SB0440 EngrossedLRB099 03101 RPS 23109 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 6-150, 6-152, 6-158, 6-164, 6-166, 6-167, and 6-229 as
6follows:
 
7    (40 ILCS 5/6-150)  (from Ch. 108 1/2, par. 6-150)
8    Sec. 6-150. Death benefit.
9    (a) Effective January 1, 1962, an ordinary death benefit
10shall be payable on account of any fireman in service and in
11receipt of salary on or after such date, which benefit shall be
12in addition to all other annuities and benefits herein
13provided. This benefit shall be payable upon death of a
14fireman:
15        (1) occurring in active service while in receipt of
16    salary;
17        (2) on an authorized and approved leave of absence,
18    without salary, beginning on or after January 1, 1962, if
19    the death occurs within 60 days from the date the fireman
20    was in receipt of salary;
21        (3) receiving duty, occupational disease, or ordinary
22    disability benefit;
23        (4) occurring within 60 days from the date of

 

 

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1    termination of duty disability, occupational disease
2    disability or ordinary disability benefit payments if
3    re-entry into service had not occurred; or
4        (5) occurring on retirement and while in receipt of an
5    age and service annuity, prior service annuity, Tier 2
6    monthly retirement annuity, or minimum annuity; provided
7    (a) retirement on such annuity occurred on or after January
8    1, 1962, and (b) such separation from service was effective
9    on or after the fireman's attainment of age 50, and (c)
10    application for such annuity was made within 60 days after
11    separation from service.
12    (b) The ordinary death benefit shall be payable to such
13beneficiary or beneficiaries as the fireman has nominated by
14written direction duly signed and acknowledged before an
15officer authorized to take acknowledgments, and filed with the
16board. If no such written direction has been filed or if the
17designated beneficiaries do not survive the fireman, payment of
18the benefit shall be made to his estate.
19    (c) Beginning July 1, 1983, if death occurs prior to
20retirement on annuity and before the fireman's attainment of
21age 50, the amount of the benefit payable shall be $12,000.
22Beginning July 1, 1983, if death occurs prior to retirement, at
23age 50 or over, the benefit of $12,000 shall be reduced $400
24for each year (commencing on the fireman's attainment of age 50
25and thereafter on each succeeding birth date) that the
26fireman's age, at date of death, is more than age 49, but in no

 

 

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1event below the amount of $6,000.
2    Beginning July 1, 1983, if the fireman's death occurs while
3he is in receipt of an annuity, the benefit shall be $6,000.
4(Source: P.A. 83-152.)
 
5    (40 ILCS 5/6-152)  (from Ch. 108 1/2, par. 6-152)
6    Sec. 6-152. Ordinary disability benefits. Any fireman who
7is not eligible for minimum annuity or Tier 2 monthly
8retirement annuity, and who becomes disabled after the
9effective date as the result of any cause other than the
10performance of an act or acts of duty, shall have a right to
11receive ordinary disability benefit during any period or
12periods of such disability, after the first 30 days of
13disability. Payment of such benefits shall not exceed, in the
14aggregate, throughout the entire service of the fireman, a
15period equal to 1/2 of the total service rendered by him prior
16to the time he became disabled, but not to exceed 5 years. In
17computing such period of service, the time that the fireman
18received ordinary disability benefit shall not be included.
19    The first payment of the benefit shall be made not later
20than one month after the benefit is granted and each subsequent
21payment shall be made not later than one month after the time
22when the latest payment was made.
23    When a disabled fireman becomes eligible for minimum
24annuity or Tier 2 monthly retirement annuity, the disability
25benefit shall cease and he shall thereafter receive such

 

 

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1annuity or annuities as are provided for him in accordance with
2other provisions of this Article.
3    Ordinary disability benefit shall be 50% of the fireman's
4salary at the time the disability occurs. Before any payment is
5made, a sum ordinarily deducted from the fireman's salary for
6annuity purposes during a period of time equal to that for
7which such payment of ordinary disability benefit is to be made
8shall be deducted from such payment and credited to him as a
9deduction from his salary for such period. The sums so credited
10shall be regarded, for annuity and refund purposes, as sums
11contributed by the fireman.
12(Source: P.A. 84-11.)
 
