligible to receive under
7        subsection (b) of this Section, based upon the actual
8        service accrued through the day before the fireman's
9        death, but determined as though the fireman was at
10        least age 55 on the day before his or her death and
11        retired on that day.
12            (C) If the deceased fireman was an active fireman
13        with at least 1 1/2 but less than 10 years of service
14        at the time of death, the Tier 2 surviving spouse's
15        annuity under this paragraph (1) shall be in the
16        amount of 30% of the salary attached to the rank of
17        first class firefighter in the classified career
18        service at the time of the fireman's death.
19            (D) Notwithstanding subdivisions (A), (B), and (C)
20        of this paragraph (1), if the performance of an act or
21        acts of duty results directly in the death of a fireman
22        subject to this Section, or prevents him from
23        subsequently resuming active service in the fire
24        department, then a surviving spouse who would
25        otherwise meet the eligibility requirements for a
26        death in the line of duty widow's annuity granted

 

 

HB5265- 24 -LRB103 38583 RPS 68719 b

1        under Section 6-140 shall be deemed to be qualified
2        for a Tier 2 surviving spouse's annuity under this
3        subdivision (D); except that no such annuity shall be
4        paid to the surviving spouse of a fireman who dies
5        while in receipt of disability benefits when the
6        fireman's death was caused by an intervening illness
7        or injury unrelated to the illness or injury that had
8        prevented him from subsequently resuming active
9        service in the fire department. The Tier 2 surviving
10        spouse's annuity calculated under this subdivision (D)
11        shall be in lieu of, but in the same amount and paid in
12        the same manner as, the widow's annuity provided under
13        Section 6-140; except that the salary used for
14        computing a Tier 2 surviving spouse's annuity under
15        this subdivision (D) shall be subject to the Tier 2
16        salary cap provided under subsection (b) of this
17        Section.
18            (E) Notwithstanding any other provision of this
19        Article, the monthly Tier 2 surviving spouse's annuity
20        under subdivision (A) or (B) of this paragraph (1)
21        shall be increased on the January 1 next occurring
22        after (i) attainment of age 60 by the recipient of the
23        Tier 2 surviving spouse's annuity or (ii) the first
24        anniversary of the Tier 2 surviving spouse's annuity
25        start date, whichever is later, and on each January 1
26        thereafter, by 3% or one-half the annual unadjusted

 

 

HB5265- 25 -LRB103 38583 RPS 68719 b

1        percentage increase in the consumer price index-u for
2        the 12 months ending with September preceding each
3        November 1, whichever is less, of the originally
4        granted Tier 2 surviving spouse's annuity. If the
5        annual unadjusted percentage change in the consumer
6        price index-u for a 12-month period ending in
7        September is zero or, when compared with the preceding
8        period, decreases, then the annuity shall not be
9        increased.
10            (F) Notwithstanding the other provisions of this
11        paragraph (1), for a qualified surviving spouse who is
12        entitled to a Tier 2 surviving spouse's annuity under
13        subdivision (A), (B), (C), or (D) of this paragraph
14        (1), that Tier 2 surviving spouse's annuity shall not
15        be less than the amount of the minimum widow's annuity
16        established from time to time under Section 6-128.4.
17        (2) Surviving children of a deceased fireman subject
18    to this Section who would otherwise meet the eligibility
19    requirements for a child's annuity set forth in Sections
20    6-147 and 6-148 shall be deemed qualified to receive a
21    Tier 2 child's annuity under this subsection (c), which
22    shall be in lieu of, but in the same amount and paid in the
23    same manner as, the child's annuity provided under those
24    Sections; except that any salary used for computing a Tier
25    2 child's annuity shall be subject to the Tier 2 salary cap
26    provided under subsection (b) of this Section. For

 

 

HB5265- 26 -LRB103 38583 RPS 68719 b

1    purposes of determining any pro rata reduction in child's
2    annuities under this subsection (c), references in Section
3    6-148 to the combined annuities of the family shall be
4    deemed to refer to the combined Tier 2 surviving spouse's
5    annuity, if any, and the Tier 2 child's annuities payable
6    under this subsection (c).
7        (3) Surviving parents of a deceased fireman subject to
8    this Section who would otherwise meet the eligibility
9    requirements for a parent's annuity set forth in Section
10    6-149 shall be deemed qualified to receive a Tier 2
11    parent's annuity under this subsection (c), which shall be
12    in lieu of, but in the same amount and paid in the same
13    manner as, the parent's annuity provided under Section
14    6-149; except that any salary used for computing a Tier 2
15    parent's annuity shall be subject to the Tier 2 salary cap
16    provided under subsection (b) of this Section. For the
17    purposes of this Section, a reference to "annuity" in
18    Section 6-149 includes: (i) in the context of a widow, a
19    Tier 2 surviving spouse's annuity and (ii) in the context
20    of a child, a Tier 2 child's annuity.
21    (d) The General Assembly finds and declares that the
22provisions of this Section, as enacted by Public Act 96-1495,
23require clarification relating to necessary eligibility
24standards and the manner of determining and paying the
25intended Tier 2 benefits and contributions in order to enable
26the Fund to unambiguously implement and administer benefits

 

 

HB5265- 27 -LRB103 38583 RPS 68719 b

1for Tier 2 members. The changes to this Section and the
2conforming changes to Sections 6-150, 6-158, 6-164 (except for
3the changes to subsection (a) of that Section), 6-166, and
46-167 made by this amendatory Act of the 99th General Assembly
5are enacted to clarify the provisions of this Section as
6enacted by Public Act 96-1495, and are hereby declared to
7represent and be consistent with the original and continuing
8intent of this Section and Public Act 96-1495.
9    (e) The changes to Sections 6-150, 6-158, 6-164 (except
10for the changes to subsection (a) of that Section), 6-166, and
116-167 made by this amendatory Act of the 99th General Assembly
12are intended to be retroactive to January 1, 2011 (the
13effective date of Public Act 96-1495) and, for the purposes of
14Section 1-103.1 of this Code, they apply without regard to
15whether the relevant fireman was in service on or after the
16effective date of this amendatory Act of the 99th General
17Assembly.
18(Source: P.A. 103-579, eff. 12-8-23.)
 
19    Section 90. The State Mandates Act is amended by adding
20Section 8.48 as follows:
 
21    (30 ILCS 805/8.48 new)
22    Sec. 8.48. Exempt mandate. Notwithstanding Sections 6 and
238 of this Act, no reimbursement by the State is required for
24the implementation of any mandate created by this amendatory

 

 

HB5265- 28 -LRB103 38583 RPS 68719 b

1Act of the 103rd General Assembly.