SB2404 EngrossedLRB098 09018 EFG 39154 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 Public Labor Relations Act is
5amended by changing Section 4 as follows:
 
6    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
7    Sec. 4. Management Rights. Employers shall not be required
8to bargain over matters of inherent managerial policy, which
9shall include such areas of discretion or policy as the
10functions of the employer, standards of services, its overall
11budget, the organizational structure and selection of new
12employees, examination techniques and direction of employees.
13Employers, however, shall be required to bargain collectively
14with regard to policy matters directly affecting wages, hours
15and terms and conditions of employment as well as the impact
16thereon upon request by employee representatives, but
17excluding (i) the payment of the additional member
18contributions set forth in subsections (a-1) and (a-5) of
19Sections 14-133, 15-157, and 16-152 of the Illinois Pension
20Code and (ii) the provision of compensation or benefits to
21employees who make the election under Section 14-106.5,
2215-132.9, or 16-122.9 of the Illinois Pension Code in order to
23offset all or part of any compensation or benefit limitations

 

 

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1included as part of the elections under those Sections.
2    To preserve the rights of employers and exclusive
3representatives which have established collective bargaining
4relationships or negotiated collective bargaining agreements
5prior to the effective date of this Act, employers shall be
6required to bargain collectively with regard to any matter
7concerning wages, hours or conditions of employment about which
8they have bargained for and agreed to in a collective
9bargaining agreement prior to the effective date of this Act,
10but excluding (i) the payment of the additional member
11contributions set forth in subsections (a-1) and (a-5) of
12Sections 14-133, 15-157, and 16-152 of the Illinois Pension
13Code and (ii) the provision of compensation or benefits to
14employees who make the election under Section 14-106.5,
1515-132.9, or 16-122.9 of the Illinois Pension Code in order to
16offset all or part of any compensation or benefit limitations
17included as part of the elections under those Sections.
18    The chief judge of the judicial circuit that employs a
19public employee who is a court reporter, as defined in the
20Court Reporters Act, has the authority to hire, appoint,
21promote, evaluate, discipline, and discharge court reporters
22within that judicial circuit.
23    Nothing in this amendatory Act of the 94th General Assembly
24shall be construed to intrude upon the judicial functions of
25any court. This amendatory Act of the 94th General Assembly
26applies only to nonjudicial administrative matters relating to

 

 

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1the collective bargaining rights of court reporters.
2(Source: P.A. 94-98, eff. 7-1-05.)
 
3    Section 10. The State Employees Group Insurance Act of 1971
4is amended by changing Sections 6.9 and 6.10 and by adding
5Sections 6.10A and 6.16 as follows:
 
6    (5 ILCS 375/6.9)
7    Sec. 6.9. Health benefits for community college benefit
8recipients and community college dependent beneficiaries.
9    (a) Purpose. It is the purpose of this amendatory Act of
101997 to establish a uniform program of health benefits for
11community college benefit recipients and their dependent
12beneficiaries under the administration of the Department of
13Central Management Services.
14    (b) Creation of program. Beginning July 1, 1999, the
15Department of Central Management Services shall be responsible
16for administering a program of health benefits for community
17college benefit recipients and community college dependent
18beneficiaries under this Section. The State Universities
19Retirement System and the boards of trustees of the various
20community college districts shall cooperate with the
21Department in this endeavor.
22    (c) Eligibility. All community college benefit recipients
23and community college dependent beneficiaries shall be
24eligible to participate in the program established under this

 

 

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1Section, without any interruption or delay in coverage or
2limitation as to pre-existing medical conditions. Eligibility
3to participate shall be determined by the State Universities
4Retirement System. Eligibility information shall be
5communicated to the Department of Central Management Services
6in a format acceptable to the Department.
7    (d) Coverage. The health benefit coverage provided under
8this Section shall be a program of health, dental, and vision
9benefits.
10    The program of health benefits under this Section may
11include any or all of the benefit limitations, including but
12not limited to a reduction in benefits based on eligibility for
13federal medicare benefits, that are provided under subsection
14(a) of Section 6 of this Act for other health benefit programs
15under this Act.
16    (e) Insurance rates and premiums. The Director shall
17determine the insurance rates and premiums for community
18college benefit recipients and community college dependent
19beneficiaries. Rates and premiums may be based in part on age
20and eligibility for federal Medicare coverage. The Director
21shall also determine premiums that will allow for the
22establishment of an actuarially sound reserve for this program.
23    The cost of health benefits under the program shall be paid
24as follows:
25        (1) For a community college benefit recipient, costs
26    shall be an amount equal to the difference between the

 

 

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1    projected costs of health benefits under the program and
2    projected contributions from community college districts,
3    active contributors, and other income of the program. Other
4    income of the program shall exclude contributions made by
5    the State to retire unpaid claims of the program up to 75%
6    of the total insurance rate shall be paid from the
7    Community College Health Insurance Security Fund.
8        (2) The balance of the rate of insurance, including the
9    entire premium for any coverage for community college
10    dependent beneficiaries that has been elected, shall be
11    paid by deductions authorized by the community college
12    benefit recipient to be withheld from his or her monthly
13    annuity or benefit payment from the State Universities
14    Retirement System; except that (i) if the balance of the
15    cost of coverage exceeds the amount of the monthly annuity
16    or benefit payment, the difference shall be paid directly
17    to the State Universities Retirement System by the
18    community college benefit recipient, and (ii) all or part
19    of the balance of the cost of coverage may, at the option
20    of the board of trustees of the community college district,
21    be paid to the State Universities Retirement System by the
22    board of the community college district from which the
23    community college benefit recipient retired. The State
24    Universities Retirement System shall promptly deposit all
25    moneys withheld by or paid to it under this subdivision
26    (e)(2) into the Community College Health Insurance

 

 

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1    Security Fund. These moneys shall not be considered assets
2    of the State Universities Retirement System.
3    (f) Financing. All revenues arising from the
4administration of the health benefit program established under
5this Section shall be deposited into the Community College
6Health Insurance Security Fund, which is hereby created as a
7nonappropriated trust fund to be held outside the State
8Treasury, with the State Treasurer as custodian. Any interest
9earned on moneys in the Community College Health Insurance
10Security Fund shall be deposited into the Fund.
11    Moneys in the Community College Health Insurance Security
12Fund shall be used only to pay the costs of the health benefit
13program established under this Section, including associated
14administrative costs and the establishment of a program
15reserve. Beginning January 1, 1999, the Department of Central
16Management Services may make expenditures from the Community
17College Health Insurance Security Fund for those costs.
18    (g) Contract for benefits. The Director shall by contract,
19self-insurance, or otherwise make available the program of
20health benefits for community college benefit recipients and
21their community college dependent beneficiaries that is
22provided for in this Section. The contract or other arrangement
23for the provision of these health benefits shall be on terms
24deemed by the Director to be in the best interest of the State
25of Illinois and the community college benefit recipients based
26on, but not limited to, such criteria as administrative cost,

 

 

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1service capabilities of the carrier or other contractor, and
2the costs of the benefits.
3    (h) Continuation of program. It is the intention of the
4General Assembly that the program of health benefits provided
5under this Section be maintained on an ongoing, affordable
6basis. The program of health benefits provided under this
7Section may be amended by the State and is not intended to be a
8pension or retirement benefit subject to protection under
9Article XIII, Section 5 of the Illinois Constitution.
10    (i) Other health benefit plans. A health benefit plan
11provided by a community college district (other than a
12community college district subject to Article VII of the Public
13Community College Act) under the terms of a collective
14bargaining agreement in effect on or prior to the effective
15date of this amendatory Act of 1997 shall continue in force
16according to the terms of that agreement, unless otherwise
17mutually agreed by the parties to that agreement and the
18affected retiree. A community college benefit recipient or
19community college dependent beneficiary whose coverage under
20such a plan expires shall be eligible to begin participating in
21the program established under this Section without any
22interruption or delay in coverage or limitation as to
23pre-existing medical conditions.
24    This Act does not prohibit any community college district
25from offering additional health benefits for its retirees or
26their dependents or survivors.

 

 

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1(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 
2    (5 ILCS 375/6.10)
3    Sec. 6.10. Contributions to the Community College Health
4Insurance Security Fund.
5    (a) Beginning January 1, 1999, every active contributor of
6the State Universities Retirement System (established under
7Article 15 of the Illinois Pension Code) who (1) is a full-time
8employee of a community college district (other than a
9community college district subject to Article VII of the Public
10Community College Act) or an association of community college
11boards and (2) is not an employee as defined in Section 3 of
12this Act shall make contributions toward the cost of community
13college annuitant and survivor health benefits at the rate of
140.50% of salary. Beginning July 1, 2014, the contribution rate
15under this subsection (a) shall be 0.93% of salary.
16    These contributions shall be deducted by the employer and
17paid to the State Universities Retirement System as service
18agent for the Department of Central Management Services. The
19System may use the same processes for collecting the
20contributions required by this subsection that it uses to
21collect the contributions received from those employees under
22Section 15-157 of the Illinois Pension Code. An employer may
23agree to pick up or pay the contributions required under this
24subsection on behalf of the employee; such contributions shall
25be deemed to have been paid by the employee.

 

 

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1    The State Universities Retirement System shall promptly
2deposit all moneys collected under this subsection (a) into the
3Community College Health Insurance Security Fund created in
4Section 6.9 of this Act. The moneys collected under this
5Section shall be used only for the purposes authorized in
6Section 6.9 of this Act and shall not be considered to be
7assets of the State Universities Retirement System.
8Contributions made under this Section are not transferable to
9other pension funds or retirement systems and are not
10refundable upon termination of service.
11    (b) Beginning January 1, 1999, every community college
12district (other than a community college district subject to
13Article VII of the Public Community College Act) or association
14of community college boards that is an employer under the State
15Universities Retirement System shall contribute toward the
16cost of the community college health benefits provided under
17Section 6.9 of this Act an amount equal to 0.50% of the salary
18paid to its full-time employees who participate in the State
19Universities Retirement System and are not members as defined
20in Section 3 of this Act. Beginning July 1, 2014, the
21contribution rate under this subsection (b) shall be 0.93% of
22salary.
23    These contributions shall be paid by the employer to the
24State Universities Retirement System as service agent for the
25Department of Central Management Services. The System may use
26the same processes for collecting the contributions required by

 

 

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1this subsection that it uses to collect the contributions
2received from those employers under Section 15-155 of the
3Illinois Pension Code.
4    The State Universities Retirement System shall promptly
5deposit all moneys collected under this subsection (b) into the
6Community College Health Insurance Security Fund created in
7Section 6.9 of this Act. The moneys collected under this
8Section shall be used only for the purposes authorized in
9Section 6.9 of this Act and shall not be considered to be
10assets of the State Universities Retirement System.
11Contributions made under this Section are not transferable to
12other pension funds or retirement systems and are not
13refundable upon termination of service.
14    The Department of Healthcare and Family Services, or any
15successor agency designated to procure healthcare contracts
16pursuant to this Act, is authorized to establish funds,
17separate accounts provided by any bank or banks as defined by
18the Illinois Banking Act, or separate accounts provided by any
19savings and loan association or associations as defined by the
20Illinois Savings and Loan Act of 1985 to be held by the
21Director, outside the State treasury, for the purpose of
22receiving the transfer of moneys from the Community College
23Health Insurance Security Fund. The Department may promulgate
24rules further defining the methodology for the transfers. Any
25interest earned by moneys in the funds or accounts shall inure
26to the Community College Health Insurance Security Fund. The

 

 

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1transferred moneys, and interest accrued thereon, shall be used
2exclusively for transfers to administrative service
3organizations or their financial institutions for payments of
4claims to claimants and providers under the self-insurance
5health plan. The transferred moneys, and interest accrued
6thereon, shall not be used for any other purpose including, but
7not limited to, reimbursement of administration fees due the
8administrative service organization pursuant to its contract
9or contracts with the Department.
10    (c) On or before November 15 of each year, the Board of
11Trustees of the State Universities Retirement System shall
12certify to the Governor, the Director of Central Management
13Services, and the State Comptroller its estimate of the total
14amount of contributions to be paid under subsection (a) of this
15Section for the next fiscal year. Beginning in fiscal year
162008, the amount certified shall be decreased or increased each
17year by the amount that the actual active employee
18contributions either fell short of or exceeded the estimate
19used by the Board in making the certification for the previous
20fiscal year. The State Universities Retirement System shall
21calculate the amount of actual active employee contributions in
22fiscal years 1999 through 2005. Based upon this calculation,
23the fiscal year 2008 certification shall include an amount
24equal to the cumulative amount that the actual active employee
25contributions either fell short of or exceeded the estimate
26used by the Board in making the certification for those fiscal

 

 

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1years. The certification shall include a detailed explanation
2of the methods and information that the Board relied upon in
3preparing its estimate. As soon as possible after the effective
4date of this Section, the Board shall submit its estimate for
5fiscal year 1999.
6    (d) Beginning in fiscal year 1999, on the first day of each
7month, or as soon thereafter as may be practical, the State
8Treasurer and the State Comptroller shall transfer from the
9General Revenue Fund to the Community College Health Insurance
10Security Fund 1/12 of the annual amount appropriated for that
11fiscal year to the State Comptroller for deposit into the
12Community College Health Insurance Security Fund under Section
131.4 of the State Pension Funds Continuing Appropriation Act.
14    (e) Except where otherwise specified in this Section, the
15definitions that apply to Article 15 of the Illinois Pension
16Code apply to this Section.
17(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
18    (5 ILCS 375/6.10A new)
19    Sec. 6.10A. City colleges; optional participation in
20program of health benefits. Notwithstanding any other
21provision of this Act, the Department of Central Management
22Services shall adopt rules authorizing optional participation
23in the program of health benefits for community college benefit
24recipients and community college dependent beneficiaries by
25any person who is otherwise ineligible to participate in that

 

 

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1program solely as a result of that or another person's
2employment with a community college district subject to Article
3VII of the Public Community College Act.
 
4    (5 ILCS 375/6.16 new)
5    Sec. 6.16. Health benefit election for Tier I employees and
6Tier I retirees.
7    (a) For purposes of this Section:
8    "Eligible Tier I employee" means, except as provided in
9subsection (g) of this Section, an individual who makes or is
10deemed to have made an election under paragraph (1) of
11subsection (a) of Section 2-110.3, 14-106.5, 15-132.9, or
1216-122.9 of the Illinois Pension Code.
13    "Eligible Tier I retiree" means, except as provided in
14subsection (g) of this Section, an individual who makes or is
15deemed to have made an election under paragraph (1) of
16subsection (a-5) of Section 2-110.3, 14-106.5, 15-132.9, or
1716-122.9 of the Illinois Pension Code.
18    "Program of health benefits" means (i) a health plan, as
19defined in subsection (o) of Section 3 of this Act, that is
20designed and contracted for by the Director under this Act or
21any successor Act or (ii) if administration of that health plan
22is transferred to a trust established by the State or an
23independent Board in order to provide health benefits to a
24class of a persons that includes eligible Tier I retirees, then
25the plan of health benefits provided through that trust.

 

 

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1    (b) As adequate and legal consideration for making an
2election under paragraph (1) of subsection (a) or (a-5) of
3Section 2-110.3, 14-106.5, 15-132.9, or 16-122.9 of the
4Illinois Pension Code, as the case may be, each eligible Tier I
5employee and each eligible Tier I retiree shall receive a
6vested and enforceable contractual right to participate in a
7program of health benefits while he or she qualifies as an
8annuitant or retired employee. That right also extends to such
9a person's dependents and survivors who are eligible under the
10applicable program of health benefits.
11    (c) Notwithstanding subsection (b), eligible Tier I
12employees and eligible Tier I retirees may be required to make
13contributions toward the cost of coverage under a program of
14health benefits.
15    (d) The vested and enforceable contractual right to a
16program of health benefits is not offered as, and shall not be
17considered, a pension or retirement benefit under Article XIII,
18Section 5 of the Illinois Constitution, the Illinois Pension
19Code, or any subsequent or successor enactment providing
20pension benefits.
21    (e) Notwithstanding any other provision of law, except
22subsection (g) of this Section, a Tier I employee or Tier I
23retiree who has made an election under paragraph (2) of
24subsection (a) or (a-5) of Section 2-110.3, 14-106.5, 15-132.9,
25or 16-122.9 of the Illinois Pension Code, as the case may be,
26shall not be entitled to participate in any program of health

 

 

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1benefits under this Act as an annuitant or retired employee
2receiving a retirement annuity, regardless of any contrary
3election pursuant to any of those Sections under any other
4retirement system.
5    Notwithstanding any other provision of law, except
6subsection (g) of this Section, a Tier I employee who is not
7entitled to participate in the program of health benefits as an
8annuitant or retired employee receiving a retirement annuity,
9due to an election under paragraph (2) of subsection (a) or
10(a-5) of Section 2-110.3, 14-106.5, 15-132.9, or 16-122.9 of
11the Illinois Pension Code, as the case may be, shall not be
12required to make contributions toward the program of health
13benefits while he or she is an employee or active contributor.
14However, an active employee may be required to make
15contributions toward health benefits he or she receives during
16active service.
17    (f) The Department shall coordinate with each retirement
18system administering an election in accordance with this
19amendatory Act of the 98th General Assembly to provide
20information concerning the impact of the election of health
21benefits. Each System shall include information prepared by the
22Department in the required election packet. The Department
23shall make information available to Tier I employees and Tier I
24retirees through video materials, group presentations,
25consultation by telephone or other electronic means, or any
26combination of these methods. The information in the election

 

 

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1packet shall include a notice that states: "YOU ARE HEREBY
2ADVISED THAT THE PROGRAM OF HEALTH BENEFITS OFFERED IS FOR
3ACCESS TO A GROUP HEALTHCARE PLAN ADMINISTERED BY THE
4DEPARTMENT, AND YOU MAY BE REQUIRED TO PAY FOR THE FULL COST OF
5COVERAGE PROVIDED BY THE PLAN, INCLUDING ALL PREMIUM,
6DEDUCTIBLE, AND COPAY AMOUNTS."
7    (g) Nothing in this Section shall be construed as applying
8to a person who is eligible to make or who made the election
9under Section 15-135.1 of the Illinois Pension Code.
 
10    Section 15. The Governor's Office of Management and Budget
11Act is amended by changing Sections 7 and 8 as follows:
 
12    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
13    Sec. 7. All statements and estimates of expenditures
14submitted to the Office in connection with the preparation of a
15State budget, and any other estimates of expenditures,
16supporting requests for appropriations, shall be formulated
17according to the various functions and activities for which the
18respective department, office or institution of the State
19government (including the elective officers in the executive
20department and including the University of Illinois and the
21judicial department) is responsible. All such statements and
22estimates of expenditures relating to a particular function or
23activity shall be further formulated or subject to analysis in
24accordance with the following classification of objects:

 

 

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1    (1) Personal services
2    (2) State contribution for employee group insurance
3    (3) Contractual services
4    (4) Travel
5    (5) Commodities
6    (6) Equipment
7    (7) Permanent improvements
8    (8) Land
9    (9) Electronic Data Processing
10    (10) Telecommunication services
11    (11) Operation of Automotive Equipment
12    (12) Contingencies
13    (13) Reserve
14    (14) Interest
15    (15) Awards and Grants
16    (16) Debt Retirement
17    (17) Non-cost Charges.
18    (18) State retirement contribution for annual normal cost
19    (19) State retirement contribution for unfunded accrued
20liability.
21(Source: P.A. 93-25, eff. 6-20-03.)
 
22    (20 ILCS 3005/8)  (from Ch. 127, par. 418)
23    Sec. 8. When used in connection with a State budget or
24expenditure or estimate, items (1) through (16) in the
25classification of objects stated in Section 7 shall have the

 

 

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1meanings ascribed to those items in Sections 14 through 24.7,
2respectively, of the State Finance Act. "An Act in relation to
3State finance", approved June 10, 1919, as amended.
4    When used in connection with a State budget or expenditure
5or estimate, items (18) and (19) in the classification of
6objects stated in Section 7 shall have the meanings ascribed to
7those items in Sections 24.12 and 24.13, respectively, of the
8State Finance Act.
9(Source: P.A. 82-325.)
 
10    Section 20. The State Finance Act is amended by changing
11Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
12    (30 ILCS 105/13)  (from Ch. 127, par. 149)
13    Sec. 13. The objects and purposes for which appropriations
14are made are classified and standardized by items as follows:
15    (1) Personal services;
16    (2) State contribution for employee group insurance;
17    (3) Contractual services;
18    (4) Travel;
19    (5) Commodities;
20    (6) Equipment;
21    (7) Permanent improvements;
22    (8) Land;
23    (9) Electronic Data Processing;
24    (10) Operation of automotive equipment;

 

 

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1    (11) Telecommunications services;
2    (12) Contingencies;
3    (13) Reserve;
4    (14) Interest;
5    (15) Awards and Grants;
6    (16) Debt Retirement;
7    (17) Non-Cost Charges;
8    (18) State retirement contribution for annual normal cost;
9    (19) State retirement contribution for unfunded accrued
10liability;
11    (20) (18) Purchase Contract for Real Estate.
12    When an appropriation is made to an officer, department,
13institution, board, commission or other agency, or to a private
14association or corporation, in one or more of the items above
15specified, such appropriation shall be construed in accordance
16with the definitions and limitations specified in this Act,
17unless the appropriation act otherwise provides.
18    An appropriation for a purpose other than one specified and
19defined in this Act may be made only as an additional, separate
20and distinct item, specifically stating the object and purpose
21thereof.
22(Source: P.A. 84-263; 84-264.)
 
23    (30 ILCS 105/24.12 new)
24    Sec. 24.12. "State retirement contribution for annual
25normal cost" defined. The term "State retirement contribution

 

 

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1for annual normal cost" means the portion of the total required
2State contribution to a retirement system for a fiscal year
3that represents the State's portion of the System's projected
4normal cost for that fiscal year, as determined and certified
5by the board of trustees of the retirement system in
6conformance with the applicable provisions of the Illinois
7Pension Code.
 
8    (30 ILCS 105/24.13 new)
9    Sec. 24.13. "State retirement contribution for unfunded
10accrued liability" defined. The term "State retirement
11contribution for unfunded accrued liability" means the portion
12of the total required State contribution to a retirement system
13for a fiscal year that is not included in the State retirement
14contribution for annual normal cost.
 
15    Section 25. The Budget Stabilization Act is amended by
16changing Sections 20 and 25 as follows:
 
17    (30 ILCS 122/20)
18    Sec. 20. Pension Stabilization Fund.
19    (a) The Pension Stabilization Fund is hereby created as a
20special fund in the State treasury. Moneys in the fund shall be
21used for the sole purpose of making payments to the designated
22retirement systems as provided in Section 25.
23    (b) For each fiscal year when the General Assembly's

 

 

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1appropriations and transfers or diversions as required by law
2from general funds do not exceed 99% of the estimated general
3funds revenues pursuant to subsection (a) of Section 10, the
4Comptroller shall transfer from the General Revenue Fund as
5provided by this Section a total amount equal to 0.5% of the
6estimated general funds revenues to the Pension Stabilization
7Fund.
8    (c) For each fiscal year through State fiscal year 2019,
9when the General Assembly's appropriations and transfers or
10diversions as required by law from general funds do not exceed
1198% of the estimated general funds revenues pursuant to
12subsection (b) of Section 10, the Comptroller shall transfer
13from the General Revenue Fund as provided by this Section a
14total amount equal to 1.0% of the estimated general funds
15revenues to the Pension Stabilization Fund.
16    (c-10) In State fiscal year 2020 and each fiscal year
17thereafter, the State Comptroller shall order transferred and
18the State Treasurer shall transfer $1,000,000,000 from the
19General Revenue Fund to the Pension Stabilization Fund.
20    (c-15) The transfers made pursuant to subsection (c-10) of
21this Section shall continue through State fiscal year 2045 or
22until each of the designated retirement systems, as defined in
23Section 25, has achieved the funding ratio prescribed by law
24for that retirement system, whichever occurs first.
25    (d) The Comptroller shall transfer 1/12 of the total amount
26to be transferred each fiscal year under this Section into the

 

 

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1Pension Stabilization Fund on the first day of each month of
2that fiscal year or as soon thereafter as possible; except that
3the final transfer of the fiscal year shall be made as soon as
4practical after the August 31 following the end of the fiscal
5year.
6    Until State fiscal year 2020, before Before the final
7transfer for a fiscal year is made, the Comptroller shall
8reconcile the estimated general funds revenues used in
9calculating the other transfers under this Section for that
10fiscal year with the actual general funds revenues for that
11fiscal year. The final transfer for the fiscal year shall be
12adjusted so that the total amount transferred under this
13Section for that fiscal year is equal to the percentage
14specified in subsection (b) or (c) of this Section, whichever
15is applicable, of the actual general funds revenues for that
16fiscal year. The actual general funds revenues for the fiscal
17year shall be calculated in a manner consistent with subsection
18(c) of Section 10 of this Act.
19(Source: P.A. 94-839, eff. 6-6-06.)
 
20    (30 ILCS 122/25)
21    Sec. 25. Transfers from the Pension Stabilization Fund.
22    (a) As used in this Section, "designated retirement
23systems" means:
24        (1) the State Employees' Retirement System of
25    Illinois;

 

 

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1        (2) the Teachers' Retirement System of the State of
2    Illinois;
3        (3) the State Universities Retirement System;
4        (4) the Judges Retirement System of Illinois; and
5        (5) the General Assembly Retirement System.
6    (b) As soon as may be practical after any money is
7deposited into the Pension Stabilization Fund, the State
8Comptroller shall apportion the deposited amount among the
9designated retirement systems and the State Comptroller and
10State Treasurer shall pay the apportioned amounts to the
11designated retirement systems. The amount deposited shall be
12apportioned among the designated retirement systems in
13proportion to their respective certified State contributions
14for the State fiscal year in which the payment is made to those
15systems in the same proportion as their respective portions of
16the total actuarial reserve deficiency of the designated
17retirement systems, as most recently determined by the
18Governor's Office of Management and Budget. Amounts received by
19a designated retirement system under this Section shall be used
20for funding the unfunded liabilities of the retirement system.
21Payments under this Section are authorized by the continuing
22appropriation under Section 1.7 of the State Pension Funds
23Continuing Appropriation Act.
24    (c) At the request of the State Comptroller, the Governor's
25Office of Management and Budget shall determine the individual
26and total actuarial reserve deficiencies of the designated

 

 

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1retirement systems. For this purpose, the Governor's Office of
2Management and Budget shall consider the latest available audit
3and actuarial reports of each of the retirement systems and the
4relevant reports and statistics of the Public Pension Division
5of the Department of Financial and Professional Regulation.
6    (d) Payments to the designated retirement systems under
7this Section shall be in addition to, and not in lieu of, any
8State contributions required under Section 2-124, 14-131,
915-155, 16-158, or 18-131 of the Illinois Pension Code.
10    Payments to the designated retirement systems under this
11Section, transferred after the effective date of this
12amendatory Act of the 98th General Assembly, do not reduce and
13do not constitute payment of any portion of the required State
14contribution under Article 2, 14, 15, 16, or 18 of the Illinois
15Pension Code in that fiscal year. Such amounts shall not
16reduce, and shall not be included in the calculation of, the
17required State contribution under Article 2, 14, 15, 16, or 18
18of the Illinois Pension Code in any future year, until the
19designated retirement system has received payment of
20contributions pursuant to this Act.
21(Source: P.A. 94-839, eff. 6-6-06.)
 
