97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5350

 

Introduced 2/15/2012, by Rep. Bill Mitchell

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/14-131
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131

    Amends the Illinois Pension Code. With respect to the 5 State-funded retirement systems, provides that final passage of a bill changing the State contribution formula requires the affirmative vote of 3/5 of the members elected to each house of the General Assembly. Effective immediately.


LRB097 16334 EFG 61489 b

PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5350LRB097 16334 EFG 61489 b

1    AN ACT concerning public employe benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 2-124, 14-131, 15-155, 16-158, and 18-131 as follows:
 
6    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
7    Sec. 2-124. Contributions by State.
8    (a) The State shall make contributions to the System by
9appropriations of amounts which, together with the
10contributions of participants, interest earned on investments,
11and other income will meet the cost of maintaining and
12administering the System on a 90% funded basis in accordance
13with actuarial recommendations.
14    (b) The Board shall determine the amount of State
15contributions required for each fiscal year on the basis of the
16actuarial tables and other assumptions adopted by the Board and
17the prescribed rate of interest, using the formula in
18subsection (c).
19    (c) For State fiscal years 2012 through 2045, the minimum
20contribution to the System to be made by the State for each
21fiscal year shall be an amount determined by the System to be
22sufficient to bring the total assets of the System up to 90% of
23the total actuarial liabilities of the System by the end of

 

 

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1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2006 is
13$4,157,000.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2007 is
16$5,220,300.
17    For each of State fiscal years 2008 through 2009, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20from the required State contribution for State fiscal year
212007, so that by State fiscal year 2011, the State is
22contributing at the rate otherwise required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010 is
25$10,454,000 and shall be made from the proceeds of bonds sold
26in fiscal year 2010 pursuant to Section 7.2 of the General

 

 

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1Obligation Bond Act, less (i) the pro rata share of bond sale
2expenses determined by the System's share of total bond
3proceeds, (ii) any amounts received from the General Revenue
4Fund in fiscal year 2010, and (iii) any reduction in bond
5proceeds due to the issuance of discounted bonds, if
6applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to Section 2-134 and shall be made from the proceeds
11of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
12the General Obligation Bond Act, less (i) the pro rata share of
13bond sale expenses determined by the System's share of total
14bond proceeds, (ii) any amounts received from the General
15Revenue Fund in fiscal year 2011, and (iii) any reduction in
16bond proceeds due to the issuance of discounted bonds, if
17applicable.
18    Beginning in State fiscal year 2046, the minimum State
19contribution for each fiscal year shall be the amount needed to
20maintain the total assets of the System at 90% of the total
21actuarial liabilities of the System.
22    Amounts received by the System pursuant to Section 25 of
23the Budget Stabilization Act or Section 8.12 of the State
24Finance Act in any fiscal year do not reduce and do not
25constitute payment of any portion of the minimum State
26contribution required under this Article in that fiscal year.

 

 

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1Such amounts shall not reduce, and shall not be included in the
2calculation of, the required State contributions under this
3Article in any future year until the System has reached a
4funding ratio of at least 90%. A reference in this Article to
5the "required State contribution" or any substantially similar
6term does not include or apply to any amounts payable to the
7System under Section 25 of the Budget Stabilization Act.
8    Notwithstanding any other provision of this Section, the
9required State contribution for State fiscal year 2005 and for
10fiscal year 2008 and each fiscal year thereafter, as calculated
11under this Section and certified under Section 2-134, shall not
12exceed an amount equal to (i) the amount of the required State
13contribution that would have been calculated under this Section
14for that fiscal year if the System had not received any
15payments under subsection (d) of Section 7.2 of the General
16Obligation Bond Act, minus (ii) the portion of the State's
17total debt service payments for that fiscal year on the bonds
18issued in fiscal year 2003 for the purposes of that Section
197.2, as determined and certified by the Comptroller, that is
20the same as the System's portion of the total moneys
21distributed under subsection (d) of Section 7.2 of the General
22Obligation Bond Act. In determining this maximum for State
23fiscal years 2008 through 2010, however, the amount referred to
24in item (i) shall be increased, as a percentage of the
25applicable employee payroll, in equal increments calculated
26from the sum of the required State contribution for State

 

 

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1fiscal year 2007 plus the applicable portion of the State's
2total debt service payments for fiscal year 2007 on the bonds
3issued in fiscal year 2003 for the purposes of Section 7.2 of
4the General Obligation Bond Act, so that, by State fiscal year
52011, the State is contributing at the rate otherwise required
6under this Section.
7    (d) For purposes of determining the required State
8contribution to the System, the value of the System's assets
9shall be equal to the actuarial value of the System's assets,
10which shall be calculated as follows:
11    As of June 30, 2008, the actuarial value of the System's
12assets shall be equal to the market value of the assets as of
13that date. In determining the actuarial value of the System's
14assets for fiscal years after June 30, 2008, any actuarial
15gains or losses from investment return incurred in a fiscal
16year shall be recognized in equal annual amounts over the
175-year period following that fiscal year.
18    (e) For purposes of determining the required State
19contribution to the system for a particular year, the actuarial
20value of assets shall be assumed to earn a rate of return equal
21to the system's actuarially assumed rate of return.
22    (f) Beginning on the effective date of this amendatory Act
23of the 97th General Assembly, final passage of a bill changing
24the State contribution formula provided in this Article
25requires the affirmative vote of 3/5 of the members elected to
26each house of the General Assembly.

 

 

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1(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
296-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
33-18-11; revised 4-6-11.)
 
4    (40 ILCS 5/14-131)
5    Sec. 14-131. Contributions by State.
6    (a) The State shall make contributions to the System by
7appropriations of amounts which, together with other employer
8contributions from trust, federal, and other funds, employee
9contributions, investment income, and other income, will be
10sufficient to meet the cost of maintaining and administering
11the System on a 90% funded basis in accordance with actuarial
12recommendations.
13    For the purposes of this Section and Section 14-135.08,
14references to State contributions refer only to employer
15contributions and do not include employee contributions that
16are picked up or otherwise paid by the State or a department on
17behalf of the employee.
18    (b) The Board shall determine the total amount of State
19contributions required for each fiscal year on the basis of the
20actuarial tables and other assumptions adopted by the Board,
21using the formula in subsection (e).
22    The Board shall also determine a State contribution rate
23for each fiscal year, expressed as a percentage of payroll,
24based on the total required State contribution for that fiscal
25year (less the amount received by the System from

 

 

