093_SB0588

 
                                     LRB093 07910 EFG 08101 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  15-136,  15-136.3,  15-145,  15-155,  and
 6    15-165 and adding Section 15-137.1 as follows:

 7        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
 8        Sec.   15-136.  Retirement   annuities   -  Amount.   The
 9    provisions  of  this  Section  15-136  apply  only  to  those
10    participants who are participating in the traditional benefit
11    package or the portable benefit package and do not  apply  to
12    participants who are participating in the self-managed plan.
13        (a)  The  amount  of  a participant's retirement annuity,
14    expressed in the form of  a  single-life  annuity,  shall  be
15    determined  by whichever of the following rules is applicable
16    and provides the largest annuity:
17        Rule 1:  The retirement annuity shall be 1.67%  of  final
18    rate  of  earnings for each of the first 10 years of service,
19    1.90% for each of the next 10 years  of  service,  2.10%  for
20    each  year  of  service in excess of 20 but not exceeding 30,
21    and 2.30% for each year in excess of 30; or for  persons  who
22    retire on or after January 1, 1998, 2.2% of the final rate of
23    earnings for each year of service.
24        Rule  2:  The  retirement annuity shall be the sum of the
25    following,  determined   from   amounts   credited   to   the
26    participant  in  accordance with the actuarial tables and the
27    prescribed rate  of  interest  in  effect  at  the  time  the
28    retirement annuity begins:
29             (i)  the  normal annuity which can be provided on an
30        actuarially equivalent basis, by the  accumulated  normal
31        contributions as of the date the annuity begins; and
 
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 1             (ii)  an  annuity  from employer contributions of an
 2        amount  equal  to  that  which  can  be  provided  on  an
 3        actuarially equivalent basis from the accumulated  normal
 4        contributions  made  by  the  participant  under  Section
 5        15-113.6  and  Section  15-113.7 plus 1.4 times all other
 6        accumulated normal contributions made by the participant.
 7        With respect to  a  police  officer  or  firefighter  who
 8    retires  on  or after August 14, 1998, the accumulated normal
 9    contributions taken into account under clauses (i)  and  (ii)
10    of   this   Rule   2  shall  include  the  additional  normal
11    contributions made by the police officer or firefighter under
12    Section 15-157(a).
13        The amount of a retirement annuity calculated under  this
14    Rule  2  shall  be  computed  solely  on  the  basis  of  the
15    participant's  accumulated normal contributions, as specified
16    in this Rule  and  defined  in  Section  15-116.  Neither  an
17    employee  or employer contribution for early retirement under
18    Section 15-136.2 nor any other employer contribution shall be
19    used in the calculation of the amount of a retirement annuity
20    under this Rule 2.
21        This amendatory Act of the 91st  General  Assembly  is  a
22    clarification   of   existing   law   and  applies  to  every
23    participant and annuitant without regard to whether status as
24    an employee terminates before  the  effective  date  of  this
25    amendatory Act.
26        Rule  3:  The  retirement annuity of a participant who is
27    employed at least one-half time during the  period  on  which
28    his or her final rate of earnings is based, shall be equal to
29    the   participant's  years  of  service  not  to  exceed  30,
30    multiplied by (1) $96 if  the  participant's  final  rate  of
31    earnings  is  less than $3,500, (2) $108 if the final rate of
32    earnings is at least $3,500 but less than $4,500, (3) $120 if
33    the final rate of earnings is at least $4,500 but  less  than
34    $5,500,  (4)  $132  if the final rate of earnings is at least
 
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 1    $5,500 but less than $6,500, (5) $144 if the  final  rate  of
 2    earnings is at least $6,500 but less than $7,500, (6) $156 if
 3    the  final  rate of earnings is at least $7,500 but less than
 4    $8,500, (7) $168 if the final rate of earnings  is  at  least
 5    $8,500  but  less than $9,500, and (8) $180 if the final rate
 6    of earnings is $9,500 or more, except that  the  annuity  for
 7    those   persons   having   made  an  election  under  Section
 8    15-154(a-1)  shall  be  calculated  and  payable  under   the
 9    portable   retirement   benefit   program   pursuant  to  the
10    provisions of Section 15-136.4.
11        Rule 4:  A participant who is at least age 50 and has  25
12    or  more years of service as a police officer or firefighter,
13    and a participant who is age 55 or over and has at  least  20
14    but  less  than  25  years  of service as a police officer or
15    firefighter, shall be entitled to  a  retirement  annuity  of
16    2 1/4% of the final rate of earnings for each of the first 10
17    years  of  service as a police officer or firefighter, 2 1/2%
18    for each of the next 10 years of service as a police  officer
19    or  firefighter,  and  2 3/4%  for  each year of service as a
20    police  officer  or  firefighter  in  excess  of   20.    The
21    retirement  annuity  for  all other service shall be computed
22    under Rule 1.
23        For purposes of this Rule 4, a participant's service as a
24    firefighter shall also include the following:
25             (i)  service that is performed while the  person  is
26        an employee under subsection (h) of Section 15-107; and
27             (ii)  in  the  case  of  an  individual  who  was  a
28        participating employee employed in the fire department of
29        the  University  of  Illinois's  Champaign-Urbana  campus
30        immediately   prior  to  the  elimination  of  that  fire
31        department and who immediately after the  elimination  of
32        that  fire department transferred to another job with the
33        University of Illinois, service performed as an  employee
34        of  the  University  of Illinois in a position other than
 
