Rep. Elaine Nekritz

Filed: 3/19/2013

 

 


 

 


 
09800HB2900ham001LRB098 08472 JDS 43584 a

1
AMENDMENT TO HOUSE BILL 2900

2    AMENDMENT NO. ______. Amend House Bill 2900 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 16-133.2 and 16-176 as follows:
 
6    (40 ILCS 5/16-133.2)  (from Ch. 108 1/2, par. 16-133.2)
7    Sec. 16-133.2. Early retirement without discount.
8    (a) A member retiring after June 1, 1980 and on or before
9June 30, 2005 (or as provided in subsection (b) of this
10Section), and applying for a retirement annuity within 6 months
11of the last day of teaching for which retirement contributions
12were required, may elect at the time of application for a
13retirement annuity, to make a one time member contribution to
14the System and thereby avoid the reduction in the retirement
15annuity for retirement before age 60 specified in paragraph (B)
16of Section 16-133. The exercise of the election shall also

 

 

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1obligate the last employer to make a one time non-refundable
2contribution to the System. Substitute teachers wishing to
3exercise this election must teach 85 or more days in one school
4term with one employer, who shall be deemed the last employer
5for purposes of this Section. The last day of teaching with
6that employer must be within 6 months of the date of
7application for retirement. All substitute teaching credit
8applied toward the required 85 days must be earned after June
930, 1990.
10    The one time member and employer contributions shall be a
11percentage of the retiring member's highest annual salary rate
12used in the determination of the average salary for retirement
13annuity purposes. However, when determining the one-time
14member and employer contributions, that part of a member's
15salary with the same employer which exceeds the annual salary
16rate for the preceding year by more than 20% shall be excluded.
17The member contribution shall be at the rate of 7% for the
18lesser of the following 2 periods: (1) for each year that the
19member is less than age 60; or (2) for each year that the
20member's creditable service is less than 35 years. If a member
21is at least age 55 and has at least 34 years of creditable
22service, no member or employer contribution for the early
23retirement option shall be required. The employer contribution
24shall be at the rate of 20% for each year the member is under
25age 60.
26    Upon receipt of the application and election, the System

 

 

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1shall determine the one time employee and employer
2contributions required. The member contribution shall be
3credited to the individual account of the member and the
4employer contribution shall be credited to the Benefit Trust
5Reserve. The provisions of this subsection (a) providing for
6the avoidance of the reduction in retirement annuity shall not
7be applicable until the member's contribution, if any, has been
8received by the System; however, the date such contributions
9are received shall not be considered in determining the
10effective date of retirement.
11    The number of members working for a single employer who may
12retire under this subsection or subsection (b) in any year may
13be limited at the option of the employer to a specified
14percentage of those eligible, not less than 30%, with the right
15to participate to be allocated among those applying on the
16basis of seniority in the service of the employer.
17    (b) The provisions of subsection (a) of this Section shall
18remain in effect for a member retiring after June 30, 2005 and
19on or before July 1, 2007, provided that the member satisfies
20both of the following requirements:
21        (1) the member notified his or her employer of intent
22    to retire under this Article on or before the effective
23    date of this amendatory Act of the 94th General Assembly
24    under the terms of a contract or collective bargaining
25    agreement entered into, amended, or renewed with the
26    employer on or before the effective date of this amendatory

 

 

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1    Act of the 94th General Assembly; and
2        (2) the effective date of the member's retirement is on
3    or before July 1, 2007.
4    The member's employer must give evidence of the member's
5notification by providing to the System:
6        (i) a copy of the member's notification to the employer
7    or the record of that notification;
8        (ii) an affidavit signed by the member and the
9    employer, verifying the notification; and
10        (iii) any additional documentation that the System may
11    require.
12    (c) Except as otherwise provided in subsections subsection
13(b) and (d), and subject to the provisions of Section 16-176, a
14member retiring on or after July 1, 2005, and applying for a
15retirement annuity within 6 months of the last day of teaching
16for which retirement contributions were required, may elect at
17the time of application for a retirement annuity, to make a
18one-time member contribution to the System and thereby avoid
19the reduction in the retirement annuity for retirement before
20age 60 specified in paragraph (B) of Section 16-133. The
21exercise of the election shall also obligate the last employer
22to make a one-time nonrefundable contribution to the System.
23Substitute teachers wishing to exercise this election must
24teach 85 or more days in one school term with one employer, who
25shall be deemed the last employer for purposes of this Section.
26The last day of teaching with that employer must be within 6