22    Section 30. The Illinois Pension Code is amended by
23changing Sections 2-108, 2-119.1, 2-125, 2-126, 2-134, 2-162,
247-109, 14-103.10, 14-114, 14-132, 14-133, 14-135.08, 14-152.1,
2515-106, 15-107, 15-111, 15-136, 15-156, 15-157, 15-163,

 

 

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115-165, 15-198, 16-106, 16-121, 16-133, 16-133.1, 16-133.6,
216-136.1, 16-152, and 16-203 and by adding Sections 1-161,
31-162, 2-105.1, 2-105.2, 2-107.9, 2-110.3, 14-103.40,
414-103.41, 14-103.42, 14-106.5, 15-108.1, 15-108.2, 15-112.1,
515-132.9, 16-107.1, 16-107.2, 16-121.1, 16-122.9, 16-133.6,
6and 16-158.2 as follows:
 
7    (40 ILCS 5/1-161 new)
8    Sec. 1-161. Tier II Task Force.
9    (a) Definitions. As used in this Section:
10    "Tier II member" means a public employee who, on or after
11January 1, 2011, became a member or participant of a retirement
12system or pension fund established under this Code.
13    "Tier II Task Force" or "Task Force" means the Tier II Task
14Force created by this Section.
15    (b) The Tier II Task Force is hereby created. The Task
16Force shall be composed of 16 members, appointed as follows:
17        (1) Two members of the House of Representatives
18    appointed by the Speaker of the House, one of whom shall
19    serve as co-chair;
20        (2) Two members of the House of Representatives
21    appointed by the Minority Leader of the House;
22        (3) Two members of the Senate appointed by the
23    President of the Senate, one of whom shall serve as
24    co-chair;
25        (4) Two members of the Senate appointed by the Minority

 

 

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1    Leader of the Senate; and
2        (5) Eight members, appointed by the co-chairs of the
3    Task Force, who are Board members of the public employee
4    unions representing Tier II members, no more than two of
5    which may be appointed from any individual public employee
6    union.
7    (c) The Task Force shall have the following
8responsibilities:
9        (1) to examine the impact of Public Acts 96-889 and
10    96-1495 on the retirement security of Tier II members;
11        (2) to study the impact of Public Acts 96-889 and
12    96-1495 on the ability of retirements systems and pension
13    funds established under this Code to maintain qualified
14    plan status under the federal Internal Revenue Code and
15    other applicable laws;
16        (3) to examine the impact of the changes made by Public
17    Acts 96-889 and 96-1495 on the ability of public employers
18    to attract and retain highly qualified employees and
19    provide sufficient retirement security; and
20        (4) to make any recommendations regarding changes to
21    the pension benefits provided to Tier II employees the Task
22    Force deems necessary or advisable in order to:
23            (A) enhance the retirement security of Tier II
24        members;
25            (B) ensure that the various pension systems
26        maintain their status as qualified plans under the

 

 

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1        federal Internal Revenue Code and other applicable
2        laws; and
3            (C) ensure that public employers in this State are
4        able to attract and retain highly qualified employees
5        and provide sufficient retirement security.
6    (d) The Commission on Government Forecasting and
7Accountability shall provide administrative support to the
8Task Force.
9    (e) The Task Force shall conduct a minimum of 4 public
10hearings, with hearings in Springfield, Chicago, and at least
11two other locations in Illinois as determined by the Task
12Force.
13    (f) The Task Force shall issue its report to the General
14Assembly no later than February 1, 2014.
15    (g) This Section is repealed on January 1, 2015.
 
16    (40 ILCS 5/1-162 new)
17    Sec. 1-162. Optional cash balance plan.
18    (a) Participation and Applicability. Beginning 12 months
19after the effective date of this Section, any Tier I employee
20who has made the election under item (i) of paragraph (1) of
21subsection (a) of Section 14-106.5, 15-132.9, or 16-122.9 may
22elect to participate in the optional cash balance plan created
23under this Section.
24    The Board of Trustees of the applicable retirement system
25shall promulgate rules to establish a one-time irrevocable

 

 

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1election period wherein a person eligible to participate in the
2optional cash balance plan may elect to participate.
3    (b) Title. The package of benefits provided under this
4Section may be referred to as the "optional cash balance plan".
5Persons subject to the provisions of this Section may be
6referred to as "participants in the optional cash balance
7plan".
8    (b-5) Definitions. As used in this Section:
9    "Account" means the notional cash balance account
10established under this Section for a participant in the
11optional cash balance plan.
12    "Salary" means "compensation" as defined in Article 14,
13"earnings" as defined in Article 15, and "salary" as defined in
14Article 16, whichever is applicable, without regard to the
15limitation in subsection (b-5) of Section 1-160.
16    "Tier I employee" means a person who is a Tier I employee
17under the applicable Article of this Code.
18    (c) Cash Balance Account. A notional cash balance account
19shall be established by the applicable retirement system for
20each participant in the optional cash balance plan. The account
21is notional and does not contain any actual money segregated
22from the commingled assets of the retirement system. The cash
23balance in the account is to be used in calculating benefits as
24provided in this Section, but is not to be used in the
25calculation of any refund, transfer, or other benefit under the
26applicable Article of this Code.

 

 

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1    The amounts to be credited to the cash balance account
2shall consist of (i) amounts contributed by or on behalf of the
3participant as employee contributions, (ii) notional employer
4contributions, and (iii) interest credit that is attributable
5to the account, all as provided in this Section.
6    Whenever necessary for the prompt calculation or
7administration, or when the System lacks information necessary
8to the calculation or administration otherwise required of or
9for a benefit under this Section, the applicable retirement
10system may estimate an amount to be credited to or debited from
11a participant's cash balance account and then adjust the amount
12so credited or debited when more accurate information becomes
13available.
14    The applicable retirement system shall give to each
15participant in the optional cash balance plan who has not yet
16retired annual notice of (1) the balance in the participant's
17cash balance account and (2) an estimate of the retirement
18annuity that will be payable to the participant if he or she
19retires at age 59 1/2.
20    (d) Employee Contributions. In addition to the other
21contributions required under the applicable Article, each
22participant shall make contributions to the applicable
23retirement system at the rate of 2% of each payment of salary.
24The amount of each contribution shall be credited to the
25participant's cash balance account upon receipt and after the
26retirement system's reconciliation of the contribution.

 

 

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1    (e) Optional Employer Contributions. Employers may make
2optional additional contributions to the applicable retirement
3system on behalf of their employees who are participants in the
4optional cash balance plan in accordance with procedures
5prescribed by the retirement system, to the extent permitted by
6federal law and the rules prescribed by the retirement system.
7The optional additional contributions under this subsection
8are actual monetary contributions to the retirement system, and
9the amount of each optional additional contribution shall be
10credited to the participant's cash balance account upon receipt
11and after the retirement system's reconciliation of the
12contribution.
13    (f) Interest Credit. An amount representing earnings on
14investments shall be determined by the retirement system in
15accordance with this Section and credited to the participant's
16cash balance account for each fiscal year in which there is a
17positive balance in that account; except that no additional
18interest credit shall be credited while an annuity based on the
19account is being paid. The interest credit amount shall be a
20percentage of the average quarterly balance in the cash balance
21account during that fiscal year, and shall be calculated on
22June 30.
23    The percentage shall be the assumed treasury rate for the
24previous fiscal year, unless neither the retirement system's
25actual rate of investment earnings for the previous fiscal year
26nor the retirement system's actual rate of investment earnings

 

 

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1for the five-year period ending at the end of the previous
2fiscal year is less than the assumed treasury rate.
3    If both the retirement system's actual rate of investment
4earnings for the previous fiscal year and the actual rate of
5investment earnings for the five-year period ending at the end
6of the previous fiscal year are at least the assumed treasury
7rate, then the percentage shall be:
8        (i) the assumed treasury rate, plus
9        (ii) two-thirds of the amount of the actual rate of
10    investment earnings for the previous fiscal year that
11    exceeds the assumed treasury rate.
12However, in no event shall the percentage applied under this
13subsection exceed 10%.
14    For the purposes of this subsection only, "previous fiscal
15year" means fiscal year ending one year before the interest
16rate is calculated.
17    For the purposes of this subsection only, "assumed treasury
18rate" means the average annual yield of the 30-year U.S.
19Treasury Bond over the previous fiscal year, but not less than
204%.
21    When a person applies for a benefit under this Section, the
22retirement system shall apply an interest credit based on a
23proration of an estimate of what the interest credit will be
24for the relevant year. When the retirement system certifies the
25credit on June 30, it shall adjust the benefit accordingly.
26    (f-10) Distribution upon Termination of Employment. Upon

 

 

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1termination of active employment with at least 5 years of
2service credit under the applicable retirement system and prior
3to making application for an annuity under this Section, a
4participant in the optional cash balance plan may make an
5irrevocable election to distribute an amount not to exceed 40%
6of the balance in the participant's account in the form of a
7direct rollover to another qualified plan, to the extent
8allowed by federal law. If the participant makes such an
9election, then the amount distributed shall be debited from the
10participant's cash balance account. A participant in the
11optional cash balance plan shall be allowed only one
12distribution under this subsection. The remaining balance in
13the participant's account shall be used for the determination
14of other benefits provided under this Section.
15    (f-15) Refund. In lieu of receiving a distribution under
16subsection (f-10), at any time after terminating active
17employment under the applicable retirement system, but before
18receiving a retirement annuity under this Section, a
19participant in the optional cash balance plan may elect to
20receive a refund under this subsection. The refund shall
21consist of an amount equal to the amount of all employee
22contributions credited to the participant's account, but shall
23not include any interest credit or employer contributions. If
24the participant so requests, the refund may be paid in the form
25of a direct rollover to another qualified plan, to the extent
26allowed by federal law and in accordance with the rules of the

 

 

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1applicable retirement system. Upon payment of the refund, the
2participant's notional cash balance account shall be closed.
3    (g) Retirement Annuity. A participant in the optional cash
4balance plan may begin collecting a retirement annuity at age
559 1/2, but no earlier than the date of termination of active
6employment under the applicable retirement system.
7    The amount of the retirement annuity shall be calculated by
8the retirement system, based on the balance in the cash balance
9account, the assumption of future investment returns as
10specified in this subsection, the participant's election to
11have a lifetime survivor's annuity as specified in this
12subsection, the annual increase in retirement annuity as
13specified in subsection (h), the annual increase in survivor's
14annuity as specified in subsection (l), and any actuarial
15assumptions and tables adopted by the board of the retirement
16system for this purpose. The calculation shall determine the
17amount of retirement annuity, on an actuarially equivalent
18basis, that shall be designed to result in the balance in the
19participant's account arriving at zero on the date when the
20last payment of the retirement annuity (or survivor's annuity,
21if the participant elects to provide for a survivor's annuity
22pursuant to this subsection) is anticipated to be paid under
23the relevant actuarial assumptions. A retirement annuity or a
24survivor's annuity provided under this Section shall be a life
25annuity and shall not expire if the account balance equals
26zero.

 

 

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1    The annuity payment shall begin on the date specified by
2the participant submitting a written application, which date
3shall not be prior to termination of employment or more than
4one year before the application is received by the board;
5however, if the participant is not an employee of an employer
6participating in this System or in a participating system as
7defined in Article 20 of this Code on April 1 of the calendar
8year next following the calendar year in which the participant
9attains age 70 1/2, the annuity payment period shall begin on
10that date regardless of whether an application has been filed.
11    The participant may elect, under the participant's written
12application for retirement, to receive a reduced annuity
13payable for his or her life and to have a lifetime survivor's
14annuity in a monthly amount equal to 50%, 75%, or 100% of that
15reduced monthly amount, to be paid after the participant's
16death to his or her eligible survivor. Eligibility for a
17survivor's annuity shall be determined under the applicable
18Article of this Code.
19    For the purpose of calculating retirement annuities,
20future investment returns shall be assumed to be a percentage
21equal to the average yield of the 30-year U.S. Treasury Bond
22over the 5 fiscal years prior to the calculation of the initial
23retirement annuity, plus 250 basis points; but not less than 4%
24nor more than 8%.
25    (h) Annual Increase in Retirement Annuity. The retirement
26annuity shall be subject to an automatic annual increase in an

 

 

SB2404 Engrossed- 35 -LRB098 09018 EFG 39154 b

1amount equal to 3% of the originally granted annuity on each
2January 1 occurring on or after the first anniversary of the
3annuity start date.
4    (i) Disability Benefits. There are no disability benefits
5provided under the optional cash balance plan, and no amounts
6for disability shall be deducted from the account of a
7participant in the optional cash balance plan. The disability
8benefits provided under the applicable retirement system apply
9to participants in the optional cash balance plan.
10    (j) Return to Service. Upon a return to service under the
11same retirement system after beginning to receive a retirement
12annuity under the optional cash balance plan, the retirement
13annuity shall be suspended and active participation in the
14optional cash balance plan shall resume. Upon termination of
15the employment, the retirement annuity shall resume in an
16amount to be recalculated in accordance with subsection (g),
17taking into effect the changes in the cash balance account. If
18a retired annuitant returns to service, his or her notional
19cash balance account shall be decreased by each payment of
20retirement annuity prior to the return to service.
21    (k) Survivor's Annuity - Death before Retirement. In the
22case of a participant in the optional cash balance plan who had
23less than 5 years of service under the applicable Article and
24had not begun receiving a retirement annuity, the eligible
25survivor shall be entitled only to a refund of employee
26contributions under subsection (f-15).

 

 

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1    In the case of a participant in the optional cash balance
2plan who had at least 5 years of service under the applicable
3Article and had not begun receiving a retirement annuity, the
4eligible survivor shall be entitled to receive a survivor's
5annuity beginning at age 59 1/2 upon written application. The
6survivor's annuity shall be calculated in the same manner as a
7retirement annuity under subsection (g). At any time before
8receiving a survivor's annuity, the eligible survivor may claim
9a distribution under subsection (f-10) or a refund under
10subsection (f-15). The deceased participant's account shall
11continue to receive interest credit until the eligible survivor
12begins to receive a survivor's annuity or receives a refund of
13employee contributions under subsection (f-15).
14    Eligibility for a survivor's annuity shall be determined
15under the applicable Article of this Code. A child's or
16parent's annuity for an otherwise eligible child or dependent
17parent shall be in the same amount, if any, prescribed under
18the applicable Article.
19    (l) Annual Increase in Survivor's Annuity. A survivor's
20annuity granted under subsection (g) or (k) shall be subject to
21an automatic annual increase in an amount equal to 3% of the
22originally granted annuity on each January 1 occurring on or
23after the first anniversary of the annuity start date.
24    (m) Applicability of Provisions. The following provisions,
25if and as they exist in this Code, do not apply to participants
26in the optional cash balance plan with respect to participation

 

 

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1in the optional cash balance plan, except as they are
2specifically provided for in this Section:
3        (1) minimum service or vesting requirements (other
4    than as provided in this Section);
5        (2) provisions limiting a retirement annuity to a
6    specified percentage of salary;
7        (3) provisions authorizing a minimum retirement or
8    survivor's annuity or a supplemental annuity;
9        (4) provisions authorizing any form of retirement
10    annuity or survivor's annuity not authorized under this
11    Section;
12        (5) provisions authorizing a reversionary annuity
13    (other than the survivor's annuity under subsection (g));
14        (6) provisions authorizing a refund of employee
15    contributions upon termination of service (other than upon
16    the death of the participant without an eligible survivor)
17    or any lump-sum payout in lieu of a retirement or
18    survivor's annuity (other than the distribution under
19    subsection (f-10) or the refund under subsection (f-15) of
20    this Section;
21        (7) provisions authorizing optional service credits or
22    the payment of optional additional contributions (other
23    than the optional employer contributions specifically
24    authorized in this Section); or
25        (8) a level income option.
26    The Retirement Systems Reciprocal Act (Article 20 of this

 

 

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1Code) does not apply to participation in the optional cash
2balance plan and does not affect the calculation of benefits
3payable under this Section.
4    The other provisions of this Code continue to apply to
5participants in the optional cash balance plan, to the extent
6that they do not conflict with this Section. In the case of a
7conflict between the provisions of this Section and any other
8provision of this Code, the provisions of this Section control.
9    (n) Rules. The Board of Trustees of the applicable
10retirement system may adopt rules and procedures for the
11implementation of this Section, including but not limited to
12determinations of how to integrate the administration of this
13Section with the requirements of the applicable Article and any
14other applicable provisions of this Code.
15    (o) Actual Employer Contributions. Payment of employer
16contributions with respect to participants in the optional cash
17balance plan shall be the responsibility of the actual
18employer. Optional additional contributions by employers may
19be paid in any amount, but must be paid in the manner specified
20by the applicable retirement system.
21    (p) Prospective Modification. The provisions set forth in
22this Section are subject to prospective changes made by law,
23provided that any such changes shall not apply to any benefits
24accrued under this Section prior to the effective date of any
25amendatory Act of the General Assembly.
26    (q) Qualified Plan Status. No provision of this Section

 

 

SB2404 Engrossed- 39 -LRB098 09018 EFG 39154 b

1shall be interpreted in a way that would cause the applicable
2retirement system to cease to be a qualified plan under Section
3401(a) of the Internal Revenue Code of 1986.
 
4    (40 ILCS 5/2-105.1 new)
5    Sec. 2-105.1. Tier I employee. "Tier I employee": A
6participant who first became a participant before January 1,
72011.
 
8    (40 ILCS 5/2-105.2 new)
9    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
10former Tier I employee who is receiving a retirement annuity.
 
11    (40 ILCS 5/2-107.9 new)
12    Sec. 2-107.9. Future increase in income. "Future increase
13in income": Any increase in income in any form offered for
14service as a member under this Article after June 30, 2014 that
15would qualify as "salary", as defined in Section 2-108, but for
16the fact that the increase in income was offered to the member
17on the condition that it not qualify as salary and was accepted
18by the member subject to that condition.
 
19    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
20    Sec. 2-108. Salary. "Salary": (1) For members of the
21General Assembly, the total compensation paid to the member by
22the State for one year of service, including the additional

 

 

SB2404 Engrossed- 40 -LRB098 09018 EFG 39154 b

1amounts, if any, paid to the member as an officer pursuant to
2Section 1 of "An Act in relation to the compensation and
3emoluments of the members of the General Assembly", approved
4December 6, 1907, as now or hereafter amended.
5    (2) For the State executive officers specified in Section
62-105, the total compensation paid to the member for one year
7of service.
8    (3) For members of the System who are participants under
9Section 2-117.1, or who are serving as Clerk or Assistant Clerk
10of the House of Representatives or Secretary or Assistant
11Secretary of the Senate, the total compensation paid to the
12member for one year of service, but not to exceed the salary of
13the highest salaried officer of the General Assembly.
14    However, in the event that federal law results in any
15participant receiving imputed income based on the value of
16group term life insurance provided by the State, such imputed
17income shall not be included in salary for the purposes of this
18Article.
19    Notwithstanding any other provision of this Section,
20"salary" does not include any future increase in income that is
21offered for service as a member under this Article pursuant to
22the requirements of subsection (c) of Section 2-110.3 and
23accepted by a Tier I employee, or a Tier I retiree returning to
24active service, who has made the election under paragraph (2)
25of subsection (a) or (a-5) of Section 2-110.3.
26(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 

 

 

SB2404 Engrossed- 41 -LRB098 09018 EFG 39154 b

1    (40 ILCS 5/2-110.3 new)
2    Sec. 2-110.3. Election by Tier I employees and Tier I
3retirees.
4    (a) Each Tier I employee shall make an irrevocable election
5either:
6        (1) to agree to item (i) or (ii) as set forth in this
7    paragraph (1):
8            (i) to have the amount of the automatic annual
9        increases in his or her retirement annuity that are
10        otherwise provided for in this Article calculated,
11        instead, as provided in subsection (a-1) of Section
12        2-119.1, and to waive his or her eligibility for 2
13        automatic annual increases in retirement annuity as
14        provided in subsection (a-2) of Section 2-119.1; or
15            (ii) to waive his or her eligibility for 3
16        automatic annual increases in retirement annuity, as
17        provided in subsection (a-3) of Section 2-119.1, and to
18        make the contributions set forth in subsection (a-5) of
19        Section 2-126; or
20        (2) to not agree to item (i) or (ii) as set forth in
21    paragraph (1) of this subsection.
22    The election required under this subsection (a) shall be
23made by each Tier I employee no earlier than February 1, 2014
24and no later than May 31, 2014, except that:
25        (i) a person who becomes a Tier I employee under this

 

 

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1    Article on or after February 1, 2014 must make the election
2    under this subsection (a) within 60 days after becoming a
3    Tier I employee;
4        (ii) a person who returns to active service as a Tier I
5    employee under this Article on or after February 1, 2014
6    and has not yet made an election under this Section must
7    make the election under this subsection (a) within 60 days
8    after returning to active service as a Tier I employee; and
9        (iii) a person who made the election under subsection
10    (a-5) as a Tier I retiree remains bound by that election
11    and shall not make a later election under this subsection
12    (a).
13    If a Tier I employee fails for any reason to make a
14required election under this subsection within the time
15specified, then the employee shall be deemed to have made the
16election under paragraph (2) of this subsection.
17    (a-5) Each Tier I retiree shall make an irrevocable
18election either:
19        (1) to agree to the following:
20            (i) to have the amount of the automatic annual
21        increases in his or her retirement annuity calculated
22        without regard to subsection (a-1), (a-2), or (a-3) of
23        Section 2-119.1; and
24            (ii) to waive his or her eligibility for 2
25        automatic annual increases in retirement annuity as
26        provided in subsection (a-4) of Section 2-119.1; or

 

 

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1        (2) to not agree to items (i) and (ii) as set forth in
2    paragraph (1) of this subsection.
3    The election required under this subsection (a-5) shall be
4made by each Tier I retiree no earlier than February 1, 2014
5and no later than May 31, 2014, except that:
6        (i) a person who becomes a Tier I retiree under this
7    Article on or after February 1, 2014 must make the election
8    under this subsection (a-5) within 60 days after becoming a
9    Tier I retiree; and
10        (ii) a person who made the election under subsection
11    (a) as a Tier I employee remains bound by that election and
12    shall not make a later election under this subsection
13    (a-5).
14    If a Tier I retiree fails for any reason to make a required
15election under this subsection within the time specified, then
16the Tier I retiree shall be deemed to have made the election
17under paragraph (2) of this subsection.
18    (a-10) All elections under subsection (a) or (a-5) that are
19made or deemed to be made before June 1, 2014 shall take effect
20on July 1, 2014. Elections that are made or deemed to be made
21on or after June 1, 2014 shall take effect on the first day of
22the month following the month in which the election is made or
23deemed to be made.
24    (b) As adequate and legal consideration provided under this
25amendatory Act of the 98th General Assembly for making an
26election under paragraph (1) of subsection (a) of this Section,

 

 

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1any future increases in income offered for service as a member
2under this Article to a Tier I employee who has made an
3election under paragraph (1) of subsection (a) of this Section
4shall be offered expressly and irrevocably as constituting
5salary under Section 2-108.
6    As adequate and legal consideration provided under this
7amendatory Act of the 98th General Assembly for making an
8election under paragraph (1) of subsection (a-5) of this
9Section, any future increases in income offered for service as
10a member under this Article to a Tier I retiree who returns to
11active service after having made an election under paragraph
12(1) of subsection (a-5) of this Section shall be offered
13expressly and irrevocably as constituting salary under Section
142-108.
15    (c) A Tier I employee who makes the election under
16paragraph (2) of subsection (a) of this Section shall not be
17subject to either item (i) or (ii) set forth in paragraph (1)
18of subsection (a) of this Section. However, any future
19increases in income offered for service as a member under this
20Article to a Tier I employee who has made the election under
21paragraph (2) of subsection (a) of this Section shall be
22offered expressly and irrevocably as not constituting salary
23under Section 2-108, and the member may not accept any future
24increase in income that is offered in violation of this
25requirement.
26    A Tier I retiree who makes the election under paragraph (2)

 

 

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1of subsection (a-5) of this Section shall not be subject to
2either item (i) or (ii) set forth in paragraph (1) of
3subsection (a-5) of this Section. However, any future increases
4in income offered for service as a member under this Article to
5a Tier I retiree who returns to active service and has made the
6election under paragraph (2) of subsection (a-5) of this
7Section shall be offered expressly and irrevocably as not
8constituting salary under Section 2-108, and the member may not
9accept any future increase in income that is offered in
10violation of this requirement.
11    (d) The System shall make a good faith effort to contact
12each Tier I employee and Tier I retiree subject to this
13Section. The System shall mail information describing the
14required election to each Tier I employee and Tier I retiree by
15United States Postal Service mail to his or her last known
16address on file with the System. If the Tier I employee or Tier
17I retiree is not responsive to other means of contact, it is
18sufficient for the System to publish the details of any
19required elections on its website or to publish those details
20in a regularly published newsletter or other existing public
21forum.
22    Tier I employees and Tier I retirees who are subject to
23this Section shall be provided with an election packet
24containing information regarding their options, as well as the
25forms necessary to make the required election. Upon request,
26the System shall offer Tier I employees and Tier I retirees an

 

 

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1opportunity to receive information from the System before
2making the required election. The information may be provided
3through video materials, group presentations, individual
4consultation with a member or authorized representative of the
5System in person or by telephone or other electronic means, or
6any combination of those methods. The System shall not provide
7advice or counseling with respect to which election a Tier I
8employee or Tier I retiree should make or specific to the legal
9or tax circumstances of or consequences to the Tier I employee
10or Tier I retiree.
11    The System shall inform Tier I employees and Tier I
12retirees in the election packet required under this subsection
13that the Tier I employee or Tier I retiree may also wish to
14obtain information and counsel relating to the election
15required under this Section from any other available source,
16including but not limited to labor organizations and private
17counsel.
18    In no event shall the System, its staff, or the Board be
19held liable for any information given to a member, beneficiary,
20or annuitant regarding the elections under this Section. The
21System shall coordinate with the Illinois Department of Central
22Management Services and each other retirement system
23administering an election in accordance with this amendatory
24Act of the 98th General Assembly to provide information
25concerning the impact of the election set forth in this
26Section.

 

 

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1    (e) Notwithstanding any other provision of law, any future
2increases in income offered for service as a member must be
3offered expressly and irrevocably as not constituting "salary"
4under Section 2-108 to any Tier I employee, or Tier I retiree
5returning to active service, who has made an election under
6paragraph (2) of subsection (a) or (a-5) of Section 2-110.3. A
7Tier I employee, or Tier I retiree returning to active service,
8who has made an election under paragraph (2) or subsection (a)
9or (a-5) of Section 2-110.3 shall not accept any future
10increase in income that is offered for service as a member
11under this Article in violation of the requirement set forth in
12this subsection.
13    (f) A member's election under this Section is not a
14prohibited election under subdivision (j)(1) of Section 1-119
15of this Code.
16    (g) No provision of this Section shall be interpreted in a
17way that would cause the System to cease to be a qualified plan
18under Section 401(a) of the Internal Revenue Code of 1986.
19    (h) If this Section is determined to be unconstitutional or
20otherwise invalid by a final unappealable decision of an
21Illinois court or a court of competent jurisdiction as applied
22to Tier I employees but not as applied to Tier I retirees, then
23this Section and the changes deriving from the election
24required under this Section shall be null and void as applied
25to Tier I employees but shall remain in full effect for Tier I
26retirees.

 

 

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1    (i) If this Section is determined to be unconstitutional or
2otherwise invalid by a final unappealable decision of an
3Illinois court or a court of competent jurisdiction as applied
4to Tier I retirees but not as applied to Tier I employees, then
5this Section and the changes deriving from the election
6required under this Section shall be null and void as applied
7to Tier I retirees but shall remain in full effect for Tier I
8employees.
9    (j) If an election created by this amendatory Act in any
10other Article of this Code or any change deriving from that
11election is determined to be unconstitutional or otherwise
12invalid by a final unappealable decision of an Illinois court
13or a court of competent jurisdiction, the invalidity of that
14provision shall not in any way affect the validity of this
15Section or the changes deriving from the election required
16under this Section.
 
