SB1366 EnrolledLRB098 07062 JDS 37121 b

1    AN ACT concerning public employee 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 16-133.2, 16-152, 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
17obligate the last employer to make a one time non-refundable
18contribution to the System. Substitute teachers wishing to
19exercise this election must teach 85 or more days in one school
20term with one employer, who shall be deemed the last employer
21for purposes of this Section. The last day of teaching with
22that employer must be within 6 months of the date of
23application for retirement. All substitute teaching credit

 

 

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1applied toward the required 85 days must be earned after June
230, 1990.
3    The one time member and employer contributions shall be a
4percentage of the retiring member's highest annual salary rate
5used in the determination of the average salary for retirement
6annuity purposes. However, when determining the one-time
7member and employer contributions, that part of a member's
8salary with the same employer which exceeds the annual salary
9rate for the preceding year by more than 20% shall be excluded.
10The member contribution shall be at the rate of 7% for the
11lesser of the following 2 periods: (1) for each year that the
12member is less than age 60; or (2) for each year that the
13member's creditable service is less than 35 years. If a member
14is at least age 55 and has at least 34 years of creditable
15service, no member or employer contribution for the early
16retirement option shall be required. The employer contribution
17shall be at the rate of 20% for each year the member is under
18age 60.
19    Upon receipt of the application and election, the System
20shall determine the one time employee and employer
21contributions required. The member contribution shall be
22credited to the individual account of the member and the
23employer contribution shall be credited to the Benefit Trust
24Reserve. The provisions of this subsection (a) providing for
25the avoidance of the reduction in retirement annuity shall not
26be applicable until the member's contribution, if any, has been

 

 

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

 

 

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1        (ii) an affidavit signed by the member and the
2    employer, verifying the notification; and
3        (iii) any additional documentation that the System may
4    require.
5    (c) Except as otherwise provided in subsection (b), and
6subject to the provisions of Section 16-176, a member retiring
7on or after July 1, 2005 and on or before June 30, 2013 (or
8January 1, 2014 in the case of a member who has filed a notice
9of intent to retire with his or her employer on or before June
1030, 2013 and attains age 55 during the period July 1, 2013
11through December 31, 2013), and applying for a retirement
12annuity within 6 months of the last day of teaching for which
13retirement contributions were required, and whose last day of
14teaching is on or before June 30, 2013, may elect at the time
15of application for a retirement annuity, to make a one-time
16member contribution to the System and thereby avoid the
17reduction in the retirement annuity for retirement before age
1860 specified in paragraph (B) of Section 16-133. The exercise
19of the election shall also obligate the last employer to make a
20one-time nonrefundable contribution to the System. Substitute
21teachers wishing to exercise this election must teach 85 or
22more days in one school term with one employer, who shall be
23deemed the last employer for purposes of this Section. The last
24day of teaching with that employer must be within 6 months of
25the date of application for retirement. All substitute teaching
26credit applied toward the required 85 days must be earned after

 

 

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

 

 

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1the option of the employer to a specified percentage of those
2eligible, not less than 10%, with the right to participate to
3be allocated among those applying on the basis of seniority in
4the service of the employer.
5    For persons not qualifying for the early retirement without
6discount option under this subsection (c), the option is
7extended for 3 years under subsection (d), but subject to the
8changes in eligibility, conditions, and required contributions
9provided in that subsection.
10    (d) A member who is not eligible for the early retirement
11without discount option under subsection (c) may qualify for
12the early retirement without discount option under this
13subsection (d) if the member (1) retires on or after July 1,
142013 and before July 1, 2016, (2) applies for a retirement
15annuity within 6 months of the last day of teaching for which
16retirement contributions were required, and (3) receives a
17certification of eligibility under this subsection from the
18member's last employer. Substitute teachers wishing to
19exercise this election must teach 85 or more days in one school
20term with one employer, who shall be deemed the last employer
21for purposes of this Section. The last day of teaching with
22that employer must be within 6 months of the date of
23application for retirement. All substitute teaching credit
24applied toward the required 85 days must be earned after June
2530, 1990.
26    A qualifying member may elect at the time of application

 

 

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1for a retirement annuity to make a one-time member contribution
2to the System and thereby avoid the reduction in the retirement
3annuity for retirement before age 60 specified in paragraph (B)
4of Section 16-133. The exercise of this election shall also
5obligate the last employer to make a one-time nonrefundable
6contribution to the System.
7    The one-time member and employer contributions shall be a
8percentage of the retiring member's highest annual salary rate
9used in the determination of the average salary for retirement
10annuity purposes. However, when determining the one-time
11member and employer contributions, that part of a member's
12salary with the same employer which exceeds the annual salary
13rate for the preceding year by more than 20% shall be excluded.
14The member contribution shall be at the rate of 14.4% for the
15lesser of the following 2 periods: (1) for each year that the
16member is less than age 60; or (2) for each year that the
17member's creditable service is less than 35 years. The employer
18contribution shall be at the rate of 29.3% for each year the
19member is under age 60.
20    Upon receipt of the application, election, and
21certification of eligibility, the System shall determine the
22one-time employee and employer contributions required. The
23member contribution shall be credited to the individual account
24of the member and the employer contribution shall be credited
25to the Benefit Trust Reserve. The avoidance of the reduction in
26retirement annuity provided under this subsection (d) is not

 

 

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1applicable until the member's contribution has been received by
2the System; however, the date that contribution is received
3shall not be considered in determining the effective date of
4retirement.
5    Eligibility to retire under this subsection (d) shall
6require the approval of the member's last employer under this
7Article, granted in accordance with criteria adopted by that
8employer with the mutual consent of the bargaining agent of a
9majority of the members employed by that employer. If the
10employer grants its approval for a member to retire under this
11subsection (d), the employer shall submit a certification of
12eligibility for the member in a manner prescribed by the
13System.
14    The early retirement without discount option under this
15subsection (d) terminates on July 1, 2016.
16(Source: P.A. 93-469, eff. 8-8-03; 94-4, eff. 6-1-05.)
 
