Sen. Jim Oberweis

Filed: 4/10/2013

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2026

2    AMENDMENT NO. ______. Amend Senate Bill 2026 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 2-124, 14-131, 15-155, 16-158, and 18-131 and
6by adding Section 1-161 as follows:
 
7    (40 ILCS 5/1-161 new)
8    Sec. 1-161. Pension benefits, end of service credit;
9self-directed retirement plans.
10    (a) For the purposes of this Section:
11        "Active participant" means a participant in a
12    State-funded retirement system who does not receive an
13    annuity from a State-funded retirement system.
14        "Annuitant" means a participant in a State-funded
15    retirement system who receives an annuity from a
16    State-funded retirement system.

 

 

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1        "Automatic increase in retirement annuity" means an
2    automatic increase in retirement annuity granted under
3    Section 1-160 or Article 2, 14, 15, 16, or 18 of this Code.
4        "Consumer price index-u" means the index published by
5    the Bureau of Labor Statistics of the United States
6    Department of Labor that measures the average change in
7    prices of goods and services purchased by all urban
8    consumers, United States city average, all items, 1982-84 =
9    100.
10        "Pensionable salary" means the amount of salary,
11    compensation, or earnings used by the applicable
12    State-funded retirement system to calculate the amount of
13    an individual's retirement annuity.
14        "State-funded retirement system" means a retirement
15    system established under Article 2, 14, 15, 16, or 18 of
16    this Code.
17    (b) No active participant may accrue service credit in a
18State-funded retirement system on or after the effective date
19of this amendatory Act of the 98th General Assembly.
20    (c) The pensionable salary of an active participant shall
21not exceed the pensionable salary of that participant as of the
22effective date of this amendatory Act of the 98th General
23Assembly.
24    (d) An annuitant shall not receive an automatic increase in
25retirement annuity on or after the effective date of this
26Section.

 

 

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1    (e) The retirement age of active participants who are
2ineligible to retire as of the effective date of this
3amendatory Act of the 98th General Assembly shall be increased
4according to a schedule developed by the Public Pension
5Division of the Department of Insurance as soon as practicable
6after the effective date of this amendatory Act of the 98th
7General Assembly. The schedule of retirement ages adopted by
8administrative rule of the Division shall, at a minimum, ensure
9(i) that persons who first become active participants on or
10after the effective date of this amendatory Act of the 98th
11General Assembly are not eligible to retire until reaching the
12Social Security Normal Retirement Age and (ii) that persons who
13are active participants but ineligible to retire as of the
14effective date of this amendatory Act of the 98th General
15Assembly remain ineligible to retire until reaching age 59. The
16Division's schedule shall also provide for the adjustment of
17retirement ages using a matrix that accounts for the current
18statutory retirement age for various classes of persons and
19service credit accrued by those persons as of the effective
20date of this amendatory Act of the 98th General Assembly.
21    (f) As soon as practicable after the effective date of this
22amendatory Act of the 98th General Assembly, each State-funded
23retirement system shall establish a self-directed retirement
24plan that allows individuals who are active participants and
25individuals who become active participants on or after the
26effective date of this amendatory Act of the 98th General

 

 

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1Assembly the opportunity to accumulate assets for retirement
2through a combination of employee and employer contributions
3that may be invested in mutual funds, collective investment
4funds, or other investment products and used to purchase
5annuity contracts, either fixed or variable or a combination
6thereof. The plan must be qualified under the Internal Revenue
7Code of 1986. Participants in the retirement system established
8under Article 15 may participate in the self-managed plan
9established under Section 15-158.2 in lieu of participating in
10a self-directed retirement plan created under this subsection
11(f).
12    (g) Each active participant in the retirement system
13established under Article 14 of this Code who is a noncovered
14employee and each active participant in a retirement system
15established under Article 15, 16, or 18 of this Code, except
16for a participant in the self-managed plan established under
17Section 15-158.2, shall participate in the self-directed
18retirement plan established under subsection (f) and
19contribute 8% of his or her salary, earnings, or compensation,
20whichever is applicable, to the plan. The employer of each of
21those active participants shall contribute 7% of salary,
22earnings, or compensation, whichever is applicable, to that
23plan on behalf of the participant.
24    Each active participant in the retirement system
25established under Article 14 who is a covered employee shall
26participate in the self-directed retirement plan established

 

 

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1under subsection (f) and shall contribute 3% of compensation to
2the plan. The employer of each of those participants shall
3contribute 3% of compensation to the self-directed retirement
4plan on behalf of the participant.
5    Each active participant in the retirement system
6established under Article 2 of this Code shall have the option
7of participating in the self-directed retirement plan
8established under subsection (f) and shall be entitled to
9contribute as much to the plan as is authorized by federal law.
10However, no employer contribution to the self-directed plan
11shall be made on behalf of active participants in the
12retirement system established under Article 2 of this Code.
13    For the purposes of this subsection (g), salary, earnings,
14or compensation shall not exceed $110,100. However, that amount
15shall be increased on January 1, 2015 and each January 1
16thereafter by the lesser of (i) 3% of that amount or (ii)
17one-half the annual unadjusted percentage increase (but not
18less than zero) in the consumer price index-u for the 12 months
19ending with the September preceding each November 1, as
20calculated by the Public Pension Division of the Department of
21Insurance and made available to the boards of the State-funded
22retirement systems by November 1, 2013 and each November 1
23thereafter.
24    (h) The provisions of this amendatory Act of the 98th
25General Assembly apply notwithstanding any other law,
26including Section 1-160 of this Code. If there is a conflict

 

 

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1between the provisions of this amendatory Act of the 98th
2General Assembly and any other law, the provisions of this
3Section shall control.
 