13    (40 ILCS 5/6-158)  (from Ch. 108 1/2, par. 6-158)
14    Sec. 6-158. Refund - General.
15    (a) A fireman who withdraws before age 50 and a fireman
16with less than 10 years of service who withdraws before age 57,
17or any fireman who withdraws and enters the service of another
18department of the city, has a right to a refund of the entire
19amount to his credit as of the date of withdrawal for age and
20service annuity or Tier 2 monthly retirement annuity, for
21automatic annual increase in annuity as provided in Section
226-164, and for widow's annuity or Tier 2 surviving spouse's
23annuity, from deductions from salary.
24    (b) Any such fireman shall be entitled to refund until he
25re-enters service or until his annuity is fixed.

 

 

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1    (c) A fireman who receives a refund forfeits all rights to
2any annuity or benefit from the fund, for himself and for any
3other person who might benefit through him because of his
4service, provided he shall retain the right to credit for any
5such service, for the purpose of computing his total service if
6he re-enters service before age 57, becomes a beneficiary of
7the fund and makes repayment of the refund with interest.
8    (d) A fireman completing 10 years of service who does not
9receive a refund, may receive an annuity as provided in this
10Article.
11    (e) A fireman completing less than 10 years who does not
12receive a refund has a right to have all amounts to his credit
13for annuity purposes on the date of withdrawal improved by
14interest while he is out of service until age 57 only, for his
15benefit and the benefit of any person who may have any right to
16annuity through him, if he subsequently reenters service and
17attains a right to annuity.
18(Source: Laws 1965, p. 2464.)
 
19    (40 ILCS 5/6-164)   (from Ch. 108 1/2, par. 6-164)
20    Sec. 6-164. Automatic annual increase; retirement after
21September 1, 1959.
22    (a) A fireman qualifying for a minimum annuity who retires
23from service after September 1, 1959 shall, upon either the
24first of the month following the first anniversary of his date
25of retirement if he is age 60 (age 55 if born before January 1,

 

 

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11955) or over on that anniversary date, or upon the first of
2the month following his attainment of age 60 (age 55 if born
3before January 1, 1955) if that occurs after the first
4anniversary of his retirement date, have his then fixed and
5payable monthly annuity increased by 1 1/2%, and such first
6fixed annuity as granted at retirement increased by an
7additional 1 1/2% in January of each year thereafter up to a
8maximum increase of 30%. Beginning July 1, 1982 for firemen
9born before January 1, 1930, and beginning January 1, 1990 for
10firemen born after December 31, 1929 and before January 1,
111940, and beginning January 1, 1996 for firemen born after
12December 31, 1939 but before January 1, 1945, and beginning
13January 1, 2004, for firemen born after December 31, 1944 but
14before January 1, 1955, such increases shall be 3% and such
15firemen shall not be subject to the 30% maximum increase.
16    Any fireman born before January 1, 1945 who qualifies for a
17minimum annuity and retires after September 1, 1967 but has not
18received the initial increase under this subsection before
19January 1, 1996 is entitled to receive the initial increase
20under this subsection on (1) January 1, 1996, (2) the first
21anniversary of the date of retirement, or (3) attainment of age
2255, whichever occurs last. The changes to this Section made by
23this amendatory Act of 1995 apply beginning January 1, 1996 and
24apply without regard to whether the fireman or annuitant
25terminated service before the effective date of this amendatory
26Act of 1995.

 

 

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1    Any fireman born before January 1, 1955 who qualifies for a
2minimum annuity and retires after September 1, 1967 but has not
3received the initial increase under this subsection before
4January 1, 2004 is entitled to receive the initial increase
5under this subsection on (1) January 1, 2004, (2) the first
6anniversary of the date of retirement, or (3) attainment of age
755, whichever occurs last. The changes to this Section made by
8this amendatory Act of the 93rd General Assembly apply without
9regard to whether the fireman or annuitant terminated service
10before the effective date of this amendatory Act.
11    (b) Subsection (a) of this Section is not applicable to an
12employee receiving a term annuity.
13    (c) To help defray the cost of such increases in annuity,
14there shall be deducted, beginning September 1, 1959, from each
15payment of salary to a fireman, 1/8 of 1% of each such salary
16payment and an additional 1/8 of 1% beginning on September 1,
171961, and September 1, 1963, respectively, concurrently with
18and in addition to the salary deductions otherwise made for
19annuity purposes.
20    Each such additional 1/8 of 1% deduction from salary which
21shall, on September 1, 1963, result in a total increase of 3/8
22of 1% of salary, shall be credited to the Automatic Increase
23Reserve, to be used, together with city contributions as
24provided in this Article, to defray the cost of the 1 1/2%
25annuity increments herein specified in this Section. Any
26balance in such reserve as of the beginning of each calendar