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 1        police officer or firefighter,  from  the  date  of  that
 2        transfer until the employee's next termination of service
 3        with the University of Illinois.
 4        Rule  5:  The  retirement  annuity  of  a participant who
 5    elected early retirement  under  the  provisions  of  Section
 6    15-136.2  and  who,  on  or before February 16, 1995, brought
 7    administrative proceedings  pursuant  to  the  administrative
 8    rules  adopted  by the System to challenge the calculation of
 9    his or her  retirement  annuity  shall  be  the  sum  of  the
10    following,   determined   from   amounts   credited   to  the
11    participant in accordance with the actuarial tables  and  the
12    prescribed  rate  of  interest  in  effect  at  the  time the
13    retirement annuity begins:
14             (i)  the normal annuity which can be provided on  an
15        actuarially  equivalent  basis, by the accumulated normal
16        contributions as of the date the annuity begins; and
17             (ii)  an annuity from employer contributions  of  an
18        amount  equal  to  that  which  can  be  provided  on  an
19        actuarially  equivalent basis from the accumulated normal
20        contributions  made  by  the  participant  under  Section
21        15-113.6 and Section 15-113.7 plus 1.4  times  all  other
22        accumulated normal contributions made by the participant;
23        and
24             (iii)  an  annuity  which  can  be  provided  on  an
25        actuarially    equivalent   basis   from   the   employee
26        contribution for early retirement under Section 15-136.2,
27        and an annuity from employer contributions of  an  amount
28        equal  to  that  which  can be provided on an actuarially
29        equivalent basis from the employee contribution for early
30        retirement under Section 15-136.2.
31        In no event shall a retirement annuity under this Rule  5
32    be  lower  than the amount obtained by adding (1) the monthly
33    amount  obtained  by  dividing  the  combined  employee   and
34    employer  contributions  made  under  Section 15-136.2 by the
 
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 1    System's annuity factor for the age of the participant at the
 2    beginning of the annuity payment period and  (2)  the  amount
 3    equal  to  the participant's annuity if calculated under Rule
 4    1, reduced under Section 15-136(b) as if no contributions had
 5    been made under Section 15-136.2.
 6        With respect to a participant  who  is  qualified  for  a
 7    retirement annuity under this Rule 5 whose retirement annuity
 8    began before the effective date of this amendatory Act of the
 9    91st  General Assembly, and for whom an employee contribution
10    was made under Section 15-136.2, the System shall recalculate
11    the retirement annuity under this Rule 5 and  shall  pay  any
12    additional  amounts  due  in  the  manner provided in Section
13    15-186.1 for benefits mistakenly set too low.
14        The amount of a retirement annuity calculated under  this
15    Rule  5  shall  be  computed  solely  on  the  basis of those
16    contributions specifically set forth in this Rule 5.   Except
17    as  provided  in  clause  (iii)  of  this  Rule 5, neither an
18    employee nor employer contribution for early retirement under
19    Section 15-136.2, nor any other employer contribution,  shall
20    be  used  in  the  calculation  of the amount of a retirement
21    annuity under this Rule 5.
22        The General Assembly has adopted the changes set forth in
23    Section 25  of  this  amendatory  Act  of  the  91st  General
24    Assembly  in  recognition  that the decision of the Appellate
25    Court for the Fourth District in Mattis v. State Universities
26    Retirement System et al. might be deemed to give  some  right
27    to  the  plaintiff in that case.  The changes made by Section
28    25 of this amendatory Act of the 91st General Assembly are  a
29    legislative  implementation  of the decision of the Appellate
30    Court for the Fourth District in Mattis v. State Universities
31    Retirement System et al. with respect to that plaintiff.
32        The changes made by Section 25 of this amendatory Act  of
33    the 91st General Assembly apply without regard to whether the
34    person is in service as an employee on or after its effective
 
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 1    date.
 2        (b)  The  retirement annuity provided under Rules 1 and 3
 3    above shall be reduced by  1/2  of  1%  for  each  month  the
 4    participant  is  under  age  60  at  the  time of retirement.
 5    However, this reduction shall  not  apply  in  the  following
 6    cases:
 7             (1)  For  a  disabled  participant  whose disability
 8        benefits have been discontinued because  he  or  she  has
 9        exhausted   eligibility  for  disability  benefits  under
10        clause (6) of Section 15-152;
11             (2)  For a participant who has at least  the  number
12        of  years  of service required to retire at any age under
13        subsection (a) of Section 15-135; or
14             (3)  For that portion of a retirement annuity  which
15        has   been   provided   on  account  of  service  of  the
16        participant during periods when he or she  performed  the
17        duties  of  a  police  officer  or  firefighter, if these
18        duties were performed for at least  5  years  immediately
19        preceding the date the retirement annuity is to begin.
20        (c)  The  maximum retirement annuity provided under Rules
21    1, 2, 4, and 5 shall be the lesser of (1) the annual limit of
22    benefits as specified in Section 415 of the Internal  Revenue
23    Code  of  1986,  as  such Section may be amended from time to
24    time and as such benefit limits  shall  be  adjusted  by  the
25    Commissioner  of  Internal Revenue, and (2) 80% of final rate
26    of earnings.
27        (d)  An annuitant whose status as an employee  terminates
28    after  August  14,  1969 shall receive automatic increases in
29    his or her retirement annuity as follows:
30        Effective January 1 immediately following  the  date  the
31    retirement  annuity  begins,  the  annuitant shall receive an
32    increase in his or her monthly retirement annuity  of  0.125%
33    of the monthly retirement annuity provided under Rule 1, Rule
34    2,  Rule  3,  Rule  4,  or Rule 5, contained in this Section,
 