4    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
5    Sec. 2-124. Contributions by State.
6    (a) The State shall make contributions to the System by
7appropriations of amounts which, together with the
8contributions of participants, interest earned on investments,
9and other income will meet the cost of maintaining and
10administering the System on a 90% funded basis in accordance
11with actuarial recommendations.
12    (b) The Board shall determine the amount of State
13contributions required for each fiscal year on the basis of the
14actuarial tables and other assumptions adopted by the Board and
15the prescribed rate of interest, using the formula in
16subsection (c).
17    (c) For State fiscal years 2012 and 2013 through 2045, the
18minimum contribution to the System to be made by the State for
19each fiscal year shall be an amount determined by the System to
20be sufficient to bring the total assets of the System up to 90%
21of the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the

 

 

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1projected unit credit actuarial cost method.
2    For State fiscal years 2014 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 100%
6of the 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 dollar amount over the years remaining to and including
10fiscal year 2045 and shall be determined under the projected
11unit 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$4,157,000.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2007 is
22$5,220,300.
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

 

 

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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$10,454,000 and shall be made from the proceeds of bonds sold
6in fiscal year 2010 pursuant to Section 7.2 of the General
7Obligation Bond Act, less (i) the pro rata share of bond sale
8expenses determined by the System's share of total bond
9proceeds, (ii) any amounts received from the General Revenue
10Fund in fiscal year 2010, and (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 2-134 and shall be made from the proceeds
17of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
18the General Obligation Bond Act, less (i) the pro rata share of
19bond sale expenses determined by the System's share of total
20bond proceeds, (ii) any amounts received from the General
21Revenue Fund in fiscal year 2011, and (iii) any reduction in
22bond proceeds due to the issuance of discounted bonds, if
23applicable.
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

 

 

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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 2-134, shall not
18exceed an amount equal to (i) the amount of the required State
19contribution that would have been calculated under this Section
20for 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    (d) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (e) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
47-13-12.)
 
5    (40 ILCS 5/14-131)
6    Sec. 14-131. Contributions by State.
7    (a) The State shall make contributions to the System by
8appropriations of amounts which, together with other employer
9contributions from trust, federal, and other funds, employee
10contributions, investment income, and other income, will be
11sufficient to meet the cost of maintaining and administering
12the System on a 90% funded basis in accordance with actuarial
13recommendations.
14    For the purposes of this Section and Section 14-135.08,
15references to State contributions refer only to employer
16contributions and do not include employee contributions that
17are picked up or otherwise paid by the State or a department on
18behalf of the employee.
19    (b) The Board shall determine the total amount of State
20contributions required for each fiscal year on the basis of the
21actuarial tables and other assumptions adopted by the Board,
22using the formula in subsection (e).
23    The Board shall also determine a State contribution rate
24for each fiscal year, expressed as a percentage of payroll,
25based on the total required State contribution for that fiscal

 

 

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

 

 

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1Section 14.1 of the State Finance Act. The several departments
2shall resume those contributions at the commencement of fiscal
3year 2005.
4    (c-1) Notwithstanding subsection (c) of this Section, for
5fiscal years 2010, 2012, and 2013 only, contributions by the
6several departments are not required to be made for General
7Revenue Funds payrolls processed by the Comptroller. Payrolls
8paid by the several departments from all other State funds must
9continue to be processed pursuant to subsection (c) of this
10Section.
11    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
12or as soon as possible after the 15th day of each month, the
13Board shall submit vouchers for payment of State contributions
14to the System, in a total monthly amount of one-twelfth of the
15fiscal year General Revenue Fund contribution as certified by
16the System pursuant to Section 14-135.08 of the Illinois
17Pension Code.
18    (d) If an employee is paid from trust funds or federal
19funds, the department or other employer shall pay employer
20contributions from those funds to the System at the certified
21rate, unless the terms of the trust or the federal-State
22agreement preclude the use of the funds for that purpose, in
23which case the required employer contributions shall be paid by
24the State. From the effective date of this amendatory Act of
25the 93rd General Assembly through the payment of the final
26payroll from fiscal year 2004 appropriations, the department or

 

 

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1other employer shall not pay contributions for the remainder of
2fiscal year 2004 but shall instead make payments as required
3under subsection (a-1) of Section 14.1 of the State Finance
4Act. The department or other employer shall resume payment of
5contributions at the commencement of fiscal year 2005.
6    (e) For State fiscal years 2012 and 2013 through 2045, the
7minimum contribution to the System to be made by the State for
8each fiscal year shall be an amount determined by the System to
9be sufficient to bring the total assets of the System up to 90%
10of the total actuarial liabilities of the System by the end of
11State fiscal year 2045. In making these determinations, the
12required State contribution shall be calculated each year as a
13level percentage of payroll over the years remaining to and
14including fiscal year 2045 and shall be determined under the
15projected unit credit actuarial cost method.
16    For State fiscal years 2014 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 100%
20of the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level dollar amount over the years remaining to and including
24fiscal year 2045 and shall be determined under the projected
25unit credit actuarial cost method.
26    For State fiscal years 1996 through 2005, the State

 

 

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1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3so that by State fiscal year 2011, the State is contributing at
4the rate required under this Section; except that (i) for State
5fiscal year 1998, for all purposes of this Code and any other
6law of this State, the certified percentage of the applicable
7employee payroll shall be 5.052% for employees earning eligible
8creditable service under Section 14-110 and 6.500% for all
9other employees, notwithstanding any contrary certification
10made under Section 14-135.08 before the effective date of this
11amendatory Act of 1997, and (ii) in the following specified
12State fiscal years, the State contribution to the System shall
13not be less than the following indicated percentages of the
14applicable employee payroll, even if the indicated percentage
15will produce a State contribution in excess of the amount
16otherwise required under this subsection and subsection (a):
179.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
182002; 10.6% in FY 2003; and 10.8% in FY 2004.
19    Notwithstanding any other provision of this Article, the
20total required State contribution to the System for State
21fiscal year 2006 is $203,783,900.
22    Notwithstanding any other provision of this Article, the
23total required State contribution to the System for State
24fiscal year 2007 is $344,164,400.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

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1employee payroll, shall be increased in equal annual increments
2from the required State contribution for State fiscal year
32007, so that by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State General Revenue Fund contribution for
7State fiscal year 2010 is $723,703,100 and shall be made from
8the proceeds of bonds sold in fiscal year 2010 pursuant to
9Section 7.2 of the General Obligation Bond Act, less (i) the
10pro rata share of bond sale expenses determined by the System's
11share of total bond proceeds, (ii) any amounts received from
12the General Revenue Fund in fiscal year 2010, and (iii) any
13reduction in bond proceeds due to the issuance of discounted
14bonds, if applicable.
15    Notwithstanding any other provision of this Article, the
16total required State General Revenue Fund contribution for
17State fiscal year 2011 is the amount recertified by the System
18on or before April 1, 2011 pursuant to Section 14-135.08 and
19shall be made from the proceeds of bonds sold in fiscal year
202011 pursuant to Section 7.2 of the General Obligation Bond
21Act, less (i) the pro rata share of bond sale expenses
22determined by the System's share of total bond proceeds, (ii)
23any amounts received from the General Revenue Fund in fiscal
24year 2011, and (iii) any reduction in bond proceeds due to the
25issuance of discounted bonds, if applicable.
26    Beginning in State fiscal year 2046, the minimum State

 

 