 

 

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1year shall be credited with interest at the rate of 3% per
2annum.
3    The salary deductions provided in this Section are not
4subject to refund, except to the fireman himself, in any case
5in which: (i) the a fireman withdraws prior to qualification
6for minimum annuity or Tier 2 monthly retirement annuity and
7applies for refund, (ii) the fireman or applies for an annuity
8of a type that is not subject to annual increases under this
9Section, or (iii) , and also where a term annuity becomes
10payable. In such cases, the total of such salary deductions
11shall be refunded to the fireman, without interest, and charged
12to the aforementioned reserve.
13    (d) Notwithstanding any other provision of this Article,
14the Tier 2 monthly retirement annuity of a person who first
15becomes a fireman under this Article on or after January 1,
162011 shall be increased on the January 1 occurring either on or
17after (i) the attainment of age 60 or (ii) the first
18anniversary of the annuity start date, whichever is later. Each
19annual increase shall be calculated at 3% or one-half the
20annual unadjusted percentage increase (but not less than zero)
21in the consumer price index-u for the 12 months ending with the
22September preceding each November 1, whichever is less, of the
23originally granted retirement annuity. If the annual
24unadjusted percentage change in the consumer price index-u for
25a 12-month period ending in September is zero or, when compared
26with the preceding period, decreases, then the annuity shall

 

 

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1not be increased.
2    For the purposes of this subsection (d), "consumer price
3index-u" means the index published by the Bureau of Labor
4Statistics of the United States Department of Labor that
5measures the average change in prices of goods and services
6purchased by all urban consumers, United States city average,
7all items, 1982-84 = 100. The new amount resulting from each
8annual adjustment shall be determined by the Public Pension
9Division of the Department of Insurance and made available to
10the boards of the pension funds by November 1 of each year.
11(Source: P.A. 96-1495, eff. 1-1-11.)
 
12    (40 ILCS 5/6-166)  (from Ch. 108 1/2, par. 6-166)
13    Sec. 6-166. Contributions for age and service annuities or
14Tier 2 monthly retirement annuities for present employees and
15future entrants.
16    (a) After the effective date and prior to July 1, 1953, 3
171/2%, and after June 30, 1953, and prior to September 1, 1959,
186%, and beginning September 1, 1959, 7 1/8% of each payment of
19the salary of each present employee and future entrant shall be
20deducted and contributed to the fund for age and service
21annuity or Tier 2 monthly retirement annuity. The deductions
22shall be made at the time payments of salary are payable and
23shall continue while the employee is in service.
24    Concurrently with each such contribution, the city shall
25contribute 8 1/2% of each payment of salary, but the city

 

 

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1contributions shall cease for all employees upon their
2attainment of age 63.
3    (b) Each contribution by the employee and the city shall be
4allocated to the account of and credited to the employee, and
5shall be improved by interest at the applicable rate during the
6time he is in service until the age and service annuity is
7fixed. Any accretion, by way of interest or otherwise, upon
8such sum or any deduction from salary made after the annuity is
9fixed for a present employee or after attainment of age 63 by a
10future entrant who first becomes a fireman under this Article
11before January 1, 2011 shall not be credited to the employee
12for age and service annuity.
13(Source: P.A. 76-1668.)
 
14    (40 ILCS 5/6-167)  (from Ch. 108 1/2, par. 6-167)
15    Sec. 6-167. Contributions for widow's annuity and Tier 2
16surviving spouse's annuity. Beginning on the effective date and
17prior to September 1, 1957, 1% of each payment of salary of not
18more than $3,000 of each employee and beginning September 1,
191957, 1% of each payment of salary of not more than $6,000 of
20each present employee and future entrant shall be deducted and
21contributed to the fund for widow's annuity. After September 1,
221967 and prior to January 1, 1976, 1%, and beginning January 1,
231976, 1 1/2% of salary without limitation shall be deducted
24from the pay of each present employee and future entrant and
25contributed to the fund for widow's annuity or Tier 2 surviving

 

 

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1spouse's annuity. The deduction shall be made at the time the
2payments of salary are payable and shall continue during the
3service of the employee.
4    Concurrently with each contribution, the city shall
5contribute 2% of each payment of salary.
6    Each contribution by the employee and the city shall be
7allocated to the accounts of and credited to the employee for
8widow's annuity or Tier 2 surviving spouse's annuity.
9(Source: P.A. 79-633.)
 