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1appropriations under Section 8.12 of the State Finance Act and
2Section 1 of the State Pension Funds Continuing Appropriation
3Act, if any, for the fiscal year ending on the June 30
4immediately preceding the applicable November 15 certification
5deadline), the estimated payroll (including all forms of
6compensation) for personal services rendered by eligible
7employees, and the recommendations of the actuary.
8    For the purposes of this Section and Section 14.1 of the
9State Finance Act, the term "eligible employees" includes
10employees who participate in the System, persons who may elect
11to participate in the System but have not so elected, persons
12who are serving a qualifying period that is required for
13participation, and annuitants employed by a department as
14described in subdivision (a)(1) or (a)(2) of Section 14-111.
15    (c) Contributions shall be made by the several departments
16for each pay period by warrants drawn by the State Comptroller
17against their respective funds or appropriations based upon
18vouchers stating the amount to be so contributed. These amounts
19shall be based on the full rate certified by the Board under
20Section 14-135.08 for that fiscal year. From the effective date
21of this amendatory Act of the 93rd General Assembly through the
22payment of the final payroll from fiscal year 2004
23appropriations, the several departments shall not make
24contributions for the remainder of fiscal year 2004 but shall
25instead make payments as required under subsection (a-1) of
26Section 14.1 of the State Finance Act. The several departments

 

 

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1shall resume those contributions at the commencement of fiscal
2year 2005.
3    (c-1) Notwithstanding subsection (c) of this Section, for
4fiscal years 2010 and 2012 only, contributions by the several
5departments are not required to be made for General Revenue
6Funds payrolls processed by the Comptroller. Payrolls paid by
7the several departments from all other State funds must
8continue to be processed pursuant to subsection (c) of this
9Section.
10    (c-2) For State fiscal years 2010 and 2012 only, on or as
11soon as possible after the 15th day of each month, the Board
12shall submit vouchers for payment of State contributions to the
13System, in a total monthly amount of one-twelfth of the fiscal
14year General Revenue Fund contribution as certified by the
15System pursuant to Section 14-135.08 of the Illinois Pension
16Code.
17    (d) If an employee is paid from trust funds or federal
18funds, the department or other employer shall pay employer
19contributions from those funds to the System at the certified
20rate, unless the terms of the trust or the federal-State
21agreement preclude the use of the funds for that purpose, in
22which case the required employer contributions shall be paid by
23the State. From the effective date of this amendatory Act of
24the 93rd General Assembly through the payment of the final
25payroll from fiscal year 2004 appropriations, the department or
26other employer shall not pay contributions for the remainder of

 

 

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1fiscal year 2004 but shall instead make payments as required
2under subsection (a-1) of Section 14.1 of the State Finance
3Act. The department or other employer shall resume payment of
4contributions at the commencement of fiscal year 2005.
5    (e) For State fiscal years 2012 through 2045, the minimum
6contribution to the System to be made by the State for each
7fiscal year shall be an amount determined by the System to be
8sufficient to bring the total assets of the System up to 90% of
9the total actuarial liabilities of the System by the end of
10State fiscal year 2045. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of payroll over the years remaining to and
13including fiscal year 2045 and shall be determined under the
14projected unit credit actuarial cost method.
15    For State fiscal years 1996 through 2005, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18so that by State fiscal year 2011, the State is contributing at
19the rate required under this Section; except that (i) for State
20fiscal year 1998, for all purposes of this Code and any other
21law of this State, the certified percentage of the applicable
22employee payroll shall be 5.052% for employees earning eligible
23creditable service under Section 14-110 and 6.500% for all
24other employees, notwithstanding any contrary certification
25made under Section 14-135.08 before the effective date of this
26amendatory Act of 1997, and (ii) in the following specified

 

 

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1State fiscal years, the State contribution to the System shall
2not be less than the following indicated percentages of the
3applicable employee payroll, even if the indicated percentage
4will produce a State contribution in excess of the amount
5otherwise required under this subsection and subsection (a):
69.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
72002; 10.6% in FY 2003; and 10.8% in FY 2004.
8    Notwithstanding any other provision of this Article, the
9total required State contribution to the System for State
10fiscal year 2006 is $203,783,900.
11    Notwithstanding any other provision of this Article, the
12total required State contribution to the System for State
13fiscal year 2007 is $344,164,400.
14    For each of State fiscal years 2008 through 2009, the State
15contribution to the System, as a percentage of the applicable
16employee payroll, shall be increased in equal annual increments
17from the required State contribution for State fiscal year
182007, so that by State fiscal year 2011, the State is
19contributing at the rate otherwise required under this Section.
20    Notwithstanding any other provision of this Article, the
21total required State General Revenue Fund contribution for
22State fiscal year 2010 is $723,703,100 and shall be made from
23the proceeds of bonds sold in fiscal year 2010 pursuant to
24Section 7.2 of the General Obligation Bond Act, less (i) the
25pro rata share of bond sale expenses determined by the System's
26share of total bond proceeds, (ii) any amounts received from

 

 

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1the General Revenue Fund in fiscal year 2010, and (iii) any
2reduction in bond proceeds due to the issuance of discounted
3bonds, if applicable.
4    Notwithstanding any other provision of this Article, the
5total required State General Revenue Fund contribution for
6State fiscal year 2011 is the amount recertified by the System
7on or before April 1, 2011 pursuant to Section 14-135.08 and
8shall be made from the proceeds of bonds sold in fiscal year
92011 pursuant to Section 7.2 of the General Obligation Bond
10Act, less (i) the pro rata share of bond sale expenses
11determined by the System's share of total bond proceeds, (ii)
12any amounts received from the General Revenue Fund in fiscal
13year 2011, and (iii) any reduction in bond proceeds due to the
14issuance of discounted bonds, if applicable.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

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1funding ratio of at least 90%. A reference in this Article to
2the "required State contribution" or any substantially similar
3term does not include or apply to any amounts payable to the
4System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter, as calculated
8under this Section and certified under Section 14-135.08, shall
9not exceed an amount equal to (i) the amount of the required
10State contribution that would have been calculated under this
11Section for that fiscal year if the System had not received any
12payments under subsection (d) of Section 7.2 of the General
13Obligation Bond Act, minus (ii) the portion of the State's
14total debt service payments for that fiscal year on the bonds
15issued in fiscal year 2003 for the purposes of that Section
167.2, as determined and certified by the Comptroller, that is
17the same as the System's portion of the total moneys
18distributed under subsection (d) of Section 7.2 of the General
19Obligation Bond Act. In determining this maximum for State
20fiscal years 2008 through 2010, however, the amount referred to
21in item (i) shall be increased, as a percentage of the
22applicable employee payroll, in equal increments calculated
23from the sum of the required State contribution for State
24fiscal year 2007 plus the applicable portion of the State's
25total debt service payments for fiscal year 2007 on the bonds
26issued in fiscal year 2003 for the purposes of Section 7.2 of

