Sen. John G. Mulroe

Filed: 4/18/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 440

2    AMENDMENT NO. ______. Amend Senate Bill 440 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 6-150, 6-152, 6-158, 6-164, 6-166, 6-167, and
66-229 as follows:
 
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;

 

 

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1        (2) on an authorized and approved leave of absence,
2    without salary, beginning on or after January 1, 1962, if
3    the death occurs within 60 days from the date the fireman
4    was in receipt of salary;
5        (3) receiving duty, occupational disease, or ordinary
6    disability benefit;
7        (4) occurring within 60 days from the date of
8    termination of duty disability, occupational disease
9    disability or ordinary disability benefit payments if
10    re-entry into service had not occurred; or
11        (5) occurring on retirement and while in receipt of an
12    age and service annuity, prior service annuity, Tier 2
13    monthly retirement annuity, or minimum annuity; provided
14    (a) retirement on such annuity occurred on or after January
15    1, 1962, and (b) such separation from service was effective
16    on or after the fireman's attainment of age 50, and (c)
17    application for such annuity was made within 60 days after
18    separation from service.
19    (b) The ordinary death benefit shall be payable to such
20beneficiary or beneficiaries as the fireman has nominated by
21written direction duly signed and acknowledged before an
22officer authorized to take acknowledgments, and filed with the
23board. If no such written direction has been filed or if the
24designated beneficiaries do not survive the fireman, payment of
25the benefit shall be made to his estate.
26    (c) Beginning July 1, 1983, if death occurs prior to

 

 

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1retirement on annuity and before the fireman's attainment of
2age 50, the amount of the benefit payable shall be $12,000.
3Beginning July 1, 1983, if death occurs prior to retirement, at
4age 50 or over, the benefit of $12,000 shall be reduced $400
5for each year (commencing on the fireman's attainment of age 50
6and thereafter on each succeeding birth date) that the
7fireman's age, at date of death, is more than age 49, but in no
8event below the amount of $6,000.
9    Beginning July 1, 1983, if the fireman's death occurs while
10he is in receipt of an annuity, the benefit shall be $6,000.
11(Source: P.A. 83-152.)
 
12    (40 ILCS 5/6-152)  (from Ch. 108 1/2, par. 6-152)
13    Sec. 6-152. Ordinary disability benefits. Any fireman who
14is not eligible for minimum annuity or Tier 2 monthly
15retirement annuity, and who becomes disabled after the
16effective date as the result of any cause other than the
17performance of an act or acts of duty, shall have a right to
18receive ordinary disability benefit during any period or
19periods of such disability, after the first 30 days of
20disability. Payment of such benefits shall not exceed, in the
21aggregate, throughout the entire service of the fireman, a
22period equal to 1/2 of the total service rendered by him prior
23to the time he became disabled, but not to exceed 5 years. In
24computing such period of service, the time that the fireman
25received ordinary disability benefit shall not be included.

 

 

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1    The first payment of the benefit shall be made not later
2than one month after the benefit is granted and each subsequent
3payment shall be made not later than one month after the time
4when the latest payment was made.
5    When a disabled fireman becomes eligible for minimum
6annuity or Tier 2 monthly retirement annuity, the disability
7benefit shall cease and he shall thereafter receive such
8annuity or annuities as are provided for him in accordance with
9other provisions of this Article.
10    Ordinary disability benefit shall be 50% of the fireman's
11salary at the time the disability occurs. Before any payment is
12made, a sum ordinarily deducted from the fireman's salary for
13annuity purposes during a period of time equal to that for
14which such payment of ordinary disability benefit is to be made
15shall be deducted from such payment and credited to him as a
16deduction from his salary for such period. The sums so credited
17shall be regarded, for annuity and refund purposes, as sums
18contributed by the fireman.
19(Source: P.A. 84-11.)
 
