94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2386

 

Introduced 1/18/2006, by Sen. Iris Y. Martinez

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/16-203

    Amends the Downstate Teacher Article of the Illinois Pension Code. Provides that provisions concerning the employer's contribution for salary increases in excess of 6% do not apply to (1) any payment or stipend that is paid to a teacher for tutoring students outside the normal school day or (2) any payment or stipend that is paid to a teacher for attending training or writing improved academic curriculum outside of his or her regular work day. Includes language exempting the changes from the definition of "new benefit increase". Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2386 LRB094 18269 AMC 53580 b

1     AN ACT concerning 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 changing
5 Sections 16-158 and 16-203 as follows:
 
6     (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
7     Sec. 16-158. Contributions by State and other employing
8 units.
9     (a) The State shall make contributions to the System by
10 means of appropriations from the Common School Fund and other
11 State funds of amounts which, together with other employer
12 contributions, employee contributions, investment income, and
13 other income, will be sufficient to meet the cost of
14 maintaining and administering the System on a 90% funded basis
15 in accordance with actuarial recommendations.
16     The Board shall determine the amount of State contributions
17 required for each fiscal year on the basis of the actuarial
18 tables and other assumptions adopted by the Board and the
19 recommendations of the actuary, using the formula in subsection
20 (b-3).
21     (a-1) Annually, on or before November 15, the Board shall
22 certify to the Governor the amount of the required State
23 contribution for the coming fiscal year. The certification
24 shall include a copy of the actuarial recommendations upon
25 which it is based.
26     On or before May 1, 2004, the Board shall recalculate and
27 recertify to the Governor the amount of the required State
28 contribution to the System for State fiscal year 2005, taking
29 into account the amounts appropriated to and received by the
30 System under subsection (d) of Section 7.2 of the General
31 Obligation Bond Act.
32     On or before July 1, 2005, the Board shall recalculate and

 

 

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1 recertify to the Governor the amount of the required State
2 contribution to the System for State fiscal year 2006, taking
3 into account the changes in required State contributions made
4 by this amendatory Act of the 94th General Assembly.
5     (b) Through State fiscal year 1995, the State contributions
6 shall be paid to the System in accordance with Section 18-7 of
7 the School Code.
8     (b-1) Beginning in State fiscal year 1996, on the 15th day
9 of each month, or as soon thereafter as may be practicable, the
10 Board shall submit vouchers for payment of State contributions
11 to the System, in a total monthly amount of one-twelfth of the
12 required annual State contribution certified under subsection
13 (a-1). From the effective date of this amendatory Act of the
14 93rd General Assembly through June 30, 2004, the Board shall
15 not submit vouchers for the remainder of fiscal year 2004 in
16 excess of the fiscal year 2004 certified contribution amount
17 determined under this Section after taking into consideration
18 the transfer to the System under subsection (a) of Section
19 6z-61 of the State Finance Act. These vouchers shall be paid by
20 the State Comptroller and Treasurer by warrants drawn on the
21 funds appropriated to the System for that fiscal year.
22     If in any month the amount remaining unexpended from all
23 other appropriations to the System for the applicable fiscal
24 year (including the appropriations to the System under Section
25 8.12 of the State Finance Act and Section 1 of the State
26 Pension Funds Continuing Appropriation Act) is less than the
27 amount lawfully vouchered under this subsection, the
28 difference shall be paid from the Common School Fund under the
29 continuing appropriation authority provided in Section 1.1 of
30 the State Pension Funds Continuing Appropriation Act.
31     (b-2) Allocations from the Common School Fund apportioned
32 to school districts not coming under this System shall not be
33 diminished or affected by the provisions of this Article.
34     (b-3) For State fiscal years 2011 through 2045, the minimum
35 contribution to the System to be made by the State for each
36 fiscal year shall be an amount determined by the System to be

 

 

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1 sufficient to bring the total assets of the System up to 90% of
2 the total actuarial liabilities of the System by the end of
3 State fiscal year 2045. In making these determinations, the
4 required State contribution shall be calculated each year as a
5 level percentage of payroll over the years remaining to and
6 including fiscal year 2045 and shall be determined under the
7 projected unit credit actuarial cost method.
8     For State fiscal years 1996 through 2005, the State
9 contribution to the System, as a percentage of the applicable
10 employee payroll, shall be increased in equal annual increments
11 so that by State fiscal year 2011, the State is contributing at
12 the rate required under this Section; except that in the
13 following specified State fiscal years, the State contribution
14 to the System shall not be less than the following indicated
15 percentages of the applicable employee payroll, even if the
16 indicated percentage will produce a State contribution in
17 excess of the amount otherwise required under this subsection
18 and subsection (a), and notwithstanding any contrary
19 certification made under subsection (a-1) before the effective
20 date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
21 in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
22 2003; and 13.56% in FY 2004.
23     Notwithstanding any other provision of this Article, the
24 total required State contribution for State fiscal year 2006 is
25 $534,627,700.
26     Notwithstanding any other provision of this Article, the
27 total required State contribution for State fiscal year 2007 is
28 $738,014,500.
29     For each of State fiscal years 2008 through 2010, the State
30 contribution to the System, as a percentage of the applicable
31 employee payroll, shall be increased in equal annual increments
32 from the required State contribution for State fiscal year
33 2007, so that by State fiscal year 2011, the State is
34 contributing at the rate otherwise required under this Section.
35     Beginning in State fiscal year 2046, the minimum State
36 contribution for each fiscal year shall be the amount needed to