 

 

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1the General Obligation Bond Act, so that, by State fiscal year
22011, the State is contributing at the rate otherwise required
3under this Section.
4    (f) After the submission of all payments for eligible
5employees from personal services line items in fiscal year 2004
6have been made, the Comptroller shall provide to the System a
7certification of the sum of all fiscal year 2004 expenditures
8for personal services that would have been covered by payments
9to the System under this Section if the provisions of this
10amendatory Act of the 93rd General Assembly had not been
11enacted. Upon receipt of the certification, the System shall
12determine the amount due to the System based on the full rate
13certified by the Board under Section 14-135.08 for fiscal year
142004 in order to meet the State's obligation under this
15Section. The System shall compare this amount due to the amount
16received by the System in fiscal year 2004 through payments
17under this Section and under Section 6z-61 of the State Finance
18Act. If the amount due is more than the amount received, the
19difference shall be termed the "Fiscal Year 2004 Shortfall" for
20purposes of this Section, and the Fiscal Year 2004 Shortfall
21shall be satisfied under Section 1.2 of the State Pension Funds
22Continuing Appropriation Act. If the amount due is less than
23the amount received, the difference shall be termed the "Fiscal
24Year 2004 Overpayment" for purposes of this Section, and the
25Fiscal Year 2004 Overpayment shall be repaid by the System to
26the Pension Contribution Fund as soon as practicable after the

 

 

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1certification.
2    (g) For purposes of determining the required State
3contribution to the System, the value of the System's assets
4shall be equal to the actuarial value of the System's assets,
5which shall be calculated as follows:
6    As of June 30, 2008, the actuarial value of the System's
7assets shall be equal to the market value of the assets as of
8that date. In determining the actuarial value of the System's
9assets for fiscal years after June 30, 2008, any actuarial
10gains or losses from investment return incurred in a fiscal
11year shall be recognized in equal annual amounts over the
125-year period following that fiscal year.
13    (h) For purposes of determining the required State
14contribution to the System for a particular year, the actuarial
15value of assets shall be assumed to earn a rate of return equal
16to the System's actuarially assumed rate of return.
17    (i) After the submission of all payments for eligible
18employees from personal services line items paid from the
19General Revenue Fund in fiscal year 2010 have been made, the
20Comptroller shall provide to the System a certification of the
21sum of all fiscal year 2010 expenditures for personal services
22that would have been covered by payments to the System under
23this Section if the provisions of this amendatory Act of the
2496th General Assembly had not been enacted. Upon receipt of the
25certification, the System shall determine the amount due to the
26System based on the full rate certified by the Board under

 

 

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1Section 14-135.08 for fiscal year 2010 in order to meet the
2State's obligation under this Section. The System shall compare
3this amount due to the amount received by the System in fiscal
4year 2010 through payments under this Section. If the amount
5due is more than the amount received, the difference shall be
6termed the "Fiscal Year 2010 Shortfall" for purposes of this
7Section, and the Fiscal Year 2010 Shortfall shall be satisfied
8under Section 1.2 of the State Pension Funds Continuing
9Appropriation Act. If the amount due is less than the amount
10received, the difference shall be termed the "Fiscal Year 2010
11Overpayment" for purposes of this Section, and the Fiscal Year
122010 Overpayment shall be repaid by the System to the General
13Revenue Fund as soon as practicable after the certification.
14    (j) After the submission of all payments for eligible
15employees from personal services line items paid from the
16General Revenue Fund in fiscal year 2011 have been made, the
17Comptroller shall provide to the System a certification of the
18sum of all fiscal year 2011 expenditures for personal services
19that would have been covered by payments to the System under
20this Section if the provisions of this amendatory Act of the
2196th General Assembly had not been enacted. Upon receipt of the
22certification, the System shall determine the amount due to the
23System based on the full rate certified by the Board under
24Section 14-135.08 for fiscal year 2011 in order to meet the
25State's obligation under this Section. The System shall compare
26this amount due to the amount received by the System in fiscal

 

 

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1year 2011 through payments under this Section. If the amount
2due is more than the amount received, the difference shall be
3termed the "Fiscal Year 2011 Shortfall" for purposes of this
4Section, and the Fiscal Year 2011 Shortfall shall be satisfied
5under Section 1.2 of the State Pension Funds Continuing
6Appropriation Act. If the amount due is less than the amount
7received, the difference shall be termed the "Fiscal Year 2011
8Overpayment" for purposes of this Section, and the Fiscal Year
92011 Overpayment shall be repaid by the System to the General
10Revenue Fund as soon as practicable after the certification.
11    (k) For fiscal year 2012 only, after the submission of all
12payments for eligible employees from personal services line
13items paid from the General Revenue Fund in the fiscal year
14have been made, the Comptroller shall provide to the System a
15certification of the sum of all expenditures in the fiscal year
16for personal services. Upon receipt of the certification, the
17System shall determine the amount due to the System based on
18the full rate certified by the Board under Section 14-135.08
19for the fiscal year in order to meet the State's obligation
20under this Section. The System shall compare this amount due to
21the amount received by the System for the fiscal year. If the
22amount due is more than the amount received, the difference
23shall be termed the "Fiscal Year Shortfall" for purposes of
24this Section, and the Fiscal Year Shortfall shall be satisfied
25under Section 1.2 of the State Pension Funds Continuing
26Appropriation Act. If the amount due is less than the amount

 

 

HB5350- 17 -LRB097 16334 EFG 61489 b

1received, the difference shall be termed the "Fiscal Year
2Overpayment" for purposes of this Section, and the Fiscal Year
3Overpayment shall be repaid by the System to the General
4Revenue Fund as soon as practicable after the certification.
5    (l) Beginning on the effective date of this amendatory Act
6of the 97th General Assembly, final passage of a bill changing
7the State contribution formula provided in this Article
8requires the affirmative vote of 3/5 of the members elected to
9each house of the General Assembly.
10(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1196-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
121-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)
 
13    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
14    Sec. 15-155. Employer contributions.
15    (a) The State of Illinois shall make contributions by
16appropriations of amounts which, together with the other
17employer contributions from trust, federal, and other funds,
18employee contributions, income from investments, and other
19income of this System, will be sufficient to meet the cost of
20maintaining and administering the System on a 90% funded basis
21in accordance with actuarial recommendations.
22    The Board shall determine the amount of State contributions
23required for each fiscal year on the basis of the actuarial
24tables and other assumptions adopted by the Board and the
25recommendations of the actuary, using the formula in subsection

 

 