17    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
18    Sec. 2-119.1. Automatic increase in retirement annuity.
19    (a) Except as provided in subsections (a-1), (a-2), (a-3),
20and (a-4), a A participant who retires after June 30, 1967, and
21who has not received an initial increase under this Section
22before the effective date of this amendatory Act of 1991,
23shall, in January or July next following the first anniversary
24of retirement, whichever occurs first, and in the same month of
25each year thereafter, but in no event prior to age 60, have the

 

 

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1amount of the originally granted retirement annuity increased
2as follows: for each year through 1971, 1 1/2%; for each year
3from 1972 through 1979, 2%; and for 1980 and each year
4thereafter, 3%. Annuitants who have received an initial
5increase under this subsection prior to the effective date of
6this amendatory Act of 1991 shall continue to receive their
7annual increases in the same month as the initial increase.
8    (a-1) Notwithstanding any other provision of this Article,
9for a Tier I employee who made the election under item (i) of
10paragraph (1) of subsection (a) of Section 2-110.3, the amount
11of each automatic annual increase in retirement annuity
12occurring on or after the effective date of that election,
13other than the initial increase, shall be 3% of the originally
14granted retirement annuity.
15    (a-2) Notwithstanding any other provision of this Article,
16for a Tier I employee who made the election under item (i) of
17paragraph (1) of subsection (a) of Section 2-110.3, once the
18first annual increase under this Section has been granted, the
19next 2 scheduled annual increases shall be skipped, and
20thereafter all annual increases shall be granted.
21    (a-3) Notwithstanding any other provision of this Article,
22for a Tier I employee who made the election under item (ii) of
23paragraph (1) of subsection (a) of Section 2-110.3, once the
24first annual increase under this Section has been granted, the
25next 3 scheduled annual increases shall be skipped, and
26thereafter all annual increases shall be granted.

 

 

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1    (a-4) Notwithstanding any other provision of this Article,
2for a Tier I retiree who made the election under paragraph (1)
3of subsection (a-5) of Section 2-110.3:
4        (1) if the Tier I retiree has not received the first
5    annual increase under this Section as of the effective date
6    of this amendatory Act of the 98th General Assembly, then
7    once the first annual increase under this Section has been
8    granted, the next scheduled annual increase shall be
9    skipped, the following annual increase shall be granted,
10    the next annual increase shall be skipped, and thereafter
11    all annual increases shall be granted; and
12        (2) if the Tier I retiree has received the first annual
13    increase under this Section as of the effective date of
14    this amendatory Act of the 98th General Assembly, then the
15    next annual increase after that effective date shall be
16    skipped, the following annual increase shall be granted,
17    the next annual increase shall be skipped, and thereafter
18    all annual increases shall be granted.
19    (b) Beginning January 1, 1990, for eligible participants
20who remain in service after attaining 20 years of creditable
21service, the 3% increases provided under subsection (a) shall
22begin to accrue on the January 1 next following the date upon
23which the participant (1) attains age 55, or (2) attains 20
24years of creditable service, whichever occurs later, and shall
25continue to accrue while the participant remains in service;
26such increases shall become payable on January 1 or July 1,

 

 

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1whichever occurs first, next following the first anniversary of
2retirement. For any person who has service credit in the System
3for the entire period from January 15, 1969 through December
431, 1992, regardless of the date of termination of service, the
5reference to age 55 in clause (1) of this subsection (b) shall
6be deemed to mean age 50.
7    This subsection (b) does not apply to any person who first
8becomes a member of the System after August 8, 2003 (the
9effective date of Public Act 93-494) this amendatory Act of the
1093rd General Assembly.
11    (b-5) Notwithstanding any other provision of this Article,
12a participant who first becomes a participant on or after
13January 1, 2011 (the effective date of Public Act 96-889)
14shall, in January or July next following the first anniversary
15of retirement, whichever occurs first, and in the same month of
16each year thereafter, but in no event prior to age 67, have the
17amount of the retirement annuity then being paid increased by
183% or the annual unadjusted percentage increase in the Consumer
19Price Index for All Urban Consumers as determined by the Public
20Pension Division of the Department of Insurance under
21subsection (a) of Section 2-108.1, whichever is less.
22    (c) The foregoing provisions relating to automatic
23increases are not applicable to a participant who retires
24before having made contributions (at the rate prescribed in
25Section 2-126) for automatic increases for less than the
26equivalent of one full year. However, in order to be eligible

 

 

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1for the automatic increases, such a participant may make
2arrangements to pay to the system the amount required to bring
3the total contributions for the automatic increase to the
4equivalent of one year's contributions based upon his or her
5last salary.
6    (d) A participant who terminated service prior to July 1,
71967, with at least 14 years of service is entitled to an
8increase in retirement annuity beginning January, 1976, and to
9additional increases in January of each year thereafter, except
10as otherwise provided in subsection (a-2), (a-3), or (a-4).
11    The initial increase shall be 1 1/2% of the originally
12granted retirement annuity multiplied by the number of full
13years that the annuitant was in receipt of such annuity prior
14to January 1, 1972, plus 2% of the originally granted
15retirement annuity for each year after that date. The
16subsequent annual increases shall be at the rate of 2% of the
17originally granted retirement annuity for each year through
181979 and at the rate of 3% for 1980 and thereafter.
19    (e) Beginning January 1, 1990, and except as provided in
20subsection (a-1) or (b-5), all automatic annual increases
21payable under this Section shall be calculated as a percentage
22of the total annuity payable at the time of the increase,
23including previous increases granted under this Article.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
25    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)

 

 

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1    Sec. 2-125. Obligations of State; funding guarantee.
2    (a) The payment of (1) the required State contributions,
3(2) all benefits granted under this system and (3) all expenses
4of administration and operation are obligations of the State to
5the extent specified in this Article.
6    All income, interest and dividends derived from deposits
7and investments shall be credited to the account of the system
8in the State Treasury and used to pay benefits under this
9Article.
10    (b) The State shall be contractually obligated to
11contribute to the System in each State fiscal year an amount
12not less than the sum required in Section 2-124 as that Section
13existed prior to the effective date of this amendatory Act of
14the 98th General Assembly.
15    The obligations created under this subsection (b) are
16contractual obligations protected and enforceable under
17Article I, Section 16 and Article XIII, Section 5 of the
18Illinois Constitution.
19    Notwithstanding any other provision of law, if the State
20fails to pay in a State fiscal year the amount guaranteed under
21this subsection (b), the System may bring a mandamus action in
22the Circuit Court of Sangamon County to compel the State to
23make that payment, irrespective of other remedies that may be
24available to the System. It shall be the mandatory fiduciary
25obligation of the Board of the System to bring that action if
26the State fails to pay in the fiscal year the amount guaranteed

 

 

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1under this subsection (b). Before commencing that action, the
2Board shall submit a voucher for contributions required under
3Section 2-134. If the State fails to pay a vouchered amount
4within 90 days after receiving a voucher for that amount, then
5the Board shall submit a written request to the Comptroller
6seeking payment of that amount. A copy of the request shall be
7filed with the Secretary of State, and the Secretary of State
8shall provide copies of the request to the Governor and General
9Assembly. No earlier than the 16th day after filing a request
10with the Secretary, but no later than the 21st day after filing
11that request, the Board may commence such an action in the
12Circuit Court. If the Board fails to commence such action on or
13before the 21st day after filing the request with the Secretary
14of State, then any Tier I employee or Tier I retiree who made
15an election under paragraph (1) of subsection (a) or (a-5) of
16Section 2-110.3 may file a mandamus action against the Board to
17compel the Board to commence its mandamus action against the
18State. This subsection (b) constitutes an express waiver of the
19State's sovereign immunity. In ordering the State to make the
20required payment, the court may order a reasonable payment
21schedule to enable the State to make the required payment. The
22obligations and causes of action created under this subsection
23(b) shall be in addition to any other right or remedy otherwise
24accorded by common law, or State or federal law, and nothing in
25this subsection (b) shall be construed to deny, abrogate,
26impair, or waive any such common law or statutory right or

 

 

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1remedy.
2    Any payments required to be made by the State pursuant to
3this subsection (b) are expressly subordinated to the payment
4of the principal, interest, and premium, if any, on any bonded
5debt obligation of the State or any other State-created entity,
6either currently outstanding or to be issued, for which the
7source of repayment or security thereon is derived directly or
8indirectly from tax revenues collected by the State or any
9other State-created entity. Payments on such bonded
10obligations include any statutory fund transfers or other
11prefunding mechanisms or formulas set forth, now or hereafter,
12in State law or bond indentures, into debt service funds or
13accounts of the State related to such bonded obligations,
14consistent with the payment schedules associated with such
15obligations.
16(Source: P.A. 83-1440.)
 
17    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
18    Sec. 2-126. Contributions by participants.
19    (a) Each participant shall contribute toward the cost of
20his or her retirement annuity a percentage of each payment of
21salary received by him or her for service as a member as
22follows: for service between October 31, 1947 and January 1,
231959, 5%; for service between January 1, 1959 and June 30,
241969, 6%; for service between July 1, 1969 and January 10,
251973, 6 1/2%; for service after January 10, 1973, 7%; for

 

 

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1service after December 31, 1981, 8 1/2%.
2    (a-5) In addition to the contributions otherwise required
3under this Article, each Tier I employee who made the election
4under item (ii) of paragraph (1) of subsection (a) of Section
52-110.3 shall also make the following contributions toward the
6cost of his or her retirement annuity from each payment of
7salary received by him or her for service as a member:
8        (1) beginning July 1, 2014 and through June 30, 2015,
9    1% of salary; and
10        (2) beginning on July 1, 2015, 2% of salary.
11    (b) Beginning August 2, 1949, each male participant, and
12from July 1, 1971, each female participant shall contribute
13towards the cost of the survivor's annuity 2% of salary.
14    A participant who has no eligible survivor's annuity
15beneficiary may elect to cease making contributions for
16survivor's annuity under this subsection. A survivor's annuity
17shall not be payable upon the death of a person who has made
18this election, unless prior to that death the election has been
19revoked and the amount of the contributions that would have
20been paid under this subsection in the absence of the election
21is paid to the System, together with interest at the rate of 4%
22per year from the date the contributions would have been made
23to the date of payment.
24    (c) Beginning July 1, 1967, each participant shall
25contribute 1% of salary towards the cost of automatic increase
26in annuity provided in Section 2-119.1. These contributions

 

 

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1shall be made concurrently with contributions for retirement
2annuity purposes.
3    (d) In addition, each participant serving as an officer of
4the General Assembly shall contribute, for the same purposes
5and at the same rates as are required of a regular participant,
6on each additional payment received as an officer. If the
7participant serves as an officer for at least 2 but less than 4
8years, he or she shall contribute an amount equal to the amount
9that would have been contributed had the participant served as
10an officer for 4 years. Persons who serve as officers in the
1187th General Assembly but cannot receive the additional payment
12to officers because of the ban on increases in salary during
13their terms may nonetheless make contributions based on those
14additional payments for the purpose of having the additional
15payments included in their highest salary for annuity purposes;
16however, persons electing to make these additional
17contributions must also pay an amount representing the
18corresponding employer contributions, as calculated by the
19System.
20    (e) Notwithstanding any other provision of this Article,
21the required contribution of a participant shall not be based
22on any salary in excess of the salary limitation applicable to
23that participant under Section 2-108 or who first becomes a
24participant on or after January 1, 2011 shall not exceed the
25contribution that would be due under this Article if that
26participant's highest salary for annuity purposes were

 

 

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1$106,800, plus any increases in that amount under Section
22-108.1.
3(Source: P.A. 96-1490, eff. 1-1-11.)
 
4    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
5    Sec. 2-134. To certify required State contributions and
6submit vouchers.
7    (a) The Board shall certify to the Governor on or before
8December 15 of each year through until December 15, 2011 the
9amount of the required State contribution to the System for the
10next fiscal year and shall specifically identify the System's
11projected State normal cost for that fiscal year. The
12certification under this subsection (a) shall include a copy of
13the actuarial recommendations upon which it is based and shall
14specifically identify the System's projected State normal cost
15for that fiscal year.
16    (a-5) On or before November 1 of each year, beginning
17November 1, 2012, the Board shall submit to the State Actuary,
18the Governor, and the General Assembly a proposed certification
19of the amount of the required State contribution to the System
20for the next fiscal year, along with all of the actuarial
21assumptions, calculations, and data upon which that proposed
22certification is based. On or before January 1 of each year,
23beginning January 1, 2013, the State Actuary shall issue a
24preliminary report concerning the proposed certification and
25identifying, if necessary, recommended changes in actuarial

 

 

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1assumptions that the Board must consider before finalizing its
2certification of the required State contributions.
3    On or before January 15, 2013 and every January 15
4thereafter, the Board shall certify to the Governor and the
5General Assembly the amount of the required State contribution
6for the next fiscal year. The certification shall include a
7copy of the actuarial recommendations upon which it is based
8and shall specifically identify the System's projected State
9normal cost for that fiscal year. The Board's certification
10must note any deviations from the State Actuary's recommended
11changes, the reason or reasons for not following the State
12Actuary's recommended changes, and the fiscal impact of not
13following the State Actuary's recommended changes on the
14required State contribution.
15    (a-7) On or before May 1, 2004, the Board shall recalculate
16and recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2005, taking
18into account the amounts appropriated to and received by the
19System under subsection (d) of Section 7.2 of the General
20Obligation Bond Act.
21    On or before July 1, 2005, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2006, taking
24into account the changes in required State contributions made
25by this amendatory Act of the 94th General Assembly.
26    On or before April 1, 2011, the Board shall recalculate and

 

 

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1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2011, applying
3the changes made by Public Act 96-889 to the System's assets
4and liabilities as of June 30, 2009 as though Public Act 96-889
5was approved on that date.
6    (b) Beginning in State fiscal year 1996, on or as soon as
7possible after the 15th day of each month the Board shall
8submit vouchers for payment of State contributions to the
9System, in a total monthly amount of one-twelfth of the
10required annual State contribution certified under subsection
11(a). From the effective date of this amendatory Act of the 93rd
12General Assembly through June 30, 2004, the Board shall not
13submit vouchers for the remainder of fiscal year 2004 in excess
14of the fiscal year 2004 certified contribution amount
15determined under this Section after taking into consideration
16the transfer to the System under subsection (d) of Section
176z-61 of the State Finance Act. These vouchers shall be paid by
18the State Comptroller and Treasurer by warrants drawn on the
19funds appropriated to the System for that fiscal year. If in
20any month the amount remaining unexpended from all other
21appropriations to the System for the applicable fiscal year
22(including the appropriations to the System under Section 8.12
23of the State Finance Act and Section 1 of the State Pension
24Funds Continuing Appropriation Act) is less than the amount
25lawfully vouchered under this Section, the difference shall be
26paid from the General Revenue Fund under the continuing

 

 

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1appropriation authority provided in Section 1.1 of the State
2Pension Funds Continuing Appropriation Act.
3    (c) The full amount of any annual appropriation for the
4System for State fiscal year 1995 shall be transferred and made
5available to the System at the beginning of that fiscal year at
6the request of the Board. Any excess funds remaining at the end
7of any fiscal year from appropriations shall be retained by the
8System as a general reserve to meet the System's accrued
9liabilities.
10(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1197-694, eff. 6-18-12.)
 
12    (40 ILCS 5/2-162)
13    Sec. 2-162. Application and expiration of new benefit
14increases.
15    (a) As used in this Section, "new benefit increase" means
16an increase in the amount of any benefit provided under this
17Article, or an expansion of the conditions of eligibility for
18any benefit under this Article, that results from an amendment
19to this Code that takes effect after the effective date of this
20amendatory Act of the 94th General Assembly. "New benefit
21increase", however, does not include any benefit increase
22resulting from the changes made to this Article by this
23amendatory Act of the 98th General Assembly.
24    (b) Notwithstanding any other provision of this Code or any
25subsequent amendment to this Code, every new benefit increase

 

 

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1is subject to this Section and shall be deemed to be granted
2only in conformance with and contingent upon compliance with
3the provisions of this Section.
4    (c) The Public Act enacting a new benefit increase must
5identify and provide for payment to the System of additional
6funding at least sufficient to fund the resulting annual
7increase in cost to the System as it accrues.
8    Every new benefit increase is contingent upon the General
9Assembly providing the additional funding required under this
10subsection. The Commission on Government Forecasting and
11Accountability shall analyze whether adequate additional
12funding has been provided for the new benefit increase and
13shall report its analysis to the Public Pension Division of the
14Department of Financial and Professional Regulation. A new
15benefit increase created by a Public Act that does not include
16the additional funding required under this subsection is null
17and void. If the Public Pension Division determines that the
18additional funding provided for a new benefit increase under
19this subsection is or has become inadequate, it may so certify
20to the Governor and the State Comptroller and, in the absence
21of corrective action by the General Assembly, the new benefit
22increase shall expire at the end of the fiscal year in which
23the certification is made.
24    (d) Every new benefit increase shall expire 5 years after
25its effective date or on such earlier date as may be specified
26in the language enacting the new benefit increase or provided

 

 

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1under subsection (c). This does not prevent the General
2Assembly from extending or re-creating a new benefit increase
3by law.
4    (e) Except as otherwise provided in the language creating
5the new benefit increase, a new benefit increase that expires
6under this Section continues to apply to persons who applied
7and qualified for the affected benefit while the new benefit
8increase was in effect and to the affected beneficiaries and
9alternate payees of such persons, but does not apply to any
10other person, including without limitation a person who
11continues in service after the expiration date and did not
12apply and qualify for the affected benefit while the new
13benefit increase was in effect.
14(Source: P.A. 94-4, eff. 6-1-05.)
 
15    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
16    Sec. 7-109. Employee.
17    (1) "Employee" means any person who:
18        (a) 1. Receives earnings as payment for the performance
19        of personal services or official duties out of the
20        general fund of a municipality, or out of any special
21        fund or funds controlled by a municipality, or by an
22        instrumentality thereof, or a participating
23        instrumentality, including, in counties, the fees or
24        earnings of any county fee office; and
25            2. Under the usual common law rules applicable in

 

 

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1        determining the employer-employee relationship, has
2        the status of an employee with a municipality, or any
3        instrumentality thereof, or a participating
4        instrumentality, including aldermen, county
5        supervisors and other persons (excepting those
6        employed as independent contractors) who are paid
7        compensation, fees, allowances or other emolument for
8        official duties, and, in counties, the several county
9        fee offices.
10        (b) Serves as a township treasurer appointed under the
11    School Code, as heretofore or hereafter amended, and who
12    receives for such services regular compensation as
13    distinguished from per diem compensation, and any regular
14    employee in the office of any township treasurer whether or
15    not his earnings are paid from the income of the permanent
16    township fund or from funds subject to distribution to the
17    several school districts and parts of school districts as
18    provided in the School Code, or from both such sources; or
19    is the chief executive officer, chief educational officer,
20    chief fiscal officer, or other employee of a Financial
21    Oversight Panel established pursuant to Article 1H of the
22    School Code, other than a superintendent or certified
23    school business official, except that such person shall not
24    be treated as an employee under this Section if that person
25    has negotiated with the Financial Oversight Panel, in
26    conjunction with the school district, a contractual

 

 

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1    agreement for exclusion from this Section.
2        (c) Holds an elective office in a municipality,
3    instrumentality thereof or participating instrumentality.
4    (2) "Employee" does not include persons who:
5        (a) Are eligible for inclusion under any of the
6    following laws:
7            1. "An Act in relation to an Illinois State
8        Teachers' Pension and Retirement Fund", approved May
9        27, 1915, as amended;
10            2. Articles 15 and 16 of this Code.
11        However, such persons shall be included as employees to
12    the extent of earnings that are not eligible for inclusion
13    under the foregoing laws for services not of an
14    instructional nature of any kind.
15        However, any member of the armed forces who is employed
16    as a teacher of subjects in the Reserve Officers Training
17    Corps of any school and who is not certified under the law
18    governing the certification of teachers shall be included
19    as an employee.
20        (b) Are designated by the governing body of a
21    municipality in which a pension fund is required by law to
22    be established for policemen or firemen, respectively, as
23    performing police or fire protection duties, except that
24    when such persons are the heads of the police or fire
25    department and are not eligible to be included within any
26    such pension fund, they shall be included within this

 

 

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1    Article; provided, that such persons shall not be excluded
2    to the extent of concurrent service and earnings not
3    designated as being for police or fire protection duties.
4    However, (i) any head of a police department who was a
5    participant under this Article immediately before October
6    1, 1977 and did not elect, under Section 3-109 of this Act,
7    to participate in a police pension fund shall be an
8    "employee", and (ii) any chief of police who elects to
9    participate in this Fund under Section 3-109.1 of this
10    Code, regardless of whether such person continues to be
11    employed as chief of police or is employed in some other
12    rank or capacity within the police department, shall be an
13    employee under this Article for so long as such person is
14    employed to perform police duties by a participating
15    municipality and has not lawfully rescinded that election.
16        (c) After August 26, 2011 (the effective date of Public
17    Act 97-609), are contributors to or eligible to contribute
18    to a Taft-Hartley pension plan established on or before
19    June 1, 2011 and are employees of a theatre, arena, or
20    convention center that is located in a municipality located
21    in a county with a population greater than 5,000,000, and
22    to which the participating municipality is required to
23    contribute as the person's employer based on earnings from
24    the municipality. Nothing in this paragraph shall affect
25    service credit or creditable service for any period of
26    service prior to August 26, 2011, and this paragraph shall

 

 

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1    not apply to individuals who are participating in the Fund
2    prior to August 26, 2011.
3        (d) Become an employee of any of the following
4    participating instrumentalities on or after the effective
5    date of this amendatory Act of the 98th General Assembly:
6    the Illinois Municipal League; the Illinois Association of
7    Park Districts; the Illinois Supervisors, County
8    Commissioners and Superintendents of Highways Association;
9    an association or not-for-profit corporation, membership
10    in which is authorized under Section 85-15 of the Township
11    Code; the United Counties Council; or the Will County
12    Governmental League.
13    (3) All persons, including, without limitation, public
14defenders and probation officers, who receive earnings from
15general or special funds of a county for performance of
16personal services or official duties within the territorial
17limits of the county, are employees of the county (unless
18excluded by subsection (2) of this Section) notwithstanding
19that they may be appointed by and are subject to the direction
20of a person or persons other than a county board or a county
21officer. It is hereby established that an employer-employee
22relationship under the usual common law rules exists between
23such employees and the county paying their salaries by reason
24of the fact that the county boards fix their rates of
25compensation, appropriate funds for payment of their earnings
26and otherwise exercise control over them. This finding and this

 

 

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1amendatory Act shall apply to all such employees from the date
2of appointment whether such date is prior to or after the
3effective date of this amendatory Act and is intended to
4clarify existing law pertaining to their status as
5participating employees in the Fund.
6(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
797-813, eff. 7-13-12.)
 
8    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
9    Sec. 14-103.10. Compensation.
10    (a) For periods of service prior to January 1, 1978, the
11full rate of salary or wages payable to an employee for
12personal services performed if he worked the full normal
13working period for his position, subject to the following
14maximum amounts: (1) prior to July 1, 1951, $400 per month or
15$4,800 per year; (2) between July 1, 1951 and June 30, 1957
16inclusive, $625 per month or $7,500 per year; (3) beginning
17July 1, 1957, no limitation.
18    In the case of service of an employee in a position
19involving part-time employment, compensation shall be
20determined according to the employees' earnings record.
21    (b) For periods of service on and after January 1, 1978,
22all remuneration for personal services performed defined as
23"wages" under the Social Security Enabling Act, including that
24part of such remuneration which is in excess of any maximum
25limitation provided in such Act, and including any benefits

 

 

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1received by an employee under a sick pay plan in effect before
2January 1, 1981, but excluding lump sum salary payments:
3        (1) for vacation,
4        (2) for accumulated unused sick leave,
5        (3) upon discharge or dismissal,
6        (4) for approved holidays.
7    (c) For periods of service on or after December 16, 1978,
8compensation also includes any benefits, other than lump sum
9salary payments made at termination of employment, which an
10employee receives or is eligible to receive under a sick pay
11plan authorized by law.
12    (d) For periods of service after September 30, 1985,
13compensation also includes any remuneration for personal
14services not included as "wages" under the Social Security
15Enabling Act, which is deducted for purposes of participation
16in a program established pursuant to Section 125 of the
17Internal Revenue Code or its successor laws.
18    (e) For members for which Section 1-160 applies for periods
19of service on and after January 1, 2011, all remuneration for
20personal services performed defined as "wages" under the Social
21Security Enabling Act, excluding remuneration that is in excess
22of the annual earnings, salary, or wages of a member or
23participant, as provided in subsection (b-5) of Section 1-160,
24but including any benefits received by an employee under a sick
25pay plan in effect before January 1, 1981. Compensation shall
26exclude lump sum salary payments:

 

 

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1        (1) for vacation;
2        (2) for accumulated unused sick leave;
3        (3) upon discharge or dismissal; and
4        (4) for approved holidays.
5    (f) Notwithstanding any other provision of this Section,
6"compensation" does not include any future increase in income
7offered by a department under this Article pursuant to the
8requirements of subsection (c) of Section 14-106.5 that is
9accepted by a Tier I employee, or a Tier I retiree returning to
10active service, who has made the election under paragraph (2)
11of subsection (a) or (a-5) of Section 14-106.5.
12    (g) Notwithstanding any other provision of this Section,
13for an employee who first becomes a participant on or after the
14effective date of this amendatory Act of the 98th General
15Assembly, "compensation" does not include any payments or
16reimbursements for travel vouchers submitted more than 30 days
17after the last day of travel for which the voucher is
18submitted.
19(Source: P.A. 96-1490, eff. 1-1-11.)
 
20    (40 ILCS 5/14-103.40 new)
21    Sec. 14-103.40. Tier I employee. "Tier I employee": An
22employee under this Article who first became a member or
23participant before January 1, 2011 under any reciprocal
24retirement system or pension fund established under this Code
25other than a retirement system or pension fund established

 

 

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1under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
2    (40 ILCS 5/14-103.41 new)
3    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
4Tier I employee who is receiving a retirement annuity.
 
5    (40 ILCS 5/14-103.42 new)
6    Sec. 14-103.42. Future increase in income. "Future
7increase in income": Any increase in income in any form offered
8by a department to an employee under this Article after June
930, 2014 that would qualify as "compensation", as defined in
10Section 14-103.10, but for the fact that the department offered
11the increase in income to the employee on the condition that it
12not qualify as compensation and the employee accepted the
13increase in income subject to that condition. The term "future
14increase in income" does not include an increase in income in
15any form that is paid to a Tier I employee under an employment
16contract or collective bargaining agreement that is in effect
17on the effective date of this Section but does include an
18increase in income in any form pursuant to an extension,
19amendment, or renewal of any such employment contract or
20collective bargaining agreement on or after the effective date
21of this amendatory Act of the 98th General Assembly.
 