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 1    multiplied by the number of full months  which  elapsed  from
 2    the  date the retirement annuity payments began to January 1,
 3    1972, plus 0.1667% of such annuity, multiplied by the  number
 4    of  full  months  which  elapsed from January 1, 1972, or the
 5    date the retirement  annuity  payments  began,  whichever  is
 6    later,  to  January  1,  1978,  plus  0.25%  of  such annuity
 7    multiplied by the number of full months  which  elapsed  from
 8    January  1, 1978, or the date the retirement annuity payments
 9    began, whichever is later,  to  the  effective  date  of  the
10    increase.
11        The  annuitant  shall  receive  an increase in his or her
12    monthly retirement  annuity  on  each  January  1  thereafter
13    during  the  annuitant's  life  of  3% of the monthly annuity
14    provided under Rule 1, Rule 2, Rule 3,  Rule  4,  or  Rule  5
15    contained  in  this  Section.   The  change  made  under this
16    subsection by P.A. 81-970 is effective January  1,  1980  and
17    applies  to  each  annuitant  whose  status  as  an  employee
18    terminates before or after that date.
19        Beginning January 1, 1990, all automatic annual increases
20    payable   under   this  Section  shall  be  calculated  as  a
21    percentage of the total annuity payable at the  time  of  the
22    increase,  including  all  increases previously granted under
23    this Article.
24        The change made in this subsection  by  P.A.  85-1008  is
25    effective  January 26, 1988, and is applicable without regard
26    to whether status as an employee terminated before that date.
27        (e)  If, on January 1, 1987, or the date  the  retirement
28    annuity payment period begins, whichever is later, the sum of
29    the  retirement  annuity  provided  under Rule 1 or Rule 2 of
30    this Section and  the  automatic  annual  increases  provided
31    under  the  preceding subsection or Section 15-136.1, amounts
32    to less than the retirement annuity which would  be  provided
33    by  Rule  3,  the retirement annuity shall be increased as of
34    January 1, 1987, or the date the retirement  annuity  payment
 
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 1    period  begins, whichever is later, to the amount which would
 2    be provided by Rule 3 of this Section. Such increased  amount
 3    shall  be considered as the retirement annuity in determining
 4    benefits provided under other Sections of this Article.  This
 5    paragraph  applies  without  regard  to  whether status as an
 6    employee  terminated  before  the  effective  date  of   this
 7    amendatory  Act  of  1987,  provided  that  the annuitant was
 8    employed at least one-half time during the  period  on  which
 9    the final rate of earnings was based.
10        (f)  A participant is entitled to such additional annuity
11    as may be provided on an actuarially equivalent basis, by any
12    accumulated  additional  contributions  to his or her credit.
13    However, the additional contributions made by the participant
14    toward the automatic increases in annuity provided under this
15    Section shall not be taken into account  in  determining  the
16    amount of such additional annuity.
17        (g)  If,  (1)  by law, a function of a governmental unit,
18    as defined by Section 20-107 of this Code, is transferred  in
19    whole  or  in  part  to  an  employer,  and (2) a participant
20    transfers employment from  such  governmental  unit  to  such
21    employer  within 6 months after the transfer of the function,
22    and (3) the sum of (A) the annuity payable to the participant
23    under Rule 1, 2, or 3 of this Section  (B)  all  proportional
24    annuities  payable to the participant by all other retirement
25    systems covered by Article 20, and (C)  the  initial  primary
26    insurance  amount  to which the participant is entitled under
27    the Social Security Act, is less than the retirement  annuity
28    which  would  have  been  payable if all of the participant's
29    pension credits  validated  under  Section  20-109  had  been
30    validated  under this system, a supplemental annuity equal to
31    the difference in  such  amounts  shall  be  payable  to  the
32    participant.
33        (h)  On January 1, 1981, an annuitant who was receiving a
34    retirement  annuity  on  or before January 1, 1971 shall have
 