20    (40 ILCS 5/6-158)  (from Ch. 108 1/2, par. 6-158)
21    Sec. 6-158. Refund - General.
22    (a) A fireman who withdraws before age 50 and a fireman
23with less than 10 years of service who withdraws before age 57,
24or any fireman who withdraws and enters the service of another
25department of the city, has a right to a refund of the entire

 

 

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1amount to his credit as of the date of withdrawal for age and
2service annuity or Tier 2 monthly retirement annuity, for
3automatic annual increase in annuity as provided in Section
46-164, and for widow's annuity or Tier 2 surviving spouse's
5annuity, from deductions from salary.
6    (b) Any such fireman shall be entitled to refund until he
7re-enters service or until his annuity is fixed.
8    (c) A fireman who receives a refund forfeits all rights to
9any annuity or benefit from the fund, for himself and for any
10other person who might benefit through him because of his
11service, provided he shall retain the right to credit for any
12such service, for the purpose of computing his total service if
13he re-enters service before age 57, becomes a beneficiary of
14the fund and makes repayment of the refund with interest.
15    (d) A fireman completing 10 years of service who does not
16receive a refund, may receive an annuity as provided in this
17Article.
18    (e) A fireman completing less than 10 years who does not
19receive a refund has a right to have all amounts to his credit
20for annuity purposes on the date of withdrawal improved by
21interest while he is out of service until age 57 only, for his
22benefit and the benefit of any person who may have any right to
23annuity through him, if he subsequently reenters service and
24attains a right to annuity.
25(Source: Laws 1965, p. 2464.)
 

 

 

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1    (40 ILCS 5/6-164)   (from Ch. 108 1/2, par. 6-164)
2    Sec. 6-164. Automatic annual increase; retirement after
3September 1, 1959.
4    (a) A fireman qualifying for a minimum annuity who retires
5from service after September 1, 1959 shall, upon either the
6first of the month following the first anniversary of his date
7of retirement if he is age 60 (age 55 if born before January 1,
81955) or over on that anniversary date, or upon the first of
9the month following his attainment of age 60 (age 55 if born
10before January 1, 1955) if that occurs after the first
11anniversary of his retirement date, have his then fixed and
12payable monthly annuity increased by 1 1/2%, and such first
13fixed annuity as granted at retirement increased by an
14additional 1 1/2% in January of each year thereafter up to a
15maximum increase of 30%. Beginning July 1, 1982 for firemen
16born before January 1, 1930, and beginning January 1, 1990 for
17firemen born after December 31, 1929 and before January 1,
181940, and beginning January 1, 1996 for firemen born after
19December 31, 1939 but before January 1, 1945, and beginning
20January 1, 2004, for firemen born after December 31, 1944 but
21before January 1, 1955, such increases shall be 3% and such
22firemen shall not be subject to the 30% maximum increase.
23    Any fireman born before January 1, 1945 who qualifies for a
24minimum annuity and retires after September 1, 1967 but has not
25received the initial increase under this subsection before
26January 1, 1996 is entitled to receive the initial increase

 

 

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1under this subsection on (1) January 1, 1996, (2) the first
2anniversary of the date of retirement, or (3) attainment of age
355, whichever occurs last. The changes to this Section made by
4this amendatory Act of 1995 apply beginning January 1, 1996 and
5apply without regard to whether the fireman or annuitant
6terminated service before the effective date of this amendatory
7Act of 1995.
8    Any fireman born before January 1, 1955 who qualifies for a
9minimum annuity and retires after September 1, 1967 but has not
10received the initial increase under this subsection before
11January 1, 2004 is entitled to receive the initial increase
12under this subsection on (1) January 1, 2004, (2) the first
13anniversary of the date of retirement, or (3) attainment of age
1455, whichever occurs last. The changes to this Section made by
15this amendatory Act of the 93rd General Assembly apply without
16regard to whether the fireman or annuitant terminated service
17before the effective date of this amendatory Act.
18    (b) Subsection (a) of this Section is not applicable to an
19employee receiving a term annuity.
20    (c) To help defray the cost of such increases in annuity,
21there shall be deducted, beginning September 1, 1959, from each
22payment of salary to a fireman, 1/8 of 1% of each such salary
23payment and an additional 1/8 of 1% beginning on September 1,
241961, and September 1, 1963, respectively, concurrently with
25and in addition to the salary deductions otherwise made for
26annuity purposes.