22    (40 ILCS 5/14-106.5 new)
23    Sec. 14-106.5. Election by Tier I employees and Tier I

 

 

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1retirees.
2    (a) Each Tier I employee shall make an irrevocable election
3either:
4        (1) to agree to item (i) or (ii) as set forth in this
5    paragraph (1):
6            (i) to have the amount of the automatic annual
7        increases in his or her retirement annuity that are
8        otherwise provided for in this Article calculated,
9        instead, as provided in subsection (a-1) of Section
10        14-114, and to waive his or her eligibility for 2
11        automatic annual increases in retirement annuity as
12        provided in subsection (a-2) of Section 14-114; or
13            (ii) to waive his or her eligibility for 3
14        automatic annual increases in retirement annuity, as
15        provided in subsection (a-3) of Section 14-114, and to
16        make the contributions set forth in subsection (a-5) of
17        Section 14-133; or
18        (2) to not agree to item (i) or (ii) as set forth in
19    paragraph (1) of this subsection.
20    The election required under this subsection (a) shall be
21made by each Tier I employee no earlier than February 1, 2014
22and no later than May 31, 2014, except that:
23        (i) a person who becomes a Tier I employee under this
24    Article on or after February 1, 2014 must make the election
25    under this subsection (a) within 60 days after becoming a
26    Tier I employee;

 

 

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1        (ii) a person who returns to active service as a Tier I
2    employee under this Article on or after February 1, 2014
3    and has not yet made an election under this Section must
4    make the election under this subsection (a) within 60 days
5    after returning to active service as a Tier I employee; and
6        (iii) a person who made the election under subsection
7    (a-5) as a Tier I retiree remains bound by that election
8    and shall not make a later election under this subsection
9    (a).
10    If a Tier I employee fails for any reason to make a
11required election under this subsection within the time
12specified, then the employee shall be deemed to have made the
13election under paragraph (2) of this subsection.
14    (a-5) Each Tier I retiree shall make an irrevocable
15election either:
16        (1) to agree to the following:
17            (i) to have the amount of the automatic annual
18        increases in his or her retirement annuity calculated
19        without regard to subsection (a-1), (a-2), or (a-3) of
20        Section 14-114; and
21            (ii) to waive his or her eligibility for 2
22        automatic annual increases in retirement annuity as
23        provided in subsection (a-4) of Section 14-114; or
24        (2) to not agree to items (i) and (ii) as set forth in
25    paragraph (1) of this subsection.
26    The election required under this subsection (a-5) shall be

 

 

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1made by each Tier I retiree no earlier than February 1, 2014
2and no later than May 31, 2014, except that:
3        (i) a person who becomes a Tier I retiree under this
4    Article on or after February 1, 2014 must make the election
5    under this subsection (a-5) within 60 days after becoming a
6    Tier I retiree; and
7        (ii) a person who made the election under subsection
8    (a) as a Tier I employee remains bound by that election and
9    shall not make a later election under this subsection
10    (a-5).
11    If a Tier I retiree fails for any reason to make a required
12election under this subsection within the time specified, then
13the Tier I retiree shall be deemed to have made the election
14under paragraph (2) of this subsection.
15    (a-10) All elections under subsection (a) or (a-5) that are
16made or deemed to be made before June 1, 2014 shall take effect
17on July 1, 2014. Elections that are made or deemed to be made
18on or after June 1, 2014 shall take effect on the first day of
19the month following the month in which the election is made or
20deemed to be made.
21    (b) As adequate and legal consideration provided under this
22amendatory Act of the 98th General Assembly for making an
23election under paragraph (1) of subsection (a) of this Section,
24any future increases in income offered by a department under
25this Article to a Tier I employee who has made an election
26under paragraph (1) of subsection (a) of this Section shall be

 

 

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1offered expressly and irrevocably as constituting compensation
2under Section 14-103.10. In addition, a Tier I employee who has
3made an election under item (i) of paragraph (1) of subsection
4(a) of this Section shall receive the right to also participate
5in the optional cash balance plan established under Section
61-162.
7    As adequate and legal consideration provided under this
8amendatory Act of the 98th General Assembly for making an
9election under paragraph (1) of subsection (a-5) of this
10Section, any future increases in income offered by a department
11under this Article to a Tier I retiree who returns to active
12service after having made the election under paragraph (1) of
13subsection (a-5) of this Section shall be offered expressly and
14irrevocably as constituting compensation under Section
1514-103.10.
16    (c) A Tier I employee who makes the election under
17paragraph (2) of subsection (a) of this Section shall not be
18subject to either item (i) or (ii) set forth in paragraph (1)
19of subsection (a) of this Section. However, any future
20increases in income offered by a department under this Article
21to a Tier I employee who has made the election under paragraph
22(2) of subsection (a) of this Section shall be offered by the
23department expressly and irrevocably as not constituting
24compensation under Section 14-103.10, and the employee may not
25accept any future increase in income that is offered in
26violation of this requirement. In addition, a Tier I employee

 

 

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1who has made the election under paragraph (2) of subsection (a)
2of this Section shall not receive the right to participate in
3the optional cash balance plan established under Section 1-162.
4    A Tier I retiree who makes the election under paragraph (2)
5of subsection (a-5) of this Section shall not be subject to
6either item (i) or (ii) set forth in paragraph (1) of
7subsection (a-5) of this Section. However, any future increases
8in income offered by a department under this Article to a Tier
9I retiree who returns to active service and has made the
10election under paragraph (2) of subsection (a-5) of this
11Section shall be offered by the department expressly and
12irrevocably as not constituting compensation under Section
1314-103.10, and the employee may not accept any future increase
14in income that is offered in violation of this requirement. In
15addition, a Tier I retiree who returns to active service and
16has made the election under paragraph (2) of subsection (a) of
17this Section shall not receive the right to participate in the
18optional cash balance plan established under Section 1-162.
19    (d) The System shall make a good faith effort to contact
20each Tier I employee and Tier I retiree subject to this
21Section. The System shall mail information describing the
22required election to each Tier I employee and Tier I retiree by
23United States Postal Service mail to his or her last known
24address on file with the System. If the Tier I employee or Tier
25I retiree is not responsive to other means of contact, it is
26sufficient for the System to publish the details of any

 

 

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1required elections on its website or to publish those details
2in a regularly published newsletter or other existing public
3forum.
4    Tier I employees and Tier I retirees who are subject to
5this Section shall be provided with an election packet
6containing information regarding their options, as well as the
7forms necessary to make the required election. Upon request,
8the System shall offer Tier I employees and Tier I retirees an
9opportunity to receive information from the System before
10making the required election. The information may consist of
11video materials, group presentations, individual consultation
12with a member or authorized representative of the System in
13person or by telephone or other electronic means, or any
14combination of those methods. The System shall not provide
15advice or counseling with respect to which election a Tier I
16employee or Tier I retiree should make or specific to the legal
17or tax circumstances of or consequences to the Tier I employee
18or Tier I retiree.
19    The System shall inform Tier I employees and Tier I
20retirees in the election packet required under this subsection
21that the Tier I employee or Tier I retiree may also wish to
22obtain information and counsel relating to the election
23required under this Section from any other available source,
24including but not limited to labor organizations and private
25counsel.
26    In no event shall the System, its staff, or the Board be

 

 

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1held liable for any information given to a member, beneficiary,
2or annuitant regarding the elections under this Section. The
3System shall coordinate with the Illinois Department of Central
4Management Services and each other retirement system
5administering an election in accordance with this amendatory
6Act of the 98th General Assembly to provide information
7concerning the impact of the election set forth in this
8Section.
9    (e) Notwithstanding any other provision of law, a
10department under this Article is required to offer any future
11increases in income expressly and irrevocably as not
12constituting "compensation" under Section 14-103.10 to any
13Tier I employee, or Tier I retiree returning to active service,
14who has made an election under paragraph (2) of subsection (a)
15or (a-5) of Section 14-106.5. A Tier I employee, or Tier I
16retiree returning to active service, who has made an election
17under paragraph (2) of subsection (a) or (a-5) of Section
1814-106.5 shall not accept any future increase in income that is
19offered by an employer under this Article in violation of the
20requirement set forth in this subsection.
21    (f) A member's election under this Section is not a
22prohibited election under subdivision (j)(1) of Section 1-119
23of this Code.
24    (g) An employee who has made the election under item (i) of
25paragraph (1) of subsection (a) of this Section may elect to
26participate in the optional cash balance plan under Section

 

 

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11-162.
2    The election to participate in the optional cash balance
3plan shall be made in writing, in the manner provided by the
4applicable retirement system.
5    (h) No provision of this Section shall be interpreted in a
6way that would cause the System to cease to be a qualified plan
7under Section 401(a) of the Internal Revenue Code of 1986.
8    (i) If this Section is determined to be unconstitutional or
9otherwise invalid by a final unappealable decision of an
10Illinois court or a court of competent jurisdiction as applied
11to Tier I employees but not as applied to Tier I retirees, then
12this Section and the changes deriving from the election
13required under this Section shall be null and void as applied
14to Tier I employees but shall remain in full effect for Tier I
15retirees.
16    (j) If this Section is determined to be unconstitutional or
17otherwise invalid by a final unappealable decision of an
18Illinois court or a court of competent jurisdiction as applied
19to Tier I retirees but not as applied to Tier I employees, then
20this Section and the changes deriving from the election
21required under this Section shall be null and void as applied
22to Tier I retirees but shall remain in full effect for Tier I
23employees.
24    (k) If an election created by this amendatory Act in any
25other Article of this Code or any change deriving from that
26election is determined to be unconstitutional or otherwise

 

 

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1invalid by a final unappealable decision of an Illinois court
2or a court of competent jurisdiction, the invalidity of that
3provision shall not in any way affect the validity of this
4Section or the changes deriving from the election required
5under this Section.
 
6    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
7    Sec. 14-114. Automatic increase in retirement annuity.
8    (a) Subject to the provisions of subsections (a-1), (a-2),
9(a-3), and (a-4), any Any person receiving a retirement annuity
10under this Article who retires having attained age 60, or who
11retires before age 60 having at least 35 years of creditable
12service, or who retires on or after January 1, 2001 at an age
13which, when added to the number of years of his or her
14creditable service, equals at least 85, shall, on January 1
15next following the first full year of retirement, have the
16amount of the then fixed and payable monthly retirement annuity
17increased 3%. Any person receiving a retirement annuity under
18this Article who retires before attainment of age 60 and with
19less than (i) 35 years of creditable service if retirement is
20before January 1, 2001, or (ii) the number of years of
21creditable service which, when added to the member's age, would
22equal 85, if retirement is on or after January 1, 2001, shall
23have the amount of the fixed and payable retirement annuity
24increased by 3% on the January 1 occurring on or next following
25(1) attainment of age 60, or (2) the first anniversary of

 

 

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1retirement, whichever occurs later. However, for persons who
2receive the alternative retirement annuity under Section
314-110, references in this subsection (a) to attainment of age
460 shall be deemed to refer to attainment of age 55. For a
5person receiving early retirement incentives under Section
614-108.3 whose retirement annuity began after January 1, 1992
7pursuant to an extension granted under subsection (e) of that
8Section, the first anniversary of retirement shall be deemed to
9be January 1, 1993. For a person who retires on or after June
1028, 2001 and on or before October 1, 2001, and whose retirement
11annuity is calculated, in whole or in part, under Section
1214-110 or subsection (g) or (h) of Section 14-108, the first
13anniversary of retirement shall be deemed to be January 1,
142002.
15    On each January 1 following the date of the initial
16increase under this subsection, the employee's monthly
17retirement annuity shall be increased by an additional 3%.
18    Beginning January 1, 1990, and except as provided in
19subsection (a-1), all automatic annual increases payable under
20this Section shall be calculated as a percentage of the total
21annuity payable at the time of the increase, including previous
22increases granted under this Article.
23    (a-1) Notwithstanding any other provision of this Article,
24for a Tier I employee who made the election under item (i) of
25paragraph (1) of subsection (a) of Section 14-106.5, the amount
26of each automatic annual increase in retirement annuity

 

 

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1occurring on or after the effective date of that election shall
2be 3% of the originally granted retirement annuity.
3    (a-2) Notwithstanding any other provision of this Article,
4for a Tier I employee who made the election under item (i) of
5paragraph (1) of subsection (a) of Section 14-106.5, once the
6first annual increase under this Section has been granted, the
7next 2 scheduled annual increases shall be skipped, and
8thereafter all annual increases shall be granted.
9    (a-3) Notwithstanding any other provision of this Article,
10for a Tier I employee who made the election under item (ii) of
11paragraph (1) of subsection (a) of Section 14-106.5, once the
12first annual increase under this Section has been granted, the
13next 3 scheduled annual increases shall be skipped, and
14thereafter all annual increases shall be granted.
15    (a-4) Notwithstanding any other provision of this Article,
16for a Tier I retiree who made the election under paragraph (1)
17of subsection (a-5) of Section 14-106.5:
18        (1) if the Tier I retiree has not received the first
19    annual increase under this Section as of the effective date
20    of this amendatory Act of the 98th General Assembly, then
21    once the first annual increase under this Section has been
22    granted, the next scheduled annual increase shall be
23    skipped, the following annual increase shall be granted,
24    the next annual increase shall be skipped, and thereafter
25    all annual increases shall be granted; and
26        (2) if the Tier I retiree has received the first annual

 

 

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1    increase under this Section as of the effective date of
2    this amendatory Act of the 98th General Assembly, then the
3    next annual increase after that effective date shall be
4    skipped, the following annual increase shall be granted,
5    the next annual increase shall be skipped, and thereafter
6    all annual increases shall be granted.
7    (b) The provisions of subsection (a) of this Section shall
8be applicable to an employee only if the employee makes the
9additional contributions required after December 31, 1969 for
10the purpose of the automatic increases for not less than the
11equivalent of one full year. If an employee becomes an
12annuitant before his additional contributions equal one full
13year's contributions based on his salary at the date of
14retirement, the employee may pay the necessary balance of the
15contributions to the system, without interest, and be eligible
16for the increasing annuity authorized by this Section.
17    (c) The provisions of subsection (a) of this Section shall
18not be applicable to any annuitant who is on retirement on
19December 31, 1969, and thereafter returns to State service,
20unless the member has established at least one year of
21additional creditable service following reentry into service.
22    (d) In addition to other increases which may be provided by
23this Section, on January 1, 1981 any annuitant who was
24receiving a retirement annuity on or before January 1, 1971
25shall have his retirement annuity then being paid increased $1
26per month for each year of creditable service. On January 1,

 

 

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11982, any annuitant who began receiving a retirement annuity on
2or before January 1, 1977, shall have his retirement annuity
3then being paid increased $1 per month for each year of
4creditable service.
5    On January 1, 1987, any annuitant who began receiving a
6retirement annuity on or before January 1, 1977, shall have the
7monthly retirement annuity increased by an amount equal to 8
8per year of creditable service times the number of years that
9have elapsed since the annuity began.
10    (e) Every person who receives the alternative retirement
11annuity under Section 14-110 and who is eligible to receive the
123% increase under subsection (a) on January 1, 1986, shall also
13receive on that date a one-time increase in retirement annuity
14equal to the difference between (1) his actual retirement
15annuity on that date, including any increases received under
16subsection (a), and (2) the amount of retirement annuity he
17would have received on that date if the amendments to
18subsection (a) made by Public Act 84-162 had been in effect
19since the date of his retirement.
20(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
2192-651, eff. 7-11-02.)
 
22    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
23    Sec. 14-132. Obligations of State; funding guarantee.
24    (a) The payment of the required department contributions,
25all allowances, annuities, benefits granted under this

 

 

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1Article, and all expenses of administration of the system are
2obligations of the State of Illinois to the extent specified in
3this Article.
4    All income of the system shall be credited to a separate
5account for this system in the State treasury and shall be used
6to pay allowances, annuities, benefits and administration
7expense.
8    (b) The State shall be contractually obligated to
9contribute to the System in each State fiscal year an amount
10not less than the sum required in Section 14-131 as that
11Section existed prior to the effective date of this amendatory
12Act of the 98th General Assembly.
13    The obligations created under this subsection (b) are
14contractual obligations protected and enforceable under
15Article I, Section 16 and Article XIII, Section 5 of the
16Illinois Constitution.
17    Notwithstanding any other provision of law, if the State
18fails to pay in a State fiscal year the amount guaranteed under
19this subsection (b), the System may bring a mandamus action in
20the Circuit Court of Sangamon County to compel the State to
21make that payment, irrespective of other remedies that may be
22available to the System. It shall be the mandatory fiduciary
23obligation of the Board of the System to bring that action if
24the State fails to pay in the fiscal year the amount guaranteed
25under this subsection (b). Before commencing that action, the
26Board shall submit a voucher for the contributions required in

 

 

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1Section 14-131. If the State fails to pay a vouchered amount
2within 90 days after receiving a voucher for that amount, then
3the Board shall submit a written request to the Comptroller
4seeking payment of that amount. A copy of the request shall be
5filed with the Secretary of State, and the Secretary of State
6shall provide copies of the request to the Governor and General
7Assembly. No earlier than the 16th day after filing a request
8with the Secretary, but no later than the 21st day after filing
9that request, the Board may commence such an action in the
10Circuit Court. If the Board fails to commence such action on or
11before the 21st day after filing the request with the Secretary
12of State, then any Tier I employee or Tier I retiree who made
13the election under paragraph (1) of subsection (a) or (a-5) of
14Section 14-106.5 may file a mandamus action against the Board
15to compel the Board to commence its mandamus action against the
16State. This subsection (b) constitutes an express waiver of the
17State's sovereign immunity. In ordering the State to make the
18required payment, the court may order a reasonable payment
19schedule to enable the State to make the required payment. The
20obligations and causes of action created under this subsection
21(b) shall be in addition to any other right or remedy otherwise
22accorded by common law, or State or federal law, and nothing in
23this subsection shall be construed to deny, abrogate, impair,
24or waive any such common law or statutory right or remedy.
25    Any payments required to be made by the State pursuant to
26this subsection (b) are expressly subordinated to the payment

 

 

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1of the principal, interest, and premium, if any, on any bonded
2debt obligation of the State or any other State-created entity,
3either currently outstanding or to be issued, for which the
4source of repayment or security thereon is derived directly or
5indirectly from tax revenues collected by the State or any
6other State-created entity. Payments on such bonded
7obligations include any statutory fund transfers or other
8prefunding mechanisms or formulas set forth, now or hereafter,
9in State law or bond indentures, into debt service funds or
10accounts of the State related to such bonded obligations,
11consistent with the payment schedules associated with such
12obligations.
13(Source: P.A. 80-841.)
 
14    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
15    Sec. 14-133. Contributions on behalf of members.
16    (a) Each participating employee shall make contributions
17to the System, based on the employee's compensation, as
18follows:
19        (1) Covered employees, except as indicated below, 3.5%
20    for retirement annuity, and 0.5% for a widow or survivors
21    annuity;
22        (2) Noncovered employees, except as indicated below,
23    7% for retirement annuity and 1% for a widow or survivors
24    annuity;
25        (3) Noncovered employees serving in a position in which

 

 

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1    "eligible creditable service" as defined in Section 14-110
2    may be earned, 1% for a widow or survivors annuity plus the
3    following amount for retirement annuity: 8.5% through
4    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
5    in 2004 and thereafter;
6        (4) Covered employees serving in a position in which
7    "eligible creditable service" as defined in Section 14-110
8    may be earned, 0.5% for a widow or survivors annuity plus
9    the following amount for retirement annuity: 5% through
10    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
11    and thereafter;
12        (5) Each security employee of the Department of
13    Corrections or of the Department of Human Services who is a
14    covered employee, 0.5% for a widow or survivors annuity
15    plus the following amount for retirement annuity: 5%
16    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
17    in 2004 and thereafter;
18        (6) Each security employee of the Department of
19    Corrections or of the Department of Human Services who is
20    not a covered employee, 1% for a widow or survivors annuity
21    plus the following amount for retirement annuity: 8.5%
22    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
23    11.5% in 2004 and thereafter.
24    (a-1) In addition to the contributions required under
25subsection (a), an employee who elects to participate in the
26optional cash balance plan under Section 1-162 shall pay to the

 

 

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1System for the purpose of participating in the optional cash
2balance plan an additional contribution of 2% of each payment
3of compensation received while he or she is a participant in
4the optional cash balance plan. These contributions shall not
5be used for the purpose of determining any benefit under this
6Article except as provided in the optional cash balance plan.
7    (a-5) In addition to the contributions otherwise required
8under this Article, each Tier I member who made the election
9under item (ii) of paragraph (1) of subsection (a) of Section
1014-106.5 shall also make the following contributions for
11retirement annuity from each payment of compensation:
12        (1) beginning July 1, 2014 and through June 30, 2015,
13    1% of compensation; and
14        (2) beginning on July 1, 2015, 2% of compensation.
15    (b) Contributions shall be in the form of a deduction from
16compensation and shall be made notwithstanding that the
17compensation paid in cash to the employee shall be reduced
18thereby below the minimum prescribed by law or regulation. Each
19member is deemed to consent and agree to the deductions from
20compensation provided for in this Article, and shall receipt in
21full for salary or compensation.
22(Source: P.A. 92-14, eff. 6-28-01.)
 
23    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
24    Sec. 14-135.08. To certify required State contributions.
25    (a) To certify to the Governor and to each department, on

 

 

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1or before November 15 of each year through until November 15,
22011, the required rate for State contributions to the System
3for the next State fiscal year, as determined under subsection
4(b) of Section 14-131. The certification to the Governor under
5this subsection (a) shall include a copy of the actuarial
6recommendations upon which the rate is based and shall
7specifically identify the System's projected State normal cost
8for that fiscal year.
9    (a-5) On or before November 1 of each year, beginning
10November 1, 2012, the Board shall submit to the State Actuary,
11the Governor, and the General Assembly a proposed certification
12of the amount of the required State contribution to the System
13for the next fiscal year, along with all of the actuarial
14assumptions, calculations, and data upon which that proposed
15certification is based. On or before January 1 of each year,
16beginning January 1, 2013, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification of the required State contributions.
21    On or before January 15, 2013 and each January 15
22thereafter, the Board shall certify to the Governor and the
23General Assembly the amount of the required State contribution
24for the next fiscal year. The certification shall include a
25copy of the actuarial recommendations upon which it is based
26and shall specifically identify the System's projected State

 

 

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1normal cost for that fiscal year. The Board's certification
2must note any deviations from the State Actuary's recommended
3changes, the reason or reasons for not following the State
4Actuary's recommended changes, and the fiscal impact of not
5following the State Actuary's recommended changes on the
6required State contribution.
7    (b) The certifications under subsections (a) and (a-5)
8shall include an additional amount necessary to pay all
9principal of and interest on those general obligation bonds due
10the next fiscal year authorized by Section 7.2(a) of the
11General Obligation Bond Act and issued to provide the proceeds
12deposited by the State with the System in July 2003,
13representing deposits other than amounts reserved under
14Section 7.2(c) of the General Obligation Bond Act. For State
15fiscal year 2005, the Board shall make a supplemental
16certification of the additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18in State fiscal years 2004 and 2005 authorized by Section
197.2(a) of the General Obligation Bond Act and issued to provide
20the proceeds deposited by the State with the System in July
212003, representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act, as soon as
23practical after the effective date of this amendatory Act of
24the 93rd General Assembly.
25    On or before May 1, 2004, the Board shall recalculate and
26recertify to the Governor and to each department the amount of

 

 

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1the required State contribution to the System and the required
2rates for State contributions to the System for State fiscal
3year 2005, taking into account the amounts appropriated to and
4received by the System under subsection (d) of Section 7.2 of
5the General Obligation Bond Act.
6    On or before July 1, 2005, the Board shall recalculate and
7recertify to the Governor and to each department the amount of
8the required State contribution to the System and the required
9rates for State contributions to the System for State fiscal
10year 2006, taking into account the changes in required State
11contributions made by this amendatory Act of the 94th General
12Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor and to each department the amount of
15the required State contribution to the System for State fiscal
16year 2011, applying the changes made by Public Act 96-889 to
17the System's assets and liabilities as of June 30, 2009 as
18though Public Act 96-889 was approved on that date.
19(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2097-694, eff. 6-18-12.)
 
21    (40 ILCS 5/14-152.1)
22    Sec. 14-152.1. Application and expiration of new benefit
23increases.
24    (a) As used in this Section, "new benefit increase" means
25an increase in the amount of any benefit provided under this

 

 

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1Article, or an expansion of the conditions of eligibility for
2any benefit under this Article, that results from an amendment
3to this Code that takes effect after June 1, 2005 (the
4effective date of Public Act 94-4). "New benefit increase",
5however, does not include any benefit increase resulting from
6the changes made to this Article or Article 1 by Public Act
796-37 or this amendatory Act of the 98th 96th General Assembly.
8    (b) Notwithstanding any other provision of this Code or any
9subsequent amendment to this Code, every new benefit increase
10is subject to this Section and shall be deemed to be granted
11only in conformance with and contingent upon compliance with
12the provisions of this Section.
13    (c) The Public Act enacting a new benefit increase must
14identify and provide for payment to the System of additional
15funding at least sufficient to fund the resulting annual
16increase in cost to the System as it accrues.
17    Every new benefit increase is contingent upon the General
18Assembly providing the additional funding required under this
19subsection. The Commission on Government Forecasting and
20Accountability shall analyze whether adequate additional
21funding has been provided for the new benefit increase and
22shall report its analysis to the Public Pension Division of the
23Department of Financial and Professional Regulation. A new
24benefit increase created by a Public Act that does not include
25the additional funding required under this subsection is null
26and void. If the Public Pension Division determines that the

 

 

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1additional funding provided for a new benefit increase under
2this subsection is or has become inadequate, it may so certify
3to the Governor and the State Comptroller and, in the absence
4of corrective action by the General Assembly, the new benefit
5increase shall expire at the end of the fiscal year in which
6the certification is made.
7    (d) Every new benefit increase shall expire 5 years after
8its effective date or on such earlier date as may be specified
9in the language enacting the new benefit increase or provided
10under subsection (c). This does not prevent the General
11Assembly from extending or re-creating a new benefit increase
12by law.
13    (e) Except as otherwise provided in the language creating
14the new benefit increase, a new benefit increase that expires
15under this Section continues to apply to persons who applied
16and qualified for the affected benefit while the new benefit
17increase was in effect and to the affected beneficiaries and
18alternate payees of such persons, but does not apply to any
19other person, including without limitation a person who
20continues in service after the expiration date and did not
21apply and qualify for the affected benefit while the new
22benefit increase was in effect.
23(Source: P.A. 96-37, eff. 7-13-09.)
 
24    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
25    Sec. 15-106. Employer. "Employer": The University of

 

 

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1Illinois, Southern Illinois University, Chicago State
2University, Eastern Illinois University, Governors State
3University, Illinois State University, Northeastern Illinois
4University, Northern Illinois University, Western Illinois
5University, the State Board of Higher Education, the Illinois
6Mathematics and Science Academy, the University Civil Service
7Merit Board, the Board of Trustees of the State Universities
8Retirement System, the Illinois Community College Board,
9community college boards, any association of community college
10boards organized under Section 3-55 of the Public Community
11College Act, the Board of Examiners established under the
12Illinois Public Accounting Act, and, only during the period for
13which employer contributions required under Section 15-155 are
14paid, the following organizations: the alumni associations,
15the foundations and the athletic associations which are
16affiliated with the universities and colleges included in this
17Section as employers. An individual that begins employment
18after the effective date of this amendatory Act of the 98th
19General Assembly with an entity not defined as an employer in
20this Section shall not be deemed an employee for the purposes
21of this Article with respect to that employment and shall not
22be eligible to participate in the System with respect to that
23employment; provided, however, that those individuals who are
24both employed and already participants in the System on the
25effective date of this amendatory Act of the 98th General
26Assembly shall be entitled to remain participants in the System

 

 

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1for the duration of that employment and continue to earn
2service credit.
3    Notwithstanding any provision of law to the contrary, an
4individual who begins employment with any of the following
5employers on or after the effective date of this amendatory Act
6of the 98th General Assembly shall not be deemed an employee
7and shall not be eligible to participate in the System with
8respect to that employment: any association of community
9college boards organized under Section 3-55 of the Public
10Community College Act, the Association of Illinois
11Middle-Grade Schools, the Illinois Association of School
12Administrators, the Illinois Association for Supervision and
13Curriculum Development, the Illinois Principals Association,
14the Illinois Association of School Business Officials, or the
15Illinois Special Olympics; provided, however, that those
16individuals who are both employed and already participants in
17the System on the effective date of this amendatory Act of the
1898th General Assembly shall be entitled to remain participants
19in the System for the duration of that employment and continue
20to earn service credit.
21    A department as defined in Section 14-103.04 is an employer
22for any person appointed by the Governor under the Civil
23Administrative Code of Illinois who is a participating employee
24as defined in Section 15-109. The Department of Central
25Management Services is an employer with respect to persons
26employed by the State Board of Higher Education in positions

 

 

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1with the Illinois Century Network as of June 30, 2004 who
2remain continuously employed after that date by the Department
3of Central Management Services in positions with the Illinois
4Century Network, the Bureau of Communication and Computer
5Services, or, if applicable, any successor bureau.
6    The cities of Champaign and Urbana shall be considered
7employers, but only during the period for which contributions
8are required to be made under subsection (b-1) of Section
915-155 and only with respect to individuals described in
10subsection (h) of Section 15-107.
11(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
12Sec. 999.)
 