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 1    his or her retirement annuity then being  paid  increased  $1
 2    per  month for each year of creditable service. On January 1,
 3    1982, an annuitant  whose  retirement  annuity  began  on  or
 4    before  January  1,  1977,  shall  have his or her retirement
 5    annuity then being paid increased $1 per month for each  year
 6    of creditable service.
 7        (i)  On  January  1, 1987, any annuitant whose retirement
 8    annuity began on or before January 1, 1977,  shall  have  the
 9    monthly retirement annuity increased by an amount equal to 8¢
10    per year of creditable service times the number of years that
11    have elapsed since the annuity began.
12        (j)  On July 1, 2003, every annuitant who began receiving
13    a  retirement  annuity  before January 1, 1980 shall have the
14    monthly retirement annuity  increased  by  whichever  of  the
15    following percentages is applicable:
16              5% if the annuity began in 1979;
17             10% if the annuity began in 1978;
18             14% if the annuity began in 1977;
19             14% if the annuity began in 1976;
20             18% if the annuity began in 1975;
21             23% if the annuity began in 1974;
22             32% if the annuity began in 1973 or before.
23        The increase under this subsection shall be calculated as
24    a  percentage of the amount of the retirement annuity payable
25    on June 30, 2003, including any increases previously received
26    under this Article, and shall be included in the  calculation
27    of increases granted thereafter under subsection (d).
28    (Source:  P.A.  91-887  (Sections  20  and  25), eff. 7-6-00;
29    92-16, eff. 6-28-01.)

30        (40 ILCS 5/15-136.3)
31        Sec. 15-136.3. Minimum retirement annuity.
32        (a)  Beginning  January  1,  1997,  any  person  who   is
33    receiving  a  monthly  retirement  annuity under this Article
 
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 1    which, after inclusion of  (1)  all  one-time  and  automatic
 2    annual  increases  to  which  the person is entitled, (2) any
 3    supplemental annuity payable under Section 15-136.1, and  (3)
 4    any amount deducted under Section 15-138 or 15-140 to provide
 5    a  reversionary  annuity,  is  less  than the minimum monthly
 6    retirement benefit amount specified in subsection (b) of this
 7    Section, shall be entitled to a monthly supplemental  payment
 8    equal to the difference.
 9        (b)  For  purposes  of the calculation in subsection (a),
10    the minimum monthly retirement benefit amount is the  sum  of
11    $25  for  each  year of service credit, up to a maximum of 30
12    years of service, plus the amount of the increase received by
13    the annuitant under subsection (j) of Section 15-136, if any.
14        (c)  This Section applies  to  all  persons  receiving  a
15    retirement  annuity  under  this  Article,  without regard to
16    whether or not employment terminated prior to  the  effective
17    date of this Section.
18    (Source: P.A. 89-616, eff. 8-9-96.)

19        (40 ILCS 5/15-137.1 new)
20        Sec.  15-137.1.  Reduction  of  purchasing power; policy;
21    report; increase.
22        (a)  The General Assembly finds and declares that:
23             (1)  The purchasing power of a fixed annuity can  be
24        eroded   over  time  by  the  effects  of  inflation  and
25        increases in the general cost of living.
26             (2)  For a person whose income consists primarily of
27        a  fixed  annuity,  the  reduction  in  purchasing  power
28        resulting from increases in the cost of living can become
29        catastrophic over time, transforming  a  once-comfortable
30        retirement into a time of poverty and need.
31             (3)  The  State  of  Illinois is concerned about the
32        effects that a significant reduction in purchasing  power
33        can  have on the quality of life of retired employees and
 
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 1        their survivors.
 2             (4)  The General Assembly has  previously  addressed
 3        this  concern by providing for automatic annual increases
 4        in  retirement  and  survivor's  annuities   under   this
 5        Article.    Recognizing   that   these  automatic  annual
 6        increases, by themselves, are not a  complete  answer  in
 7        times  of  high inflation, the General Assembly has also,
 8        from time to time, provided specific  one-time  increases
 9        in annuities for certain categories of annuitants.
10        (b)  It  is  the  public  policy  of  this  State and the
11    intention of  the  General  Assembly  to  protect  annuitants
12    against  significant decreases in the purchasing power of the
13    retirement  and  survivor's  annuities  granted  under   this
14    Article.
15        (c)  The  System  shall regularly review the changes that
16    have occurred in the purchasing power of the  retirement  and
17    survivor's  annuities  being  paid under this Article, and it
18    shall report to the General Assembly, the Governor,  and  the
19    Pension  Laws  Commission  whenever  it  determines  that the
20    original purchasing power of those annuities has been reduced
21    by 20% or more for any category or group of annuitants.   The
22    System may include in the report its recommendations, if any,
23    for legislative action to address its findings.
24        (d)  As  used  in  this Section, the term "retirement and
25    survivor's annuities"  means  all  retirement  annuities  and
26    those  survivors insurance benefits payable in the form of an
27    annuity.
28        (e)  This Section does not apply to  any  benefits  under
29    the self-managed plan.

