Rep. Tom Cross

Filed: 5/30/2012

 

 


 

 


 
09700SB1673ham006LRB097 07605 JWD 70399 a

1
AMENDMENT TO SENATE BILL 1673

2    AMENDMENT NO. ______. Amend Senate Bill 1673, AS AMENDED,
3with reference to page and line numbers of House Amendment No.
45, as follows:
 
5on page 25, line 15, by deleting "15-159,"; and
 
6on page 25, line 21, by deleting "15-155.1, 15-155.2,"; and
 
7by replacing page 162, line 8, through page 182, line 9, with
8the following:
 
9    "(40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
10    Sec. 15-155. Employer contributions.
11    (a) Except as otherwise provided in this Section, the The
12State of Illinois shall make contributions by appropriations of
13amounts which, together with the other employer contributions
14from trust, federal, and other funds, employee contributions,

 

 

09700SB1673ham006- 2 -LRB097 07605 JWD 70399 a

1income from investments, and other income of this System, will
2be sufficient to meet the cost of maintaining and administering
3the System on a 90% funded basis in accordance with actuarial
4recommendations.
5    The Board shall determine the amount of State contributions
6required for each fiscal year on the basis of the actuarial
7tables and other assumptions adopted by the Board and the
8recommendations of the actuary, using the formula in subsection
9(a-1).
10    (a-1) Except as otherwise provided in subsection (b-5),
11for For State fiscal years 2012 through 2045, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 90% of
15the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of payroll over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit credit actuarial cost method.
21    For State fiscal years 1996 through 2005, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24so that by State fiscal year 2011, the State is contributing at
25the rate required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09700SB1673ham006- 3 -LRB097 07605 JWD 70399 a

1total required State contribution for State fiscal year 2006 is
2$166,641,900.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2007 is
5$252,064,100.
6    For each of State fiscal years 2008 through 2009, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9from the required State contribution for State fiscal year
102007, so that by State fiscal year 2011, the State is
11contributing at the rate otherwise required under this Section.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2010 is
14$702,514,000 and shall be made from the State Pensions Fund and
15proceeds of bonds sold in fiscal year 2010 pursuant to Section
167.2 of the General Obligation Bond Act, less (i) the pro rata
17share of bond sale expenses determined by the System's share of
18total bond proceeds, (ii) any amounts received from the General
19Revenue Fund in fiscal year 2010, (iii) any reduction in bond
20proceeds due to the issuance of discounted bonds, if
21applicable.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2011 is
24the amount recertified by the System on or before April 1, 2011
25pursuant to Section 15-165 and shall be made from the State
26Pensions Fund and proceeds of bonds sold in fiscal year 2011

 

 

09700SB1673ham006- 4 -LRB097 07605 JWD 70399 a

1pursuant to Section 7.2 of the General Obligation Bond Act,
2less (i) the pro rata share of bond sale expenses determined by
3the System's share of total bond proceeds, (ii) any amounts
4received from the General Revenue Fund in fiscal year 2011, and
5(iii) any reduction in bond proceeds due to the issuance of
6discounted bonds, if applicable.
7    Except as otherwise provided in subsection (b-5),
8beginning Beginning in State fiscal year 2046, the minimum State
9contribution for each fiscal year shall be the amount needed to
10maintain the total assets of the System at 90% of the total
11actuarial liabilities of the System.
12    Amounts received by the System pursuant to Section 25 of
13the Budget Stabilization Act or Section 8.12 of the State
14Finance Act in any fiscal year do not reduce and do not
15constitute payment of any portion of the minimum State
16contribution required under this Article in that fiscal year.
17Such amounts shall not reduce, and shall not be included in the
18calculation of, the required State contributions under this
19Article in any future year until the System has reached a
20funding ratio of at least 90%. A reference in this Article to
21the "required State contribution" or any substantially similar
22term does not include or apply to any amounts payable to the
23System under Section 25 of the Budget Stabilization Act.
24    Notwithstanding any other provision of this Section, the
25required State contribution for State fiscal year 2005 and for
26fiscal year 2008 and each fiscal year thereafter, as calculated

 

 

09700SB1673ham006- 5 -LRB097 07605 JWD 70399 a

1under this Section and certified under Section 15-165, shall
2not exceed an amount equal to (i) the amount of the required
3State contribution that would have been calculated under this
4Section for that fiscal year if the System had not received any
5payments under subsection (d) of Section 7.2 of the General
6Obligation Bond Act, minus (ii) the portion of the State's
7total debt service payments for that fiscal year on the bonds
8issued in fiscal year 2003 for the purposes of that Section
97.2, as determined and certified by the Comptroller, that is
10the same as the System's portion of the total moneys
11distributed under subsection (d) of Section 7.2 of the General
12Obligation Bond Act. In determining this maximum for State
13fiscal years 2008 through 2010, however, the amount referred to
14in item (i) shall be increased, as a percentage of the
15applicable employee payroll, in equal increments calculated
16from the sum of the required State contribution for State
17fiscal year 2007 plus the applicable portion of the State's
18total debt service payments for fiscal year 2007 on the bonds
19issued in fiscal year 2003 for the purposes of Section 7.2 of
20the General Obligation Bond Act, so that, by State fiscal year
212011, the State is contributing at the rate otherwise required
22under this Section.
23    (b) If an employee is paid from trust or federal funds, the
24employer shall pay to the Board contributions from those funds
25which are sufficient to cover the accruing normal costs on
26behalf of the employee. However, universities having employees