 

 

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1    Each such additional 1/8 of 1% deduction from salary which
2shall, on September 1, 1963, result in a total increase of 3/8
3of 1% of salary, shall be credited to the Automatic Increase
4Reserve, to be used, together with city contributions as
5provided in this Article, to defray the cost of the 1 1/2%
6annuity increments herein specified in this Section. Any
7balance in such reserve as of the beginning of each calendar
8year shall be credited with interest at the rate of 3% per
9annum.
10    The salary deductions provided in this Section are not
11subject to refund, except to the fireman himself, in any case
12in which: (i) the a fireman withdraws prior to qualification
13for minimum annuity or Tier 2 monthly retirement annuity and
14applies for refund, (ii) the fireman or applies for an annuity
15of a type that is not subject to annual increases under this
16Section, or (iii) , and also where a term annuity becomes
17payable. In such cases, the total of such salary deductions
18shall be refunded to the fireman, without interest, and charged
19to the aforementioned reserve.
20    (d) Notwithstanding any other provision of this Article,
21the Tier 2 monthly retirement annuity of a person who first
22becomes a fireman under this Article on or after January 1,
232011 shall be increased on the January 1 occurring either on or
24after (i) the attainment of age 60 or (ii) the first
25anniversary of the annuity start date, whichever is later. Each
26annual increase shall be calculated at 3% or one-half the

 

 

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1annual unadjusted percentage increase (but not less than zero)
2in the consumer price index-u for the 12 months ending with the
3September preceding each November 1, whichever is less, of the
4originally granted retirement annuity. If the annual
5unadjusted percentage change in the consumer price index-u for
6a 12-month period ending in September is zero or, when compared
7with the preceding period, decreases, then the annuity shall
8not be increased.
9    For the purposes of this subsection (d), "consumer price
10index-u" means the index published by the Bureau of Labor
11Statistics of the United States Department of Labor that
12measures the average change in prices of goods and services
13purchased by all urban consumers, United States city average,
14all items, 1982-84 = 100. The new amount resulting from each
15annual adjustment shall be determined by the Public Pension
16Division of the Department of Insurance and made available to
17the boards of the pension funds by November 1 of each year.
18(Source: P.A. 96-1495, eff. 1-1-11.)
 
19    (40 ILCS 5/6-166)  (from Ch. 108 1/2, par. 6-166)
20    Sec. 6-166. Contributions for age and service annuities or
21Tier 2 monthly retirement annuities for present employees and
22future entrants.
23    (a) After the effective date and prior to July 1, 1953, 3
241/2%, and after June 30, 1953, and prior to September 1, 1959,
256%, and beginning September 1, 1959, 7 1/8% of each payment of

 

 

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1the salary of each present employee and future entrant shall be
2deducted and contributed to the fund for age and service
3annuity or Tier 2 monthly retirement annuity. The deductions
4shall be made at the time payments of salary are payable and
5shall continue while the employee is in service.
6    Concurrently with each such contribution, the city shall
7contribute 8 1/2% of each payment of salary, but the city
8contributions shall cease for all employees upon their
9attainment of age 63.
10    (b) Each contribution by the employee and the city shall be
11allocated to the account of and credited to the employee, and
12shall be improved by interest at the applicable rate during the
13time he is in service until the age and service annuity is
14fixed. Any accretion, by way of interest or otherwise, upon
15such sum or any deduction from salary made after the annuity is
16fixed for a present employee or after attainment of age 63 by a
17future entrant who first becomes a fireman under this Article
18before January 1, 2011 shall not be credited to the employee
19for age and service annuity.
20(Source: P.A. 76-1668.)
 
21    (40 ILCS 5/6-167)  (from Ch. 108 1/2, par. 6-167)
22    Sec. 6-167. Contributions for widow's annuity and Tier 2
23surviving spouse's annuity. Beginning on the effective date and
24prior to September 1, 1957, 1% of each payment of salary of not
25more than $3,000 of each employee and beginning September 1,

 

 

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11957, 1% of each payment of salary of not more than $6,000 of
2each present employee and future entrant shall be deducted and
3contributed to the fund for widow's annuity. After September 1,
41967 and prior to January 1, 1976, 1%, and beginning January 1,
51976, 1 1/2% of salary without limitation shall be deducted
6from the pay of each present employee and future entrant and
7contributed to the fund for widow's annuity or Tier 2 surviving
8spouse's annuity. The deduction shall be made at the time the
9payments of salary are payable and shall continue during the
10service of the employee.
11    Concurrently with each contribution, the city shall
12contribute 2% of each payment of salary.
13    Each contribution by the employee and the city shall be
14allocated to the accounts of and credited to the employee for
15widow's annuity or Tier 2 surviving spouse's annuity.
16(Source: P.A. 79-633.)
 