30        (40 ILCS 5/15-145) (from Ch. 108 1/2, par. 15-145)
31        Sec.  15-145.   Survivors  insurance benefits; conditions
32    and amounts.
33        (a)  The survivors insurance benefits provided under this
 
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 1    Section shall be payable  to  the  eligible  survivors  of  a
 2    participant  covered  under  the  traditional benefit package
 3    upon the death of (1) a participating employee with at  least
 4    1 1/2  years  of  service,  (2)  a participant who terminated
 5    employment with at least 10 years  of  service,  and  (3)  an
 6    annuitant  in  receipt  of a retirement annuity or disability
 7    retirement annuity under this Article.
 8        Service under the State Employees' Retirement  System  of
 9    Illinois,  the  Teachers'  Retirement  System of the State of
10    Illinois  and  the  Public  School  Teachers'   Pension   and
11    Retirement Fund of Chicago shall be considered in determining
12    eligibility for survivors benefits under this Section.
13        If  by law, a function of a governmental unit, as defined
14    by Section 20-107, is transferred in whole or in part  to  an
15    employer,  and  an  employee  transfers  employment from this
16    governmental unit to such employer within 6 months after  the
17    transfer  of  this  function,  the  service  credits  in  the
18    governmental   unit's   retirement  system  which  have  been
19    validated  under  Section  20-109  shall  be  considered   in
20    determining  eligibility  for  survivors  benefits under this
21    Section.
22        (b)  A surviving spouse of a deceased participant, or  of
23    a  deceased annuitant who did not take a refund or additional
24    annuity  consisting  of   accumulated   survivors   insurance
25    contributions,  shall  receive  a survivors annuity of 30% of
26    the final rate of earnings.  Payments shall begin on the  day
27    following  the participant's or annuitant's death or the date
28    the surviving spouse attains age 50, whichever is later,  and
29    continue  until  the  death  of  the  surviving  spouse.  The
30    annuity shall be payable to the  surviving  spouse  prior  to
31    attainment  of  age  50 if the surviving spouse has in his or
32    her care a deceased participant's  or  annuitant's  dependent
33    unmarried  child  under  age  18 (under age 22 if a full-time
34    student) who is eligible for a survivors annuity.
 
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 1        Remarriage of a surviving spouse prior to  attainment  of
 2    age  55  that  occurs  before  the  effective  date  of  this
 3    amendatory  Act of the 91st General Assembly shall disqualify
 4    him or her for the receipt of a survivors annuity until  July
 5    6, 2000.
 6        A  surviving  spouse  whose  survivors  annuity  has been
 7    terminated due to remarriage may apply for  reinstatement  of
 8    that  annuity.   The reinstated annuity shall begin to accrue
 9    on July 6, 2000, except that if, on July 6, 2000, the annuity
10    is payable to an eligible surviving child or parent,  payment
11    of   the  annuity  to  the  surviving  spouse  shall  not  be
12    reinstated until the annuity is  no  longer  payable  to  any
13    eligible  surviving  child or parent.  The reinstated annuity
14    shall include any one-time or annual increases received prior
15    to the date of termination, as well  as  any  increases  that
16    would  otherwise have accrued from the date of termination to
17    the date of reinstatement.    An  eligible  surviving  spouse
18    whose  expectation  of receiving a survivors annuity was lost
19    due to remarriage before attainment of age 50 shall  also  be
20    entitled  to  reinstatement  under  this  subsection, but the
21    resulting survivors annuity shall not begin to accrue  sooner
22    than upon the surviving spouse's attainment of age 50.
23        The  changes  made  to this subsection by this amendatory
24    Act of the 92nd General Assembly  (pertaining  to  remarriage
25    prior  to  age  55 or 50) apply without regard to whether the
26    deceased participant or annuitant was in service on or  after
27    the effective date of this amendatory Act.
28        (c)  Each  dependent  unmarried child under age 18 (under
29    age 22 if a full-time student) of a deceased participant,  or
30    of  a  deceased  annuitant  who  did  not  take  a  refund or
31    additional  annuity  consisting  of   accumulated   survivors
32    insurance  contributions,  shall  receive a survivors annuity
33    equal to the sum of (1) 20% of the final  rate  of  earnings,
34    and  (2)  10%  of  the  final rate of earnings divided by the
 
                            -14-     LRB093 07910 EFG 08101 b
 1    number of children entitled to this benefit.  Payments  shall
 2    begin  on  the day following the participant's or annuitant's
 3    death and continue until the child marries, dies, or  attains
 4    age  18  (age 22 if a full-time student).  If the child is in
 5    the care of a surviving spouse who is eligible for  survivors
 6    insurance  benefits, the child's benefit shall be paid to the
 7    surviving spouse.
 8        Each  unmarried  child  over  age  18   of   a   deceased
 9    participant  or  of a deceased annuitant who had a survivor's
10    insurance beneficiary at the time of his or  her  retirement,
11    and  who  was  dependent upon the participant or annuitant by
12    reason of a physical or mental disability which  began  prior
13    to  the date the child attained age 18 (age 22 if a full-time
14    student), shall receive a survivor's annuity equal to the sum
15    of (1) 20% of the final rate of earnings, and (2) 10% of  the
16    final  rate  of  earnings  divided  by the number of children
17    entitled to survivors benefits.  Payments shall begin on  the
18    day  following  the  participant's  or  annuitant's death and
19    continue until the child  marries,  dies,  or  is  no  longer
20    disabled.   If the child is in the care of a surviving spouse
21    who is eligible for survivors insurance benefits, the child's
22    benefit may  be  paid  to  the  surviving  spouse.   For  the
23    purposes  of  this  Section,  disability  means  inability to
24    engage in any substantial gainful activity by reason  of  any
25    medically determinable physical or mental impairment that can
26    be  expected  to result in death or that has lasted or can be
27    expected to last for a continuous  period  of  at  least  one
28    year.
29        (d)  Each  dependent parent of a deceased participant, or
30    of a  deceased  annuitant  who  did  not  take  a  refund  or
31    additional   annuity   consisting  of  accumulated  survivors
32    insurance contributions, shall receive  a  survivors  annuity
33    equal  to  the  sum of (1) 20% of final rate of earnings, and
34    (2) 10% of final rate of earnings divided by  the  number  of
 