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1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 90% of the total
3actuarial liabilities of the System.
4    Amounts received by the System pursuant to Section 25 of
5the Budget Stabilization Act or Section 8.12 of the State
6Finance Act in any fiscal year do not reduce and do not
7constitute payment of any portion of the minimum State
8contribution required under this Article in that fiscal year.
9Such amounts shall not reduce, and shall not be included in the
10calculation of, the required State contributions under this
11Article in any future year until the System has reached a
12funding ratio of at least 90%. A reference in this Article to
13the "required State contribution" or any substantially similar
14term does not include or apply to any amounts payable to the
15System under Section 25 of the Budget Stabilization Act.
16    Notwithstanding any other provision of this Section, the
17required State contribution for State fiscal year 2005 and for
18fiscal year 2008 and each fiscal year thereafter, as calculated
19under this Section and certified under Section 14-135.08, shall
20not exceed an amount equal to (i) the amount of the required
21State contribution that would have been calculated under this
22Section for that fiscal year if the System had not received any
23payments under subsection (d) of Section 7.2 of the General
24Obligation Bond Act, minus (ii) the portion of the State's
25total debt service payments for that fiscal year on the bonds
26issued in fiscal year 2003 for the purposes of that Section

 

 

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17.2, as determined and certified by the Comptroller, that is
2the same as the System's portion of the total moneys
3distributed under subsection (d) of Section 7.2 of the General
4Obligation Bond Act. In determining this maximum for State
5fiscal years 2008 through 2010, however, the amount referred to
6in item (i) shall be increased, as a percentage of the
7applicable employee payroll, in equal increments calculated
8from the sum of the required State contribution for State
9fiscal year 2007 plus the applicable portion of the State's
10total debt service payments for fiscal year 2007 on the bonds
11issued in fiscal year 2003 for the purposes of Section 7.2 of
12the General Obligation Bond Act, so that, by State fiscal year
132011, the State is contributing at the rate otherwise required
14under this Section.
15    (f) After the submission of all payments for eligible
16employees from personal services line items in fiscal year 2004
17have been made, the Comptroller shall provide to the System a
18certification of the sum of all fiscal year 2004 expenditures
19for personal services that would have been covered by payments
20to the System under this Section if the provisions of this
21amendatory Act of the 93rd General Assembly had not been
22enacted. Upon receipt of the certification, the System shall
23determine the amount due to the System based on the full rate
24certified by the Board under Section 14-135.08 for fiscal year
252004 in order to meet the State's obligation under this
26Section. The System shall compare this amount due to the amount

 

 

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1received by the System in fiscal year 2004 through payments
2under this Section and under Section 6z-61 of the State Finance
3Act. If the amount due is more than the amount received, the
4difference shall be termed the "Fiscal Year 2004 Shortfall" for
5purposes of this Section, and the Fiscal Year 2004 Shortfall
6shall be satisfied under Section 1.2 of the State Pension Funds
7Continuing Appropriation Act. If the amount due is less than
8the amount received, the difference shall be termed the "Fiscal
9Year 2004 Overpayment" for purposes of this Section, and the
10Fiscal Year 2004 Overpayment shall be repaid by the System to
11the Pension Contribution Fund as soon as practicable after the
12certification.
13    (g) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (h) For purposes of determining the required State
25contribution to the System for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the System's actuarially assumed rate of return.
2    (i) After the submission of all payments for eligible
3employees from personal services line items paid from the
4General Revenue Fund in fiscal year 2010 have been made, the
5Comptroller shall provide to the System a certification of the
6sum of all fiscal year 2010 expenditures for personal services
7that would have been covered by payments to the System under
8this Section if the provisions of this amendatory Act of the
996th General Assembly had not been enacted. Upon receipt of the
10certification, the System shall determine the amount due to the
11System based on the full rate certified by the Board under
12Section 14-135.08 for fiscal year 2010 in order to meet the
13State's obligation under this Section. The System shall compare
14this amount due to the amount received by the System in fiscal
15year 2010 through payments under this Section. If the amount
16due is more than the amount received, the difference shall be
17termed the "Fiscal Year 2010 Shortfall" for purposes of this
18Section, and the Fiscal Year 2010 Shortfall shall be satisfied
19under Section 1.2 of the State Pension Funds Continuing
20Appropriation Act. If the amount due is less than the amount
21received, the difference shall be termed the "Fiscal Year 2010
22Overpayment" for purposes of this Section, and the Fiscal Year
232010 Overpayment shall be repaid by the System to the General
24Revenue Fund as soon as practicable after the certification.
25    (j) After the submission of all payments for eligible
26employees from personal services line items paid from the

 

 

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1General Revenue Fund in fiscal year 2011 have been made, the
2Comptroller shall provide to the System a certification of the
3sum of all fiscal year 2011 expenditures for personal services
4that would have been covered by payments to the System under
5this Section if the provisions of this amendatory Act of the
696th General Assembly had not been enacted. Upon receipt of the
7certification, the System shall determine the amount due to the
8System based on the full rate certified by the Board under
9Section 14-135.08 for fiscal year 2011 in order to meet the
10State's obligation under this Section. The System shall compare
11this amount due to the amount received by the System in fiscal
12year 2011 through payments under this Section. If the amount
13due is more than the amount received, the difference shall be
14termed the "Fiscal Year 2011 Shortfall" for purposes of this
15Section, and the Fiscal Year 2011 Shortfall shall be satisfied
16under Section 1.2 of the State Pension Funds Continuing
17Appropriation Act. If the amount due is less than the amount
18received, the difference shall be termed the "Fiscal Year 2011
19Overpayment" for purposes of this Section, and the Fiscal Year
202011 Overpayment shall be repaid by the System to the General
21Revenue Fund as soon as practicable after the certification.
22    (k) For fiscal years 2012 and 2013 only, after the
23submission of all payments for eligible employees from personal
24services line items paid from the General Revenue Fund in the
25fiscal year have been made, the Comptroller shall provide to
26the System a certification of the sum of all expenditures in

 

 

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1the fiscal year for personal services. Upon receipt of the
2certification, the System shall determine the amount due to the
3System based on the full rate certified by the Board under
4Section 14-135.08 for the fiscal year in order to meet the
5State's obligation under this Section. The System shall compare
6this amount due to the amount received by the System for the
7fiscal year. If the amount due is more than the amount
8received, the difference shall be termed the "Prior Fiscal Year
9Shortfall" for purposes of this Section, and the Prior Fiscal
10Year Shortfall shall be satisfied under Section 1.2 of the
11State Pension Funds Continuing Appropriation Act. If the amount
12due is less than the amount received, the difference shall be
13termed the "Prior Fiscal Year Overpayment" for purposes of this
14Section, and the Prior Fiscal Year Overpayment shall be repaid
15by the System to the General Revenue Fund as soon as
16practicable after the certification.
17(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1896-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
191-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
20eff. 6-30-12.)
 