 

 

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1 maintain the total assets of the System at 90% of the total
2 actuarial liabilities of the System.
3     Notwithstanding any other provision of this Section, the
4 required State contribution for State fiscal year 2005 and for
5 fiscal year 2008 and each fiscal year thereafter, as calculated
6 under this Section and certified under subsection (a-1), shall
7 not exceed an amount equal to (i) the amount of the required
8 State contribution that would have been calculated under this
9 Section for that fiscal year if the System had not received any
10 payments under subsection (d) of Section 7.2 of the General
11 Obligation Bond Act, minus (ii) the portion of the State's
12 total debt service payments for that fiscal year on the bonds
13 issued for the purposes of that Section 7.2, as determined and
14 certified by the Comptroller, that is the same as the System's
15 portion of the total moneys distributed under subsection (d) of
16 Section 7.2 of the General Obligation Bond Act. In determining
17 this maximum for State fiscal years 2008 through 2010, however,
18 the amount referred to in item (i) shall be increased, as a
19 percentage of the applicable employee payroll, in equal
20 increments calculated from the sum of the required State
21 contribution for State fiscal year 2007 plus the applicable
22 portion of the State's total debt service payments for fiscal
23 year 2007 on the bonds issued for the purposes of Section 7.2
24 of the General Obligation Bond Act, so that, by State fiscal
25 year 2011, the State is contributing at the rate otherwise
26 required under this Section.
27     (c) Payment of the required State contributions and of all
28 pensions, retirement annuities, death benefits, refunds, and
29 other benefits granted under or assumed by this System, and all
30 expenses in connection with the administration and operation
31 thereof, are obligations of the State.
32     If members are paid from special trust or federal funds
33 which are administered by the employing unit, whether school
34 district or other unit, the employing unit shall pay to the
35 System from such funds the full accruing retirement costs based
36 upon that service, as determined by the System. Employer

 

 

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1 contributions, based on salary paid to members from federal
2 funds, may be forwarded by the distributing agency of the State
3 of Illinois to the System prior to allocation, in an amount
4 determined in accordance with guidelines established by such
5 agency and the System.
6     (d) Effective July 1, 1986, any employer of a teacher as
7 defined in paragraph (8) of Section 16-106 shall pay the
8 employer's normal cost of benefits based upon the teacher's
9 service, in addition to employee contributions, as determined
10 by the System. Such employer contributions shall be forwarded
11 monthly in accordance with guidelines established by the
12 System.
13     However, with respect to benefits granted under Section
14 16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
15 of Section 16-106, the employer's contribution shall be 12%
16 (rather than 20%) of the member's highest annual salary rate
17 for each year of creditable service granted, and the employer
18 shall also pay the required employee contribution on behalf of
19 the teacher. For the purposes of Sections 16-133.4 and
20 16-133.5, a teacher as defined in paragraph (8) of Section
21 16-106 who is serving in that capacity while on leave of
22 absence from another employer under this Article shall not be
23 considered an employee of the employer from which the teacher
24 is on leave.
25     (e) Beginning July 1, 1998, every employer of a teacher
26 shall pay to the System an employer contribution computed as
27 follows:
28         (1) Beginning July 1, 1998 through June 30, 1999, the
29     employer contribution shall be equal to 0.3% of each
30     teacher's salary.
31         (2) Beginning July 1, 1999 and thereafter, the employer
32     contribution shall be equal to 0.58% of each teacher's
33     salary.
34 The school district or other employing unit may pay these
35 employer contributions out of any source of funding available
36 for that purpose and shall forward the contributions to the

 

 