13    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
14    Sec. 15-107. Employee.
15    (a) "Employee" means any member of the educational,
16administrative, secretarial, clerical, mechanical, labor or
17other staff of an employer whose employment is permanent and
18continuous or who is employed in a position in which services
19are expected to be rendered on a continuous basis for at least
204 months or one academic term, whichever is less, who (A)
21receives payment for personal services on a warrant issued
22pursuant to a payroll voucher certified by an employer and
23drawn by the State Comptroller upon the State Treasurer or by
24an employer upon trust, federal or other funds, or (B) is on a
25leave of absence without pay. Employment which is irregular,

 

 

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1intermittent or temporary shall not be considered continuous
2for purposes of this paragraph.
3    However, a person is not an "employee" if he or she:
4        (1) is a student enrolled in and regularly attending
5    classes in a college or university which is an employer,
6    and is employed on a temporary basis at less than full
7    time;
8        (2) is currently receiving a retirement annuity or a
9    disability retirement annuity under Section 15-153.2 from
10    this System;
11        (3) is on a military leave of absence;
12        (4) is eligible to participate in the Federal Civil
13    Service Retirement System and is currently making
14    contributions to that system based upon earnings paid by an
15    employer;
16        (5) is on leave of absence without pay for more than 60
17    days immediately following termination of disability
18    benefits under this Article;
19        (6) is hired after June 30, 1979 as a public service
20    employment program participant under the Federal
21    Comprehensive Employment and Training Act and receives
22    earnings in whole or in part from funds provided under that
23    Act; or
24        (7) is employed on or after July 1, 1991 to perform
25    services that are excluded by subdivision (a)(7)(f) or
26    (a)(19) of Section 210 of the federal Social Security Act

 

 

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1    from the definition of employment given in that Section (42
2    U.S.C. 410).
3    (b) Any employer may, by filing a written notice with the
4board, exclude from the definition of "employee" all persons
5employed pursuant to a federally funded contract entered into
6after July 1, 1982 with a federal military department in a
7program providing training in military courses to federal
8military personnel on a military site owned by the United
9States Government, if this exclusion is not prohibited by the
10federally funded contract or federal laws or rules governing
11the administration of the contract.
12    (c) Any person appointed by the Governor under the Civil
13Administrative Code of the State is an employee, if he or she
14is a participant in this system on the effective date of the
15appointment.
16    (d) A participant on lay-off status under civil service
17rules is considered an employee for not more than 120 days from
18the date of the lay-off.
19    (e) A participant is considered an employee during (1) the
20first 60 days of disability leave, (2) the period, not to
21exceed one year, in which his or her eligibility for disability
22benefits is being considered by the board or reviewed by the
23courts, and (3) the period he or she receives disability
24benefits under the provisions of Section 15-152, workers'
25compensation or occupational disease benefits, or disability
26income under an insurance contract financed wholly or partially

 

 

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1by the employer.
2    (f) Absences without pay, other than formal leaves of
3absence, of less than 30 calendar days, are not considered as
4an interruption of a person's status as an employee. If such
5absences during any period of 12 months exceed 30 work days,
6the employee status of the person is considered as interrupted
7as of the 31st work day.
8    (g) A staff member whose employment contract requires
9services during an academic term is to be considered an
10employee during the summer and other vacation periods, unless
11he or she declines an employment contract for the succeeding
12academic term or his or her employment status is otherwise
13terminated, and he or she receives no earnings during these
14periods.
15    (h) An individual who was a participating employee employed
16in the fire department of the University of Illinois's
17Champaign-Urbana campus immediately prior to the elimination
18of that fire department and who immediately after the
19elimination of that fire department became employed by the fire
20department of the City of Urbana or the City of Champaign shall
21continue to be considered as an employee for purposes of this
22Article for so long as the individual remains employed as a
23firefighter by the City of Urbana or the City of Champaign. The
24individual shall cease to be considered an employee under this
25subsection (h) upon the first termination of the individual's
26employment as a firefighter by the City of Urbana or the City

 

 

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1of Champaign.
2    (i) An individual who is employed on a full-time basis as
3an officer or employee of a statewide teacher organization that
4serves System participants or an officer of a national teacher
5organization that serves System participants may participate
6in the System and shall be deemed an employee, provided that
7(1) the individual has previously earned creditable service
8under this Article, (2) the individual files with the System an
9irrevocable election to become a participant before the
10effective date of this amendatory Act of the 97th General
11Assembly, (3) the individual does not receive credit for that
12employment under any other Article of this Code, and (4) the
13individual first became a full-time employee of the teacher
14organization and becomes a participant before the effective
15date of this amendatory Act of the 97th General Assembly. An
16employee under this subsection (i) is responsible for paying to
17the System both (A) employee contributions based on the actual
18compensation received for service with the teacher
19organization and (B) employer contributions equal to the normal
20costs (as defined in Section 15-155) resulting from that
21service; all or any part of these contributions may be paid on
22the employee's behalf or picked up for tax purposes (if
23authorized under federal law) by the teacher organization.
24    A person who is an employee as defined in this subsection
25(i) may establish service credit for similar employment prior
26to becoming an employee under this subsection by paying to the

 

 

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1System for that employment the contributions specified in this
2subsection, plus interest at the effective rate from the date
3of service to the date of payment. However, credit shall not be
4granted under this subsection for any such prior employment for
5which the applicant received credit under any other provision
6of this Code, or during which the applicant was on a leave of
7absence under Section 15-113.2.
8    (j) A person employed by the State Board of Higher
9Education in a position with the Illinois Century Network as of
10June 30, 2004 shall be considered to be an employee for so long
11as he or she remains continuously employed after that date by
12the Department of Central Management Services in a position
13with the Illinois Century Network, the Bureau of Communication
14and Computer Services, or, if applicable, any successor bureau
15and meets the requirements of subsection (a).
16    (k) In the case of doubt as to whether any person is an
17employee within the meaning of this Section, the decision of
18the Board shall be final.
19(Source: P.A. 97-651, eff. 1-5-12.)
 
20    (40 ILCS 5/15-108.1 new)
21    Sec. 15-108.1. Tier I employee. "Tier I employee": An
22employee under this Article, other than a participant in the
23self-managed plan under Section 15-158.2, who first became a
24member or participant before January 1, 2011 under any
25reciprocal retirement system or pension fund established under

 

 

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1this Code other than a retirement system or pension fund
2established under Article 2, 3, 4, 5, 6, or 18 of this Code.
3However, for the purposes of the election under Section
415-132.9 and the consequences arising from that election, "Tier
5I employee" does not include a participant under this Article
6who would qualify as a Tier I employee but who has made an
7irrevocable election on or before January 1, 2013 to retire
8from service pursuant to the terms of a collective bargaining
9agreement in effect on January 1, 2013, excluding any
10extension, amendment, or renewal of that agreement on or after
11that date, and has notified the System of that election.
 
12    (40 ILCS 5/15-108.2 new)
13    Sec. 15-108.2. Tier I retiree. "Tier I retiree": A former
14Tier I employee who is receiving a retirement annuity. However,
15for the purposes of the election under Section 15-132.9 and the
16consequences arising from that election, "Tier I retiree" also
17includes a participant under this Article who would qualify as
18a Tier I employee but who has made an irrevocable election on
19or before January 1, 2013 to retire from service pursuant to
20the terms of a collective bargaining agreement in effect on
21January 1, 2013, excluding any extension, amendment, or renewal
22of that agreement on or after that date, and has notified the
23System of that election.
24    A person does not become a Tier I retiree by virtue of
25receiving a reversionary, survivors, beneficiary or disability

 

 

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1annuity.
 
2    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
3    Sec. 15-111. Earnings. "Earnings": An amount paid for
4personal services equal to the sum of the basic compensation
5plus extra compensation for summer teaching, overtime or other
6extra service. For periods for which an employee receives
7service credit under subsection (c) of Section 15-113.1 or
8Section 15-113.2, earnings are equal to the basic compensation
9on which contributions are paid by the employee during such
10periods. Compensation for employment which is irregular,
11intermittent and temporary shall not be considered earnings,
12unless the participant is also receiving earnings from the
13employer as an employee under Section 15-107.
14    With respect to transition pay paid by the University of
15Illinois to a person who was a participating employee employed
16in the fire department of the University of Illinois's
17Champaign-Urbana campus immediately prior to the elimination
18of that fire department:
19        (1) "Earnings" includes transition pay paid to the
20    employee on or after the effective date of this amendatory
21    Act of the 91st General Assembly.
22        (2) "Earnings" includes transition pay paid to the
23    employee before the effective date of this amendatory Act
24    of the 91st General Assembly only if (i) employee
25    contributions under Section 15-157 have been withheld from

 

 

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1    that transition pay or (ii) the employee pays to the System
2    before January 1, 2001 an amount representing employee
3    contributions under Section 15-157 on that transition pay.
4    Employee contributions under item (ii) may be paid in a
5    lump sum, by withholding from additional transition pay
6    accruing before January 1, 2001, or in any other manner
7    approved by the System. Upon payment of the employee
8    contributions on transition pay, the corresponding
9    employer contributions become an obligation of the State.
10    Notwithstanding any other provision of this Section,
11"earnings" does not include any future increase in income
12offered by an employer under this Article pursuant to the
13requirements of subsection (c) of Section 15-132.9 that is
14accepted by a Tier I employee, or a Tier I retiree returning to
15active service, who has made the election under paragraph (2)
16of subsection (a) or (a-5) of Section 15-132.9.
17(Source: P.A. 91-887, eff. 7-6-00.)
 
18    (40 ILCS 5/15-112.1 new)
19    Sec. 15-112.1. Future increase in income. "Future increase
20in income": Any increase in income in any form offered by an
21employer to an employee under this Article after June 30, 2014
22that would qualify as "earnings", as defined in Section 15-111,
23but for the fact that the employer offered the increase in
24income to the employee on the condition that it not qualify as
25earnings and the employee accepted the increase in income

 

 

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1subject to that condition. The term "future increase in income"
2does not include an increase in income in any form that is paid
3to a Tier I employee under an employment contract or collective
4bargaining agreement that is in effect on the effective date of
5this Section but does include an increase in income in any form
6pursuant to an extension, amendment, or renewal of any such
7employment contract or collective bargaining agreement on or
8after the effective date of this amendatory Act of the 98th
9General Assembly.
 
10    (40 ILCS 5/15-132.9 new)
11    Sec. 15-132.9. Election by Tier I employees and Tier I
12retirees.
13    (a) Each Tier I employee shall make an irrevocable election
14either:
15        (1) to agree to item (i) or (ii) as set forth in this
16    paragraph (1):
17            (i) to have the amount of the automatic annual
18        increases in his or her retirement annuity that are
19        otherwise provided for in this Article calculated,
20        instead, as provided in subsection (d-1) of Section
21        15-136, and to waive his or her eligibility for 2
22        automatic annual increases in retirement annuity as
23        provided in subsection (d-2) of Section 15-157; or
24            (ii) to waive his or her eligibility for 3
25        automatic annual increases in retirement annuity, as

 

 

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1        provided in subsection (d-3) of Section 15-136, and to
2        make the contributions set forth in subsection (a-5) of
3        Section 15-157; or
4        (2) to not agree to item (i) or (ii) as set forth in
5    paragraph (1) of this subsection.
6    The election required under this subsection (a) shall be
7made by each Tier I employee no earlier than February 1, 2014
8and no later than May 31, 2014, except that:
9        (i) a person who becomes a Tier I employee under this
10    Article on or after February 1, 2014 must make the election
11    under this subsection (a) within 60 days after becoming a
12    Tier I employee;
13        (ii) a person who returns to active service as a Tier I
14    employee under this Article on or after February 1, 2014
15    and has not yet made an election under this Section must
16    make the election under this subsection (a) within 60 days
17    after returning to active service as a Tier I employee; and
18        (iii) a person who made the election under subsection
19    (a-5) as a Tier I retiree remains bound by that election
20    and shall not make a later election under this subsection
21    (a).
22    If a Tier I employee fails for any reason to make a
23required election under this subsection within the time
24specified, then the employee shall be deemed to have made the
25election under paragraph (2) of this subsection.
26    (a-5) Each Tier I retiree shall make an irrevocable

 

 

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1election either:
2        (1) to agree to the following:
3            (i) to have the amount of the automatic annual
4        increases in his or her retirement annuity calculated
5        without regard to subsection (d-1), (d-2), or (d-3) of
6        Section 15-136; and
7            (ii) to waive his or her eligibility for 2
8        automatic annual increases in retirement annuity as
9        provided in subsection (d-4) of Section 15-136; or
10        (2) to not agree to items (i) and (ii) as set forth in
11    paragraph (1) of this subsection.
12    The election required under this subsection (a-5) shall be
13made by each Tier I retiree no earlier than February 1, 2014
14and no later than May 31, 2014, except that:
15        (i) a person who becomes a Tier I retiree under this
16    Article on or after February 1, 2014 must make the election
17    under this subsection (a-5) within 60 days after becoming a
18    Tier I retiree; and
19        (ii) a person who made the election under subsection
20    (a) as a Tier I employee remains bound by that election and
21    shall not make a later election under this subsection
22    (a-5).
23    If a Tier I retiree fails for any reason to make a required
24election under this subsection within the time specified, then
25the Tier I retiree shall be deemed to have made the election
26under paragraph (2) of this subsection.

 

 

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1    (a-10) All elections under subsection (a) or (a-5) that are
2made or deemed to be made before June 1, 2014 shall take effect
3on July 1, 2014. Elections that are made or deemed to be made
4on or after June 1, 2014 shall take effect on the first day of
5the month following the month in which the election is made or
6deemed to be made.
7    (b) As adequate and legal consideration provided under this
8amendatory Act of the 98th General Assembly for making an
9election under paragraph (1) of subsection (a) of this Section,
10any future increases in income offered by an employer under
11this Article to a Tier I employee who has made an election
12under paragraph (1) of subsection (a) of this Section shall be
13offered expressly and irrevocably as constituting earnings
14under Section 15-111. In addition, a Tier I employee who has
15made an election under item (i) of paragraph (1) of subsection
16(a) of this Section shall receive the right to also participate
17in the optional cash balance plan established under Section
181-162.
19    As adequate and legal consideration provided under this
20amendatory Act of the 98th General Assembly for making an
21election under paragraph (1) of subsection (a-5) of this
22Section, any future increases in income offered by an employer
23under this Article to a Tier I retiree who returns to active
24service after having made the election under paragraph (1) of
25subsection (a-5) of this Section shall be offered expressly and
26irrevocably as constituting earnings under Section 15-111.

 

 

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1    (c) A Tier I employee who makes the election under
2paragraph (2) of subsection (a) of this Section shall not be
3subject to either item (i) or (ii) set forth in paragraph (1)
4of subsection (a) of this Section. However, any future
5increases in income offered by an employer under this Article
6to a Tier I employee who has made the election under paragraph
7(2) of subsection (a) of this Section shall be offered by the
8employer expressly and irrevocably as not constituting
9earnings under Section 15-111, and the employee may not accept
10any future increase in income that is offered in violation of
11this requirement. In addition, a Tier I employee who has made
12the election under paragraph (2) of subsection (a) of this
13Section shall not receive the right to participate in the
14optional cash balance plan established under Section 1-162.
15    A Tier I retiree who makes the election under paragraph (2)
16of subsection (a-5) of this Section shall not be subject to
17either item (i) or (ii) set forth in paragraph (1) of
18subsection (a-5) of this Section. However, any future increases
19in income offered by an employer under this Article to a Tier I
20retiree who returns to active service and has made the election
21under paragraph (2) of subsection (a-5) of this Section shall
22be offered by the employer expressly and irrevocably as not
23constituting earnings under Section 15-111, and the employee
24may not accept any future increase in income that is offered in
25violation of this requirement. In addition, a Tier I retiree
26who returns to active service and has made the election under

 

 

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1paragraph (2) of subsection (a-5) of this Section shall not
2receive the right to participate in the optional cash balance
3plan established under Section 1-162.
4    (d) The System shall make a good faith effort to contact
5each Tier I employee and Tier I retiree subject to this
6Section. The System shall mail information describing the
7required election to each Tier I employee and Tier I retiree by
8United States Postal Service mail to his or her last known
9address on file with the System. If the Tier I employee or Tier
10I retiree is not responsive to other means of contact, it is
11sufficient for the System to publish the details of any
12required elections on its website or to publish those details
13in a regularly published newsletter or other existing public
14forum.
15    Tier I employees and Tier I retirees who are subject to
16this Section shall be provided with an election packet
17containing information regarding their options, as well as the
18forms necessary to make the required election. Upon request,
19the System shall offer Tier I employees and Tier I retirees an
20opportunity to receive information from the System before
21making the required election. The information may consist of
22video materials, group presentations, individual consultation
23with a member or authorized representative of the System in
24person or by telephone or other electronic means, or any
25combination of those methods. The System shall not provide
26advice or counseling with respect to which election a Tier I

 

 

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1employee or Tier I retiree should make or specific to the legal
2or tax circumstances of or consequences to the Tier I employee
3or Tier I retiree.
4    The System shall inform Tier I employees and Tier I
5retirees in the election packet required under this subsection
6that the Tier I employee or Tier I retiree may also wish to
7obtain information and counsel relating to the election
8required under this Section from any other available source,
9including but not limited to labor organizations and private
10counsel.
11    In no event shall the System, its staff, or the Board be
12held liable for any information given to a member, beneficiary,
13or annuitant regarding the elections under this Section. The
14System shall coordinate with the Illinois Department of Central
15Management Services and each other retirement system
16administering an election in accordance with this amendatory
17Act of the 98th General Assembly to provide information
18concerning the impact of the election set forth in this
19Section.
20    (e) Notwithstanding any other provision of law, an employer
21under this Article is required to offer any future increases in
22income expressly and irrevocably as not constituting
23"earnings" under Section 15-111 to any Tier I employee, or Tier
24I retiree returning to active service, who has made an election
25under paragraph (2) of subsection (a) or (a-5) of this Section.
26A Tier I employee, or Tier I retiree returning to active

 

 

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1service, who has made an election under paragraph (2) of
2subsection (a) or (a-5) of this Section shall not accept any
3future increase in income that is offered by an employer under
4this Article in violation of the requirement set forth in this
5subsection.
6    (f) A member's election under this Section is not a
7prohibited election under subdivision (j)(1) of Section 1-119
8of this Code.
9    (g) An employee who has made the election under item (i) of
10paragraph (1) of subsection (a) of this Section may elect to
11participate in the optional cash balance plan under Section
121-162.
13    The election to participate in the optional cash balance
14plan shall be made in writing, in the manner provided by the
15applicable retirement system.
16    (h) No provision of this Section shall be interpreted in a
17way that would cause the System to cease to be a qualified plan
18under Section 401(a) of the Internal Revenue Code of 1986.
19    (i) If this Section is determined to be unconstitutional or
20otherwise invalid by a final unappealable decision of an
21Illinois court or a court of competent jurisdiction as applied
22to Tier I employees but not as applied to Tier I retirees, then
23this Section and the changes deriving from the election
24required under this Section shall be null and void as applied
25to Tier I employees but shall remain in full effect for Tier I
26retirees.

 

 

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1    (j) If this Section is determined to be unconstitutional or
2otherwise invalid by a final unappealable decision of an
3Illinois court or a court of competent jurisdiction as applied
4to Tier I retirees but not as applied to Tier I employees, then
5this Section and the changes deriving from the election
6required under this Section shall be null and void as applied
7to Tier I retirees but shall remain in full effect for Tier I
8employees.
9    (k) If an election created by this amendatory Act in any
10other Article of this Code or any change deriving from that
11election is determined to be unconstitutional or otherwise
12invalid by a final unappealable decision of an Illinois court
13or a court of competent jurisdiction, the invalidity of that
14provision shall not in any way affect the validity of this
15Section or the changes deriving from the election required
16under this Section.
 
17    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
18    Sec. 15-136. Retirement annuities - Amount. The provisions
19of this Section 15-136 apply only to those participants who are
20participating in the traditional benefit package or the
21portable benefit package and do not apply to participants who
22are participating in the self-managed plan.
23    (a) The amount of a participant's retirement annuity,
24expressed in the form of a single-life annuity, shall be
25determined by whichever of the following rules is applicable

 

 

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1and provides the largest annuity:
2    Rule 1: The retirement annuity shall be 1.67% of final rate
3of earnings for each of the first 10 years of service, 1.90%
4for each of the next 10 years of service, 2.10% for each year
5of service in excess of 20 but not exceeding 30, and 2.30% for
6each year in excess of 30; or for persons who retire on or
7after January 1, 1998, 2.2% of the final rate of earnings for
8each year of service.
9    Rule 2: The retirement annuity shall be the sum of the
10following, determined from amounts credited to the participant
11in accordance with the actuarial tables and the effective rate
12of interest in effect at the time the retirement annuity
13begins:
14        (i) the normal annuity which can be provided on an
15    actuarially equivalent basis, by the accumulated normal
16    contributions as of the date the annuity begins;
17        (ii) an annuity from employer contributions of an
18    amount equal to that which can be provided on an
19    actuarially equivalent basis from the accumulated normal
20    contributions made by the participant under Section
21    15-113.6 and Section 15-113.7 plus 1.4 times all other
22    accumulated normal contributions made by the participant;
23    and
24        (iii) the annuity that can be provided on an
25    actuarially equivalent basis from the entire contribution
26    made by the participant under Section 15-113.3.

 

 

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1    For the purpose of calculating an annuity under this Rule
22, neither the contribution required under subsection (a-1) of
3Section 15-157 nor the contribution required under subsection
4(a-5) of that Section shall be considered when determining the
5participant's accumulated normal contributions under clause
6(i) or the employer contribution under clause (ii).
7    With respect to a police officer or firefighter who retires
8on or after August 14, 1998, the accumulated normal
9contributions taken into account under clauses (i) and (ii) of
10this Rule 2 shall include the additional normal contributions
11made by the police officer or firefighter under Section
1215-157(a).
13    The amount of a retirement annuity calculated under this
14Rule 2 shall be computed solely on the basis of the
15participant's accumulated normal contributions, as specified
16in this Rule and defined in Section 15-116. Neither an employee
17or employer contribution for early retirement under Section
1815-136.2 nor any other employer contribution shall be used in
19the calculation of the amount of a retirement annuity under
20this Rule 2.
21    This amendatory Act of the 91st General Assembly is a
22clarification of existing law and applies to every participant
23and annuitant without regard to whether status as an employee
24terminates before the effective date of this amendatory Act.
25    This Rule 2 does not apply to a person who first becomes an
26employee under this Article on or after July 1, 2005.