HB5350- 18 -LRB097 16334 EFG 61489 b

1(a-1).
2    (a-1) For State fiscal years 2012 through 2045, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5sufficient to bring the total assets of the System up to 90% of
6the total actuarial liabilities of the System by the end of
7State fiscal year 2045. In making these determinations, the
8required State contribution shall be calculated each year as a
9level percentage of payroll over the years remaining to and
10including fiscal year 2045 and shall be determined under the
11projected unit credit actuarial cost method.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2006 is
19$166,641,900.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2007 is
22$252,064,100.
23    For each of State fiscal years 2008 through 2009, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26from the required State contribution for State fiscal year

 

 

HB5350- 19 -LRB097 16334 EFG 61489 b

12007, so that by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2010 is
5$702,514,000 and shall be made from the State Pensions Fund and
6proceeds of bonds sold in fiscal year 2010 pursuant to Section
77.2 of the General Obligation Bond Act, less (i) the pro rata
8share of bond sale expenses determined by the System's share of
9total bond proceeds, (ii) any amounts received from the General
10Revenue Fund in fiscal year 2010, (iii) any reduction in bond
11proceeds due to the issuance of discounted bonds, if
12applicable.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2011 is
15the amount recertified by the System on or before April 1, 2011
16pursuant to Section 15-165 and shall be made from the State
17Pensions Fund and proceeds of bonds sold in fiscal year 2011
18pursuant to Section 7.2 of the General Obligation Bond Act,
19less (i) the pro rata share of bond sale expenses determined by
20the System's share of total bond proceeds, (ii) any amounts
21received from the General Revenue Fund in fiscal year 2011, and
22(iii) any reduction in bond proceeds due to the issuance of
23discounted bonds, if applicable.
24    Beginning in State fiscal year 2046, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 90% of the total

 

 

HB5350- 20 -LRB097 16334 EFG 61489 b

1actuarial liabilities of the System.
2    Amounts received by the System pursuant to Section 25 of
3the Budget Stabilization Act or Section 8.12 of the State
4Finance Act in any fiscal year do not reduce and do not
5constitute payment of any portion of the minimum State
6contribution required under this Article in that fiscal year.
7Such amounts shall not reduce, and shall not be included in the
8calculation of, the required State contributions under this
9Article in any future year until the System has reached a
10funding ratio of at least 90%. A reference in this Article to
11the "required State contribution" or any substantially similar
12term does not include or apply to any amounts payable to the
13System under Section 25 of the Budget Stabilization Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter, as calculated
17under this Section and certified under Section 15-165, shall
18not exceed an amount equal to (i) the amount of the required
19State contribution that would have been calculated under this
20Section for that fiscal year if the System had not received any
21payments under subsection (d) of Section 7.2 of the General
22Obligation Bond Act, minus (ii) the portion of the State's
23total debt service payments for that fiscal year on the bonds
24issued in fiscal year 2003 for the purposes of that Section
257.2, as determined and certified by the Comptroller, that is
26the same as the System's portion of the total moneys

 

 

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1distributed under subsection (d) of Section 7.2 of the General
2Obligation Bond Act. In determining this maximum for State
3fiscal years 2008 through 2010, however, the amount referred to
4in item (i) shall be increased, as a percentage of the
5applicable employee payroll, in equal increments calculated
6from the sum of the required State contribution for State
7fiscal year 2007 plus the applicable portion of the State's
8total debt service payments for fiscal year 2007 on the bonds
9issued in fiscal year 2003 for the purposes of Section 7.2 of
10the General Obligation Bond Act, so that, by State fiscal year
112011, the State is contributing at the rate otherwise required
12under this Section.
13    (b) If an employee is paid from trust or federal funds, the
14employer shall pay to the Board contributions from those funds
15which are sufficient to cover the accruing normal costs on
16behalf of the employee. However, universities having employees
17who are compensated out of local auxiliary funds, income funds,
18or service enterprise funds are not required to pay such
19contributions on behalf of those employees. The local auxiliary
20funds, income funds, and service enterprise funds of
21universities shall not be considered trust funds for the
22purpose of this Article, but funds of alumni associations,
23foundations, and athletic associations which are affiliated
24with the universities included as employers under this Article
25and other employers which do not receive State appropriations
26are considered to be trust funds for the purpose of this

 

 

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1Article.
2    (b-1) The City of Urbana and the City of Champaign shall
3each make employer contributions to this System for their
4respective firefighter employees who participate in this
5System pursuant to subsection (h) of Section 15-107. The rate
6of contributions to be made by those municipalities shall be
7determined annually by the Board on the basis of the actuarial
8assumptions adopted by the Board and the recommendations of the
9actuary, and shall be expressed as a percentage of salary for
10each such employee. The Board shall certify the rate to the
11affected municipalities as soon as may be practical. The
12employer contributions required under this subsection shall be
13remitted by the municipality to the System at the same time and
14in the same manner as employee contributions.
15    (c) Through State fiscal year 1995: The total employer
16contribution shall be apportioned among the various funds of
17the State and other employers, whether trust, federal, or other
18funds, in accordance with actuarial procedures approved by the
19Board. State of Illinois contributions for employers receiving
20State appropriations for personal services shall be payable
21from appropriations made to the employers or to the System. The
22contributions for Class I community colleges covering earnings
23other than those paid from trust and federal funds, shall be
24payable solely from appropriations to the Illinois Community
25College Board or the System for employer contributions.
26    (d) Beginning in State fiscal year 1996, the required State

 

 

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1contributions to the System shall be appropriated directly to
2the System and shall be payable through vouchers issued in
3accordance with subsection (c) of Section 15-165, except as
4provided in subsection (g).
5    (e) The State Comptroller shall draw warrants payable to
6the System upon proper certification by the System or by the
7employer in accordance with the appropriation laws and this
8Code.
9    (f) Normal costs under this Section means liability for
10pensions and other benefits which accrues to the System because
11of the credits earned for service rendered by the participants
12during the fiscal year and expenses of administering the
13System, but shall not include the principal of or any
14redemption premium or interest on any bonds issued by the Board
15or any expenses incurred or deposits required in connection
16therewith.
17    (g) If the amount of a participant's earnings for any
18academic year used to determine the final rate of earnings,
19determined on a full-time equivalent basis, exceeds the amount
20of his or her earnings with the same employer for the previous
21academic year, determined on a full-time equivalent basis, by
22more than 6%, the participant's employer shall pay to the
23System, in addition to all other payments required under this
24Section and in accordance with guidelines established by the
25System, the present value of the increase in benefits resulting
26from the portion of the increase in earnings that is in excess

 

 