21    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
22    Sec. 15-155. Employer contributions.
23    (a) The State of Illinois shall make contributions by
24appropriations of amounts which, together with the other
25employer contributions from trust, federal, and other funds,

 

 

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1employee contributions, income from investments, and other
2income of this System, will be sufficient to meet the cost of
3maintaining and administering the System on a 90% funded basis
4in accordance with actuarial recommendations.
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) For State fiscal years 2012 and 2013 through 2045,
11the minimum contribution to the System to be made by the State
12for each fiscal year shall be an amount determined by the
13System to be sufficient to bring the total assets of the System
14up to 90% of the total actuarial liabilities of the System by
15the end of State fiscal year 2045. In making these
16determinations, the required State contribution shall be
17calculated each year as a level percentage of payroll over the
18years remaining to and including fiscal year 2045 and shall be
19determined under the projected unit credit actuarial cost
20method.
21    For State fiscal years 2014 through 2045, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total assets of the System up to 100%
25of the total actuarial liabilities of the System by the end of
26State fiscal year 2045. In making these determinations, the

 

 

09800SB2026sam001- 24 -LRB098 06591 EFG 43188 a

1required State contribution shall be calculated each year as a
2level dollar amount over the years remaining to and including
3fiscal year 2045 and shall be determined under the projected
4unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$166,641,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$252,064,100.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$702,514,000 and shall be made from the State Pensions Fund and
25proceeds of bonds sold in fiscal year 2010 pursuant to Section
267.2 of the General Obligation Bond Act, less (i) the pro rata

 

 

09800SB2026sam001- 25 -LRB098 06591 EFG 43188 a

1share of bond sale expenses determined by the System's share of
2total bond proceeds, (ii) any amounts received from the General
3Revenue Fund in fiscal year 2010, (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 15-165 and shall be made from the State
10Pensions Fund and proceeds of bonds sold in fiscal year 2011
11pursuant to Section 7.2 of the General Obligation Bond Act,
12less (i) the pro rata share of bond sale expenses determined by
13the System's share of total bond proceeds, (ii) any amounts
14received from the General Revenue Fund in fiscal year 2011, and
15(iii) any reduction in bond proceeds due to the issuance of
16discounted bonds, if applicable.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 90% of the total
20actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

09800SB2026sam001- 26 -LRB098 06591 EFG 43188 a

1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 90%. A reference in this Article to
4the "required State contribution" or any substantially similar
5term does not include or apply to any amounts payable to the
6System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter, as calculated
10under this Section and certified under Section 15-165, shall
11not exceed an amount equal to (i) the amount of the required
12State contribution that would have been calculated under this
13Section for that fiscal year if the System had not received any
14payments under subsection (d) of Section 7.2 of the General
15Obligation Bond Act, minus (ii) the portion of the State's
16total debt service payments for that fiscal year on the bonds
17issued in fiscal year 2003 for the purposes of that Section
187.2, as determined and certified by the Comptroller, that is
19the same as the System's portion of the total moneys
20distributed under subsection (d) of Section 7.2 of the General
21Obligation Bond Act. In determining this maximum for State
22fiscal years 2008 through 2010, however, the amount referred to
23in item (i) shall be increased, as a percentage of the
24applicable employee payroll, in equal increments calculated
25from the sum of the required State contribution for State
26fiscal year 2007 plus the applicable portion of the State's

 

 

09800SB2026sam001- 27 -LRB098 06591 EFG 43188 a

1total debt service payments for fiscal year 2007 on the bonds
2issued in fiscal year 2003 for the purposes of Section 7.2 of
3the General Obligation Bond Act, so that, by State fiscal year
42011, the State is contributing at the rate otherwise required
5under this Section.
6    (b) If an employee is paid from trust or federal funds, the
7employer shall pay to the Board contributions from those funds
8which are sufficient to cover the accruing normal costs on
9behalf of the employee. However, universities having employees
10who are compensated out of local auxiliary funds, income funds,
11or service enterprise funds are not required to pay such
12contributions on behalf of those employees. The local auxiliary
13funds, income funds, and service enterprise funds of
14universities shall not be considered trust funds for the
15purpose of this Article, but funds of alumni associations,
16foundations, and athletic associations which are affiliated
17with the universities included as employers under this Article
18and other employers which do not receive State appropriations
19are considered to be trust funds for the purpose of this
20Article.
21    (b-1) The City of Urbana and the City of Champaign shall
22each make employer contributions to this System for their
23respective firefighter employees who participate in this
24System pursuant to subsection (h) of Section 15-107. The rate
25of contributions to be made by those municipalities shall be
26determined annually by the Board on the basis of the actuarial

 

 

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1assumptions adopted by the Board and the recommendations of the
2actuary, and shall be expressed as a percentage of salary for
3each such employee. The Board shall certify the rate to the
4affected municipalities as soon as may be practical. The
5employer contributions required under this subsection shall be
6remitted by the municipality to the System at the same time and
7in the same manner as employee contributions.
8    (c) Through State fiscal year 1995: The total employer
9contribution shall be apportioned among the various funds of
10the State and other employers, whether trust, federal, or other
11funds, in accordance with actuarial procedures approved by the
12Board. State of Illinois contributions for employers receiving
13State appropriations for personal services shall be payable
14from appropriations made to the employers or to the System. The
15contributions for Class I community colleges covering earnings
16other than those paid from trust and federal funds, shall be
17payable solely from appropriations to the Illinois Community
18College Board or the System for employer contributions.
19    (d) Beginning in State fiscal year 1996, the required State
20contributions to the System shall be appropriated directly to
21the System and shall be payable through vouchers issued in
22accordance with subsection (c) of Section 15-165, except as
23provided in subsection (g).
24    (e) The State Comptroller shall draw warrants payable to
25the System upon proper certification by the System or by the
26employer in accordance with the appropriation laws and this

 

 