 

 

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1    Rule 3: The retirement annuity of a participant who is
2employed at least one-half time during the period on which his
3or her final rate of earnings is based, shall be equal to the
4participant's years of service not to exceed 30, multiplied by
5(1) $96 if the participant's final rate of earnings is less
6than $3,500, (2) $108 if the final rate of earnings is at least
7$3,500 but less than $4,500, (3) $120 if the final rate of
8earnings is at least $4,500 but less than $5,500, (4) $132 if
9the final rate of earnings is at least $5,500 but less than
10$6,500, (5) $144 if the final rate of earnings is at least
11$6,500 but less than $7,500, (6) $156 if the final rate of
12earnings is at least $7,500 but less than $8,500, (7) $168 if
13the final rate of earnings is at least $8,500 but less than
14$9,500, and (8) $180 if the final rate of earnings is $9,500 or
15more, except that the annuity for those persons having made an
16election under Section 15-154(a-1) shall be calculated and
17payable under the portable retirement benefit program pursuant
18to the provisions of Section 15-136.4.
19    Rule 4: A participant who is at least age 50 and has 25 or
20more years of service as a police officer or firefighter, and a
21participant who is age 55 or over and has at least 20 but less
22than 25 years of service as a police officer or firefighter,
23shall be entitled to a retirement annuity of 2 1/4% of the
24final rate of earnings for each of the first 10 years of
25service as a police officer or firefighter, 2 1/2% for each of
26the next 10 years of service as a police officer or

 

 

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1firefighter, and 2 3/4% for each year of service as a police
2officer or firefighter in excess of 20. The retirement annuity
3for all other service shall be computed under Rule 1.
4    For purposes of this Rule 4, a participant's service as a
5firefighter shall also include the following:
6        (i) service that is performed while the person is an
7    employee under subsection (h) of Section 15-107; and
8        (ii) in the case of an individual who was a
9    participating employee employed in the fire department of
10    the University of Illinois's Champaign-Urbana campus
11    immediately prior to the elimination of that fire
12    department and who immediately after the elimination of
13    that fire department transferred to another job with the
14    University of Illinois, service performed as an employee of
15    the University of Illinois in a position other than police
16    officer or firefighter, from the date of that transfer
17    until the employee's next termination of service with the
18    University of Illinois.
19    Rule 5: The retirement annuity of a participant who elected
20early retirement under the provisions of Section 15-136.2 and
21who, on or before February 16, 1995, brought administrative
22proceedings pursuant to the administrative rules adopted by the
23System to challenge the calculation of his or her retirement
24annuity shall be the sum of the following, determined from
25amounts credited to the participant in accordance with the
26actuarial tables and the prescribed rate of interest in effect

 

 

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1at the time the retirement annuity begins:
2        (i) the normal annuity which can be provided on an
3    actuarially equivalent basis, by the accumulated normal
4    contributions as of the date the annuity begins; and
5        (ii) an annuity from employer contributions of an
6    amount equal to that which can be provided on an
7    actuarially equivalent basis from the accumulated normal
8    contributions made by the participant under Section
9    15-113.6 and Section 15-113.7 plus 1.4 times all other
10    accumulated normal contributions made by the participant;
11    and
12        (iii) an annuity which can be provided on an
13    actuarially equivalent basis from the employee
14    contribution for early retirement under Section 15-136.2,
15    and an annuity from employer contributions of an amount
16    equal to that which can be provided on an actuarially
17    equivalent basis from the employee contribution for early
18    retirement under Section 15-136.2.
19    In no event shall a retirement annuity under this Rule 5 be
20lower than the amount obtained by adding (1) the monthly amount
21obtained by dividing the combined employee and employer
22contributions made under Section 15-136.2 by the System's
23annuity factor for the age of the participant at the beginning
24of the annuity payment period and (2) the amount equal to the
25participant's annuity if calculated under Rule 1, reduced under
26Section 15-136(b) as if no contributions had been made under

 

 

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1Section 15-136.2.
2    With respect to a participant who is qualified for a
3retirement annuity under this Rule 5 whose retirement annuity
4began before the effective date of this amendatory Act of the
591st General Assembly, and for whom an employee contribution
6was made under Section 15-136.2, the System shall recalculate
7the retirement annuity under this Rule 5 and shall pay any
8additional amounts due in the manner provided in Section
915-186.1 for benefits mistakenly set too low.
10    The amount of a retirement annuity calculated under this
11Rule 5 shall be computed solely on the basis of those
12contributions specifically set forth in this Rule 5. Except as
13provided in clause (iii) of this Rule 5, neither an employee
14nor employer contribution for early retirement under Section
1515-136.2, nor any other employer contribution, shall be used in
16the calculation of the amount of a retirement annuity under
17this Rule 5.
18    The General Assembly has adopted the changes set forth in
19Section 25 of this amendatory Act of the 91st General Assembly
20in recognition that the decision of the Appellate Court for the
21Fourth District in Mattis v. State Universities Retirement
22System et al. might be deemed to give some right to the
23plaintiff in that case. The changes made by Section 25 of this
24amendatory Act of the 91st General Assembly are a legislative
25implementation of the decision of the Appellate Court for the
26Fourth District in Mattis v. State Universities Retirement

 

 

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1System et al. with respect to that plaintiff.
2    The changes made by Section 25 of this amendatory Act of
3the 91st General Assembly apply without regard to whether the
4person is in service as an employee on or after its effective
5date.
6    (b) The retirement annuity provided under Rules 1 and 3
7above shall be reduced by 1/2 of 1% for each month the
8participant is under age 60 at the time of retirement. However,
9this reduction shall not apply in the following cases:
10        (1) For a disabled participant whose disability
11    benefits have been discontinued because he or she has
12    exhausted eligibility for disability benefits under clause
13    (6) of Section 15-152;
14        (2) For a participant who has at least the number of
15    years of service required to retire at any age under
16    subsection (a) of Section 15-135; or
17        (3) For that portion of a retirement annuity which has
18    been provided on account of service of the participant
19    during periods when he or she performed the duties of a
20    police officer or firefighter, if these duties were
21    performed for at least 5 years immediately preceding the
22    date the retirement annuity is to begin.
23    (c) The maximum retirement annuity provided under Rules 1,
242, 4, and 5 shall be the lesser of (1) the annual limit of
25benefits as specified in Section 415 of the Internal Revenue
26Code of 1986, as such Section may be amended from time to time

 

 

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1and as such benefit limits shall be adjusted by the
2Commissioner of Internal Revenue, and (2) 80% of final rate of
3earnings.
4    (d) Subject to the provisions of subsections (d-1), (d-2),
5(d-3), and (d-4), an An annuitant whose status as an employee
6terminates after August 14, 1969 shall receive automatic
7increases in his or her retirement annuity as follows:
8    Effective January 1 immediately following the date the
9retirement annuity begins, the annuitant shall receive an
10increase in his or her monthly retirement annuity of 0.125% of
11the monthly retirement annuity provided under Rule 1, Rule 2,
12Rule 3, Rule 4, or Rule 5, contained in this Section,
13multiplied by the number of full months which elapsed from the
14date the retirement annuity payments began to January 1, 1972,
15plus 0.1667% of such annuity, multiplied by the number of full
16months which elapsed from January 1, 1972, or the date the
17retirement annuity payments began, whichever is later, to
18January 1, 1978, plus 0.25% of such annuity multiplied by the
19number of full months which elapsed from January 1, 1978, or
20the date the retirement annuity payments began, whichever is
21later, to the effective date of the increase.
22    The annuitant shall receive an increase in his or her
23monthly retirement annuity on each January 1 thereafter during
24the annuitant's life of 3% of the monthly annuity provided
25under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
26this Section. The change made under this subsection by P.A.

 

 

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181-970 is effective January 1, 1980 and applies to each
2annuitant whose status as an employee terminates before or
3after that date.
4    Beginning January 1, 1990, and except as provided in
5subsection (d-1), all automatic annual increases payable under
6this Section shall be calculated as a percentage of the total
7annuity payable at the time of the increase, including all
8increases previously granted under this Article.
9    The change made in this subsection by P.A. 85-1008 is
10effective January 26, 1988, and is applicable without regard to
11whether status as an employee terminated before that date.
12    (d-1) Notwithstanding any other provision of this Article,
13for a Tier I employee who made the election under item (i) of
14paragraph (1) of subsection (a) of Section 15-132.9, the amount
15of each automatic annual increase in retirement annuity
16occurring on or after the effective date of that election,
17other than the initial increase, shall be 3% of the originally
18granted retirement annuity.
19    (d-2) Notwithstanding any other provision of this Article,
20for a Tier I employee who made the election under item (i) of
21paragraph (1) of subsection (a) of Section 15-132.9, once the
22first annual increase under this Section has been granted, the
23next 2 scheduled annual increases shall be skipped, and
24thereafter all annual increases shall be granted.
25    (d-3) Notwithstanding any other provision of this Article,
26for a Tier I employee who made the election under item (ii) of

 

 

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1paragraph (1) of subsection (a) of Section 15-132.9, once the
2first annual increase under this Section has been granted, the
3next 3 scheduled annual increases shall be skipped, and
4thereafter all annual increases shall be granted.
5    (d-4) Notwithstanding any other provision of this Article,
6for a Tier I retiree who made the election under paragraph (1)
7of subsection (a-5) of Section 15-132.9:
8        (1) if the Tier I retiree has not received the first
9    annual increase under this Section as of the effective date
10    of this amendatory Act of the 98th General Assembly, then
11    once the first annual increase under this Section has been
12    granted, the next scheduled annual increase shall be
13    skipped, the following annual increase shall be granted,
14    the next annual increase shall be skipped, and thereafter
15    all annual increases shall be granted; and
16        (2) if the Tier I retiree has received the first annual
17    increase under this Section as of the effective date of
18    this amendatory Act of the 98th General Assembly, then the
19    next annual increase after that effective date shall be
20    skipped, the following annual increase shall be granted,
21    the next annual increase shall be skipped, and thereafter
22    all annual increases shall be granted.
23    (e) If, on January 1, 1987, or the date the retirement
24annuity payment period begins, whichever is later, the sum of
25the retirement annuity provided under Rule 1 or Rule 2 of this
26Section and the automatic annual increases provided under the

 

 

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1preceding subsection or Section 15-136.1, amounts to less than
2the retirement annuity which would be provided by Rule 3, the
3retirement annuity shall be increased as of January 1, 1987, or
4the date the retirement annuity payment period begins,
5whichever is later, to the amount which would be provided by
6Rule 3 of this Section. Such increased amount shall be
7considered as the retirement annuity in determining benefits
8provided under other Sections of this Article. This paragraph
9applies without regard to whether status as an employee
10terminated before the effective date of this amendatory Act of
111987, provided that the annuitant was employed at least
12one-half time during the period on which the final rate of
13earnings was based.
14    (f) A participant is entitled to such additional annuity as
15may be provided on an actuarially equivalent basis, by any
16accumulated additional contributions to his or her credit.
17However, the additional contributions made by the participant
18toward the automatic increases in annuity provided under this
19Section shall not be taken into account in determining the
20amount of such additional annuity.
21    (g) If, (1) by law, a function of a governmental unit, as
22defined by Section 20-107 of this Code, is transferred in whole
23or in part to an employer, and (2) a participant transfers
24employment from such governmental unit to such employer within
256 months after the transfer of the function, and (3) the sum of
26(A) the annuity payable to the participant under Rule 1, 2, or

 

 

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13 of this Section (B) all proportional annuities payable to the
2participant by all other retirement systems covered by Article
320, and (C) the initial primary insurance amount to which the
4participant is entitled under the Social Security Act, is less
5than the retirement annuity which would have been payable if
6all of the participant's pension credits validated under
7Section 20-109 had been validated under this system, a
8supplemental annuity equal to the difference in such amounts
9shall be payable to the participant.
10    (h) On January 1, 1981, an annuitant who was receiving a
11retirement annuity on or before January 1, 1971 shall have his
12or her retirement annuity then being paid increased $1 per
13month for each year of creditable service. On January 1, 1982,
14an annuitant whose retirement annuity began on or before
15January 1, 1977, shall have his or her retirement annuity then
16being paid increased $1 per month for each year of creditable
17service.
18    (i) On January 1, 1987, any annuitant whose retirement
19annuity began on or before January 1, 1977, shall have the
20monthly retirement annuity increased by an amount equal to 8
21per year of creditable service times the number of years that
22have elapsed since the annuity began.
23(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
24    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
25    Sec. 15-156. Obligations of State.

 

 

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1    (a) The payment of (1) the required State contributions,
2(2) all benefits granted under this system and (3) all expenses
3in connection with the administration and operation thereof are
4obligations of the State of Illinois to the extent specified in
5this Article. The accumulated employee normal, additional and
6survivors insurance contributions credited to the accounts of
7active and inactive participants shall not be used to pay the
8State's share of the obligations.
9    (b) The State shall be contractually obligated to
10contribute to the System in each State fiscal year an amount
11not less than the sum required in Section 15-155 as that
12Section existed prior to the effective date of this amendatory
13Act of the 98th General Assembly.
14    The obligations created under this subsection (b) are
15contractual obligations protected and enforceable under
16Article I, Section 16 and Article XIII, Section 5 of the
17Illinois Constitution.
18    Notwithstanding any other provision of law, if the State
19fails to pay in a State fiscal year the amount guaranteed under
20this subsection (b), the System may bring a mandamus action in
21the Circuit Court of Champaign County to compel the State to
22make that payment, irrespective of other remedies that may be
23available to the System. It shall be the mandatory fiduciary
24obligation of the Board of the System to bring that action if
25the State fails to pay in the fiscal year the amount guaranteed
26under this subsection (b). Before commencing that action, the

 

 

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1Board shall submit a voucher for contributions required under
2Section 15-155. If the State fails to pay a vouchered amount
3within 90 days after receiving a voucher for that amount, then
4the Board shall submit a written request to the Comptroller
5seeking payment of that amount. A copy of the request shall be
6filed with the Secretary of State, and the Secretary of State
7shall provide copies of the request to the Governor and General
8Assembly. No earlier than the 16th day after filing a request
9with the Secretary, but no later than the 21st day after filing
10that request, the Board may commence such an action in the
11Circuit Court. If the Board fails to commence such action on or
12before the 21st day after filing the request with the Secretary
13of State, then any Tier I employee or Tier I retiree who made
14the election under paragraph (1) of subsection (a) or (a-5) of
15Section 15-132.9 may file a mandamus action against the Board
16to compel the Board to commence its mandamus action against the
17State. This subsection (b) constitutes an express waiver of the
18State's sovereign immunity. In ordering the State to make the
19required payment, the court may order a reasonable payment
20schedule to enable the State to make the required payment. The
21obligations and causes of action created under this subsection
22(b) shall be in addition to any other right or remedy otherwise
23accorded by common law, or State or federal law, and nothing in
24this subsection shall be construed to deny, abrogate, impair,
25or waive any such common law or statutory right or remedy.
26    Any payments required to be made by the State pursuant to

 

 

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1this subsection (b) are expressly subordinated to the payment
2of the principal, interest, and premium, if any, on any bonded
3debt obligation of the State or any other State-created entity,
4either currently outstanding or to be issued, for which the
5source of repayment or security thereon is derived directly or
6indirectly from tax revenues collected by the State or any
7other State-created entity. Payments on such bonded
8obligations include any statutory fund transfers or other
9prefunding mechanisms or formulas set forth, now or hereafter,
10in State law or bond indentures, into debt service funds or
11accounts of the State related to such bonded obligations,
12consistent with the payment schedules associated with such
13obligations.
14(Source: P.A. 83-1440.)
 
15    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
16    Sec. 15-157. Employee Contributions.
17    (a) Each participating employee shall make contributions
18towards the retirement benefits payable under the retirement
19program applicable to the employee from each payment of
20earnings applicable to employment under this system on and
21after the date of becoming a participant as follows: Prior to
22September 1, 1949, 3 1/2% of earnings; from September 1, 1949
23to August 31, 1955, 5%; from September 1, 1955 to August 31,
241969, 6%; from September 1, 1969, 6 1/2%. These contributions
25are to be considered as normal contributions for purposes of

 

 

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1this Article.
2    Each participant who is a police officer or firefighter
3shall make normal contributions of 8% of each payment of
4earnings applicable to employment as a police officer or
5firefighter under this system on or after September 1, 1981,
6unless he or she files with the board within 60 days after the
7effective date of this amendatory Act of 1991 or 60 days after
8the board receives notice that he or she is employed as a
9police officer or firefighter, whichever is later, a written
10notice waiving the retirement formula provided by Rule 4 of
11Section 15-136. This waiver shall be irrevocable. If a
12participant had met the conditions set forth in Section
1315-132.1 prior to the effective date of this amendatory Act of
141991 but failed to make the additional normal contributions
15required by this paragraph, he or she may elect to pay the
16additional contributions plus compound interest at the
17effective rate. If such payment is received by the board, the
18service shall be considered as police officer service in
19calculating the retirement annuity under Rule 4 of Section
2015-136. While performing service described in clause (i) or
21(ii) of Rule 4 of Section 15-136, a participating employee
22shall be deemed to be employed as a firefighter for the purpose
23of determining the rate of employee contributions under this
24Section.
25    (a-1) In addition to the contributions otherwise required
26under this Article, an employee who elects to participate in

 

 

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1the optional cash balance plan under Section 1-162 shall pay to
2the System for the purpose of participating in the optional
3cash balance plan a contribution of 2% of each payment of
4earnings received while he or she is a participant in the
5optional cash balance plan. These contributions shall not be
6used for the purpose of determining any benefit under this
7Article except as provided in the optional cash balance plan.
8    (a-5) In addition to the contributions otherwise required
9under this Article, each Tier I participant who made the
10election under item (ii) of paragraph (1) of subsection (a) of
11Section 15-132.9 shall also make the following contributions
12toward the retirement benefits payable under the retirement
13program applicable to the employee from each payment of
14earnings applicable to employment under this system:
15        (1) beginning July 1, 2014 and through June 30, 2015,
16    1% of earnings; and
17        (2) beginning on July 1, 2015, 2% of earnings.
18    Except as otherwise specified, these contributions are to
19be considered as normal contributions for purposes of this
20Article.
21    (b) Starting September 1, 1969, each participating
22employee shall make additional contributions of 1/2 of 1% of
23earnings to finance a portion of the cost of the annual
24increases in retirement annuity provided under Section 15-136,
25except that with respect to participants in the self-managed
26plan this additional contribution shall be used to finance the

 

 

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1benefits obtained under that retirement program.
2    (c) In addition to the amounts described in subsections (a)
3and (b) of this Section, each participating employee shall make
4contributions of 1% of earnings applicable under this system on
5and after August 1, 1959. The contributions made under this
6subsection (c) shall be considered as survivor's insurance
7contributions for purposes of this Article if the employee is
8covered under the traditional benefit package, and such
9contributions shall be considered as additional contributions
10for purposes of this Article if the employee is participating
11in the self-managed plan or has elected to participate in the
12portable benefit package and has completed the applicable
13one-year waiting period. Contributions in excess of $80 during
14any fiscal year beginning before August 31, 1969 and in excess
15of $120 during any fiscal year thereafter until September 1,
161971 shall be considered as additional contributions for
17purposes of this Article.
18    (d) If the board by board rule so permits and subject to
19such conditions and limitations as may be specified in its
20rules, a participant may make other additional contributions of
21such percentage of earnings or amounts as the participant shall
22elect in a written notice thereof received by the board.
23    (e) That fraction of a participant's total accumulated
24normal contributions, the numerator of which is equal to the
25number of years of service in excess of that which is required
26to qualify for the maximum retirement annuity, and the

 

 

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1denominator of which is equal to the total service of the
2participant, shall be considered as accumulated additional
3contributions. The determination of the applicable maximum
4annuity and the adjustment in contributions required by this
5provision shall be made as of the date of the participant's
6retirement.
7    (f) Notwithstanding the foregoing, a participating
8employee shall not be required to make contributions under this
9Section after the date upon which continuance of such
10contributions would otherwise cause his or her retirement
11annuity to exceed the maximum retirement annuity as specified
12in clause (1) of subsection (c) of Section 15-136.
13    (g) A participating employee may make contributions for the
14purchase of service credit under this Article.
15(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
16eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1790-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
18    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
19    Sec. 15-163. To consider applications and authorize
20payments.
21    To consider and pass on all certifications of employment
22and applications for annuities and benefits; to authorize the
23granting of annuities and benefits; and to limit or suspend any
24payment or payments, all in accordance with this Article.
25(Source: Laws 1963, p. 161.)
 

 

 

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1    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
2    Sec. 15-165. To certify amounts and submit vouchers.
3    (a) The Board shall certify to the Governor on or before
4November 15 of each year through until November 15, 2011 the
5appropriation required from State funds for the purposes of
6this System for the following fiscal year. The certification
7under this subsection (a) shall include a copy of the actuarial
8recommendations upon which it is based and shall specifically
9identify the System's projected State normal cost for that
10fiscal year and the projected State cost for the self-managed
11plan for that fiscal year.
12    On or before May 1, 2004, the Board shall recalculate and
13recertify to the Governor the amount of the required State
14contribution to the System for State fiscal year 2005, taking
15into account the amounts appropriated to and received by the
16System under subsection (d) of Section 7.2 of the General
17Obligation Bond Act.
18    On or before July 1, 2005, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2006, taking
21into account the changes in required State contributions made
22by this amendatory Act of the 94th General Assembly.
23    On or before April 1, 2011, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2011, applying

 

 

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

 

 

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1Actuary's recommended changes, and the fiscal impact of not
2following the State Actuary's recommended changes on the
3required State contribution.
4    (b) The Board shall certify to the State Comptroller or
5employer, as the case may be, from time to time, by its
6president and secretary, with its seal attached, the amounts
7payable to the System from the various funds.
8    (c) Beginning in State fiscal year 1996, on or as soon as
9possible after the 15th day of each month the Board shall
10submit vouchers for payment of State contributions to the
11System, in a total monthly amount of one-twelfth of the
12required annual State contribution certified under subsection
13(a). From the effective date of this amendatory Act of the 93rd
14General Assembly through June 30, 2004, the Board shall not
15submit vouchers for the remainder of fiscal year 2004 in excess
16of the fiscal year 2004 certified contribution amount
17determined under this Section after taking into consideration
18the transfer to the System under subsection (b) of Section
196z-61 of the State Finance Act. These vouchers shall be paid by
20the State Comptroller and Treasurer by warrants drawn on the
21funds appropriated to the System for that fiscal year.
22    If in any month the amount remaining unexpended from all
23other appropriations to the System for the applicable fiscal
24year (including the appropriations to the System under Section
258.12 of the State Finance Act and Section 1 of the State
26Pension Funds Continuing Appropriation Act) is less than the

 

 

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1amount lawfully vouchered under this Section, the difference
2shall be paid from the General Revenue Fund under the
3continuing appropriation authority provided in Section 1.1 of
4the State Pension Funds Continuing Appropriation Act.
5    (d) So long as the payments received are the full amount
6lawfully vouchered under this Section, payments received by the
7System under this Section shall be applied first toward the
8employer contribution to the self-managed plan established
9under Section 15-158.2. Payments shall be applied second toward
10the employer's portion of the normal costs of the System, as
11defined in subsection (f) of Section 15-155. The balance shall
12be applied toward the unfunded actuarial liabilities of the
13System.
14    (e) In the event that the System does not receive, as a
15result of legislative enactment or otherwise, payments
16sufficient to fully fund the employer contribution to the
17self-managed plan established under Section 15-158.2 and to
18fully fund that portion of the employer's portion of the normal
19costs of the System, as calculated in accordance with Section
2015-155(a-1), then any payments received shall be applied
21proportionately to the optional retirement program established
22under Section 15-158.2 and to the employer's portion of the
23normal costs of the System, as calculated in accordance with
24Section 15-155(a-1).
25(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2697-694, eff. 6-18-12.)
 

 

 

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1    (40 ILCS 5/15-198)
2    Sec. 15-198. Application and expiration of new benefit
3increases.
4    (a) As used in this Section, "new benefit increase" means
5an increase in the amount of any benefit provided under this
6Article, or an expansion of the conditions of eligibility for
7any benefit under this Article or Article 1, that results from
8an amendment to this Code that takes effect after the effective
9date of this amendatory Act of the 94th General Assembly. "New
10benefit increase", however, does not include any benefit
11increase resulting from the changes made to this Article or
12Article 1 by this amendatory Act of the 98th General Assembly.
13    (b) Notwithstanding any other provision of this Code or any
14subsequent amendment to this Code, every new benefit increase
15is subject to this Section and shall be deemed to be granted
16only in conformance with and contingent upon compliance with
17the provisions of this Section.
18    (c) The Public Act enacting a new benefit increase must
19identify and provide for payment to the System of additional
20funding at least sufficient to fund the resulting annual
21increase in cost to the System as it accrues.
22    Every new benefit increase is contingent upon the General
23Assembly providing the additional funding required under this
24subsection. The Commission on Government Forecasting and
25Accountability shall analyze whether adequate additional

 

 

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1funding has been provided for the new benefit increase and
2shall report its analysis to the Public Pension Division of the
3Department of Financial and Professional Regulation. A new
4benefit increase created by a Public Act that does not include
5the additional funding required under this subsection is null
6and void. If the Public Pension Division determines that the
7additional funding provided for a new benefit increase under
8this subsection is or has become inadequate, it may so certify
9to the Governor and the State Comptroller and, in the absence
10of corrective action by the General Assembly, the new benefit
11increase shall expire at the end of the fiscal year in which
12the certification is made.
13    (d) Every new benefit increase shall expire 5 years after
14its effective date or on such earlier date as may be specified
15in the language enacting the new benefit increase or provided
16under subsection (c). This does not prevent the General
17Assembly from extending or re-creating a new benefit increase
18by law.
19    (e) Except as otherwise provided in the language creating
20the new benefit increase, a new benefit increase that expires
21under this Section continues to apply to persons who applied
22and qualified for the affected benefit while the new benefit
23increase was in effect and to the affected beneficiaries and
24alternate payees of such persons, but does not apply to any
25other person, including without limitation a person who
26continues in service after the expiration date and did not

 

 

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1apply and qualify for the affected benefit while the new
2benefit increase was in effect.
3(Source: P.A. 94-4, eff. 6-1-05.)
 
4    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
5    Sec. 16-106. Teacher. "Teacher": The following
6individuals, provided that, for employment prior to July 1,
71990, they are employed on a full-time basis, or if not
8full-time, on a permanent and continuous basis in a position in
9which services are expected to be rendered for at least one
10school term:
11        (1) Any educational, administrative, professional or
12    other staff employed in the public common schools included
13    within this system in a position requiring certification
14    under the law governing the certification of teachers;
15        (2) Any educational, administrative, professional or
16    other staff employed in any facility of the Department of
17    Children and Family Services or the Department of Human
18    Services, in a position requiring certification under the
19    law governing the certification of teachers, and any person
20    who (i) works in such a position for the Department of
21    Corrections, (ii) was a member of this System on May 31,
22    1987, and (iii) did not elect to become a member of the
23    State Employees' Retirement System pursuant to Section
24    14-108.2 of this Code; except that "teacher" does not
25    include any person who (A) becomes a security employee of

 

 

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1    the Department of Human Services, as defined in Section
2    14-110, after June 28, 2001 (the effective date of Public
3    Act 92-14), or (B) becomes a member of the State Employees'
4    Retirement System pursuant to Section 14-108.2c of this
5    Code;
6        (3) Any regional superintendent of schools, assistant
7    regional superintendent of schools, State Superintendent
8    of Education; any person employed by the State Board of
9    Education as an executive; any executive of the boards
10    engaged in the service of public common school education in
11    school districts covered under this system of which the
12    State Superintendent of Education is an ex-officio member;
13        (4) Any employee of a school board association
14    operating in compliance with Article 23 of the School Code
15    who is certificated under the law governing the
16    certification of teachers, provided that he or she becomes
17    such an employee before the effective date of this
18    amendatory Act of the 98th General Assembly;
19        (5) Any person employed by the retirement system who:
20            (i) was an employee of and a participant in the
21        system on August 17, 2001 (the effective date of Public
22        Act 92-416), or
23            (ii) becomes an employee of the system on or after
24        August 17, 2001;
25        (6) Any educational, administrative, professional or
26    other staff employed by and under the supervision and

 

 

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1    control of a regional superintendent of schools, provided
2    such employment position requires the person to be
3    certificated under the law governing the certification of
4    teachers and is in an educational program serving 2 or more
5    districts in accordance with a joint agreement authorized
6    by the School Code or by federal legislation;
7        (7) Any educational, administrative, professional or
8    other staff employed in an educational program serving 2 or
9    more school districts in accordance with a joint agreement
10    authorized by the School Code or by federal legislation and
11    in a position requiring certification under the laws
12    governing the certification of teachers;
13        (8) Any officer or employee of a statewide teacher
14    organization or officer of a national teacher organization
15    who is certified under the law governing certification of
16    teachers, provided: (i) the individual had previously
17    established creditable service under this Article, (ii)
18    the individual files with the system an irrevocable
19    election to become a member before January 5, 2012 (the
20    effective date of Public Act 97-651) this amendatory Act of
21    the 97th General Assembly, (iii) the individual does not
22    receive credit for such service under any other Article of
23    this Code, and (iv) the individual first became an officer
24    or employee of the teacher organization and becomes a
25    member before January 5, 2012 (the effective date of Public
26    Act 97-651) this amendatory Act of the 97th General

 

 

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1    Assembly;
2        (9) Any educational, administrative, professional, or
3    other staff employed in a charter school operating in
4    compliance with the Charter Schools Law who is certificated
5    under the law governing the certification of teachers; .
6        (10) Any person employed, on the effective date of this
7    amendatory Act of the 94th General Assembly, by the
8    Macon-Piatt Regional Office of Education in a
9    birth-through-age-three pilot program receiving funds
10    under Section 2-389 of the School Code who is required by
11    the Macon-Piatt Regional Office of Education to hold a
12    teaching certificate, provided that the Macon-Piatt
13    Regional Office of Education makes an election, within 6
14    months after the effective date of this amendatory Act of
15    the 94th General Assembly, to have the person participate
16    in the system. Any service established prior to the
17    effective date of this amendatory Act of the 94th General
18    Assembly for service as an employee of the Macon-Piatt
19    Regional Office of Education in a birth-through-age-three
20    pilot program receiving funds under Section 2-389 of the
21    School Code shall be considered service as a teacher if
22    employee and employer contributions have been received by
23    the system and the system has not refunded those
24    contributions.
25    An annuitant receiving a retirement annuity under this
26Article or under Article 17 of this Code who is employed by a

 

 

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1board of education or other employer as permitted under Section
216-118 or 16-150.1 is not a "teacher" for purposes of this
3Article. A person who has received a single-sum retirement
4benefit under Section 16-136.4 of this Article is not a
5"teacher" for purposes of this Article.
6(Source: P.A. 97-651, eff. 1-5-12; revised 8-3-12.)
 
7    (40 ILCS 5/16-107.1 new)
8    Sec. 16-107.1. Tier I employee. "Tier I employee": A
9teacher under this Article who first became a member or
10participant before January 1, 2011 under any reciprocal
11retirement system or pension fund established under this Code
12other than a retirement system or pension fund established
13under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
14the purposes of the election under Section 16-122.9 and the
15consequences arising from that election, "Tier I employee" does
16not include a teacher under this Article who would qualify as a
17Tier I employee but who has made an irrevocable election on or
18before January 1, 2013 to retire from service pursuant to the
19terms of a collective bargaining agreement in effect on January
201, 2013, excluding any extension, amendment, or renewal of that
21agreement on or after that date, and has notified the System of
22that election.
 
