093_HB3916

                                     LRB093 13000 LRD 20021 b

 1        AN ACT in relation to public employee benefits.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The  Illinois  Pension  Code  is  amended  by
 5    changing Sections 16-133 and 16-158 as follows:

 6        (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
 7        Sec. 16-133.  Retirement annuity; amount.
 8        (a)  The  amount  of  the retirement annuity shall be the
 9    larger of the amounts determined under paragraphs (A) and (B)
10    below:
11             (A)  An  amount  consisting  of  the  sum   of   the
12        following:
13                  (1)  An  amount  that  can  be  provided  on an
14             actuarially  equivalent  basis   by   the   member's
15             accumulated contributions at the time of retirement;
16             and
17                  (2)  The  sum  of  (i)  the  amount that can be
18             provided on an actuarially equivalent basis  by  the
19             member's   accumulated   contributions  representing
20             service prior to July 1, 1947, and (ii)  the  amount
21             that  can  be  provided on an actuarially equivalent
22             basis by the  amount  obtained  by  multiplying  1.4
23             times   the   member's   accumulated   contributions
24             covering service subsequent to June 30, 1947; and
25                  (3)  If  there  is  prior  service, 2 times the
26             amount  that  would  have  been   determined   under
27             subparagraph  (2)  of paragraph (A) above on account
28             of contributions which would have been  made  during
29             the period of prior service creditable to the member
30             had  the System been in operation and had the member
31             made  contributions  at  the  contribution  rate  in
 
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 1             effect prior to July 1, 1947.
 2             (B)  An amount consisting  of  the  greater  of  the
 3        following:
 4                  (1)  For  creditable service earned before July
 5             1, 1998 that has not been  augmented  under  Section
 6             16-129.1:  1.67% of final average salary for each of
 7             the  first  10 years of creditable service, 1.90% of
 8             final average salary for each year in excess  of  10
 9             but  not exceeding 20, 2.10% of final average salary
10             for each year in excess of 20 but not exceeding  30,
11             and  2.30%  of final average salary for each year in
12             excess of 30; and
13                  For creditable service earned on or after  July
14             1,  1998  by  a  member who has at least 24 years of
15             creditable service on July 1, 1998 and who does  not
16             elect  to  augment  service  under Section 16-129.1:
17             2.2% of  final  average  salary  for  each  year  of
18             creditable  service  earned on or after July 1, 1998
19             but before the member reaches a total of 30 years of
20             creditable service and 2.3% of final average  salary
21             for  each  year  of  creditable service earned on or
22             after July 1, 1998 and after the  member  reaches  a
23             total of 30 years of creditable service; and
24                  For  all  other  creditable  service:   2.2% of
25             final average salary for  each  year  of  creditable
26             service; or
27                  (2)  1.5% of final average salary for each year
28             of creditable service plus the sum $7.50 for each of
29             the first 20 years of creditable service.
30        The  amount  of  the  retirement annuity determined under
31        this paragraph (B) shall be reduced by 1/2 of 1% for each
32        month that the member is less than age 60 at the time the
33        retirement annuity begins.  However, this reduction shall
34        not apply (i) if the member has  at  least  35  years  of
 
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 1        creditable  service,  or  (ii)  if  the member retires on
 2        account of disability  under  Section  16-149.2  of  this
 3        Article  with at least 20 years of creditable service, or
 4        (iii) if the member (1)  has  earned  during  the  period
 5        immediately  preceding  the  last day of service at least
 6        one  year  of  contributing  creditable  service  as   an
 7        employee of a department as defined in Section 14-103.04,
 8        (2)   has   earned  at  least  5  years  of  contributing
 9        creditable service as an  employee  of  a  department  as
10        defined  in  Section  14-103.04,  (3) retires on or after
11        January 1, 2001, and (4) retires having attained  an  age
12        which,  when  added  to the number of years of his or her
13        total creditable service, equals at least  85.   Portions
14        of years shall be counted as decimal equivalents.
15        (b)  For  purposes  of this Section, final average salary
16    shall be the average salary for  the  highest  4  consecutive
17    years  within  the  last  10  years  of creditable service as
18    determined under rules  of  the  board.   The  minimum  final
19    average salary shall be considered to be $2,400 per year.
20        In  the determination of final average salary for members
21    other than elected officials and their appointees  when  such
22    appointees  are  allowed  by statute, that part of a member's
23    salary for any year  beginning  after  June  30,  1979  which
24    exceeds  the  member's  annual full-time salary rate with the
25    same employer for the preceding year by more than  20%  shall
26    be  excluded.    The exclusion shall not apply in any year in
27    which the member's creditable earnings are less than  50%  of
28    the  preceding  year's  mean salary for downstate teachers as
29    determined by the survey of school district salaries provided
30    in Section 2-3.103 of the School Code.
31        If a superintendent receives  a  salary  increase  on  or
32    after  the  effective date of this amendatory Act of the 93rd
33    General Assembly, the superintendent may choose to have  some
34    or  all  of that increase in salary not included as a part of
 