                            -15-     LRB093 07910 EFG 08101 b
 1    parents  who  qualify  for the benefit.  Payments shall begin
 2    when the parent reaches age  55  or  the  day  following  the
 3    participant's  or  annuitant's death, whichever is later, and
 4    continue until the parent dies.  Remarriage of a parent prior
 5    to attainment of age 55 shall disqualify the parent  for  the
 6    receipt of a survivors annuity.
 7        (e)  In addition to the survivors annuity provided above,
 8    each survivors insurance beneficiary shall, upon death of the
 9    participant  or  annuitant,  receive  a  lump  sum payment of
10    $1,000 divided by the number of such beneficiaries.
11        (f)  The changes made  in  this  Section  by  Public  Act
12    81-712   pertaining   to  survivors  annuities  in  cases  of
13    remarriage prior to age 55  shall  apply  to  each  survivors
14    insurance  beneficiary  who  remarries  after  June 30, 1979,
15    regardless of the date  that  the  participant  or  annuitant
16    terminated his employment or died.
17        The change made to this Section by this amendatory Act of
18    the  91st General Assembly, pertaining to remarriage prior to
19    age 55,  applies  without  regard  to  whether  the  deceased
20    participant  or  annuitant  was  in  service  on or after the
21    effective date of this amendatory Act  of  the  91st  General
22    Assembly.
23        (g)  On  January  1, 1981, any person who was receiving a
24    survivors annuity on or before January 1, 1971 shall have the
25    survivors annuity then being paid increased by  1%  for  each
26    full  year which has elapsed from the date the annuity began.
27    On January 1, 1982, any survivor whose  annuity  began  after
28    January  1,  1971, but before January 1, 1981, shall have the
29    survivor's annuity then being paid increased by 1%  for  each
30    year  which  has elapsed from the date the survivor's annuity
31    began. On January 1, 1987, any survivor who began receiving a
32    survivor's annuity on or before January 1, 1977,  shall  have
33    the  monthly survivor's annuity increased by $1 for each full
34    year which has elapsed since the date the survivor's  annuity
 
                            -16-     LRB093 07910 EFG 08101 b
 1    began.
 2        (g-1)  On  July  1, 2003, every recipient of a survivor's
 3    annuity whose original annuity began before January  1,  1980
 4    shall  have  the  monthly  survivor's  annuity  increased  by
 5    whichever of the following percentages is applicable:
 6              5% if the original annuity began in 1979;
 7             10% if the original annuity began in 1978;
 8             14% if the original annuity began in 1977;
 9             14% if the original annuity began in 1976;
10             18% if the original annuity began in 1975;
11             23% if the original annuity began in 1974;
12             32% if the original annuity began in 1973 or before.
13        In  the  case of the survivor of a deceased annuitant who
14    died while receiving a retirement annuity, "original annuity"
15    means the deceased annuitant's  retirement  annuity;  in  all
16    other cases, "original annuity" means the survivor's annuity.
17        The increase under this subsection shall be calculated as
18    a  percentage of the amount of the survivor's annuity payable
19    on June 30, 2003, including any increases previously received
20    under this Article, and shall be included in the  calculation
21    of increases granted thereafter under subsection (j).
22        (h)  If  the  sum  of  the  lump  sum  and  total monthly
23    survivor benefits payable under this Section upon  the  death
24    of  a  participant  amounts to less than the sum of the death
25    benefits payable under items (2) and (3) of  Section  15-141,
26    the difference shall be paid in a lump sum to the beneficiary
27    of  the  participant  who  is  living  on  the date that this
28    additional amount becomes payable.
29        (i)  If the  sum  of  the  lump  sum  and  total  monthly
30    survivor  benefits  payable under this Section upon the death
31    of an annuitant receiving a retirement annuity or  disability
32    retirement  annuity  amounts  to  less than the death benefit
33    payable under Section 15-142, the difference shall be paid to
34    the beneficiary of the annuitant who is living  on  the  date
 