23    (40 ILCS 5/16-107.2 new)
24    Sec. 16-107.2. Tier I retiree. "Tier I retiree": A former

 

 

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1Tier I employee who is receiving a retirement annuity. However,
2for the purposes of the election under Section 16-122.9 and the
3consequences arising from that election, "Tier I retiree" also
4includes a teacher under this Article who would qualify as a
5Tier I employee but who has made an irrevocable election on or
6before January 1, 2013 to retire from service pursuant to the
7terms of a collective bargaining agreement in effect on January
81, 2013, excluding any extension, amendment, or renewal of that
9agreement on or after that date, and has notified the System of
10that election.
 
11    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
12    Sec. 16-121. Salary. "Salary": The actual compensation
13received by a teacher during any school year and recognized by
14the system in accordance with rules of the board. For purposes
15of this Section, "school year" includes the regular school term
16plus any additional period for which a teacher is compensated
17and such compensation is recognized by the rules of the board.
18    Notwithstanding any other provision of this Section,
19"salary" does not include any future increase in income offered
20by an employer under this Article pursuant to the requirements
21of subsection (c) of Section 16-122.9 that is accepted by a
22Tier I employee, or a Tier I retiree returning to active
23service, who has made the election under paragraph (2) of
24subsection (a) or (a-5) of Section 16-122.9.
25(Source: P.A. 84-1028.)
 

 

 

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1    (40 ILCS 5/16-121.1 new)
2    Sec. 16-121.1. Future increase in income. "Future increase
3in income": Any increase in income in any form offered by an
4employer to a teacher under this Article after June 30, 2014
5that would qualify as "salary", as defined in Section 16-121,
6but for the fact that the employer offered the increase in
7income to the employee on the condition that it not qualify as
8compensation and the employee accepted the increase in income
9subject to that condition. The term "future increase in income"
10does not include an increase in income in any form that is paid
11to a Tier I employee under an employment contract or collective
12bargaining agreement that is in effect on the effective date of
13this Section but does include an increase in income in any form
14pursuant to an extension, amendment, or renewal of any such
15employment contract or collective bargaining agreement on or
16after the effective date of this amendatory Act of the 98th
17General Assembly.
 
18    (40 ILCS 5/16-122.9 new)
19    Sec. 16-122.9. Election by Tier I employees.
20    (a) Each Tier I employee shall make an irrevocable election
21either:
22        (1) to agree to item (i) or (ii) as set forth in this
23    paragraph (1):
24            (i) to have the amount of the automatic annual

 

 

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1        increases in his or her retirement annuity that are
2        otherwise provided for in this Article calculated,
3        instead, as provided in subsection (a-1) of Section
4        16-133.1 or subsection (b-1) of Section 16-136.1,
5        whichever is applicable, and to waive his or her
6        eligibility for 2 automatic annual increases in
7        retirement annuity, as provided in subsection (a-2) of
8        Section 16-133.1 or subsection (b-2) of Section
9        16-136.1, whichever is applicable; or
10            (ii) to waive his or her eligibility for 3
11        automatic annual increases in retirement annuity, as
12        provided in subsection (a-3) of Section 16-133.1 or
13        subsection (b-3) of Section 16-136.1, whichever is
14        applicable, and to make the contributions set forth in
15        subsection (a-5) of Section 16-152; or
16        (2) to not agree to item (i) or (ii) as set forth in
17    paragraph (1) of this subsection.
18    The election required under this subsection (a) shall be
19made by each Tier I employee no earlier than February 1, 2014
20and no later than May 31, 2014, except that:
21        (i) a person who becomes a Tier I employee under this
22    Article on or after February 1, 2014 must make the election
23    under this subsection (a) within 60 days after becoming a
24    Tier I employee; and
25        (ii) a person who returns to active service as a Tier I
26    employee under this Article on or after February 1, 2014

 

 

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1    and has not yet made an election under this Section must
2    make the election under this subsection (a) within 60 days
3    after returning to active service as a Tier I employee; and
4        (iii) a person who made the election under subsection
5    (a-5) as a Tier I retiree remains bound by that election
6    and shall not make a later election under this subsection
7    (a).
8    If a Tier I employee fails for any reason to make a
9required election under this subsection within the time
10specified, then the employee shall be deemed to have made the
11election under paragraph (2) of this subsection.
12    (a-5) Each Tier I retiree shall make an irrevocable
13election either:
14        (1) to agree to the following:
15            (i) to have the amount of the automatic annual
16        increases in his or her retirement annuity calculated
17        without regard to subsection (a-1), (a-2), or (a-3) of
18        Section 16-133.1 or subsection (b-1), (b-2), or (b-3)
19        of Section 16-136.1, whichever is applicable; and
20            (ii) to waive his or her eligibility for 2
21        automatic annual increases in retirement annuity, as
22        provided in subsection (a-4) of Section 16-133.1 or
23        subsection (b-4) of Section 16-136.1, whichever is
24        applicable; or
25        (2) to not agree to items (i) and (ii) as set forth in
26    paragraph (1) of this subsection.

 

 

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1    The election required under this subsection (a-5) shall be
2made by each Tier I retiree no earlier than February 1, 2014
3and no later than May 31, 2014, except that:
4        (i) a person who becomes a Tier I retiree under this
5    Article on or after February 1, 2014 must make the election
6    under this subsection (a-5) within 60 days after becoming a
7    Tier I retiree; and
8        (ii) a person who made the election under subsection
9    (a) as a Tier I employee remains bound by that election and
10    shall not make a later election under this subsection
11    (a-5).
12    If a Tier I retiree fails for any reason to make a required
13election under this subsection within the time specified, then
14the Tier I retiree shall be deemed to have made the election
15under paragraph (2) of this subsection.
16    (a-10) All elections under subsection (a) that are made or
17deemed to be made before June 1, 2014 shall take effect on July
181, 2014. Elections that are made or deemed to be made on or
19after June 1, 2014 shall take effect on the first day of the
20month following the month in which the election is made or
21deemed to be made.
22    (b) As adequate and legal consideration provided under this
23amendatory Act of the 98th General Assembly for making an
24election under paragraph (1) of subsection (a) of this Section,
25any future increases in income offered by an employer under
26this Article to a Tier I employee who has made an election

 

 

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1under paragraph (1) of subsection (a) of this Section shall be
2offered expressly and irrevocably as constituting salary under
3Section 16-121. In addition, a Tier I employee who has made an
4election under item (i) of paragraph (1) of subsection (a) of
5this Section shall receive the right to also participate in the
6optional cash balance plan established under Section 1-162.
7Finally, a Tier I employee, other than a Tier I retiree
8returning to active service as a Tier I employee, who has made
9an election under item (i) of paragraph (1) of subsection (a)
10of this Section shall receive the right to the early retirement
11without discount option set forth in Section 16-133.6.
12    As adequate and legal consideration provided under this
13amendatory Act of the 98th General Assembly for making an
14election under paragraph (1) of subsection (a-5) of this
15Section, any future increases in income offered by an employer
16under this Article to a Tier I retiree who returns to active
17service after having made an election under paragraph (1) of
18subsection (a-5) of this Section shall be offered expressly and
19irrevocably as constituting salary under Section 16-121.
20    (c) A Tier I employee who makes the election under
21paragraph (2) of subsection (a) of this Section shall not be
22subject to either item (i) or (ii) set forth in paragraph (1)
23of subsection (a) of this Section. However, any future
24increases in income offered by an employer under this Article
25to a Tier I employee who has made the election under paragraph
26(2) of subsection (a) of this Section shall be offered by the

 

 

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1employer expressly and irrevocably as not constituting salary
2under Section 16-121, and the employee may not accept any
3future increase in income that is offered in violation of this
4requirement. In addition, a Tier I employee who has made the
5election under paragraph (2) of subsection (a) of this Section
6shall not receive the right to participate in the optional cash
7balance plan established under Section 1-162. Finally, a Tier I
8employee who has made the election under paragraph (2) of
9subsection (a) of this Section shall not receive the right to
10the early retirement without discount option set forth in
11Section 16-133.6.
12    A Tier I retiree who makes the election under paragraph (2)
13of subsection (a-5) of this Section shall not be subject to
14either item (i) or (ii) set forth in paragraph (1) of
15subsection (a-5) of this Section. However, any future increases
16in income offered by an employer under this Article to a Tier I
17retiree who returns to active service and has made the election
18under paragraph (2) of subsection (a-5) of this Section shall
19be offered by the employer expressly and irrevocably as not
20constituting salary under Section 16-121, and the employee may
21not accept any future increase in income that is offered in
22violation of this requirement. In addition, a Tier I retiree
23who returns to active service and has made the election under
24paragraph (2) of subsection (a) of this Section shall not
25receive the right to participate in the optional cash balance
26plan established under Section 1-162.

 

 

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1    (d) The System shall make a good faith effort to contact
2each Tier I employee and Tier I retiree subject to this
3Section. The System shall mail information describing the
4required election to each Tier I employee and Tier I retiree by
5United States Postal Service mail to his or her last known
6address on file with the System. If the Tier I employee or Tier
7I retiree is not responsive to other means of contact, it is
8sufficient for the System to publish the details of any
9required elections on its website or to publish those details
10in a regularly published newsletter or other existing public
11forum.
12    Tier I employees and Tier I retirees who are subject to
13this Section shall be provided with an election packet
14containing information regarding their options, as well as the
15forms necessary to make the required election. Upon request,
16the System shall offer Tier I employees and Tier I retirees an
17opportunity to receive information from the System before
18making the required election. The information may consist of
19video materials, group presentations, individual consultation
20with a member or authorized representative of the System in
21person or by telephone or other electronic means, or any
22combination of those methods. The System shall not provide
23advice or counseling with respect to which election a Tier I
24employee or Tier I retiree should make or specific to the legal
25or tax circumstances of or consequences to the Tier I employee
26or Tier I retiree.

 

 

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1    The System shall inform Tier I employees and Tier I
2retirees in the election packet required under this subsection
3that the Tier I employee or Tier I retiree may also wish to
4obtain information and counsel relating to the election
5required under this Section from any other available source,
6including but not limited to labor organizations and private
7counsel.
8    In no event shall the System, its staff, or the Board be
9held liable for any information given to a member, beneficiary,
10or annuitant regarding the elections under this Section. The
11System shall coordinate with the Illinois Department of Central
12Management Services and each other retirement system
13administering an election in accordance with this amendatory
14Act of the 98th General Assembly to provide information
15concerning the impact of the election set forth in this
16Section.
17    (e) Notwithstanding any other provision of law, an employer
18under this Article is required to offer any future increases in
19income expressly and irrevocably as not constituting "salary"
20under Section 16-121 to any Tier I employee, or Tier I retiree
21returning to active service, who has made an election under
22paragraph (2) of subsection (a) or (a-5) of Section 16-122.9. A
23Tier I employee, or Tier I retiree returning to active service,
24who has made an election under paragraph (2) of subsection (a)
25or (a-5) of Section 16-122.9 shall not accept any future
26increase in income that is offered by an employer under this

 

 

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1Article in violation of the requirement set forth in this
2subsection.
3    (f) A member's election under this Section is not a
4prohibited election under subdivision (j)(1) of Section 1-119
5of this Code.
6    (g) An employee who has made the election under item (i) of
7paragraph (1) of subsection (a) of this Section may elect to
8participate in the optional cash balance plan under Section
91-162.
10    The election to participate in the optional cash balance
11plan shall be made in writing, in the manner provided by the
12applicable retirement system.
13    (h) No provision of this Section shall be interpreted in a
14way that would cause the System to cease to be a qualified plan
15under Section 401(a) of the Internal Revenue Code of 1986.
16    (i) If this Section is determined to be unconstitutional or
17otherwise invalid by a final unappealable decision of an
18Illinois court or a court of competent jurisdiction as applied
19to Tier I employees but not as applied to Tier I retirees, then
20this Section and the changes deriving from the election
21required under this Section shall be null and void as applied
22to Tier I employees but shall remain in full effect for Tier I
23retirees.
24    (j) If this Section is determined to be unconstitutional or
25otherwise invalid by a final unappealable decision of an
26Illinois court or a court of competent jurisdiction as applied

 

 

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1to Tier I retirees but not as applied to Tier I employees, then
2this Section and the changes deriving from the election
3required under this Section shall be null and void as applied
4to Tier I retirees but shall remain in full effect for Tier I
5employees.
6    (k) If an election created by this amendatory Act in any
7other Article of this Code or any change deriving from that
8election is determined to be unconstitutional or otherwise
9invalid by a final unappealable decision of an Illinois court
10or a court of competent jurisdiction, the invalidity of that
11provision shall not in any way affect the validity of this
12Section or the changes deriving from the election required
13under this Section.
 
14    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
15    Sec. 16-133. Retirement annuity; amount.
16    (a) The amount of the retirement annuity shall be (i) in
17the case of a person who first became a teacher under this
18Article before July 1, 2005, the larger of the amounts
19determined under paragraphs (A) and (B) below, or (ii) in the
20case of a person who first becomes a teacher under this Article
21on or after July 1, 2005, the amount determined under the
22applicable provisions of paragraph (B):
23        (A) An amount consisting of the sum of the following:
24            (1) An amount that can be provided on an
25        actuarially equivalent basis by the member's

 

 

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1        accumulated contributions at the time of retirement;
2        and
3            (2) The sum of (i) the amount that can be provided
4        on an actuarially equivalent basis by the member's
5        accumulated contributions representing service prior
6        to July 1, 1947, and (ii) the amount that can be
7        provided on an actuarially equivalent basis by the
8        amount obtained by multiplying 1.4 times the member's
9        accumulated contributions covering service subsequent
10        to June 30, 1947; and
11            (3) If there is prior service, 2 times the amount
12        that would have been determined under subparagraph (2)
13        of paragraph (A) above on account of contributions
14        which would have been made during the period of prior
15        service creditable to the member had the System been in
16        operation and had the member made contributions at the
17        contribution rate in effect prior to July 1, 1947.
18    For the purpose of calculating an annuity under this Rule
19    2, neither the contribution required under subsection
20    (a-1) of Section 16-152 nor the contribution required under
21    subsection (a-5) of that Section shall be considered when
22    determining the participant's accumulated normal
23    contributions under clause (i) or the employer
24    contribution under clause (ii).
25        This paragraph (A) does not apply to a person who first
26    becomes a teacher under this Article on or after July 1,

 

 

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1    2005.
2        (B) An amount consisting of the greater of the
3    following:
4            (1) For creditable service earned before July 1,
5        1998 that has not been augmented under Section
6        16-129.1: 1.67% of final average salary for each of the
7        first 10 years of creditable service, 1.90% of final
8        average salary for each year in excess of 10 but not
9        exceeding 20, 2.10% of final average salary for each
10        year in excess of 20 but not exceeding 30, and 2.30% of
11        final average salary for each year in excess of 30; and
12            For creditable service earned on or after July 1,
13        1998 by a member who has at least 24 years of
14        creditable service on July 1, 1998 and who does not
15        elect to augment service under Section 16-129.1: 2.2%
16        of final average salary for each year of creditable
17        service earned on or after July 1, 1998 but before the
18        member reaches a total of 30 years of creditable
19        service and 2.3% of final average salary for each year
20        of creditable service earned on or after July 1, 1998
21        and after the member reaches a total of 30 years of
22        creditable service; and
23            For all other creditable service: 2.2% of final
24        average salary for each year of creditable service; or
25            (2) 1.5% of final average salary for each year of
26        creditable service plus the sum $7.50 for each of the

 

 

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1        first 20 years of creditable service.
2    The amount of the retirement annuity determined under this
3    paragraph (B) shall be reduced by 1/2 of 1% for each month
4    that the member is less than age 60 at the time the
5    retirement annuity begins. However, this reduction shall
6    not apply (i) if the member has at least 35 years of
7    creditable service, or (ii) if the member retires on
8    account of disability under Section 16-149.2 of this
9    Article with at least 20 years of creditable service, or
10    (iii) if the member (1) has earned during the period
11    immediately preceding the last day of service at least one
12    year of contributing creditable service as an employee of a
13    department as defined in Section 14-103.04, (2) has earned
14    at least 5 years of contributing creditable service as an
15    employee of a department as defined in Section 14-103.04,
16    (3) retires on or after January 1, 2001, and (4) retires
17    having attained an age which, when added to the number of
18    years of his or her total creditable service, equals at
19    least 85. Portions of years shall be counted as decimal
20    equivalents.
21    (b) For purposes of this Section, final average salary
22shall be the average salary for the highest 4 consecutive years
23within the last 10 years of creditable service as determined
24under rules of the board. The minimum final average salary
25shall be considered to be $2,400 per year.
26    In the determination of final average salary for members

 

 

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1other than elected officials and their appointees when such
2appointees are allowed by statute, that part of a member's
3salary for any year beginning after June 30, 1979 which exceeds
4the member's annual full-time salary rate with the same
5employer for the preceding year by more than 20% shall be
6excluded. The exclusion shall not apply in any year in which
7the member's creditable earnings are less than 50% of the
8preceding year's mean salary for downstate teachers as
9determined by the survey of school district salaries provided
10in Section 2-3.103 of the School Code.
11    (c) In determining the amount of the retirement annuity
12under paragraph (B) of this Section, a fractional year shall be
13granted proportional credit.
14    (d) The retirement annuity determined under paragraph (B)
15of this Section shall be available only to members who render
16teaching service after July 1, 1947 for which member
17contributions are required, and to annuitants who re-enter
18under the provisions of Section 16-150.
19    (e) The maximum retirement annuity provided under
20paragraph (B) of this Section shall be 75% of final average
21salary.
22    (f) A member retiring after the effective date of this
23amendatory Act of 1998 shall receive a pension equal to 75% of
24final average salary if the member is qualified to receive a
25retirement annuity equal to at least 74.6% of final average
26salary under this Article or as proportional annuities under

 

 

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1Article 20 of this Code.
2(Source: P.A. 94-4, eff. 6-1-05.)
 
3    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
4    Sec. 16-133.1. Automatic annual increase in annuity.
5    (a) Each member with creditable service and retiring on or
6after August 26, 1969 is entitled to the automatic annual
7increases in annuity provided under this Section while
8receiving a retirement annuity or disability retirement
9annuity from the system.
10    An annuitant shall first be entitled to an initial increase
11under this Section on the January 1 next following the first
12anniversary of retirement, or January 1 of the year next
13following attainment of age 61, whichever is later. At such
14time, the system shall pay an initial increase determined as
15follows:
16        (1) 1.5% of the originally granted retirement annuity
17    or disability retirement annuity multiplied by the number
18    of years elapsed, if any, from the date of retirement until
19    January 1, 1972, plus
20        (2) 2% of the originally granted annuity multiplied by
21    the number of years elapsed, if any, from the date of
22    retirement or January 1, 1972, whichever is later, until
23    January 1, 1978, plus
24        (3) 3% of the originally granted annuity multiplied by
25    the number of years elapsed from the date of retirement or

 

 

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1    January 1, 1978, whichever is later, until the effective
2    date of the initial increase.
3However, the initial annual increase calculated under this
4Section for the recipient of a disability retirement annuity
5granted under Section 16-149.2 shall be reduced by an amount
6equal to the total of all increases in that annuity received
7under Section 16-149.5 (but not exceeding 100% of the amount of
8the initial increase otherwise provided under this Section).
9    Except as otherwise provided in subsection (a-1), (a-2),
10(a-3), or (a-4), if applicable, following Following the initial
11increase, automatic annual increases in annuity shall be
12payable on each January 1 thereafter during the lifetime of the
13annuitant, determined as a percentage of the originally granted
14retirement annuity or disability retirement annuity for
15increases granted prior to January 1, 1990, and calculated as a
16percentage of the total amount of annuity, including previous
17increases under this Section, for increases granted on or after
18January 1, 1990, as follows: 1.5% for periods prior to January
191, 1972, 2% for periods after December 31, 1971 and prior to
20January 1, 1978, and 3% for periods after December 31, 1977.
21    (a-1) Notwithstanding any other provision of this Article,
22for a Tier I employee who made the election under item (i) of
23paragraph (1) of subsection (a) of Section 16-122.9, the amount
24of each automatic annual increase in retirement annuity
25occurring on or after the effective date of that election,
26other than the initial increase, shall be 3% of the originally

 

 

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1granted retirement annuity.
2    (a-2) Notwithstanding any other provision of this Article,
3for a Tier I employee who made the election under item (i) of
4paragraph (1) of subsection (a) of Section 16-122.9, once the
5initial annual increase under this Section has been granted,
6the next 2 scheduled annual increases shall be skipped, and
7thereafter all annual increases shall be granted.
8    (a-3) Notwithstanding any other provision of this Article,
9for a Tier I employee who made the election under item (ii) of
10paragraph (1) of subsection (a) of Section 16-122.9 once the
11first annual increase under this Section has been granted, the
12next 3 scheduled annual increases shall be skipped, and
13thereafter all annual increases shall be granted.
14    (a-4) Notwithstanding any other provision of this Article,
15for a Tier I retiree who made the election under paragraph (1)
16of subsection (a-5) of Section 16-122.9:
17        (1) if the Tier I retiree has not received the initial
18    annual increase under this Section as of the effective date
19    of this amendatory Act of the 98th General Assembly, then
20    once the initial annual increase under this Section has
21    been granted, the next scheduled annual increase shall be
22    skipped, the following annual increase shall be granted,
23    the next annual increase shall be skipped, and thereafter
24    all annual increases shall be granted; and
25        (2) if the Tier I retiree has received the initial
26    annual increase under this Section as of the effective date

 

 

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1    of this amendatory Act of the 98th General Assembly, then
2    the next annual increase after that effective date shall be
3    skipped, the following annual increase shall be granted,
4    the next annual increase shall be skipped, and thereafter
5    all annual increases shall be granted.
6    (b) The automatic annual increases in annuity provided
7under this Section shall not be applicable unless a member has
8made contributions toward such increases for a period
9equivalent to one full year of creditable service. If a member
10contributes for service performed after August 26, 1969 but the
11member becomes an annuitant before such contributions amount to
12one full year's contributions based on the salary at the date
13of retirement, he or she may pay the necessary balance of the
14contributions to the system and be eligible for the automatic
15annual increases in annuity provided under this Section.
16    (c) Each member shall make contributions toward the cost of
17the automatic annual increases in annuity as provided under
18Section 16-152.
19    (d) An annuitant receiving a retirement annuity or
20disability retirement annuity on July 1, 1969, who subsequently
21re-enters service as a teacher is eligible for the automatic
22annual increases in annuity provided under this Section if he
23or she renders at least one year of creditable service
24following the latest re-entry.
25    (e) In addition to the automatic annual increases in
26annuity provided under this Section, an annuitant who meets the

 

 

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1service requirements of this Section and whose retirement
2annuity or disability retirement annuity began on or before
3January 1, 1971 shall receive, on January 1, 1981, an increase
4in the annuity then being paid of one dollar per month for each
5year of creditable service. On January 1, 1982, an annuitant
6whose retirement annuity or disability retirement annuity
7began on or before January 1, 1977 shall receive an increase in
8the annuity then being paid of one dollar per month for each
9year of creditable service.
10    On January 1, 1987, any annuitant whose retirement annuity
11began on or before January 1, 1977, shall receive an increase
12in the monthly retirement annuity equal to 8 per year of
13creditable service times the number of years that have elapsed
14since the annuity began.
15(Source: P.A. 91-927, eff. 12-14-00.)
 
16    (40 ILCS 5/16-133.6 new)
17    Sec. 16-133.6. Optional teacher early retirement without
18discount. A Tier I employee who makes an election under item
19(i) of paragraph (1) of subsection (a) of Section 16-122.9,
20retires on or after the beginning of the first State fiscal
21year to occur after the end of the election period specified in
22Section 16-122.9, and applies for a retirement annuity within 6
23months of the last day of teaching for which retirement
24contributions were required may elect, at the time of
25application for a retirement annuity, to make a one-time member

 

 

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1contribution to the System and, thereby, avoid the reduction in
2the retirement annuity for retirement before age 60 specified
3in paragraph (B) of Section 16-133. The exercise of the
4election shall also obligate the last employer to make a
5one-time nonrefundable contribution to the System. Substitute
6teachers wishing to exercise this election must teach 85 or
7more days in one school term with one employer, who shall be
8deemed the last employer for purposes of this Section. The last
9day of teaching with that employer must be within 6 months of
10the date of application for retirement. All substitute teaching
11credit applied toward the required 85 days must be earned after
12June 30, 1990.
13    The one-time member and employer contributions shall be a
14percentage of the cost of this benefit as determined by the
15System. However, when determining the one-time member and
16employer contributions, that part of a member's salary with the
17same employer which exceeds the annual salary rate for the
18preceding year by more than 20% shall be excluded. The member
19contribution shall be at the rate of 50% of the cost of the
20benefits as determined by the System. The employer contribution
21shall be at the rate of 50% of the cost of the benefits as
22determined by the System.
23    Upon receipt of the application and election, the System
24shall determine the one-time employee and employer
25contributions required. The member contribution shall be
26credited to the individual account of the member and the

 

 

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1employer contribution shall be credited to the Benefit Trust
2Reserve. The avoidance of the reduction in retirement annuity
3provided under this Section is not applicable until the
4member's contribution, if any, has been received by the System;
5however, the date that contribution is received shall not be
6considered in determining the effective date of retirement.
7    The number of members working for a single employer who may
8retire under this Section in any year may be limited at the
9option of the employer to a specified percentage of those
10eligible, not less than 10%, with the right to participate to
11be allocated among those applying on the basis of seniority in
12the service of the employer.
 