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1Code.
2    (f) Normal costs under this Section means liability for
3pensions and other benefits which accrues to the System because
4of the credits earned for service rendered by the participants
5during the fiscal year and expenses of administering the
6System, but shall not include the principal of or any
7redemption premium or interest on any bonds issued by the Board
8or any expenses incurred or deposits required in connection
9therewith.
10    (g) If the amount of a participant's earnings for any
11academic year used to determine the final rate of earnings,
12determined on a full-time equivalent basis, exceeds the amount
13of his or her earnings with the same employer for the previous
14academic year, determined on a full-time equivalent basis, by
15more than 6%, the participant's employer shall pay to the
16System, in addition to all other payments required under this
17Section and in accordance with guidelines established by the
18System, the present value of the increase in benefits resulting
19from the portion of the increase in earnings that is in excess
20of 6%. This present value shall be computed by the System on
21the basis of the actuarial assumptions and tables used in the
22most recent actuarial valuation of the System that is available
23at the time of the computation. The System may require the
24employer to provide any pertinent information or
25documentation.
26    Whenever it determines that a payment is or may be required

 

 

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1under this subsection (g), the System shall calculate the
2amount of the payment and bill the employer for that amount.
3The bill shall specify the calculations used to determine the
4amount due. If the employer disputes the amount of the bill, it
5may, within 30 days after receipt of the bill, apply to the
6System in writing for a recalculation. The application must
7specify in detail the grounds of the dispute and, if the
8employer asserts that the calculation is subject to subsection
9(h) or (i) of this Section, must include an affidavit setting
10forth and attesting to all facts within the employer's
11knowledge that are pertinent to the applicability of subsection
12(h) or (i). Upon receiving a timely application for
13recalculation, the System shall review the application and, if
14appropriate, recalculate the amount due.
15    The employer contributions required under this subsection
16(g) (f) may be paid in the form of a lump sum within 90 days
17after receipt of the bill. If the employer contributions are
18not paid within 90 days after receipt of the bill, then
19interest will be charged at a rate equal to the System's annual
20actuarially assumed rate of return on investment compounded
21annually from the 91st day after receipt of the bill. Payments
22must be concluded within 3 years after the employer's receipt
23of the bill.
24    (h) This subsection (h) applies only to payments made or
25salary increases given on or after June 1, 2005 but before July
261, 2011. The changes made by Public Act 94-1057 shall not

 

 

09800SB2026sam001- 31 -LRB098 06591 EFG 43188 a

1require the System to refund any payments received before July
231, 2006 (the effective date of Public Act 94-1057).
3    When assessing payment for any amount due under subsection
4(g), the System shall exclude earnings increases paid to
5participants under contracts or collective bargaining
6agreements entered into, amended, or renewed before June 1,
72005.
8    When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases paid to a
10participant at a time when the participant is 10 or more years
11from retirement eligibility under Section 15-135.
12    When assessing payment for any amount due under subsection
13(g), the System shall exclude earnings increases resulting from
14overload work, including a contract for summer teaching, or
15overtime when the employer has certified to the System, and the
16System has approved the certification, that: (i) in the case of
17overloads (A) the overload work is for the sole purpose of
18academic instruction in excess of the standard number of
19instruction hours for a full-time employee occurring during the
20academic year that the overload is paid and (B) the earnings
21increases are equal to or less than the rate of pay for
22academic instruction computed using the participant's current
23salary rate and work schedule; and (ii) in the case of
24overtime, the overtime was necessary for the educational
25mission.
26    When assessing payment for any amount due under subsection

 

 

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1(g), the System shall exclude any earnings increase resulting
2from (i) a promotion for which the employee moves from one
3classification to a higher classification under the State
4Universities Civil Service System, (ii) a promotion in academic
5rank for a tenured or tenure-track faculty position, or (iii) a
6promotion that the Illinois Community College Board has
7recommended in accordance with subsection (k) of this Section.
8These earnings increases shall be excluded only if the
9promotion is to a position that has existed and been filled by
10a member for no less than one complete academic year and the
11earnings increase as a result of the promotion is an increase
12that results in an amount no greater than the average salary
13paid for other similar positions.
14    (i) When assessing payment for any amount due under
15subsection (g), the System shall exclude any salary increase
16described in subsection (h) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (g) of this Section.
24    (j) The System shall prepare a report and file copies of
25the report with the Governor and the General Assembly by
26January 1, 2007 that contains all of the following information:

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (k) The Illinois Community College Board shall adopt rules
14for recommending lists of promotional positions submitted to
15the Board by community colleges and for reviewing the
16promotional lists on an annual basis. When recommending
17promotional lists, the Board shall consider the similarity of
18the positions submitted to those positions recognized for State
19universities by the State Universities Civil Service System.
20The Illinois Community College Board shall file a copy of its
21findings with the System. The System shall consider the
22findings of the Illinois Community College Board when making
23determinations under this Section. The System shall not exclude
24any earnings increases resulting from a promotion when the
25promotion was not submitted by a community college. Nothing in
26this subsection (k) shall require any community college to

 

 

09800SB2026sam001- 34 -LRB098 06591 EFG 43188 a

1submit any information to the Community College Board.
2    (l) 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    (m) 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(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1896-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
197-13-12; revised 10-17-12.)
 
20    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
21    Sec. 16-158. Contributions by State and other employing
22units.
23    (a) The State shall make contributions to the System by
24means of appropriations from the Common School Fund and other
25State funds of amounts which, together with other employer

 

 

09800SB2026sam001- 35 -LRB098 06591 EFG 43188 a

1contributions, employee contributions, investment income, and
2other income, will be sufficient to meet the cost of
3maintaining and administering the System on a 90% funded basis
4in accordance with actuarial recommendations.
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(b-3).
10    (a-1) Annually, on or before November 15 until November 15,
112011, the Board shall certify to the Governor the amount of the
12required State contribution for the coming fiscal year. The
13certification under this subsection (a-1) shall include a copy
14of the actuarial recommendations upon which it is based and
15shall specifically identify the System's projected State
16normal cost for that fiscal year.
17    On or before May 1, 2004, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2005, taking
20into account the amounts appropriated to and received by the
21System under subsection (d) of Section 7.2 of the General
22Obligation Bond Act.
23    On or before July 1, 2005, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2006, taking
26into account the changes in required State contributions made

 

 