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1of 6%. This present value shall be computed by the System on
2the basis of the actuarial assumptions and tables used in the
3most recent actuarial valuation of the System that is available
4at the time of the computation. The System may require the
5employer to provide any pertinent information or
6documentation.
7    Whenever it determines that a payment is or may be required
8under this subsection (g), the System shall calculate the
9amount of the payment and bill the employer for that amount.
10The bill shall specify the calculations used to determine the
11amount due. If the employer disputes the amount of the bill, it
12may, within 30 days after receipt of the bill, apply to the
13System in writing for a recalculation. The application must
14specify in detail the grounds of the dispute and, if the
15employer asserts that the calculation is subject to subsection
16(h) or (i) of this Section, must include an affidavit setting
17forth and attesting to all facts within the employer's
18knowledge that are pertinent to the applicability of subsection
19(h) or (i). Upon receiving a timely application for
20recalculation, the System shall review the application and, if
21appropriate, recalculate the amount due.
22    The employer contributions required under this subsection
23(f) may be paid in the form of a lump sum within 90 days after
24receipt of the bill. If the employer contributions are not paid
25within 90 days after receipt of the bill, then interest will be
26charged at a rate equal to the System's annual actuarially

 

 

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1assumed rate of return on investment compounded annually from
2the 91st day after receipt of the bill. Payments must be
3concluded within 3 years after the employer's receipt of the
4bill.
5    (h) This subsection (h) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to
12participants under contracts or collective bargaining
13agreements entered into, amended, or renewed before June 1,
142005.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases paid to a
17participant at a time when the participant is 10 or more years
18from retirement eligibility under Section 15-135.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases resulting from
21overload work, including a contract for summer teaching, or
22overtime when the employer has certified to the System, and the
23System has approved the certification, that: (i) in the case of
24overloads (A) the overload work is for the sole purpose of
25academic instruction in excess of the standard number of
26instruction hours for a full-time employee occurring during the

 

 

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1academic year that the overload is paid and (B) the earnings
2increases are equal to or less than the rate of pay for
3academic instruction computed using the participant's current
4salary rate and work schedule; and (ii) in the case of
5overtime, the overtime was necessary for the educational
6mission.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude any earnings increase resulting
9from (i) a promotion for which the employee moves from one
10classification to a higher classification under the State
11Universities Civil Service System, (ii) a promotion in academic
12rank for a tenured or tenure-track faculty position, or (iii) a
13promotion that the Illinois Community College Board has
14recommended in accordance with subsection (k) of this Section.
15These earnings increases shall be excluded only if the
16promotion is to a position that has existed and been filled by
17a member for no less than one complete academic year and the
18earnings increase as a result of the promotion is an increase
19that results in an amount no greater than the average salary
20paid for other similar positions.
21    (i) When assessing payment for any amount due under
22subsection (g), the System shall exclude any salary increase
23described in subsection (h) of this Section given on or after
24July 1, 2011 but before July 1, 2014 under a contract or
25collective bargaining agreement entered into, amended, or
26renewed on or after June 1, 2005 but before July 1, 2011.

 

 

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1Notwithstanding any other provision of this Section, any
2payments made or salary increases given after June 30, 2014
3shall be used in assessing payment for any amount due under
4subsection (g) of this Section.
5    (j) The System shall prepare a report and file copies of
6the report with the Governor and the General Assembly by
7January 1, 2007 that contains all of the following information:
8        (1) The number of recalculations required by the
9    changes made to this Section by Public Act 94-1057 for each
10    employer.
11        (2) The dollar amount by which each employer's
12    contribution to the System was changed due to
13    recalculations required by Public Act 94-1057.
14        (3) The total amount the System received from each
15    employer as a result of the changes made to this Section by
16    Public Act 94-4.
17        (4) The increase in the required State contribution
18    resulting from the changes made to this Section by Public
19    Act 94-1057.
20    (k) The Illinois Community College Board shall adopt rules
21for recommending lists of promotional positions submitted to
22the Board by community colleges and for reviewing the
23promotional lists on an annual basis. When recommending
24promotional lists, the Board shall consider the similarity of
25the positions submitted to those positions recognized for State
26universities by the State Universities Civil Service System.

 

 

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1The Illinois Community College Board shall file a copy of its
2findings with the System. The System shall consider the
3findings of the Illinois Community College Board when making
4determinations under this Section. The System shall not exclude
5any earnings increases resulting from a promotion when the
6promotion was not submitted by a community college. Nothing in
7this subsection (k) shall require any community college to
8submit any information to the Community College Board.
9    (l) For purposes of determining the required State
10contribution to the System, the value of the System's assets
11shall be equal to the actuarial value of the System's assets,
12which shall be calculated as follows:
13    As of June 30, 2008, the actuarial value of the System's
14assets shall be equal to the market value of the assets as of
15that date. In determining the actuarial value of the System's
16assets for fiscal years after June 30, 2008, any actuarial
17gains or losses from investment return incurred in a fiscal
18year shall be recognized in equal annual amounts over the
195-year period following that fiscal year.
20    (m) For purposes of determining the required State
21contribution to the system for a particular year, the actuarial
22value of assets shall be assumed to earn a rate of return equal
23to the system's actuarially assumed rate of return.
24    (n) Beginning on the effective date of this amendatory Act
25of the 97th General Assembly, final passage of a bill changing
26the State contribution formula provided in this Article

 

 

HB5350- 29 -LRB097 16334 EFG 61489 b

1requires the affirmative vote of 3/5 of the members elected to
2each house of the General Assembly.
3(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
496-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
51-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
6    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
7    Sec. 16-158. Contributions by State and other employing
8units.
9    (a) The State shall make contributions to the System by
10means of appropriations from the Common School Fund and other
11State funds of amounts which, together with other employer
12contributions, employee contributions, investment income, and
13other income, will be sufficient to meet the cost of
14maintaining and administering the System on a 90% funded basis
15in accordance with actuarial recommendations.
16    The Board shall determine the amount of State contributions
17required for each fiscal year on the basis of the actuarial
18tables and other assumptions adopted by the Board and the
19recommendations of the actuary, using the formula in subsection
20(b-3).
21    (a-1) Annually, on or before November 15, the Board shall
22certify to the Governor the amount of the required State
23contribution for the coming fiscal year. The certification
24shall include a copy of the actuarial recommendations upon
25which it is based.