17    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
18    Sec. 16-152. Contributions by members.
19    (a) Each member shall make contributions for membership
20service to this System as follows:
21        (1) Effective July 1, 1998, contributions of 7.50% of
22    salary towards the cost of the retirement annuity. Such
23    contributions shall be deemed "normal contributions".
24        (2) Effective July 1, 1969, contributions of 1/2 of 1%
25    of salary toward the cost of the automatic annual increase

 

 

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1    in retirement annuity provided under Section 16-133.1.
2        (3) Effective July 24, 1959, contributions of 1% of
3    salary towards the cost of survivor benefits. Such
4    contributions shall not be credited to the individual
5    account of the member and shall not be subject to refund
6    except as provided under Section 16-143.2.
7        (4) Effective July 1, 2005, contributions of 0.40% of
8    salary toward the cost of the early retirement without
9    discount option provided under Section 16-133.2. This
10    contribution shall cease upon termination of the early
11    retirement without discount option as provided in Section
12    16-133.2 16-176.
13    (b) The minimum required contribution for any year of
14full-time teaching service shall be $192.
15    (c) Contributions shall not be required of any annuitant
16receiving a retirement annuity who is given employment as
17permitted under Section 16-118 or 16-150.1.
18    (d) A person who (i) was a member before July 1, 1998, (ii)
19retires with more than 34 years of creditable service, and
20(iii) does not elect to qualify for the augmented rate under
21Section 16-129.1 shall be entitled, at the time of retirement,
22to receive a partial refund of contributions made under this
23Section for service occurring after the later of June 30, 1998
24or attainment of 34 years of creditable service, in an amount
25equal to 1.00% of the salary upon which those contributions
26were based.

 

 

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1    (e) A member's contributions toward the cost of early
2retirement without discount made under item (a)(4) of this
3Section shall not be refunded if the member has elected early
4retirement without discount under Section 16-133.2 and has
5begun to receive a retirement annuity under this Article
6calculated in accordance with that election. Otherwise, a
7member's contributions toward the cost of early retirement
8without discount made under item (a)(4) of this Section shall
9be refunded according to whichever one of the following
10circumstances occurs first:
11        (1) The contributions shall be refunded to the member,
12    without interest, within 120 days after the member's
13    retirement annuity commences, if the member does not elect
14    early retirement without discount under Section 16-133.2.
15        (2) The contributions shall be included, without
16    interest, in any refund claimed by the member under Section
17    16-151.
18        (3) The contributions shall be refunded to the member's
19    designated beneficiary (or if there is no beneficiary, to
20    the member's estate), without interest, if the member dies
21    without having begun to receive a retirement annuity under
22    this Article.
23        (4) The contributions shall be refunded to the member,
24    without interest, if within 120 days after the early
25    retirement without discount option provided under
26    subsection (d) of Section 16-133.2 is terminated under

 

 

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1    Section 16-176. The System shall provide to the member,
2    within 120 days after the option is terminated, an
3    application for a refund of those contributions.
4(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
5    (40 ILCS 5/16-176)  (from Ch. 108 1/2, par. 16-176)
6    Sec. 16-176. To adopt actuarial assumptions. For the 5-year
7period ending June 30, 1997 and every 5 years thereafter, the
8actuary, as technical advisor, shall make an actuarial
9investigation into the mortality, service and compensation
10experience of the members, annuitants, and beneficiaries of the
11retirement system. Based upon the result of that investigation,
12the board shall adopt such actuarial assumptions as it deems
13appropriate.
14    Beginning with the 5-year period ending June 30, 2012 and
15every 5 years thereafter through June 30, 2012, the actuarial
16investigation required under this Section shall include the
17System's experience under the early retirement without
18discount option established in Section 16-133.2, including
19consideration of the sufficiency of the member and employer
20contributions under Section 16-133.2 and the active member
21contribution under Section 16-152 to adequately fund the early
22retirement without discount option. The Board shall promptly
23communicate the results of the actuarial investigation to the
24Commission on Government Forecasting and Accountability. Based
25on the actuarial investigation, the Commission on Government

 

 

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1Forecasting and Accountability shall, no later than February 1
2of the next year, recommend to the General Assembly any
3proportional adjustment in the amounts of the member and
4employer contributions under Section 16-133.2 that it deems
5necessary.
6    The If the General Assembly fails to adjust the member and
7employer contributions under Section 16-133.2 in response to
8the Commission's recommendations, then the early retirement
9without discount option under subsection (c) of Section
1016-133.2 is extended as provided in subsection (d) of that
11Section. The early retirement without discount option under
12subsection (d) of Section 16-133.2 terminates on July 1, 2016
13terminated and shall cease to be available at the end of the
14fiscal year in which the Commission made its recommendation to
15the General Assembly.
16(Source: P.A. 94-4, eff. 6-1-05.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.