09800SB2026sam001- 36 -LRB098 06591 EFG 43188 a

1by this amendatory Act of the 94th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2011, applying
5the changes made by Public Act 96-889 to the System's assets
6and liabilities as of June 30, 2009 as though Public Act 96-889
7was approved on that date.
8    (a-5) On or before November 1 of each year, beginning
9November 1, 2012, the Board shall submit to the State Actuary,
10the Governor, and the General Assembly a proposed certification
11of the amount of the required State contribution to the System
12for the next fiscal year, along with all of the actuarial
13assumptions, calculations, and data upon which that proposed
14certification is based. On or before January 1 of each year,
15beginning January 1, 2013, the State Actuary shall issue a
16preliminary report concerning the proposed certification and
17identifying, if necessary, recommended changes in actuarial
18assumptions that the Board must consider before finalizing its
19certification of the required State contributions. On or before
20January 15, 2013 and each January 15 thereafter, the Board
21shall certify to the Governor and the General Assembly the
22amount of the required State contribution for the next fiscal
23year. The Board's certification must note any deviations from
24the State Actuary's recommended changes, the reason or reasons
25for not following the State Actuary's recommended changes, and
26the fiscal impact of not following the State Actuary's

 

 

09800SB2026sam001- 37 -LRB098 06591 EFG 43188 a

1recommended changes on the required State contribution.
2    (b) Through State fiscal year 1995, the State contributions
3shall be paid to the System in accordance with Section 18-7 of
4the School Code.
5    (b-1) Beginning in State fiscal year 1996, on the 15th day
6of each month, or as soon thereafter as may be practicable, the
7Board shall submit vouchers for payment of State contributions
8to the System, in a total monthly amount of one-twelfth of the
9required annual State contribution certified under subsection
10(a-1). From the effective date of this amendatory Act of the
1193rd General Assembly through June 30, 2004, the Board shall
12not submit vouchers for the remainder of fiscal year 2004 in
13excess of the fiscal year 2004 certified contribution amount
14determined under this Section after taking into consideration
15the transfer to the System under subsection (a) of Section
166z-61 of the State Finance Act. These vouchers shall be paid by
17the State Comptroller and Treasurer by warrants drawn on the
18funds appropriated to the System for that fiscal year.
19    If in any month the amount remaining unexpended from all
20other appropriations to the System for the applicable fiscal
21year (including the appropriations to the System under Section
228.12 of the State Finance Act and Section 1 of the State
23Pension Funds Continuing Appropriation Act) is less than the
24amount lawfully vouchered under this subsection, the
25difference shall be paid from the Common School Fund under the
26continuing appropriation authority provided in Section 1.1 of

 

 

09800SB2026sam001- 38 -LRB098 06591 EFG 43188 a

1the State Pension Funds Continuing Appropriation Act.
2    (b-2) Allocations from the Common School Fund apportioned
3to school districts not coming under this System shall not be
4diminished or affected by the provisions of this Article.
5    (b-3) For State fiscal years 2012 2013 through 2045, the
6minimum contribution to the System to be made by the State for
7each fiscal year shall be an amount determined by the System to
8be sufficient to bring the total assets of the System up to 90%
9of the 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 2014 through 2045, the minimum
16contribution to the System to be made by the State for each
17fiscal year shall be an amount determined by the System to be
18sufficient to bring the total assets of the System up to 100%
19of the total actuarial liabilities of the System by the end of
20State fiscal year 2045. In making these determinations, the
21required State contribution shall be calculated each year as a
22level dollar amount over the years remaining to and including
23fiscal year 2045 and shall be determined under the projected
24unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

09800SB2026sam001- 39 -LRB098 06591 EFG 43188 a

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; except that in the
4following specified State fiscal years, the State contribution
5to the System shall not be less than the following indicated
6percentages of the applicable employee payroll, even if the
7indicated percentage will produce a State contribution in
8excess of the amount otherwise required under this subsection
9and subsection (a), and notwithstanding any contrary
10certification made under subsection (a-1) before the effective
11date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
12in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
132003; and 13.56% in FY 2004.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$534,627,700.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$738,014,500.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09800SB2026sam001- 40 -LRB098 06591 EFG 43188 a

1total required State contribution for State fiscal year 2010 is
2$2,089,268,000 and shall be made from the proceeds of bonds
3sold in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the Common School Fund
7in fiscal year 2010, and (iii) any reduction in bond proceeds
8due to the issuance of discounted bonds, if applicable.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to subsection (a-1) of this Section and shall be made
13from the proceeds of bonds sold in fiscal year 2011 pursuant to
14Section 7.2 of the General Obligation Bond Act, less (i) the
15pro rata share of bond sale expenses determined by the System's
16share of total bond proceeds, (ii) any amounts received from
17the Common School Fund in fiscal year 2011, and (iii) any
18reduction in bond proceeds due to the issuance of discounted
19bonds, if applicable. This amount shall include, in addition to
20the amount certified by the System, an amount necessary to meet
21employer contributions required by the State as an employer
22under paragraph (e) of this Section, which may also be used by
23the System for contributions required by paragraph (a) of
24Section 16-127.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

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

 

 

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1the same as the System's portion of the total moneys
2distributed under subsection (d) of Section 7.2 of the General
3Obligation Bond Act. In determining this maximum for State
4fiscal years 2008 through 2010, however, the amount referred to
5in item (i) shall be increased, as a percentage of the
6applicable employee payroll, in equal increments calculated
7from the sum of the required State contribution for State
8fiscal year 2007 plus the applicable portion of the State's
9total debt service payments for fiscal year 2007 on the bonds
10issued in fiscal year 2003 for the purposes of Section 7.2 of
11the General Obligation Bond Act, so that, by State fiscal year
122011, the State is contributing at the rate otherwise required
13under this Section.
14    (c) Payment of the required State contributions and of all
15pensions, retirement annuities, death benefits, refunds, and
16other benefits granted under or assumed by this System, and all
17expenses in connection with the administration and operation
18thereof, are obligations of the State.
19    If members are paid from special trust or federal funds
20which are administered by the employing unit, whether school
21district or other unit, the employing unit shall pay to the
22System from such funds the full accruing retirement costs based
23upon that service, as determined by the System. Employer
24contributions, based on salary paid to members from federal
25funds, may be forwarded by the distributing agency of the State
26of Illinois to the System prior to allocation, in an amount

 

 

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1determined in accordance with guidelines established by such
2agency and the System.
3    (d) Effective July 1, 1986, any employer of a teacher as
4defined in paragraph (8) of Section 16-106 shall pay the
5employer's normal cost of benefits based upon the teacher's
6service, in addition to employee contributions, as determined
7by the System. Such employer contributions shall be forwarded
8monthly in accordance with guidelines established by the
9System.
10    However, with respect to benefits granted under Section
1116-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
12of Section 16-106, the employer's contribution shall be 12%
13(rather than 20%) of the member's highest annual salary rate
14for each year of creditable service granted, and the employer
15shall also pay the required employee contribution on behalf of
16the teacher. For the purposes of Sections 16-133.4 and
1716-133.5, a teacher as defined in paragraph (8) of Section
1816-106 who is serving in that capacity while on leave of
19absence from another employer under this Article shall not be
20considered an employee of the employer from which the teacher
21is on leave.
22    (e) Beginning July 1, 1998, every employer of a teacher
23shall pay to the System an employer contribution computed as
24follows:
25        (1) Beginning July 1, 1998 through June 30, 1999, the
26    employer contribution shall be equal to 0.3% of each