 

 

HB5350- 30 -LRB097 16334 EFG 61489 b

1    On or before May 1, 2004, the Board shall recalculate and
2recertify to the Governor the amount of the required State
3contribution to the System for State fiscal year 2005, taking
4into account the amounts appropriated to and received by the
5System under subsection (d) of Section 7.2 of the General
6Obligation Bond Act.
7    On or before July 1, 2005 April 1, 2011, the Board shall
8recalculate and recertify to the Governor the amount of the
9required State contribution to the System for State fiscal year
102006, taking into account the changes in required State
11contributions made by this amendatory Act of the 94th General
12Assembly.
13    On or before April 1, 2011 June 15, 2010, the Board shall
14recalculate and recertify to the Governor the amount of the
15required State contribution to the System for State fiscal year
162011, applying the changes made by Public Act 96-889 to the
17System's assets and liabilities as of June 30, 2009 as though
18Public Act 96-889 was approved on that date.
19    (b) Through State fiscal year 1995, the State contributions
20shall be paid to the System in accordance with Section 18-7 of
21the School Code.
22    (b-1) Beginning in State fiscal year 1996, on the 15th day
23of each month, or as soon thereafter as may be practicable, the
24Board shall submit vouchers for payment of State contributions
25to the System, in a total monthly amount of one-twelfth of the
26required annual State contribution certified under subsection

 

 

HB5350- 31 -LRB097 16334 EFG 61489 b

1(a-1). From the effective date of this amendatory Act of the
293rd General Assembly through June 30, 2004, the Board shall
3not submit vouchers for the remainder of fiscal year 2004 in
4excess of the fiscal year 2004 certified contribution amount
5determined under this Section after taking into consideration
6the transfer to the System under subsection (a) of Section
76z-61 of the State Finance Act. These vouchers shall be paid by
8the State Comptroller and Treasurer by warrants drawn on the
9funds appropriated to the System for that fiscal year.
10    If in any month the amount remaining unexpended from all
11other appropriations to the System for the applicable fiscal
12year (including the appropriations to the System under Section
138.12 of the State Finance Act and Section 1 of the State
14Pension Funds Continuing Appropriation Act) is less than the
15amount lawfully vouchered under this subsection, the
16difference shall be paid from the Common School Fund under the
17continuing appropriation authority provided in Section 1.1 of
18the State Pension Funds Continuing Appropriation Act.
19    (b-2) Allocations from the Common School Fund apportioned
20to school districts not coming under this System shall not be
21diminished or affected by the provisions of this Article.
22    (b-3) For State fiscal years 2012 through 2045, the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 90% of
26the total actuarial liabilities of the System by the end of

 

 

HB5350- 32 -LRB097 16334 EFG 61489 b

1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section; except that in the
11following specified State fiscal years, the State contribution
12to the System shall not be less than the following indicated
13percentages of the applicable employee payroll, even if the
14indicated percentage will produce a State contribution in
15excess of the amount otherwise required under this subsection
16and subsection (a), and notwithstanding any contrary
17certification made under subsection (a-1) before the effective
18date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
19in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
202003; and 13.56% in FY 2004.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2006 is
23$534,627,700.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2007 is
26$738,014,500.

 

 

HB5350- 33 -LRB097 16334 EFG 61489 b

1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$2,089,268,000 and shall be made from the proceeds of bonds
10sold in fiscal year 2010 pursuant to Section 7.2 of the General
11Obligation Bond Act, less (i) the pro rata share of bond sale
12expenses determined by the System's share of total bond
13proceeds, (ii) any amounts received from the Common School Fund
14in fiscal year 2010, and (iii) any reduction in bond proceeds
15due to the issuance of discounted bonds, if applicable.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2011 is
18the amount recertified by the System on or before April 1, 2011
19pursuant to subsection (a-1) of this Section and shall be made
20from the proceeds of bonds sold in fiscal year 2011 pursuant to
21Section 7.2 of the General Obligation Bond Act, less (i) the
22pro rata share of bond sale expenses determined by the System's
23share of total bond proceeds, (ii) any amounts received from
24the Common School Fund in fiscal year 2011, and (iii) any
25reduction in bond proceeds due to the issuance of discounted
26bonds, if applicable. This amount shall include, in addition to

 

 

HB5350- 34 -LRB097 16334 EFG 61489 b

1the amount certified by the System, an amount necessary to meet
2employer contributions required by the State as an employer
3under paragraph (e) of this Section, which may also be used by
4the System for contributions required by paragraph (a) of
5Section 16-127.
6    Beginning in State fiscal year 2046, the minimum State
7contribution for each fiscal year shall be the amount needed to
8maintain the total assets of the System at 90% of the total
9actuarial liabilities of the System.
10    Amounts received by the System pursuant to Section 25 of
11the Budget Stabilization Act or Section 8.12 of the State
12Finance Act in any fiscal year do not reduce and do not
13constitute payment of any portion of the minimum State
14contribution required under this Article in that fiscal year.
15Such amounts shall not reduce, and shall not be included in the
16calculation of, the required State contributions under this
17Article in any future year until the System has reached a
18funding ratio of at least 90%. A reference in this Article to
19the "required State contribution" or any substantially similar
20term does not include or apply to any amounts payable to the
21System under Section 25 of the Budget Stabilization Act.
22    Notwithstanding any other provision of this Section, the
23required State contribution for State fiscal year 2005 and for
24fiscal year 2008 and each fiscal year thereafter, as calculated
25under this Section and certified under subsection (a-1), shall
26not exceed an amount equal to (i) the amount of the required

 

 

HB5350- 35 -LRB097 16334 EFG 61489 b

1State contribution that would have been calculated under this
2Section for that fiscal year if the System had not received any
3payments under subsection (d) of Section 7.2 of the General
4Obligation Bond Act, minus (ii) the portion of the State's
5total debt service payments for that fiscal year on the bonds
6issued in fiscal year 2003 for the purposes of that Section
77.2, as determined and certified by the Comptroller, that is
8the same as the System's portion of the total moneys
9distributed under subsection (d) of Section 7.2 of the General
10Obligation Bond Act. In determining this maximum for State
11fiscal years 2008 through 2010, however, the amount referred to
12in item (i) shall be increased, as a percentage of the
13applicable employee payroll, in equal increments calculated
14from the sum of the required State contribution for State
15fiscal year 2007 plus the applicable portion of the State's
16total debt service payments for fiscal year 2007 on the bonds
17issued in fiscal year 2003 for the purposes of Section 7.2 of
18the General Obligation Bond Act, so that, by State fiscal year
192011, the State is contributing at the rate otherwise required
20under this Section.
21    (c) Payment of the required State contributions and of all
22pensions, retirement annuities, death benefits, refunds, and
23other benefits granted under or assumed by this System, and all
24expenses in connection with the administration and operation
25thereof, are obligations of the State.
26    If members are paid from special trust or federal funds

 

 