                            -4-      LRB093 13000 LRD 20021 b
 1    his or her  salary  for  the  purpose  of  determining  final
 2    average  salary  by filing a written election with the System
 3    within 30 days after receiving the salary increase.
 4        (c)  In determining the amount of the retirement  annuity
 5    under  paragraph (B) of this Section, a fractional year shall
 6    be granted proportional credit.
 7        (d)  The retirement annuity  determined  under  paragraph
 8    (B)  of  this  Section shall be available only to members who
 9    render teaching service after July 1, 1947 for  which  member
10    contributions  are  required,  and to annuitants who re-enter
11    under the provisions of Section 16-150.
12        (e)  The  maximum  retirement  annuity   provided   under
13    paragraph  (B)  of this Section shall be 75% of final average
14    salary.
15        (f)  A member retiring after the effective date  of  this
16    amendatory  Act  of 1998 shall receive a pension equal to 75%
17    of final average salary if the member is qualified to receive
18    a retirement annuity equal to at least 74.6% of final average
19    salary under this Article or as proportional annuities  under
20    Article 20 of this Code.
21    (Source: P.A.  90-582,  eff.  5-27-98;  91-17,  eff.  6-4-99;
22    91-887, eff. 7-6-00; 91-927, eff. 12-14-00.)

23        (40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
24        Sec.  16-158.  Contributions by State and other employing
25    units.
26        (a)  The State shall make contributions to the System  by
27    means of appropriations from the Common School Fund and other
28    State  funds  of  amounts which, together with other employer
29    contributions, employee contributions, investment income, and
30    other  income,  will  be  sufficient  to  meet  the  cost  of
31    maintaining and administering the  System  on  a  90%  funded
32    basis in accordance with actuarial recommendations.
33        The   Board   shall   determine   the   amount  of  State
 
                            -5-      LRB093 13000 LRD 20021 b
 1    contributions required for each fiscal year on the  basis  of
 2    the  actuarial  tables  and  other assumptions adopted by the
 3    Board and the  recommendations  of  the  actuary,  using  the
 4    formula in subsection (b-3).
 5        (a-1)  Annually,  on  or  before  November  15, the Board
 6    shall certify to the Governor  the  amount  of  the  required
 7    State   contribution   for   the  coming  fiscal  year.   The
 8    certification  shall  include  a  copy   of   the   actuarial
 9    recommendations upon which it is based.
10        On or before May 1, 2004, the Board shall recalculate and
11    recertify  to  the  Governor the amount of the required State
12    contribution to the System for State fiscal year 2005, taking
13    into account the amounts appropriated to and received by  the
14    System  under  subsection  (d)  of Section 7.2 of the General
15    Obligation Bond Act.
16        (b)  Through  State   fiscal   year   1995,   the   State
17    contributions  shall be paid to the System in accordance with
18    Section 18-7 of the School Code.
19        (b-1)  Beginning in State fiscal year 1996, on  the  15th
20    day   of  each  month,  or  as  soon  thereafter  as  may  be
21    practicable, the Board shall submit vouchers for  payment  of
22    State  contributions to the System, in a total monthly amount
23    of one-twelfth of  the  required  annual  State  contribution
24    certified  under  subsection  (a-1).  These vouchers shall be
25    paid by the State Comptroller and Treasurer by warrants drawn
26    on the funds appropriated to the System for that fiscal year.
27        If in any month the amount remaining unexpended from  all
28    other  appropriations to the System for the applicable fiscal
29    year  (including  the  appropriations  to  the  System  under
30    Section 8.12 of the State Finance Act and Section  1  of  the
31    State  Pension  Funds  Continuing  Appropriation Act) is less
32    than the amount lawfully vouchered under this subsection, the
33    difference shall be paid from the Common  School  Fund  under
34    the  continuing  appropriation  authority provided in Section
 