 

 

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1    teacher's salary.
2        (2) Beginning July 1, 1999 and thereafter, the employer
3    contribution shall be equal to 0.58% of each teacher's
4    salary.
5The school district or other employing unit may pay these
6employer contributions out of any source of funding available
7for that purpose and shall forward the contributions to the
8System on the schedule established for the payment of member
9contributions.
10    These employer contributions are intended to offset a
11portion of the cost to the System of the increases in
12retirement benefits resulting from this amendatory Act of 1998.
13    Each employer of teachers is entitled to a credit against
14the contributions required under this subsection (e) with
15respect to salaries paid to teachers for the period January 1,
162002 through June 30, 2003, equal to the amount paid by that
17employer under subsection (a-5) of Section 6.6 of the State
18Employees Group Insurance Act of 1971 with respect to salaries
19paid to teachers for that period.
20    The additional 1% employee contribution required under
21Section 16-152 by this amendatory Act of 1998 is the
22responsibility of the teacher and not the teacher's employer,
23unless the employer agrees, through collective bargaining or
24otherwise, to make the contribution on behalf of the teacher.
25    If an employer is required by a contract in effect on May
261, 1998 between the employer and an employee organization to

 

 

09800SB2026sam001- 45 -LRB098 06591 EFG 43188 a

1pay, on behalf of all its full-time employees covered by this
2Article, all mandatory employee contributions required under
3this Article, then the employer shall be excused from paying
4the employer contribution required under this subsection (e)
5for the balance of the term of that contract. The employer and
6the employee organization shall jointly certify to the System
7the existence of the contractual requirement, in such form as
8the System may prescribe. This exclusion shall cease upon the
9termination, extension, or renewal of the contract at any time
10after May 1, 1998.
11    (f) If the amount of a teacher's salary for any school year
12used to determine final average salary exceeds the member's
13annual full-time salary rate with the same employer for the
14previous school year by more than 6%, the teacher's employer
15shall pay to the System, in addition to all other payments
16required under this Section and in accordance with guidelines
17established by the System, the present value of the increase in
18benefits resulting from the portion of the increase in salary
19that is in excess of 6%. This present value shall be computed
20by the System on the basis of the actuarial assumptions and
21tables used in the most recent actuarial valuation of the
22System that is available at the time of the computation. If a
23teacher's salary for the 2005-2006 school year is used to
24determine final average salary under this subsection (f), then
25the changes made to this subsection (f) by Public Act 94-1057
26shall apply in calculating whether the increase in his or her

 

 

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1salary is in excess of 6%. For the purposes of this Section,
2change in employment under Section 10-21.12 of the School Code
3on or after June 1, 2005 shall constitute a change in employer.
4The System may require the employer to provide any pertinent
5information or documentation. The changes made to this
6subsection (f) by this amendatory Act of the 94th General
7Assembly apply without regard to whether the teacher was in
8service on or after its effective date.
9    Whenever it determines that a payment is or may be required
10under this subsection, the System shall calculate the amount of
11the payment and bill the employer for that amount. The bill
12shall specify the calculations used to determine the amount
13due. If the employer disputes the amount of the bill, it may,
14within 30 days after receipt of the bill, apply to the System
15in writing for a recalculation. The application must specify in
16detail the grounds of the dispute and, if the employer asserts
17that the calculation is subject to subsection (g) or (h) of
18this Section, must include an affidavit setting forth and
19attesting to all facts within the employer's knowledge that are
20pertinent to the applicability of that subsection. Upon
21receiving a timely application for recalculation, the System
22shall review the application and, if appropriate, recalculate
23the amount due.
24    The employer contributions required under this subsection
25(f) may be paid in the form of a lump sum within 90 days after
26receipt of the bill. If the employer contributions are not paid

 

 

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1within 90 days after receipt of the bill, then interest will be
2charged at a rate equal to the System's annual actuarially
3assumed rate of return on investment compounded annually from
4the 91st day after receipt of the bill. Payments must be
5concluded within 3 years after the employer's receipt of the
6bill.
7    (g) This subsection (g) applies only to payments made or
8salary increases given on or after June 1, 2005 but before July
91, 2011. The changes made by Public Act 94-1057 shall not
10require the System to refund any payments received before July
1131, 2006 (the effective date of Public Act 94-1057).
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude salary increases paid to teachers
14under contracts or collective bargaining agreements entered
15into, amended, or renewed before June 1, 2005.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases paid to a
18teacher at a time when the teacher is 10 or more years from
19retirement eligibility under Section 16-132 or 16-133.2.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases resulting from
22overload work, including summer school, when the school
23district has certified to the System, and the System has
24approved the certification, that (i) the overload work is for
25the sole purpose of classroom instruction in excess of the
26standard number of classes for a full-time teacher in a school

 

 

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1district during a school year and (ii) the salary increases are
2equal to or less than the rate of pay for classroom instruction
3computed on the teacher's current salary and work schedule.
4    When assessing payment for any amount due under subsection
5(f), the System shall exclude a salary increase resulting from
6a promotion (i) for which the employee is required to hold a
7certificate or supervisory endorsement issued by the State
8Teacher Certification Board that is a different certification
9or supervisory endorsement than is required for the teacher's
10previous position and (ii) to a position that has existed and
11been filled by a member for no less than one complete academic
12year and the salary increase from the promotion is an increase
13that results in an amount no greater than the lesser of the
14average salary paid for other similar positions in the district
15requiring the same certification or the amount stipulated in
16the collective bargaining agreement for a similar position
17requiring the same certification.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude any payment to the teacher from
20the State of Illinois or the State Board of Education over
21which the employer does not have discretion, notwithstanding
22that the payment is included in the computation of final
23average salary.
24    (h) When assessing payment for any amount due under
25subsection (f), the System shall exclude any salary increase
26described in subsection (g) of this Section given on or after

 

 

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1July 1, 2011 but before July 1, 2014 under a contract or
2collective bargaining agreement entered into, amended, or
3renewed on or after June 1, 2005 but before July 1, 2011.
4Notwithstanding any other provision of this Section, any
5payments made or salary increases given after June 30, 2014
6shall be used in assessing payment for any amount due under
7subsection (f) of this Section.
8    (i) The System shall prepare a report and file copies of
9the report with the Governor and the General Assembly by
10January 1, 2007 that contains all of the following information:
11        (1) The number of recalculations required by the
12    changes made to this Section by Public Act 94-1057 for each
13    employer.
14        (2) The dollar amount by which each employer's
15    contribution to the System was changed due to
16    recalculations required by Public Act 94-1057.
17        (3) The total amount the System received from each
18    employer as a result of the changes made to this Section by
19    Public Act 94-4.
20        (4) The increase in the required State contribution
21    resulting from the changes made to this Section by Public
22    Act 94-1057.
23    (j) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

 

 

09800SB2026sam001- 50 -LRB098 06591 EFG 43188 a

1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (k) For purposes of determining the required State
9contribution to the system for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the system's actuarially assumed rate of return.
12(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
146-18-12; 97-813, eff. 7-13-12.)
 