10    (40 ILCS 5/6-229)
11    Sec. 6-229. Provisions applicable to new hires; Tier 2.
12    (a) Notwithstanding any other provision of this Article,
13the provisions of this Section apply to a person who first
14becomes a fireman under this Article on or after January 1,
152011, and to certain qualified survivors of such a fireman.
16Such persons, and the benefits and restrictions that apply
17specifically to them under this Article, may be referred to as
18"Tier 2".
19    (b) A fireman who has withdrawn from service, has attained
20age 50 55 or more, and who has 10 or more years of service in
21that capacity shall be entitled, upon proper application being
22received by the Fund, at his option to receive a Tier 2 monthly
23retirement annuity for his service as a fireman. The Tier 2
24monthly retirement annuity shall be computed by multiplying
252.5% for each year of such service by his or her final average

 

 

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1salary, subject to an annuity reduction factor of . The
2retirement annuity of a fireman who is retiring after attaining
3age 50 with 10 or more years of creditable service shall be
4reduced by one-half of 1% for each month that the fireman's age
5at retirement is under age 55. The Tier 2 monthly retirement
6annuity is in lieu of any age and service annuity or other form
7of retirement annuity under this Article.
8    The maximum retirement annuity under this subsection (b)
9shall be 75% of final average salary.
10    For the purposes of this subsection (b), "final average
11salary" means the average monthly salary obtained by dividing
12the total salary of the fireman during the 96 consecutive
13months of service within the last 120 months of service in
14which the total salary was the highest by the number of months
15of service in that period.
16    Beginning on January 1, 2011, for all purposes under this
17Code (including without limitation the calculation of benefits
18and employee contributions), the annual salary based on the
19plan year of a member or participant to whom this Section
20applies shall not exceed $106,800; however, that amount shall
21annually thereafter be increased by the lesser of (i) 3% of
22that amount, including all previous adjustments, or (ii)
23one-half the annual unadjusted percentage increase (but not
24less than zero) in the consumer price index-u for the 12 months
25ending with the September preceding each November 1, including
26all previous adjustments.

 

 

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1    (b-5) For the purposes of this Section, "consumer price
2index-u" means the index published by the Bureau of Labor
3Statistics of the United States Department of Labor that
4measures the average change in prices of goods and services
5purchased by all urban consumers, United States city average,
6all items, 1982-84 = 100. The new amount resulting from each
7annual adjustment shall be determined by the Public Pension
8Division of the Department of Insurance and made available to
9the boards of the retirement systems and pension funds by
10November 1 of each year.
11    (c) Notwithstanding any other provision of this Article,
12for a person who first becomes a fireman under this Article on
13or after January 1, 2011, eligibility for and the amount of the
14annuity to which the qualified surviving spouse, children, and
15or parents of the fireman are entitled under this subsection
16(c) shall be determined as follows:
17        (1) The surviving spouse of a deceased fireman to whom
18    this Section applies shall be deemed qualified to receive a
19    Tier 2 surviving spouse's annuity under this paragraph (1)
20    if: (i) the deceased fireman meets the requirements
21    specified under subdivision (A) or (B) of this paragraph
22    (1); and (ii) the surviving spouse would not otherwise be
23    excluded from receiving a widow's annuity under the
24    eligibility requirements for a widow's annuity set forth in
25    Section 6-142. The Tier 2 surviving spouse's annuity is in
26    lieu of the widow's annuity determined under any other

 

 

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1    Section of this Article and is subject to the requirements
2    of Section 6-143.2.
3        As used in this subsection (c), "earned pension" means
4    a Tier 2 monthly retirement annuity determined under
5    subsection (b) of this Section, including any increases the
6    fireman had received pursuant to Section 6-164.
7            (A) If the deceased fireman was receiving an earned
8        pension at the date of his or her death, the Tier 2
9        surviving spouse's annuity under this paragraph (1)
10        shall be in the amount of 66 2/3% of the fireman's
11        earned pension at the date of death.
12            (B) If the deceased fireman was not receiving an
13        earned pension but had at least 10 years of service at
14        the time of death, the Tier 2 surviving spouse's
15        annuity under this paragraph (1) shall be in the amount
16        of 66 2/3% of the Tier 2 monthly retirement annuity
17        that the deceased fireman would have been eligible to
18        receive under subsection (b) of this Section, based
19        upon the actual service accrued through the day before
20        the fireman's death, but determined as though the
21        fireman was at least age 55 on the day before his or
22        her death and retired on that day.
23            (C) Notwithstanding any other provision of this
24        Article, the monthly Tier 2 surviving spouse's annuity
25        under subdivision (A) or (B) of this paragraph (1) of a
26        survivor of a person who first becomes a fireman under