                            -6-      LRB093 13000 LRD 20021 b
 1    1.1 of the State Pension Funds Continuing Appropriation Act.
 2        (b-2)  Allocations   from   the   Common   School    Fund
 3    apportioned  to school districts not coming under this System
 4    shall not be diminished or affected by the provisions of this
 5    Article.
 6        (b-3)  For State fiscal  years  2011  through  2045,  the
 7    minimum  contribution  to  the System to be made by the State
 8    for each fiscal year shall be an  amount  determined  by  the
 9    System  to  be  sufficient  to  bring the total assets of the
10    System up to 90% of the total actuarial  liabilities  of  the
11    System by the end of State fiscal year 2045.  In making these
12    determinations,  the  required  State  contribution  shall be
13    calculated each year as a level percentage  of  payroll  over
14    the  years  remaining  to  and including fiscal year 2045 and
15    shall be determined under the projected unit credit actuarial
16    cost method.
17        For State fiscal  years  1996  through  2010,  the  State
18    contribution to the System, as a percentage of the applicable
19    employee   payroll,   shall  be  increased  in  equal  annual
20    increments so that by State fiscal year 2011,  the  State  is
21    contributing  at the rate required under this Section; except
22    that in the following specified State fiscal years, the State
23    contribution to  the  System  shall  not  be  less  than  the
24    following  indicated  percentages  of the applicable employee
25    payroll, even if the  indicated  percentage  will  produce  a
26    State contribution in excess of the amount otherwise required
27    under this subsection and subsection (a), and notwithstanding
28    any contrary certification made under subsection (a-1) before
29    the effective date of this amendatory Act of 1998:  10.02% in
30    FY  1999;  10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY
31    2002; 12.86% in FY 2003; and 13.56% in FY 2004.
32        Beginning in State fiscal year 2046,  the  minimum  State
33    contribution  for each fiscal year shall be the amount needed
34    to maintain the total assets of the  System  at  90%  of  the
 
                            -7-      LRB093 13000 LRD 20021 b
 1    total actuarial liabilities of the System.
 2        Notwithstanding  any other provision of this Section, the
 3    required State contribution for State fiscal  year  2005  and
 4    each fiscal year thereafter, as calculated under this Section
 5    and  certified  under  subsection  (a-1), shall not exceed an
 6    amount  equal  to  (i)  the  amount  of  the  required  State
 7    contribution that  would  have  been  calculated  under  this
 8    Section  for  that fiscal year if the System had not received
 9    any payments under subsection  (d)  of  Section  7.2  of  the
10    General  Obligation  Bond  Act, minus (ii) the portion of the
11    State's total debt service payments for that fiscal  year  on
12    the  bonds  issued  for  the purposes of that Section 7.2, as
13    determined and certified by the Comptroller, that is the same
14    as the System's portion of the total moneys distributed under
15    subsection (d) of Section 7.2 of the General Obligation  Bond
16    Act.
17        (b-4)  If  a superintendent's salary for a school year is
18    more than 7% greater than his or her  salary  with  the  same
19    employer  for  the previous school year, the superintendent's
20    employer shall pay to the System, in addition  to  all  other
21    payments  required  under this Section and in accordance with
22    guidelines established by the System, the actuarial value  of
23    the  increase  in  benefits resulting from the portion of the
24    increase in salary that is in excess of 7%.
25        If, during any calendar year, a  superintendent's  salary
26    exceeds the salary of the Governor during that calendar year,
27    the  superintendent's  employer  shall  pay to the System, in
28    addition to all other payments required  under  this  Section
29    and  in accordance with guidelines established by the System,
30    the actuarial  value  of  the  benefits  resulting  from  the
31    portion  of  the  salary  that is in excess of the Governor's
32    salary.
33        For the  purposes  of  this  subsection  (b-4)  the  term
34    "superintendent"  means  a  superintendent  who  is  employed
 