13    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
14    Sec. 16-136.1. Annual increase for certain annuitants.
15    (a) Any annuitant receiving a retirement annuity on June
1630, 1969 and any member retiring after June 30, 1969 shall be
17eligible for the annual increases provided under this Section
18provided the annuitant is ineligible for the automatic annual
19increase in annuity provided under Section 16-133.1, and
20provided further that (1) retirement occurred at age 55 or over
21and was based on 5 or more years of creditable service or (2)
22if retirement occurred prior to age 55, the retirement annuity
23was based on 20 or more years of creditable service.
24    (b) An annuitant entitled to increases under this Section
25shall be entitled to the initial increase as of the later of:

 

 

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1(1) January 1 following attainment of age 65, (2) January 1
2following the first anniversary of retirement, or (3) the first
3day of the month following receipt of the required qualifying
4contribution from the annuitant. The initial monthly increase
5shall be computed on the basis of the period elapsed between
6the later of the date of last retirement or attainment of age
750 and the date of qualification for the initial increase, at
8the rate of 1 1/2% of the original monthly retirement annuity
9per year for periods prior to September 1, 1971, and at the
10rate of 2% per year for periods between September 1, 1971 and
11September 1, 1978, and at the rate of 3% per year for periods
12thereafter.
13    Except as otherwise provided in subsection (b-1), (b-2),
14(b-3), or (b-4), if applicable, an An annuitant who has
15received an initial increase under this Section, shall be
16entitled, on each January 1 following the granting of the
17initial increase, to an increase of 3% of the original monthly
18retirement annuity for increases granted prior to January 1,
191990, and equal to 3% of the total annuity, including previous
20increases under this Section, for increases granted on or after
21January 1, 1990. The original monthly retirement annuity for
22computations under this subsection (b) shall be considered to
23be $83.34 for any annuitant entitled to benefits under Section
2416-134. The minimum original disability retirement annuity for
25computations under this subsection (b) shall be considered to
26be $33.34 per month for any annuitant retired on account of

 

 

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1disability.
2    (b-1) Notwithstanding any other provision of this Article,
3for a Tier I employee who made the election under item (i) of
4paragraph (1) of subsection (a) of Section 16-122.9, the amount
5of each automatic annual increase in retirement annuity
6occurring on or after the effective date of that election,
7other than the initial increase, shall be 3% of the originally
8granted retirement annuity.
9    (b-2) Notwithstanding any other provision of this Article,
10for a Tier I employee who made the election under item (i) of
11paragraph (1) of subsection (a) of Section 16-122.9, once the
12initial annual increase under this Section has been granted,
13the next 2 scheduled annual increases shall be skipped, and
14thereafter all annual increases shall be granted.
15    (b-3) Notwithstanding any other provision of this Article,
16for a Tier I employee who made the election under item (ii) of
17paragraph (1) of subsection (a) of Section 16-122.9, once the
18first annual increase under this Section has been granted, the
19next 3 scheduled annual increases shall be skipped, and
20thereafter all annual increases shall be granted.
21    (b-4) Notwithstanding any other provision of this Article,
22for a Tier I retiree who made the election under paragraph (1)
23of subsection (a-5) of Section 16-122.9:
24        (1) if the Tier I retiree has not received the initial
25    annual increase under this Section as of the effective date
26    of this amendatory Act of the 98th General Assembly, then

 

 

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1    once the initial annual increase under this Section has
2    been granted, the next scheduled annual increase shall be
3    skipped, the following annual increase shall be granted,
4    the next annual increase shall be skipped, and thereafter
5    all annual increases shall be granted; and
6        (2) if the Tier I retiree has received the initial
7    annual increase under this Section as of the effective date
8    of this amendatory Act of the 98th General Assembly, then
9    the next annual increase after that effective date shall be
10    skipped, the following annual increase shall be granted,
11    the next annual increase shall be skipped, and thereafter
12    all annual increases shall be granted.
13    (c) An annuitant who otherwise qualifies for annual
14increases under this Section must make a one-time payment of 1%
15of the monthly final average salary for each full year of the
16creditable service forming the basis of the retirement annuity
17or, if the retirement annuity was not computed using final
18average salary, 1% of the original monthly retirement annuity
19for each full year of service forming the basis of the
20retirement annuity.
21    (d) In addition to other increases which may be provided by
22this Section, regardless of creditable service, annuitants not
23meeting the service requirements of Section 16-133.1 and whose
24retirement annuity began on or before January 1, 1971 shall
25receive, on January 1, 1981, an increase in the retirement
26annuity then being paid of one dollar per month for each year

 

 

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1of creditable service forming the basis of the retirement
2allowance. On January 1, 1982, annuitants whose retirement
3annuity began on or before January 1, 1977, shall receive an
4increase in the retirement annuity then being paid of one
5dollar per month for each year of creditable service.
6    On January 1, 1987, any annuitant whose retirement annuity
7began on or before January 1, 1977, shall receive an increase
8in the monthly retirement annuity equal to 8 per year of
9creditable service times the number of years that have elapsed
10since the annuity began.
11(Source: P.A. 86-273.)
 
12    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
13    Sec. 16-152. Contributions by members.
14    (a) Each member shall make contributions for membership
15service to this System as follows:
16        (1) Effective July 1, 1998, contributions of 7.50% of
17    salary towards the cost of the retirement annuity. Such
18    contributions shall be deemed "normal contributions".
19        (2) Effective July 1, 1969, contributions of 1/2 of 1%
20    of salary toward the cost of the automatic annual increase
21    in retirement annuity provided under Section 16-133.1.
22        (3) Effective July 24, 1959, contributions of 1% of
23    salary towards the cost of survivor benefits. Such
24    contributions shall not be credited to the individual
25    account of the member and shall not be subject to refund

 

 

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1    except as provided under Section 16-143.2.
2        (4) Effective July 1, 2005, contributions of 0.40% of
3    salary toward the cost of the early retirement without
4    discount option provided under Section 16-133.2. This
5    contribution shall cease upon termination of the early
6    retirement without discount option as provided in Section
7    16-176.
8    (a-1) In addition to the contributions required under
9subsection (a), a member who elects to participate in the
10optional cash balance plan under Section 1-162 shall pay to the
11System for the purpose of participating in the optional cash
12balance plan a contribution of 2% of each payment of
13compensation received while he or she is a participant in the
14optional cash balance plan. These contributions shall not be
15used for the purpose of determining any benefit under this
16Article except as provided in the optional cash balance plan.
17    (a-5) In addition to the contributions otherwise required
18under this Article, each Tier I member who made the election
19under item (ii) of paragraph (1) of subsection (a) of Section
2016-122.9 shall also make the following contributions toward the
21cost of the retirement annuity from each payment of salary:
22        (1) beginning July 1, 2014 and through June 30, 2015,
23    1% of salary; and
24        (2) beginning on July 1, 2015, 2% of salary.
25    Except as otherwise specified, these contributions are to
26be considered as normal contributions for purposes of this

 

 

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1Article.
2    (b) The minimum required contribution for any year of
3full-time teaching service shall be $192.
4    (c) Contributions shall not be required of any annuitant
5receiving a retirement annuity who is given employment as
6permitted under Section 16-118 or 16-150.1.
7    (d) A person who (i) was a member before July 1, 1998, (ii)
8retires with more than 34 years of creditable service, and
9(iii) does not elect to qualify for the augmented rate under
10Section 16-129.1 shall be entitled, at the time of retirement,
11to receive a partial refund of contributions made under this
12Section for service occurring after the later of June 30, 1998
13or attainment of 34 years of creditable service, in an amount
14equal to 1.00% of the salary upon which those contributions
15were based.
16    (e) A member's contributions toward the cost of early
17retirement without discount made under item (a)(4) of this
18Section shall not be refunded if the member has elected early
19retirement without discount under Section 16-133.2 and has
20begun to receive a retirement annuity under this Article
21calculated in accordance with that election. Otherwise, a
22member's contributions toward the cost of early retirement
23without discount made under item (a)(4) of this Section shall
24be refunded according to whichever one of the following
25circumstances occurs first:
26        (1) The contributions shall be refunded to the member,

 

 

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1    without interest, within 120 days after the member's
2    retirement annuity commences, if the member does not elect
3    early retirement without discount under Section 16-133.2.
4        (2) The contributions shall be included, without
5    interest, in any refund claimed by the member under Section
6    16-151.
7        (3) The contributions shall be refunded to the member's
8    designated beneficiary (or if there is no beneficiary, to
9    the member's estate), without interest, if the member dies
10    without having begun to receive a retirement annuity under
11    this Article.
12        (4) The contributions shall be refunded to the member,
13    without interest, within 120 days after the early
14    retirement without discount option provided under Section
15    16-133.2 is terminated under Section 16-176.
16(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
17    (40 ILCS 5/16-158.2 new)
18    Sec. 16-158.2. Obligations of State; funding guarantee.
19The State shall be contractually obligated to contribute to the
20System in each State fiscal year an amount not less than the
21sum required in Section 16-158 as that Section existed prior to
22the effective date of this amendatory Act of the 98th General
23Assembly.
24    The obligations created under this Section are contractual
25obligations protected and enforceable under Article I, Section

 

 

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116 and Article XIII, Section 5 of the Illinois Constitution.
2    Notwithstanding any other provision of law, if the State
3fails to pay in a State fiscal year the amount guaranteed under
4this Section, the System may bring a mandamus action in the
5Circuit Court of Sangamon County to compel the State to make
6that payment, irrespective of other remedies that may be
7available to the System. It shall be the mandatory fiduciary
8obligation of the Board of the System to bring that action if
9the State fails to pay in the fiscal year the amount guaranteed
10under this Section. Before commencing that action, the Board
11shall submit a voucher for contributions required under Section
1216-158. If the State fails to pay a vouchered amount within 90
13days after receiving a voucher for that amount, then the Board
14shall submit a written request to the Comptroller seeking
15payment of that amount. A copy of the request shall be filed
16with the Secretary of State, and the Secretary of State shall
17provide copies of the request to the Governor and General
18Assembly. No earlier than the 16th day after filing a request
19with the Secretary, but no later than the 21st day after filing
20that request, the Board may commence such an action in the
21Circuit Court. If the Board fails to commence such action on or
22before the 21st day after filing the request with the Secretary
23of State, then any Tier I employee or Tier I retiree who has
24made the election under paragraph (1) of subsection (a) or
25(a-5) of Section 16-122.9 may file a mandamus action against
26the Board to compel the Board to commence its mandamus action

 

 

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1against the State. This Section constitutes an express waiver
2of the State's sovereign immunity. In ordering the State to
3make the required payment, the court may order a reasonable
4payment schedule to enable the State to make the required
5payment. The obligations and causes of action created under
6this subsection (b) shall be in addition to any other right or
7remedy otherwise accorded by common law, or State or federal
8law, and nothing in this subsection (b) shall be construed to
9deny, abrogate, impair, or waive any such common law or
10statutory right or remedy.
11    Any payments required to be made by the State pursuant to
12this Section are expressly subordinated to the payment of the
13principal, interest, and premium, if any, on any bonded debt
14obligation of the State or any other State-created entity,
15either currently outstanding or to be issued, for which the
16source of repayment or security thereon is derived directly or
17indirectly from tax revenues collected by the State or any
18other State-created entity. Payments on such bonded
19obligations include any statutory fund transfers or other
20prefunding mechanisms or formulas set forth, now or hereafter,
21in State law or bond indentures, into debt service funds or
22accounts of the State related to such bonded obligations,
23consistent with the payment schedules associated with such
24obligations.
 
25    (40 ILCS 5/16-203)

 

 

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1    Sec. 16-203. Application and expiration of new benefit
2increases.
3    (a) As used in this Section, "new benefit increase" means
4an increase in the amount of any benefit provided under this
5Article, or an expansion of the conditions of eligibility for
6any benefit under this Article, that results from an amendment
7to this Code that takes effect after June 1, 2005 (the
8effective date of Public Act 94-4). "New benefit increase",
9however, does not include any benefit increase resulting from
10the changes made to this Article by Public Act 95-910 or this
11amendatory Act of the 98th 95th General Assembly.
12    (b) Notwithstanding any other provision of this Code or any
13subsequent amendment to this Code, every new benefit increase
14is subject to this Section and shall be deemed to be granted
15only in conformance with and contingent upon compliance with
16the provisions of this Section.
17    (c) The Public Act enacting a new benefit increase must
18identify and provide for payment to the System of additional
19funding at least sufficient to fund the resulting annual
20increase in cost to the System as it accrues.
21    Every new benefit increase is contingent upon the General
22Assembly providing the additional funding required under this
23subsection. The Commission on Government Forecasting and
24Accountability shall analyze whether adequate additional
25funding has been provided for the new benefit increase and
26shall report its analysis to the Public Pension Division of the

 

 

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1Department of Financial and Professional Regulation. A new
2benefit increase created by a Public Act that does not include
3the additional funding required under this subsection is null
4and void. If the Public Pension Division determines that the
5additional funding provided for a new benefit increase under
6this subsection is or has become inadequate, it may so certify
7to the Governor and the State Comptroller and, in the absence
8of corrective action by the General Assembly, the new benefit
9increase shall expire at the end of the fiscal year in which
10the certification is made.
11    (d) Every new benefit increase shall expire 5 years after
12its effective date or on such earlier date as may be specified
13in the language enacting the new benefit increase or provided
14under subsection (c). This does not prevent the General
15Assembly from extending or re-creating a new benefit increase
16by law.
17    (e) Except as otherwise provided in the language creating
18the new benefit increase, a new benefit increase that expires
19under this Section continues to apply to persons who applied
20and qualified for the affected benefit while the new benefit
21increase was in effect and to the affected beneficiaries and
22alternate payees of such persons, but does not apply to any
23other person, including without limitation a person who
24continues in service after the expiration date and did not
25apply and qualify for the affected benefit while the new
26benefit increase was in effect.

 

 

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1(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
2    Section 35. The School Code is amended by changing Sections
324-1 and 24-8 as follows:
 
4    (105 ILCS 5/24-1)  (from Ch. 122, par. 24-1)
5    Sec. 24-1. Appointment-Salaries-Payment-School
6month-School term.) School boards shall appoint all teachers,
7determine qualifications of employment and fix the amount of
8their salaries subject to any limitation set forth in this Act
9and subject to any applicable restrictions in Section 14-106.5,
1015-132.9, or 16-122.9 of the Illinois Pension Code. They shall
11pay the wages of teachers monthly, subject, however, to the
12provisions of Section 24-21. The school month shall be the same
13as the calendar month but by resolution the school board may
14adopt for its use a month of 20 days, including holidays. The
15school term shall consist of at least the minimum number of
16pupil attendance days required by Section 10-19, any additional
17legal school holidays, days of teachers' institutes, or
18equivalent professional educational experiences, and one or
19two days at the beginning of the school term when used as a
20teachers' workshop.
21(Source: P.A. 80-249.)
 
22    (105 ILCS 5/24-8)  (from Ch. 122, par. 24-8)
23    Sec. 24-8. Minimum salary. In fixing the salaries of

 

 

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1teachers, school boards shall pay those who serve on a
2full-time basis not less than a rate for the school year that
3is based upon training completed in a recognized institution of
4higher learning, as follows: for the school year beginning July
51, 1980 and thereafter, less than a bachelor's degree, $9,000;
6120 semester hours or more and a bachelor's degree, $10,000;
7150 semester hours or more and a master's degree, $11,000.
8    Based upon previous public school experience in this State
9or any other State, territory, dependency or possession of the
10United States, or in schools operated by or under the auspices
11of the United States, teachers who serve on a full-time basis
12shall have their salaries increased to at least the following
13amounts above the starting salary for a teacher in such
14district in the same classification: with less than a
15bachelor's degree, $750 after 5 years; with 120 semester hours
16or more and a bachelor's degree, $1,000 after 5 years and
17$1,600 after 8 years; with 150 semester hours or more and a
18master's degree, $1,250 after 5 years, $2,000 after 8 years and
19$2,750 after 13 years. However, any salary increase is subject
20to any applicable restrictions in Section 14-106.5, 15-132.9,
21or 16-122.9 of the Illinois Pension Code.
22    For the purpose of this Section a teacher's salary shall
23include any amount paid by the school district on behalf of the
24teacher, as teacher contributions, to the Teachers' Retirement
25System of the State of Illinois.
26    If a school board establishes a schedule for teachers'

 

 

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1salaries based on education and experience, not inconsistent
2with this Section, all certificated nurses employed by that
3board shall be paid in accordance with the provisions of such
4schedule (subject to any applicable restrictions in Section
514-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code).
6    For purposes of this Section, a teacher who submits a
7certificate of completion to the school office prior to the
8first day of the school term shall be considered to have the
9degree stated in such certificate.
10(Source: P.A. 83-913.)
 
11    Section 40. The State Universities Civil Service Act is
12amended by changing Section 36d as follows:
 
13    (110 ILCS 70/36d)  (from Ch. 24 1/2, par. 38b3)
14    Sec. 36d. Powers and duties of the Merit Board.
15    The Merit Board shall have the power and duty-
16    (1) To approve a classification plan prepared under its
17direction, assigning to each class positions of substantially
18similar duties. The Merit Board shall have power to delegate to
19its Director the duty of assigning each position in the
20classified service to the appropriate class in the
21classification plan approved by the Merit Board.
22    (2) To prescribe the duties of each class of positions and
23the qualifications required by employment in that class.
24    (3) To prescribe the range of compensation for each class

 

 

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1or to fix a single rate of compensation for employees in a
2particular class; and to establish other conditions of
3employment which an employer and employee representatives have
4agreed upon as fair and equitable. The Merit Board shall direct
5the payment of the "prevailing rate of wages" in those
6classifications in which, on January 1, 1952, any employer is
7paying such prevailing rate and in such other classes as the
8Merit Board may thereafter determine. "Prevailing rate of
9wages" as used herein shall be the wages paid generally in the
10locality in which the work is being performed to employees
11engaged in work of a similar character. Subject to any
12applicable restrictions in Section 14-106.5, 15-132.9, or
1316-122.9 of the Illinois Pension Code, each Each employer
14covered by the University System shall be authorized to
15negotiate with representatives of employees to determine
16appropriate ranges or rates of compensation or other conditions
17of employment and may recommend to the Merit Board for
18establishment the rates or ranges or other conditions of
19employment which the employer and employee representatives
20have agreed upon as fair and equitable, but excluding the
21changes, the impact of changes, and the implementation of the
22changes set forth in this amendatory Act of the 98th General
23Assembly. Any rates or ranges established prior to January 1,
241952, and hereafter, shall not be changed except in accordance
25with the procedures herein provided.
26    (4) To recommend to the institutions and agencies specified

 

 

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1in Section 36e standards for hours of work, holidays, sick
2leave, overtime compensation and vacation for the purpose of
3improving conditions of employment covered therein and for the
4purpose of insuring conformity with the prevailing rate
5principal.
6    (5) To prescribe standards of examination for each class,
7the examinations to be related to the duties of such class. The
8Merit Board shall have power to delegate to the Director and
9his staff the preparation, conduct and grading of examinations.
10Examinations may be written, oral, by statement of training and
11experience, in the form of tests of knowledge, skill, capacity,
12intellect, aptitude; or, by any other method, which in the
13judgment of the Merit Board is reasonable and practical for any
14particular classification. Different examining procedures may
15be determined for the examinations in different
16classifications but all examinations in the same
17classification shall be uniform.
18    (6) To authorize the continuous recruitment of personnel
19and to that end, to delegate to the Director and his staff the
20power and the duty to conduct open and continuous competitive
21examinations for all classifications of employment.
22    (7) To cause to be established from the results of
23examinations registers for each class of positions in the
24classified service of the State Universities Civil Service
25System, of the persons who shall attain the minimum mark fixed
26by the Merit Board for the examination; and such persons shall

 

 

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1take rank upon the registers as candidates in the order of
2their relative excellence as determined by examination,
3without reference to priority of time of examination.
4    (8) To provide by its rules for promotions in the
5classified service. Vacancies shall be filled by promotion
6whenever practicable. For the purpose of this paragraph, an
7advancement in class shall constitute a promotion.
8    (9) To set a probationary period of employment of no less
9than 6 months and no longer than 12 months for each class of
10positions in the classification plan, the length of the
11probationary period for each class to be determined by the
12Director.
13    (10) To provide by its rules for employment at regular
14rates of compensation of physically handicapped persons in
15positions in which the handicap does not prevent the individual
16from furnishing satisfactory service.
17    (11) To make and publish rules, to carry out the purpose of
18the State Universities Civil Service System and for
19examination, appointments, transfers and removals and for
20maintaining and keeping records of the efficiency of officers
21and employees and groups of officers and employees in
22accordance with the provisions of Sections 36b to 36q,
23inclusive, and said Merit Board may from time to time make
24changes in such rules.
25    (12) To appoint a Director and such assistants and other
26clerical and technical help as may be necessary efficiently to

 

 

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1administer Sections 36b to 36q, inclusive. To authorize the
2Director to appoint an assistant resident at the place of
3employment of each employer specified in Section 36e and this
4assistant may be authorized to give examinations and to certify
5names from the regional registers provided in Section 36k.
6    (13) To submit to the Governor of this state on or before
7November 1 of each year prior to the regular session of the
8General Assembly a report of the University System's business
9and an estimate of the amount of appropriation from state funds
10required for the purpose of administering the University
11System.
12(Source: P.A. 82-524.)
 
13    Section 45. The University of Illinois Act is amended by
14adding Section 85 as follows:
 
15    (110 ILCS 305/85 new)
16    Sec. 85. Future increases in income. The University of
17Illinois must not pay, offer, or agree to pay any future
18increase in income, as that term is defined in Section
1914-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
20to any person in a manner that violates any of those Sections.
 
21    Section 50. The Southern Illinois University Management
22Act is amended by adding Section 70 as follows:
 

 

 

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1    (110 ILCS 520/70 new)
2    Sec. 70. Future increases in income. Southern Illinois
3University must not pay, offer, or agree to pay any future
4increase in income, as that term is defined in Section
514-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
6to any person in a manner that violates any of those Sections.
 
7    Section 55. The Chicago State University Law is amended by
8adding Section 5-180 as follows:
 
9    (110 ILCS 660/5-180 new)
10    Sec. 5-180. Future increases in income. Chicago State
11University must not pay, offer, or agree to pay any future
12increase in income, as that term is defined in Section
1314-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
14to any person in a manner that violates any of those Sections.
 
15    Section 60. The Eastern Illinois University Law is amended
16by adding Section 10-180 as follows:
 
17    (110 ILCS 665/10-180 new)
18    Sec. 10-180. Future increases in income. Eastern Illinois
19University must not pay, offer, or agree to pay any future
20increase in income, as that term is defined in Section
2114-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
22to any person in a manner that violates any of those Sections.
 

 

 

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1    Section 65. The Governors State University Law is amended
2by adding Section 15-180 as follows:
 
3    (110 ILCS 670/15-180 new)
4    Sec. 15-180. Future increases in income. Governors State
5University must not pay, offer, or agree to pay any future
6increase in income, as that term is defined in Section
714-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
8to any person in a manner that violates any of those Sections.
 
9    Section 70. The Illinois State University Law is amended by
10adding Section 20-185 as follows:
 
11    (110 ILCS 675/20-185 new)
12    Sec. 20-185. Future increases in income. Illinois State
13University must not pay, offer, or agree to pay any future
14increase in income, as that term is defined in Section
1514-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
16to any person in a manner that violates any of those Sections.
 
17    Section 75. The Northeastern Illinois University Law is
18amended by adding Section 25-180 as follows:
 
19    (110 ILCS 680/25-180 new)
20    Sec. 25-180. Future increases in income. Northeastern

 

 

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1Illinois University must not pay, offer, or agree to pay any
2future increase in income, as that term is defined in Section
314-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
4to any person in a manner that violates any of those Sections.
 
5    Section 80. The Northern Illinois University Law is amended
6by adding Section 30-190 as follows:
 
7    (110 ILCS 685/30-190 new)
8    Sec. 30-190. Future increases in income. Northern Illinois
9University must not pay, offer, or agree to pay any future
10increase in income, as that term is defined in Section
1114-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
12to any person in a manner that violates any of those Sections.
 
13    Section 85. The Western Illinois University Law is amended
14by adding Section 35-185 as follows:
 
15    (110 ILCS 690/35-185 new)
16    Sec. 35-185. Future increases in income. Western Illinois
17University must not pay, offer, or agree to pay any future
18increase in income, as that term is defined in Section
1914-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code,
20to any person in a manner that violates any of those Sections.
 
21    Section 90. The Public Community College Act is amended by

 

 

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1changing Sections 3-26 and 3-42 as follows:
 
2    (110 ILCS 805/3-26)  (from Ch. 122, par. 103-26)
3    Sec. 3-26. (a) To make appointments and fix the salaries of
4a chief administrative officer, who shall be the executive
5officer of the board, other administrative personnel, and all
6teachers, but subject to any applicable restrictions in Section
714-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code.
8In making these appointments and fixing the salaries, the board
9may make no discrimination on account of sex, race, creed,
10color or national origin.
11    (b) Upon the written request of an employee, to withhold
12from the compensation of that employee the membership dues of
13such employee payable to any specified labor organization as
14defined in the Illinois Educational Labor Relations Act. Under
15such arrangement, an amount shall be withheld for each regular
16payroll period which is equal to the prorata share of the
17annual membership dues plus any payments or contributions and
18the board shall pay such withholding to the specified labor
19organization within 10 working days from the time of the
20withholding.
21(Source: P.A. 83-1014.)
 
22    (110 ILCS 805/3-42)  (from Ch. 122, par. 103-42)
23    Sec. 3-42. To employ such personnel as may be needed, to
24establish policies governing their employment and dismissal,

 

 

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1and to fix the amount of their compensation, subject to any
2applicable restrictions in Section 14-106.5, 15-132.9, or
316-122.9 of the Illinois Pension Code. In the employment,
4establishment of policies and fixing of compensation the board
5may make no discrimination on account of sex, race, creed,
6color or national origin.
7    Residence within any community college district or outside
8any community college district shall not be considered:
9        (a) in determining whether to retain or not retain any
10    employee of a community college employed prior to July 1,
11    1977 or prior to the adoption by the community college
12    board of a resolution making residency within the community
13    college district of some or all employees a condition of
14    employment, whichever is later;
15        (b) in assigning, promoting or transferring any
16    employee of a community college to an office or position
17    employed prior to July 1, 1977 or prior to the adoption by
18    the community college board of a resolution making
19    residency within the community college district of some or
20    all employees a condition of employment, whichever is
21    later; or
22        (c) in determining the salary or other compensation of
23    any employee of a community college.
24(Source: P.A. 80-248.)
 
25    Section 95. The Illinois Educational Labor Relations Act is

 

 

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1amended by changing Section 4 as follows:
 
2    (115 ILCS 5/4)  (from Ch. 48, par. 1704)
3    Sec. 4. Employer rights. Employers shall not be required to
4bargain over matters of inherent managerial policy, which shall
5include such areas of discretion or policy as the functions of
6the employer, standards of services, its overall budget, the
7organizational structure and selection of new employees and
8direction of employees. Employers, however, shall be required
9to bargain collectively with regard to policy matters directly
10affecting wages, hours and terms and conditions of employment
11as well as the impact thereon upon request by employee
12representatives, but excluding (i) the payment of the
13additional member contributions set forth in subsections (a-1)
14and (a-5) of Sections 14-133, 15-157, and 16-152 of the
15Illinois Pension Code and (ii) the provision of compensation or
16benefits to employees who make an election under Section
1714-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code in
18order to offset all or part of any compensation or benefit
19limitations included as part of the elections under those
20Sections. To preserve the rights of employers and exclusive
21representatives which have established collective bargaining
22relationships or negotiated collective bargaining agreements
23prior to the effective date of this Act, employers shall be
24required to bargain collectively with regard to any matter
25concerning wages, hours or conditions of employment about which

 

 

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1they have bargained for and agreed to in a collective
2bargaining agreement prior to the effective date of this Act,
3but excluding (i) the payment of the additional member
4contributions set forth in subsections (a-1) and (a-5) of
5Sections 14-133, 15-157, and 16-152 of the Illinois Pension
6Code and (ii) the provision of compensation or benefits to
7employees who make an election under Section 14-106.5,
815-132.9, or 16-122.9 of the Illinois Pension Code in order to
9offset all or part of any compensation or benefit limitations
10included as part of the elections under those Sections.
11(Source: P.A. 83-1014.)
 
12    Section 100. The State Mandates Act is amended by adding
13Section 8.37 as follows:
 
14    (30 ILCS 805/8.37 new)
15    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
16of this Act, no reimbursement by the State is required for the
17implementation of any mandate created by this amendatory Act of
18the 98th General Assembly.
 
19    Section 197. Severability.
20    (a) Except as otherwise provided in this Act, and except as
21provided in subsection (b), the provisions of this Act are
22severable under Section 1.31 of the Statute on Statutes.
23    (b) If any benefit change made by this amendatory Act in an

 

 

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1Article of the Illinois Pension Code is determined to be
2unconstitutional or otherwise invalid by a final unappealable
3decision of an Illinois court or a court of competent
4jurisdiction, then the State funding guarantee provisions
5added to that Article by this amendatory Act shall also be
6invalid, and those funding guarantee provisions shall be
7contingent upon and inseverable from those benefit changes.
 
8    Section 999. Effective date. This Act takes effect upon
9becoming law.