HB5350- 36 -LRB097 16334 EFG 61489 b

1which are administered by the employing unit, whether school
2district or other unit, the employing unit shall pay to the
3System from such funds the full accruing retirement costs based
4upon that service, as determined by the System. Employer
5contributions, based on salary paid to members from federal
6funds, may be forwarded by the distributing agency of the State
7of Illinois to the System prior to allocation, in an amount
8determined in accordance with guidelines established by such
9agency and the System.
10    (d) Effective July 1, 1986, any employer of a teacher as
11defined in paragraph (8) of Section 16-106 shall pay the
12employer's normal cost of benefits based upon the teacher's
13service, in addition to employee contributions, as determined
14by the System. Such employer contributions shall be forwarded
15monthly in accordance with guidelines established by the
16System.
17    However, with respect to benefits granted under Section
1816-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
19of Section 16-106, the employer's contribution shall be 12%
20(rather than 20%) of the member's highest annual salary rate
21for each year of creditable service granted, and the employer
22shall also pay the required employee contribution on behalf of
23the teacher. For the purposes of Sections 16-133.4 and
2416-133.5, a teacher as defined in paragraph (8) of Section
2516-106 who is serving in that capacity while on leave of
26absence from another employer under this Article shall not be

 

 

HB5350- 37 -LRB097 16334 EFG 61489 b

1considered an employee of the employer from which the teacher
2is on leave.
3    (e) Beginning July 1, 1998, every employer of a teacher
4shall pay to the System an employer contribution computed as
5follows:
6        (1) Beginning July 1, 1998 through June 30, 1999, the
7    employer contribution shall be equal to 0.3% of each
8    teacher's salary.
9        (2) Beginning July 1, 1999 and thereafter, the employer
10    contribution shall be equal to 0.58% of each teacher's
11    salary.
12The school district or other employing unit may pay these
13employer contributions out of any source of funding available
14for that purpose and shall forward the contributions to the
15System on the schedule established for the payment of member
16contributions.
17    These employer contributions are intended to offset a
18portion of the cost to the System of the increases in
19retirement benefits resulting from this amendatory Act of 1998.
20    Each employer of teachers is entitled to a credit against
21the contributions required under this subsection (e) with
22respect to salaries paid to teachers for the period January 1,
232002 through June 30, 2003, equal to the amount paid by that
24employer under subsection (a-5) of Section 6.6 of the State
25Employees Group Insurance Act of 1971 with respect to salaries
26paid to teachers for that period.

 

 

HB5350- 38 -LRB097 16334 EFG 61489 b

1    The additional 1% employee contribution required under
2Section 16-152 by this amendatory Act of 1998 is the
3responsibility of the teacher and not the teacher's employer,
4unless the employer agrees, through collective bargaining or
5otherwise, to make the contribution on behalf of the teacher.
6    If an employer is required by a contract in effect on May
71, 1998 between the employer and an employee organization to
8pay, on behalf of all its full-time employees covered by this
9Article, all mandatory employee contributions required under
10this Article, then the employer shall be excused from paying
11the employer contribution required under this subsection (e)
12for the balance of the term of that contract. The employer and
13the employee organization shall jointly certify to the System
14the existence of the contractual requirement, in such form as
15the System may prescribe. This exclusion shall cease upon the
16termination, extension, or renewal of the contract at any time
17after May 1, 1998.
18    (f) If the amount of a teacher's salary for any school year
19used to determine final average salary exceeds the member's
20annual full-time salary rate with the same employer for the
21previous school year by more than 6%, the teacher's employer
22shall pay to the System, in addition to all other payments
23required under this Section and in accordance with guidelines
24established by the System, the present value of the increase in
25benefits resulting from the portion of the increase in salary
26that is in excess of 6%. This present value shall be computed

 

 

HB5350- 39 -LRB097 16334 EFG 61489 b

1by the System on the basis of the actuarial assumptions and
2tables used in the most recent actuarial valuation of the
3System that is available at the time of the computation. If a
4teacher's salary for the 2005-2006 school year is used to
5determine final average salary under this subsection (f), then
6the changes made to this subsection (f) by Public Act 94-1057
7shall apply in calculating whether the increase in his or her
8salary is in excess of 6%. For the purposes of this Section,
9change in employment under Section 10-21.12 of the School Code
10on or after June 1, 2005 shall constitute a change in employer.
11The System may require the employer to provide any pertinent
12information or documentation. The changes made to this
13subsection (f) by this amendatory Act of the 94th General
14Assembly apply without regard to whether the teacher was in
15service on or after its effective date.
16    Whenever it determines that a payment is or may be required
17under this subsection, the System shall calculate the amount of
18the payment and bill the employer for that amount. The bill
19shall specify the calculations used to determine the amount
20due. If the employer disputes the amount of the bill, it may,
21within 30 days after receipt of the bill, apply to the System
22in writing for a recalculation. The application must specify in
23detail the grounds of the dispute and, if the employer asserts
24that the calculation is subject to subsection (g) or (h) of
25this Section, must include an affidavit setting forth and
26attesting to all facts within the employer's knowledge that are

 

 

HB5350- 40 -LRB097 16334 EFG 61489 b

1pertinent to the applicability of that subsection. Upon
2receiving a timely application for recalculation, the System
3shall review the application and, if appropriate, recalculate
4the amount due.
5    The employer contributions required under this subsection
6(f) may be paid in the form of a lump sum within 90 days after
7receipt of the bill. If the employer contributions are not paid
8within 90 days after receipt of the bill, then interest will be
9charged at a rate equal to the System's annual actuarially
10assumed rate of return on investment compounded annually from
11the 91st day after receipt of the bill. Payments must be
12concluded within 3 years after the employer's receipt of the
13bill.
14    (g) This subsection (g) applies only to payments made or
15salary increases given on or after June 1, 2005 but before July
161, 2011. The changes made by Public Act 94-1057 shall not
17require the System to refund any payments received before July
1831, 2006 (the effective date of Public Act 94-1057).
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude salary increases paid to teachers
21under contracts or collective bargaining agreements entered
22into, amended, or renewed before June 1, 2005.
23    When assessing payment for any amount due under subsection
24(f), the System shall exclude salary increases paid to a
25teacher at a time when the teacher is 10 or more years from
26retirement eligibility under Section 16-132 or 16-133.2.