                            -17-     LRB093 07910 EFG 08101 b
 1    that this additional amount becomes payable.
 2        (j)  Effective  on  the  later of (1) January 1, 1990, or
 3    (2) the January 1 on or next after  the  date  on  which  the
 4    survivor  annuity  begins,  if the deceased member died while
 5    receiving a retirement annuity, or in  all  other  cases  the
 6    January  1  nearest  the  first  anniversary  of the date the
 7    survivor annuity payments begin,  every  survivors  insurance
 8    beneficiary  shall  receive an increase in his or her monthly
 9    survivors annuity of 3%.  On each January 1 after the initial
10    increase, the monthly survivors annuity shall be increased by
11    3%  of  the  total  survivors  annuity  provided  under  this
12    Article,  including  previous  increases  provided  by   this
13    subsection.   Such  increases  shall  apply  to the survivors
14    insurance beneficiaries of each  participant  and  annuitant,
15    whether  or  not  the employment status of the participant or
16    annuitant  terminates  before  the  effective  date  of  this
17    amendatory Act of 1990.  This subsection (j) also applies  to
18    persons  receiving  a  survivor  annuity  under  the portable
19    benefit package.
20        (k)  If the Internal Revenue Code of  1986,  as  amended,
21    requires  that  the  survivors  benefits be payable at an age
22    earlier than that specified  in  this  Section  the  benefits
23    shall   begin  at  the  earlier  age,  in  which  event,  the
24    survivor's beneficiary shall be entitled only to that  amount
25    which  is  equal  to the actuarial equivalent of the benefits
26    provided by this Section.
27        (l)  The changes made to this Section and Section  15-131
28    by  this  amendatory  Act  of  1997, relating to benefits for
29    certain unmarried children who are full-time  students  under
30    age  22,  apply without regard to whether the deceased member
31    was in service  on  or  after  the  effective  date  of  this
32    amendatory  Act  of 1997.  These changes do not authorize the
33    repayment of a refund or a re-election of benefits,  and  any
34    benefit  or increase in benefits resulting from these changes
 
                            -18-     LRB093 07910 EFG 08101 b
 1    is not  payable  retroactively  for  any  period  before  the
 2    effective date of this amendatory Act of 1997.
 3    (Source: P.A. 91-887, eff. 7-6-00; 92-749, eff. 8-2-02.)

 4        (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
 5        Sec. 15-155.  Employer contributions.
 6        (a)  The  State  of  Illinois shall make contributions by
 7    appropriations of amounts  which,  together  with  the  other
 8    employer  contributions from trust, federal, and other funds,
 9    employee contributions, income from  investments,  and  other
10    income of this System, will be sufficient to meet the cost of
11    maintaining  and  administering  the  System  on a 90% funded
12    basis in accordance with actuarial recommendations.
13        The  Board  shall   determine   the   amount   of   State
14    contributions  required  for each fiscal year on the basis of
15    the actuarial tables and other  assumptions  adopted  by  the
16    Board  and  the  recommendations  of  the  actuary, using the
17    formulae formula in subsection (a-1)  and  subsection  (a-2).
18    The  minimum  contribution  to  the  System to be made by the
19    State for each fiscal year shall be the  sum  of  the  amount
20    determined  under  subsection (a-1) and the amount determined
21    under subsection (a-2).
22        (a-1)  For State fiscal  years  2011  through  2045,  the
23    minimum  contribution  to  the System to be made by the State
24    for each fiscal year shall be an  amount  determined  by  the
25    System  to  be  sufficient  to  bring the total assets of the
26    System up to 90% of the total actuarial  liabilities  of  the
27    System  (other  than  the liabilities described in subsection
28    (a-2) of this Section) by the end of State fiscal year  2045.
29    In   making   these   determinations,   the   required  State
30    contribution  shall  be  calculated  each  year  as  a  level
31    percentage  of  payroll  over  the  years  remaining  to  and
32    including fiscal year 2045 and shall be determined under  the
33    projected unit credit actuarial cost method.
 
                            -19-     LRB093 07910 EFG 08101 b
 1        For  State  fiscal  years  1996  through  2010, the State
 2    contribution to the System, as a percentage of the applicable
 3    employee  payroll,  shall  be  increased  in   equal   annual
 4    increments  so  that  by State fiscal year 2011, the State is
 5    contributing at the rate required under this Section.
 6        Beginning in State fiscal year 2046,  the  minimum  State
 7    contribution  for each fiscal year shall be the amount needed
 8    to maintain the total assets of the  System  at  90%  of  the
 9    total actuarial liabilities of the System.
10        (a-2)  The cost of the one-time increases granted by this
11    amendatory  Act of the 93rd General Assembly under subsection
12    (j) of Section 15-136, subsection  (b)  of  Section  15-136.3
13    (insofar  as  it  derives from that subsection (j) increase),
14    and subsection (g-1) of Section 15-145 shall be paid  by  the
15    State  on  a  level  dollar  basis  over a period of 10 years
16    beginning July 1, 2005.  These contributions are in  addition
17    to,  and  shall  not  be  included in the calculation of, the
18    State contribution required under subsection (a-1).
19        (b)  If an employee is paid from trust or federal  funds,
20    the  employer shall pay to the Board contributions from those
21    funds which are sufficient to cover the accruing normal costs
22    on behalf of the  employee.    However,  universities  having
23    employees  who  are compensated out of local auxiliary funds,
24    income funds, or service enterprise funds are not required to
25    pay such contributions on behalf  of  those  employees.   The
26    local  auxiliary  funds, income funds, and service enterprise
27    funds of universities shall not be considered trust funds for
28    the  purpose  of  this   Article,   but   funds   of   alumni
29    associations,  foundations,  and  athletic associations which
30    are affiliated with the universities  included  as  employers
31    under  this  Article and other employers which do not receive
32    State appropriations are considered to be trust funds for the
33    purpose of this Article.
34        (b-1)  The City of Urbana and the City of Champaign shall
 