 

 

09700SB1673ham006- 6 -LRB097 07605 JWD 70399 a

1who are compensated out of local auxiliary funds, income funds,
2or service enterprise funds are not required to pay such
3contributions on behalf of those employees. The local auxiliary
4funds, income funds, and service enterprise funds of
5universities shall not be considered trust funds for the
6purpose of this Article, but funds of alumni associations,
7foundations, and athletic associations which are affiliated
8with the universities included as employers under this Article
9and other employers which do not receive State appropriations
10are considered to be trust funds for the purpose of this
11Article.
12    (b-1) The City of Urbana and the City of Champaign shall
13each make employer contributions to this System for their
14respective firefighter employees who participate in this
15System pursuant to subsection (h) of Section 15-107. The rate
16of contributions to be made by those municipalities shall be
17determined annually by the Board on the basis of the actuarial
18assumptions adopted by the Board and the recommendations of the
19actuary, and shall be expressed as a percentage of salary for
20each such employee. The Board shall certify the rate to the
21affected municipalities as soon as may be practical. The
22employer contributions required under this subsection shall be
23remitted by the municipality to the System at the same time and
24in the same manner as employee contributions.
25    (b-5) If at least 50% of Tier I employees making an
26election under Section 15-134.6 before June 1, 2013 choose the

 

 

09700SB1673ham006- 7 -LRB097 07605 JWD 70399 a

1option under paragraph (1) of subsection (a) of that Section,
2then:
3        (1) In lieu of the State contributions required under
4    subsection (a-1), for State fiscal years 2014 through 2043
5    the minimum contribution to the System to be made by the
6    State for each fiscal year shall be an amount determined by
7    the System to be equal to the sum of (1) the State's
8    portion of the projected normal cost for that fiscal year,
9    plus (2) an amount sufficient to bring the total assets of
10    the System up to 100% of the total actuarial liabilities of
11    the System by the end of State fiscal year 2043. In making
12    these determinations, the required State contribution
13    shall be calculated each year as a level percentage of
14    payroll over the years remaining to and including fiscal
15    year 2043 and shall be determined under the projected unit
16    credit actuarial cost method.
17        (2) Beginning in State fiscal year 2044, the minimum
18    State contribution for each fiscal year shall be the amount
19    needed to maintain the total assets of the System at 100%
20    of the total actuarial liabilities of the System.
21    (b-6) If less than 50% of Tier I employees making an
22election under Section 15-134.6 before June 1, 2013 choose the
23option under paragraph (1) of subsection (a) of that Section,
24then:
25        (1) Instead of the annual required contribution
26    otherwise specified in subsection (b-5) of this Section,

 

 

09700SB1673ham006- 8 -LRB097 07605 JWD 70399 a

1    the annual required contribution to the System to be made
2    by the State shall be determined under subsection (a-1) of
3    this Section.
4        (2) As soon as possible after June 1, 2014, the Board
5    shall recertify the annual required contribution by the
6    State for State fiscal year 2015.
7    (c) Through State fiscal year 1995: The total employer
8contribution shall be apportioned among the various funds of
9the State and other employers, whether trust, federal, or other
10funds, in accordance with actuarial procedures approved by the
11Board. State of Illinois contributions for employers receiving
12State appropriations for personal services shall be payable
13from appropriations made to the employers or to the System. The
14contributions for Class I community colleges covering earnings
15other than those paid from trust and federal funds, shall be
16payable solely from appropriations to the Illinois Community
17College Board or the System for employer contributions.
18    (d) Beginning in State fiscal year 1996, the required State
19contributions to the System shall be appropriated directly to
20the System and shall be payable through vouchers issued in
21accordance with subsection (c) of Section 15-165, except as
22provided in subsection (g).
23    (e) The State Comptroller shall draw warrants payable to
24the System upon proper certification by the System or by the
25employer in accordance with the appropriation laws and this
26Code.