 

 

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1    When assessing payment for any amount due under subsection
2(f), the System shall exclude salary increases resulting from
3overload work, including summer school, when the school
4district has certified to the System, and the System has
5approved the certification, that (i) the overload work is for
6the sole purpose of classroom instruction in excess of the
7standard number of classes for a full-time teacher in a school
8district during a school year and (ii) the salary increases are
9equal to or less than the rate of pay for classroom instruction
10computed on the teacher's current salary and work schedule.
11    When assessing payment for any amount due under subsection
12(f), the System shall exclude a salary increase resulting from
13a promotion (i) for which the employee is required to hold a
14certificate or supervisory endorsement issued by the State
15Teacher Certification Board that is a different certification
16or supervisory endorsement than is required for the teacher's
17previous position and (ii) to a position that has existed and
18been filled by a member for no less than one complete academic
19year and the salary increase from the promotion is an increase
20that results in an amount no greater than the lesser of the
21average salary paid for other similar positions in the district
22requiring the same certification or the amount stipulated in
23the collective bargaining agreement for a similar position
24requiring the same certification.
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude any payment to the teacher from

 

 

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1the State of Illinois or the State Board of Education over
2which the employer does not have discretion, notwithstanding
3that the payment is included in the computation of final
4average salary.
5    (h) When assessing payment for any amount due under
6subsection (f), the System shall exclude any salary increase
7described in subsection (g) of this Section given on or after
8July 1, 2011 but before July 1, 2014 under a contract or
9collective bargaining agreement entered into, amended, or
10renewed on or after June 1, 2005 but before July 1, 2011.
11Notwithstanding any other provision of this Section, any
12payments made or salary increases given after June 30, 2014
13shall be used in assessing payment for any amount due under
14subsection (f) of this Section.
15    (i) The System shall prepare a report and file copies of
16the report with the Governor and the General Assembly by
17January 1, 2007 that contains all of the following information:
18        (1) The number of recalculations required by the
19    changes made to this Section by Public Act 94-1057 for each
20    employer.
21        (2) The dollar amount by which each employer's
22    contribution to the System was changed due to
23    recalculations required by Public Act 94-1057.
24        (3) The total amount the System received from each
25    employer as a result of the changes made to this Section by
26    Public Act 94-4.

 

 

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1        (4) The increase in the required State contribution
2    resulting from the changes made to this Section by Public
3    Act 94-1057.
4    (j) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (k) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19    (l) Beginning on the effective date of this amendatory Act
20of the 97th General Assembly, final passage of a bill changing
21the State contribution formula provided in this Article
22requires the affirmative vote of 3/5 of the members elected to
23each house of the General Assembly.
24(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
2596-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
261-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 

 

 

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1    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
2    Sec. 18-131. Financing; employer contributions.
3    (a) The State of Illinois shall make contributions to this
4System by appropriations of the amounts which, together with
5the contributions of participants, net earnings on
6investments, and other income, will meet the costs of
7maintaining and administering this System on a 90% funded basis
8in accordance with actuarial recommendations.
9    (b) The Board shall determine the amount of State
10contributions required for each fiscal year on the basis of the
11actuarial tables and other assumptions adopted by the Board and
12the prescribed rate of interest, using the formula in
13subsection (c).
14    (c) For State fiscal years 2012 through 2045, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17sufficient to bring the total assets of the System up to 90% of
18the total actuarial liabilities of the System by the end of
19State fiscal year 2045. In making these determinations, the
20required State contribution shall be calculated each year as a
21level percentage of payroll over the years remaining to and
22including fiscal year 2045 and shall be determined under the
23projected unit credit actuarial cost method.
24    For State fiscal years 1996 through 2005, the State
25contribution to the System, as a percentage of the applicable

 

 

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1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2006 is
6$29,189,400.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2007 is
9$35,236,800.
10    For each of State fiscal years 2008 through 2009, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13from the required State contribution for State fiscal year
142007, so that by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2010 is
18$78,832,000 and shall be made from the proceeds of bonds sold
19in fiscal year 2010 pursuant to Section 7.2 of the General
20Obligation Bond Act, less (i) the pro rata share of bond sale
21expenses determined by the System's share of total bond
22proceeds, (ii) any amounts received from the General Revenue
23Fund in fiscal year 2010, and (iii) any reduction in bond
24proceeds due to the issuance of discounted bonds, if
25applicable.
26    Notwithstanding any other provision of this Article, the

 

 

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1total required State contribution for State fiscal year 2011 is
2the amount recertified by the System on or before April 1, 2011
3pursuant to Section 18-140 and shall be made from the proceeds
4of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
5the General Obligation Bond Act, less (i) the pro rata share of
6bond sale expenses determined by the System's share of total
7bond proceeds, (ii) any amounts received from the General
8Revenue Fund in fiscal year 2011, and (iii) any reduction in
9bond proceeds due to the issuance of discounted bonds, if
10applicable.
11    Beginning in State fiscal year 2046, the minimum State
12contribution for each fiscal year shall be the amount needed to
13maintain the total assets of the System at 90% of the total
14actuarial liabilities of the System.
15    Amounts received by the System pursuant to Section 25 of
16the Budget Stabilization Act or Section 8.12 of the State
17Finance Act in any fiscal year do not reduce and do not
18constitute payment of any portion of the minimum State
19contribution required under this Article in that fiscal year.
20Such amounts shall not reduce, and shall not be included in the
21calculation of, the required State contributions under this
22Article in any future year until the System has reached a
23funding ratio of at least 90%. A reference in this Article to
24the "required State contribution" or any substantially similar
25term does not include or apply to any amounts payable to the
26System under Section 25 of the Budget Stabilization Act.

 

 

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1    Notwithstanding any other provision of this Section, the
2required State contribution for State fiscal year 2005 and for
3fiscal year 2008 and each fiscal year thereafter, as calculated
4under this Section and certified under Section 18-140, shall
5not exceed an amount equal to (i) the amount of the required
6State contribution that would have been calculated under this
7Section for that fiscal year if the System had not received any
8payments under subsection (d) of Section 7.2 of the General
9Obligation Bond Act, minus (ii) the portion of the State's
10total debt service payments for that fiscal year on the bonds
11issued in fiscal year 2003 for the purposes of that Section
127.2, as determined and certified by the Comptroller, that is
13the same as the System's portion of the total moneys
14distributed under subsection (d) of Section 7.2 of the General
15Obligation Bond Act. In determining this maximum for State
16fiscal years 2008 through 2010, however, the amount referred to
17in item (i) shall be increased, as a percentage of the
18applicable employee payroll, in equal increments calculated
19from the sum of the required State contribution for State
20fiscal year 2007 plus the applicable portion of the State's
21total debt service payments for fiscal year 2007 on the bonds
22issued in fiscal year 2003 for the purposes of Section 7.2 of
23the General Obligation Bond Act, so that, by State fiscal year
242011, the State is contributing at the rate otherwise required
25under this Section.
26    (d) For purposes of determining the required State

 

 

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1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (e) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15    (f) Beginning on the effective date of this amendatory Act
16of the 97th General Assembly, final passage of a bill changing
17the State contribution formula provided in this Article
18requires the affirmative vote of 3/5 of the members elected to
19each house of the General Assembly.
20(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
2196-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
223-18-11; revised 4-6-11.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.