 

 

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1months of the date of application for retirement. All
2substitute teaching credit applied toward the required 85 days
3must be earned after June 30, 1990.
4    The one-time member and employer contributions shall be a
5percentage of the retiring member's highest annual salary rate
6used in the determination of the average salary for retirement
7annuity purposes. However, when determining the one-time
8member and employer contributions, that part of a member's
9salary with the same employer which exceeds the annual salary
10rate for the preceding year by more than 20% shall be excluded.
11The member contribution shall be at the rate of 11.5% for the
12lesser of the following 2 periods: (1) for each year that the
13member is less than age 60; or (2) for each year that the
14member's creditable service is less than 35 years. The employer
15contribution shall be at the rate of 23.5% for each year the
16member is under age 60.
17    Upon receipt of the application and election, the System
18shall determine the one-time employee and employer
19contributions required. The member contribution shall be
20credited to the individual account of the member and the
21employer contribution shall be credited to the Benefit Trust
22Reserve. The avoidance of the reduction in retirement annuity
23provided under this subsection (c) is not applicable until the
24member's contribution, if any, has been received by the System;
25however, the date that contribution is received shall not be
26considered in determining the effective date of retirement.

 

 

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1    The number of members working for a single employer who may
2retire under this subsection (c) in any year may be limited at
3the option of the employer to a specified percentage of those
4eligible, not less than 10%, with the right to participate to
5be allocated among those applying on the basis of seniority in
6the service of the employer.
7    (d) Notwithstanding any other provision of this Section,
8beginning July 1, 2013, a member shall be ineligible to elect
9at the time of application for a retirement annuity, to make a
10one-time member contribution to the System and thereby avoid
11the reduction in the retirement annuity for retirement before
12age 60 specified in paragraph (B) of Section 16-133, unless,
13prior to July 1, 2013, he or she has notified his or her
14employer of his or her intent to retire under this Section
15before that date.
16(Source: P.A. 93-469, eff. 8-8-03; 94-4, eff. 6-1-05.)
 
17    (40 ILCS 5/16-176)  (from Ch. 108 1/2, par. 16-176)
18    Sec. 16-176. To adopt actuarial assumptions. For the 5-year
19period ending June 30, 1997 and every 5 years thereafter
20through June 30, 2012, the actuary, as technical advisor, shall
21make an actuarial investigation into the mortality, service and
22compensation experience of the members, annuitants, and
23beneficiaries of the retirement system. Based upon the result
24of that investigation, the board shall adopt such actuarial
25assumptions as it deems appropriate.

 

 

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1    Beginning with the 5-year period ending June 30, 2012 and
2every 5 years thereafter through June 30, 2012, the actuarial
3investigation required under this Section shall include the
4System's experience under the early retirement without
5discount option established in Section 16-133.2, including
6consideration of the sufficiency of the member and employer
7contributions under Section 16-133.2 and the active member
8contribution under Section 16-152 to adequately fund the early
9retirement without discount option. The Board shall promptly
10communicate the results of the actuarial investigation to the
11Commission on Government Forecasting and Accountability. Based
12on the actuarial investigation, the Commission on Government
13Forecasting and Accountability shall, no later than February 1
14of the next year, recommend to the General Assembly any
15proportional adjustment in the amounts of the member and
16employer contributions under Section 16-133.2 that it deems
17necessary. Except as provided in subsection (d) of Section
1816-133.2, the If the General Assembly fails to adjust the
19member and employer contributions under Section 16-133.2 in
20response to the Commission's recommendations, then the early
21retirement without discount option under Section 16-133.2 is
22terminated as of July 1, 2013 and shall cease to be available
23at the end of the fiscal year in which the Commission made its
24recommendation to the General Assembly.
25(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.".