                            -20-     LRB093 07910 EFG 08101 b
 1    each make employer contributions to  this  System  for  their
 2    respective  firefighter  employees  who  participate  in this
 3    System pursuant to subsection (h)  of  Section  15-107.   The
 4    rate  of  contributions  to  be  made by those municipalities
 5    shall be determined annually by the Board on the basis of the
 6    actuarial  assumptions  adopted  by   the   Board   and   the
 7    recommendations  of  the actuary, and shall be expressed as a
 8    percentage of salary for each such employee.  The Board shall
 9    certify the rate to the affected municipalities  as  soon  as
10    may  be practical.  The employer contributions required under
11    this subsection shall be remitted by the municipality to  the
12    System  at  the  same time and in the same manner as employee
13    contributions.
14        (c)  Through State fiscal year 1995: The  total  employer
15    contribution  shall be apportioned among the various funds of
16    the State and other employers,  whether  trust,  federal,  or
17    other funds, in accordance with actuarial procedures approved
18    by  the board.  State of Illinois contributions for employers
19    receiving State appropriations for personal services shall be
20    payable from appropriations made to the employers or  to  the
21    System.   The  contributions  for  Class I community colleges
22    covering earnings  other  than  those  paid  from  trust  and
23    federal funds, shall be payable solely from appropriations to
24    the  Illinois  Community  College  Board  or  the  System for
25    employer contributions.
26        (d)  Beginning in State fiscal year  1996,  the  required
27    State  contributions  to  the  System  shall  be appropriated
28    directly to the System and shall be payable through  vouchers
29    issued in accordance with subsection (c) of Section 15-165.
30        (e)  The State Comptroller shall draw warrants payable to
31    the  System upon proper certification by the System or by the
32    employer in accordance with the appropriation laws  and  this
33    Code.
34        (f)  Normal  costs under this Section means liability for
 
                            -21-     LRB093 07910 EFG 08101 b
 1    pensions and other  benefits  which  accrues  to  the  System
 2    because  of  the  credits  earned for service rendered by the
 3    participants  during  the  fiscal  year   and   expenses   of
 4    administering the System, but shall not include the principal
 5    of  or any redemption premium or interest on any bonds issued
 6    by the board or any expenses incurred or deposits required in
 7    connection therewith.
 8    (Source: P.A. 89-602, eff. 8-2-96; 90-576, eff. 3-31-98.)

 9        (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
10        Sec. 15-165.  To certify amounts and submit vouchers.
11        (a)  The Board shall certify to the Governor on or before
12    November 15 of each  year  the  appropriation  required  from
13    State funds for the purposes of this System for the following
14    fiscal  year.   The certification shall include a copy of the
15    actuarial recommendations upon which it is based.
16        (b)  The Board shall certify to the State Comptroller  or
17    employer,  as  the  case  may  be,  from time to time, by its
18    president and secretary, with its seal attached, the  amounts
19    payable to the System from the various funds.
20        (c)  Beginning  in  State fiscal year 1996, on or as soon
21    as possible after the 15th day of each month the Board  shall
22    submit  vouchers  for  payment  of State contributions to the
23    System, in a total  monthly  amount  of  one-twelfth  of  the
24    required annual State contribution certified under subsection
25    (a).   These  vouchers shall be paid by the State Comptroller
26    and Treasurer by warrants drawn on the funds appropriated  to
27    the System for that fiscal year.
28        If  in any month the amount remaining unexpended from all
29    other appropriations to the System for the applicable  fiscal
30    year  (including  the  appropriations  to  the  System  under
31    Section  8.12  of  the State Finance Act and Section 1 of the
32    State Pension Funds Continuing  Appropriation  Act)  is  less
33    than  the  amount  lawfully vouchered under this Section, the
 
                            -22-     LRB093 07910 EFG 08101 b
 1    difference shall be paid from the General Revenue Fund  under
 2    the  continuing  appropriation  authority provided in Section
 3    1.1 of the State Pension Funds Continuing Appropriation Act.
 4        (d)  So long as the payments received are the full amount
 5    lawfully vouchered under this Section, payments  received  by
 6    the  System  under this Section shall be applied first toward
 7    the  employer   contribution   to   the   self-managed   plan
 8    established   under  Section  15-158.2.   Payments  shall  be
 9    applied second toward the employer's portion  of  the  normal
10    costs  of the System, as defined in subsection (f) of Section
11    15-155.  The balance shall be  applied  toward  the  unfunded
12    actuarial liabilities of the System.
13        (e)  In  the event that the System does not receive, as a
14    result  of  legislative  enactment  or  otherwise,   payments
15    sufficient  to  fully  fund  the employer contribution to the
16    self-managed plan established under Section 15-158.2  and  to
17    fully  fund  that  portion  of  the employer's portion of the
18    normal costs of the System, as calculated in accordance  with
19    subsections  (a-1)  and  (a-2) of Section 15-155 15-155(a-1),
20    then any payments received shall be  applied  proportionately
21    to  the optional retirement program established under Section
22    15-158.2 and to the employer's portion of the normal costs of
23    the System, as  calculated  in  accordance  with  subsections
24    (a-1) and (a-2) of Section 15-155 15-155(a-1).
25    (Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

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