                            -8-      LRB093 13000 LRD 20021 b
 1    pursuant to Section 10-21.4 of the School Code.
 2        The provisions of this subsection (b-4) apply to salaries
 3    paid  to  general  superintendents under employment contracts
 4    entered into, amended, or extended after  November  18,  2003
 5    (other  than  any  portion  of a salary that a superintendent
 6    elects to have not included as a part of his  or  her  salary
 7    for  the  purpose  of  determining final average salary under
 8    subsection (b) of Section 16-133).
 9        (c)  Payment of the required State contributions  and  of
10    all  pensions, retirement annuities, death benefits, refunds,
11    and other benefits granted under or assumed by  this  System,
12    and  all  expenses  in connection with the administration and
13    operation thereof, are obligations of the State.
14        If members are paid from special trust or  federal  funds
15    which  are administered by the employing unit, whether school
16    district or other unit, the employing unit shall pay  to  the
17    System  from  such  funds  the full accruing retirement costs
18    based  upon  that  service,  as  determined  by  the  System.
19    Employer contributions, based on salary paid to members  from
20    federal funds, may be forwarded by the distributing agency of
21    the  State  of Illinois to the System prior to allocation, in
22    an  amount   determined   in   accordance   with   guidelines
23    established by such agency and the System.
24        (d)  Effective July 1, 1986, any employer of a teacher as
25    defined  in  paragraph  (8)  of  Section 16-106 shall pay the
26    employer's normal cost of benefits based upon  the  teacher's
27    service, in addition to employee contributions, as determined
28    by   the   System.   Such  employer  contributions  shall  be
29    forwarded monthly in accordance with  guidelines  established
30    by the System.
31        However,  with  respect to benefits granted under Section
32    16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
33    of Section 16-106, the employer's contribution shall  be  12%
34    (rather  than 20%) of the member's highest annual salary rate
 
                            -9-      LRB093 13000 LRD 20021 b
 1    for each year of creditable service granted, and the employer
 2    shall also pay the required employee contribution  on  behalf
 3    of  the  teacher.   For the purposes of Sections 16-133.4 and
 4    16-133.5, a teacher as defined in paragraph  (8)  of  Section
 5    16-106  who  is  serving  in  that capacity while on leave of
 6    absence from another employer under this Article shall not be
 7    considered an employee of the employer from which the teacher
 8    is on leave.
 9        (e)  Beginning July 1, 1998, every employer of a  teacher
10    shall  pay to the System an employer contribution computed as
11    follows:
12             (1)  Beginning July 1, 1998 through June  30,  1999,
13        the  employer contribution shall be equal to 0.3% of each
14        teacher's salary.
15             (2)  Beginning July  1,  1999  and  thereafter,  the
16        employer  contribution  shall  be  equal to 0.58% of each
17        teacher's salary.
18    The school district or other employing  unit  may  pay  these
19    employer contributions out of any source of funding available
20    for  that  purpose and shall forward the contributions to the
21    System on the schedule established for the payment of  member
22    contributions.
23        These  employer  contributions  are  intended to offset a
24    portion of the  cost  to  the  System  of  the  increases  in
25    retirement  benefits  resulting  from  this amendatory Act of
26    1998.
27        Each employer of teachers is entitled to a credit against
28    the contributions required under  this  subsection  (e)  with
29    respect  to  salaries paid to teachers for the period January
30    1, 2002 through June 30, 2003, equal to the  amount  paid  by
31    that  employer  under  subsection (a-5) of Section 6.6 of the
32    State Employees Group Insurance Act of 1971 with  respect  to
33    salaries paid to teachers for that period.
34        The  additional  1%  employee contribution required under
 
                            -10-     LRB093 13000 LRD 20021 b
 1    Section  16-152  by  this  amendatory  Act  of  1998  is  the
 2    responsibility of the teacher and not the teacher's employer,
 3    unless the employer agrees, through collective bargaining  or
 4    otherwise, to make the contribution on behalf of the teacher.
 5        If an employer is required by a contract in effect on May
 6    1,  1998 between the employer and an employee organization to
 7    pay, on behalf of all its full-time employees covered by this
 8    Article, all mandatory employee contributions required  under
 9    this  Article, then the employer shall be excused from paying
10    the employer contribution required under this subsection  (e)
11    for  the  balance of the term of that contract.  The employer
12    and the employee organization shall jointly  certify  to  the
13    System  the existence of the contractual requirement, in such
14    form as the System may prescribe.  This exclusion shall cease
15    upon the termination, extension, or renewal of  the  contract
16    at any time after May 1, 1998.
17    (Source: P.A. 92-505, eff. 12-20-01; 93-2, eff. 4-7-03.)

18        Section  90.  The State Mandates Act is amended by adding
19    Section 8.27 as follows:

20        (30 ILCS 805/8.27 new)
21        Sec. 8.27. Exempt mandate.   Notwithstanding  Sections  6
22    and  8 of this Act, no reimbursement by the State is required
23    for  the  implementation  of  any  mandate  created  by  this
24    amendatory Act of the 93rd General Assembly.

25        Section 99.  Effective date.  This Act takes effect  upon
26    becoming law.