 

 

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1        this Article on or after January 1, 2011 shall be
2        increased on the January 1 next occurring after (i)
3        attainment of age 60 by the recipient of the Tier 2
4        surviving spouse's annuity or (ii) the first
5        anniversary of the Tier 2 surviving spouse's annuity
6        start date, whichever is later, survivor's pension and
7        on each January 1 thereafter, by 3% or one-half the
8        annual unadjusted percentage increase in the consumer
9        price index-u for the 12 months ending with September
10        preceding each November 1, whichever is less, of the
11        originally granted Tier 2 surviving spouse's
12        survivor's annuity. If the annual unadjusted
13        percentage change in the consumer price index-u for a
14        12-month period ending in September is zero or, when
15        compared with the preceding period, decreases, then
16        the annuity shall not be increased.
17            (D) Notwithstanding the other provisions of this
18        paragraph (1), for a qualified surviving spouse who is
19        entitled to a Tier 2 surviving spouse's annuity under
20        subdivision (A) or (B) of this paragraph (1), that Tier
21        2 surviving spouse's annuity shall not be less than the
22        amount of the minimum widow's annuity established from
23        time to time under Section 6-128.4.
24        (2) Surviving children of a deceased fireman subject to
25    this Section who would otherwise meet the eligibility
26    requirements for a child's annuity set forth in Sections

 

 

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1    6-147 and 6-148 shall be deemed qualified to receive a Tier
2    2 child's annuity under this subsection (c), which shall be
3    in lieu of, but in the same amount and paid in the same
4    manner as, the child's annuity provided under those
5    Sections; except that any salary used for computing a Tier
6    2 child's annuity shall be subject to the Tier 2 salary cap
7    provided under subsection (b) of this Section. For purposes
8    of determining any pro rata reduction in child's annuities
9    under this subsection (c), references in Section 6-148 to
10    the combined annuities of the family shall be deemed to
11    refer to the combined Tier 2 surviving spouse's annuity, if
12    any, and the Tier 2 child's annuities payable under this
13    subsection (c).
14        (3) Surviving parents of a deceased fireman subject to
15    this Section who would otherwise meet the eligibility
16    requirements for a parent's annuity set forth in Section
17    6-149 shall be deemed qualified to receive a Tier 2
18    parent's annuity under this subsection (c), which shall be
19    in lieu of, but in the same amount and paid in the same
20    manner as, the parent's annuity provided under Section
21    6-149; except that any salary used for computing a Tier 2
22    parent's annuity shall be subject to the Tier 2 salary cap
23    provided under subsection (b) of this Section. For the
24    purposes of this Section, a reference to "annuity" in
25    Section 6-149 includes: (i) in the context of a widow, a
26    Tier 2 surviving spouse's annuity and (ii) in the context

 

 

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1    of a child, a Tier 2 child's annuity.
2    (d) The General Assembly finds and declares that the
3provisions of this Section, as enacted by Public Act 96-1495,
4require clarification relating to necessary eligibility
5standards and the manner of determining and paying the intended
6Tier 2 benefits and contributions in order to enable the Fund
7to unambiguously implement and administer benefits for Tier 2
8members. The changes to this Section and the conforming changes
9to Sections 6-150, 6-152, 6-158, 6-164, 6-166, and 6-167 made
10by this amendatory Act of the 99th General Assembly are enacted
11to clarify the provisions of this Section as enacted by Public
12Act 96-1495, and are hereby declared to represent and be
13consistent with the original and continuing intent of this
14Section and Public Act 96-1495.
15    (e) The changes made by this amendatory Act of the 99th
16General Assembly are intended to be retroactive to January 1,
172011 (the effective date of Public Act 96-1495) and, for the
18purposes of Section 1-103.1 of this Code, they apply without
19regard to whether the relevant fireman was in service on or
20after the effective date of this amendatory Act of the 99th
21General Assembly.
22(Source: P.A. 96-1495, eff. 1-1-11.)