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1 System on the schedule established for the payment of member
2 contributions.
3     These employer contributions are intended to offset a
4 portion of the cost to the System of the increases in
5 retirement benefits resulting from this amendatory Act of 1998.
6     Each employer of teachers is entitled to a credit against
7 the contributions required under this subsection (e) with
8 respect to salaries paid to teachers for the period January 1,
9 2002 through June 30, 2003, equal to the amount paid by that
10 employer under subsection (a-5) of Section 6.6 of the State
11 Employees Group Insurance Act of 1971 with respect to salaries
12 paid to teachers for that period.
13     The additional 1% employee contribution required under
14 Section 16-152 by this amendatory Act of 1998 is the
15 responsibility of the teacher and not the teacher's employer,
16 unless the employer agrees, through collective bargaining or
17 otherwise, to make the contribution on behalf of the teacher.
18     If an employer is required by a contract in effect on May
19 1, 1998 between the employer and an employee organization to
20 pay, on behalf of all its full-time employees covered by this
21 Article, all mandatory employee contributions required under
22 this Article, then the employer shall be excused from paying
23 the employer contribution required under this subsection (e)
24 for the balance of the term of that contract. The employer and
25 the employee organization shall jointly certify to the System
26 the existence of the contractual requirement, in such form as
27 the System may prescribe. This exclusion shall cease upon the
28 termination, extension, or renewal of the contract at any time
29 after May 1, 1998.
30     (f) If the amount of a teacher's salary for any school year
31 used to determine final average salary exceeds the amount of
32 his or her salary with the same employer for the previous
33 school year by more than 6%, the teacher's employer shall pay
34 to the System, in addition to all other payments required under
35 this Section and in accordance with guidelines established by
36 the System, the present value of the increase in benefits

 

 

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1 resulting from the portion of the increase in salary that is in
2 excess of 6%. This present value shall be computed by the
3 System on the basis of the actuarial assumptions and tables
4 used in the most recent actuarial valuation of the System that
5 is available at the time of the computation. The employer
6 contributions required under this subsection (f) shall be paid
7 in the form of a lump sum within 30 days after receipt of the
8 bill after the teacher begins receiving benefits under this
9 Article.
10     The provisions of this subsection (f) do not apply to any
11 of the following:
12         (1) Salary salary increases paid to teachers under
13     contracts or collective bargaining agreements entered
14     into, amended, or renewed before the effective date of this
15     amendatory Act of the 94th General Assembly.
16         (2) Any payment or stipend that is paid to a teacher
17     for tutoring students outside the normal school day.
18         (3) Any payment or stipend that is paid to a teacher
19     for attending training or writing improved academic
20     curriculum outside of his or her regular work day.
21 (Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04; 94-4,
22 eff. 6-1-05.)
 
23     (40 ILCS 5/16-203)
24     Sec. 16-203. Application and expiration of new benefit
25 increases.
26     (a) As used in this Section, "new benefit increase" means
27 an increase in the amount of any benefit provided under this
28 Article, or an expansion of the conditions of eligibility for
29 any benefit under this Article, that results from an amendment
30 to this Code that takes effect after June 1, 2005 (the
31 effective date of Public Act 94-4) this amendatory Act of the
32 94th General Assembly. "New benefit increase", however, does
33 not include any benefit increase resulting from the changes
34 made to this Article by this amendatory Act of the 94th General
35 Assembly.

 

 

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1     (b) Notwithstanding any other provision of this Code or any
2 subsequent amendment to this Code, every new benefit increase
3 is subject to this Section and shall be deemed to be granted
4 only in conformance with and contingent upon compliance with
5 the provisions of this Section.
6     (c) The Public Act enacting a new benefit increase must
7 identify and provide for payment to the System of additional
8 funding at least sufficient to fund the resulting annual
9 increase in cost to the System as it accrues.
10     Every new benefit increase is contingent upon the General
11 Assembly providing the additional funding required under this
12 subsection. The Commission on Government Forecasting and
13 Accountability shall analyze whether adequate additional
14 funding has been provided for the new benefit increase and
15 shall report its analysis to the Public Pension Division of the
16 Department of Financial and Professional Regulation. A new
17 benefit increase created by a Public Act that does not include
18 the additional funding required under this subsection is null
19 and void. If the Public Pension Division determines that the
20 additional funding provided for a new benefit increase under
21 this subsection is or has become inadequate, it may so certify
22 to the Governor and the State Comptroller and, in the absence
23 of corrective action by the General Assembly, the new benefit
24 increase shall expire at the end of the fiscal year in which
25 the certification is made.
26     (d) Every new benefit increase shall expire 5 years after
27 its effective date or on such earlier date as may be specified
28 in the language enacting the new benefit increase or provided
29 under subsection (c). This does not prevent the General
30 Assembly from extending or re-creating a new benefit increase
31 by law.
32     (e) Except as otherwise provided in the language creating
33 the new benefit increase, a new benefit increase that expires
34 under this Section continues to apply to persons who applied
35 and qualified for the affected benefit while the new benefit
36 increase was in effect and to the affected beneficiaries and

 

 

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1 alternate payees of such persons, but does not apply to any
2 other person, including without limitation a person who
3 continues in service after the expiration date and did not
4 apply and qualify for the affected benefit while the new
5 benefit increase was in effect.
6 (Source: P.A. 94-4, eff. 6-1-05.)
 
7     Section 99. Effective date. This Act takes effect upon
8 becoming law.