15    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
16    Sec. 18-131. Financing; employer contributions.
17    (a) The State of Illinois shall make contributions to this
18System by appropriations of the amounts which, together with
19the contributions of participants, net earnings on
20investments, and other income, will meet the costs of
21maintaining and administering this System on a 90% funded basis
22in accordance with actuarial recommendations.
23    (b) The Board shall determine the amount of State
24contributions required for each fiscal year on the basis of the
25actuarial tables and other assumptions adopted by the Board and

 

 

09800SB2026sam001- 51 -LRB098 06591 EFG 43188 a

1the prescribed rate of interest, using the formula in
2subsection (c).
3    (c) For State fiscal years 2012 and 2013 through 2045, the
4minimum contribution to the System to be made by the State for
5each fiscal year shall be an amount determined by the System to
6be sufficient to bring the total assets of the System up to 90%
7of the total actuarial liabilities of the System by the end of
8State fiscal year 2045. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13    For State fiscal years 2014 through 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 100%
17of the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level dollar amount over the years remaining to and including
21fiscal year 2045 and shall be determined under the projected
22unit credit actuarial cost method.
23    For State fiscal years 1996 through 2005, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26so that by State fiscal year 2011, the State is contributing at

 

 

09800SB2026sam001- 52 -LRB098 06591 EFG 43188 a

1the rate required under this Section.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2006 is
4$29,189,400.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2007 is
7$35,236,800.
8    For each of State fiscal years 2008 through 2009, the State
9contribution to the System, as a percentage of the applicable
10employee payroll, shall be increased in equal annual increments
11from the required State contribution for State fiscal year
122007, so that by State fiscal year 2011, the State is
13contributing at the rate otherwise required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2010 is
16$78,832,000 and shall be made from the proceeds of bonds sold
17in fiscal year 2010 pursuant to Section 7.2 of the General
18Obligation Bond Act, less (i) the pro rata share of bond sale
19expenses determined by the System's share of total bond
20proceeds, (ii) any amounts received from the General Revenue
21Fund in fiscal year 2010, and (iii) any reduction in bond
22proceeds due to the issuance of discounted bonds, if
23applicable.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2011 is
26the amount recertified by the System on or before April 1, 2011

 

 

09800SB2026sam001- 53 -LRB098 06591 EFG 43188 a

1pursuant to Section 18-140 and shall be made from the proceeds
2of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
3the General Obligation Bond Act, less (i) the pro rata share of
4bond sale expenses determined by the System's share of total
5bond proceeds, (ii) any amounts received from the General
6Revenue Fund in fiscal year 2011, and (iii) any reduction in
7bond proceeds due to the issuance of discounted bonds, if
8applicable.
9    Beginning in State fiscal year 2046, the minimum State
10contribution for each fiscal year shall be the amount needed to
11maintain the total assets of the System at 90% of the total
12actuarial liabilities of the System.
13    Amounts received by the System pursuant to Section 25 of
14the Budget Stabilization Act or Section 8.12 of the State
15Finance Act in any fiscal year do not reduce and do not
16constitute payment of any portion of the minimum State
17contribution required under this Article in that fiscal year.
18Such amounts shall not reduce, and shall not be included in the
19calculation of, the required State contributions under this
20Article in any future year until the System has reached a
21funding ratio of at least 90%. A reference in this Article to
22the "required State contribution" or any substantially similar
23term does not include or apply to any amounts payable to the
24System under Section 25 of the Budget Stabilization Act.
25    Notwithstanding any other provision of this Section, the
26required State contribution for State fiscal year 2005 and for

 

 

09800SB2026sam001- 54 -LRB098 06591 EFG 43188 a

1fiscal year 2008 and each fiscal year thereafter, as calculated
2under this Section and certified under Section 18-140, shall
3not exceed an amount equal to (i) the amount of the required
4State contribution that would have been calculated under this
5Section for that fiscal year if the System had not received any
6payments under subsection (d) of Section 7.2 of the General
7Obligation Bond Act, minus (ii) the portion of the State's
8total debt service payments for that fiscal year on the bonds
9issued in fiscal year 2003 for the purposes of that Section
107.2, as determined and certified by the Comptroller, that is
11the same as the System's portion of the total moneys
12distributed under subsection (d) of Section 7.2 of the General
13Obligation Bond Act. In determining this maximum for State
14fiscal years 2008 through 2010, however, the amount referred to
15in item (i) shall be increased, as a percentage of the
16applicable employee payroll, in equal increments calculated
17from the sum of the required State contribution for State
18fiscal year 2007 plus the applicable portion of the State's
19total debt service payments for fiscal year 2007 on the bonds
20issued in fiscal year 2003 for the purposes of Section 7.2 of
21the General Obligation Bond Act, so that, by State fiscal year
222011, the State is contributing at the rate otherwise required
23under this Section.
24    (d) For purposes of determining the required State
25contribution to the System, the value of the System's assets
26shall be equal to the actuarial value of the System's assets,

 

 

09800SB2026sam001- 55 -LRB098 06591 EFG 43188 a

1which shall be calculated as follows:
2    As of June 30, 2008, the actuarial value of the System's
3assets shall be equal to the market value of the assets as of
4that date. In determining the actuarial value of the System's
5assets for fiscal years after June 30, 2008, any actuarial
6gains or losses from investment return incurred in a fiscal
7year shall be recognized in equal annual amounts over the
85-year period following that fiscal year.
9    (e) For purposes of determining the required State
10contribution to the system for a particular year, the actuarial
11value of assets shall be assumed to earn a rate of return equal
12to the system's actuarially assumed rate of return.
13(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
157-13-12.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.".