 

 

09700SB1673ham006- 9 -LRB097 07605 JWD 70399 a

1    (f) Normal costs under this Section means liability for
2pensions and other benefits which accrues to the System because
3of the credits earned for service rendered by the participants
4during the fiscal year and expenses of administering the
5System, but shall not include the principal of or any
6redemption premium or interest on any bonds issued by the Board
7or any expenses incurred or deposits required in connection
8therewith.
9    (g) If the amount of a participant's earnings for any
10academic year used to determine the final rate of earnings,
11determined on a full-time equivalent basis, exceeds the amount
12of his or her earnings with the same employer for the previous
13academic year, determined on a full-time equivalent basis, by
14more than 6%, the participant's employer shall pay to the
15System, in addition to all other payments required under this
16Section and in accordance with guidelines established by the
17System, the present value of the increase in benefits resulting
18from the portion of the increase in earnings that is in excess
19of 6%. This present value shall be computed by the System on
20the basis of the actuarial assumptions and tables used in the
21most recent actuarial valuation of the System that is available
22at the time of the computation. The System may require the
23employer to provide any pertinent information or
24documentation. The changes to this subsection (removing the 6%
25increase permitted without payment to the System by the
26employer) made by this amendatory Act of the 97th General

 

 

09700SB1673ham006- 10 -LRB097 07605 JWD 70399 a

1Assembly do not apply to a teacher who is covered by a
2collective bargaining agreement or employment contract in
3effect on the effective date of this amendatory Act that
4provides for such increases, until such time as that agreement
5or contract expires or is amended or renewed.
6    Whenever it determines that a payment is or may be required
7under this subsection (g), the System shall calculate the
8amount of the payment and bill the employer for that amount.
9The bill shall specify the calculations used to determine the
10amount due. If the employer disputes the amount of the bill, it
11may, within 30 days after receipt of the bill, apply to the
12System in writing for a recalculation. The application must
13specify in detail the grounds of the dispute and, if the
14employer asserts that the calculation is subject to subsection
15(h) or (i) of this Section, must include an affidavit setting
16forth and attesting to all facts within the employer's
17knowledge that are pertinent to the applicability of subsection
18(h) or (i). Upon receiving a timely application for
19recalculation, the System shall review the application and, if
20appropriate, recalculate the amount due.
21    The employer contributions required under this subsection
22(g) (f) may be paid in the form of a lump sum within 90 days
23after receipt of the bill. If the employer contributions are
24not paid within 90 days after receipt of the bill, then
25interest will be charged at a rate equal to the System's annual
26actuarially assumed rate of return on investment compounded

 

 

09700SB1673ham006- 11 -LRB097 07605 JWD 70399 a

1annually from the 91st day after receipt of the bill. Payments
2must be concluded within 3 years after the employer's receipt
3of the bill.
4    (h) This subsection (h) applies only to payments made or
5salary increases given on or after June 1, 2005 but before July
61, 2011. The changes made by Public Act 94-1057 shall not
7require the System to refund any payments received before July
831, 2006 (the effective date of Public Act 94-1057).
9    When assessing payment for any amount due under subsection
10(g), the System shall exclude earnings increases paid to
11participants under contracts or collective bargaining
12agreements entered into, amended, or renewed before June 1,
132005.
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude earnings increases paid to a
16participant at a time when the participant is 10 or more years
17from retirement eligibility under Section 15-135.
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases resulting from
20overload work, including a contract for summer teaching, or
21overtime when the employer has certified to the System, and the
22System has approved the certification, that: (i) in the case of
23overloads (A) the overload work is for the sole purpose of
24academic instruction in excess of the standard number of
25instruction hours for a full-time employee occurring during the
26academic year that the overload is paid and (B) the earnings

 

 

09700SB1673ham006- 12 -LRB097 07605 JWD 70399 a

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

 

 

09700SB1673ham006- 13 -LRB097 07605 JWD 70399 a

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

 

 

09700SB1673ham006- 14 -LRB097 07605 JWD 70399 a

1findings with the System. The System shall consider the
2findings of the Illinois Community College Board when making
3determinations under this Section. The System shall not exclude
4any earnings increases resulting from a promotion when the
5promotion was not submitted by a community college. Nothing in
6this subsection (k) shall require any community college to
7submit any information to the Community College Board.
8    (l) For purposes of determining the required State
9contribution to the System, the value of the System's assets
10shall be equal to the actuarial value of the System's assets,
11which shall be calculated as follows:
12    As of June 30, 2008, the actuarial value of the System's
13assets shall be equal to the market value of the assets as of
14that date. In determining the actuarial value of the System's
15assets for fiscal years after June 30, 2008, any actuarial
16gains or losses from investment return incurred in a fiscal
17year shall be recognized in equal annual amounts over the
185-year period following that fiscal year.
19    (m) For purposes of determining the required State
20contribution to the system for a particular year, the actuarial
21value of assets shall be assumed to earn a rate of return equal
22to the system's actuarially assumed rate of return.
23(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
2496-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
251-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)"; and
 

 

 

09700SB1673ham006- 15 -LRB097 07605 JWD 70399 a

1by deleting page 195, line 6, through page 201, line 11.