17    (40 ILCS 5/6-229)
18    Sec. 6-229. Provisions applicable to new hires; Tier 2.
19    (a) Notwithstanding any other provision of this Article,
20the provisions of this Section apply to a person who first
21becomes a fireman under this Article on or after January 1,
222011, and to certain qualified survivors of such a fireman.
23Such persons, and the benefits and restrictions that apply
24specifically to them under this Article, may be referred to as
25"Tier 2".

 

 

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1    (b) A fireman who has withdrawn from service, has attained
2age 50 55 or more, and who has 10 or more years of service in
3that capacity shall be entitled, upon proper application being
4received by the Fund, at his option to receive a Tier 2 monthly
5retirement annuity for his service as a fireman. The Tier 2
6monthly retirement annuity shall be computed by multiplying
72.5% for each year of such service by his or her final average
8salary, subject to an annuity reduction factor of . The
9retirement annuity of a fireman who is retiring after attaining
10age 50 with 10 or more years of creditable service shall be
11reduced by one-half of 1% for each month that the fireman's age
12at retirement is under age 55. The Tier 2 monthly retirement
13annuity is in lieu of any age and service annuity or other form
14of retirement annuity under this Article.
15    The maximum retirement annuity under this subsection (b)
16shall be 75% of final average salary.
17    For the purposes of this subsection (b), "final average
18salary" means the average monthly salary obtained by dividing
19the total salary of the fireman during the 96 consecutive
20months of service within the last 120 months of service in
21which the total salary was the highest by the number of months
22of service in that period.
23    Beginning on January 1, 2011, for all purposes under this
24Code (including without limitation the calculation of benefits
25and employee contributions), the annual salary based on the
26plan year of a member or participant to whom this Section

 

 

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1applies shall not exceed $106,800; however, that amount shall
2annually thereafter be increased by the lesser of (i) 3% of
3that amount, including all previous adjustments, or (ii)
4one-half the annual unadjusted percentage increase (but not
5less than zero) in the consumer price index-u for the 12 months
6ending with the September preceding each November 1, including
7all previous adjustments.
8    (b-5) For the purposes of this Section, "consumer price
9index-u" means the index published by the Bureau of Labor
10Statistics of the United States Department of Labor that
11measures the average change in prices of goods and services
12purchased by all urban consumers, United States city average,
13all items, 1982-84 = 100. The new amount resulting from each
14annual adjustment shall be determined by the Public Pension
15Division of the Department of Insurance and made available to
16the boards of the retirement systems and pension funds by
17November 1 of each year.
18    (c) Notwithstanding any other provision of this Article,
19for a person who first becomes a fireman under this Article on
20or after January 1, 2011, eligibility for and the amount of the
21annuity to which the qualified surviving spouse, children, and
22or parents of the fireman are entitled under this subsection
23(c) shall be determined as follows:
24        (1) The surviving spouse of a deceased fireman to whom
25    this Section applies shall be deemed qualified to receive a
26    Tier 2 surviving spouse's annuity under this paragraph (1)

 

 

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1    if: (i) the deceased fireman meets the requirements
2    specified under subdivision (A) or (B) of this paragraph
3    (1); and (ii) the surviving spouse would not otherwise be
4    excluded from receiving a widow's annuity under the
5    eligibility requirements for a widow's annuity set forth in
6    Section 6-142. The Tier 2 surviving spouse's annuity is in
7    lieu of the widow's annuity determined under any other
8    Section of this Article and is subject to the requirements
9    of Section 6-143.2.
10        As used in this subsection (c), "earned pension" means
11    a Tier 2 monthly retirement annuity determined under
12    subsection (b) of this Section, including any increases the
13    fireman had received pursuant to Section 6-164.
14            (A) If the deceased fireman was receiving an earned
15        pension at the date of his or her death, the Tier 2
16        surviving spouse's annuity under this paragraph (1)
17        shall be in the amount of 66 2/3% of the fireman's
18        earned pension at the date of death.
19            (B) If the deceased fireman was not receiving an
20        earned pension but had at least 10 years of service at
21        the time of death, the Tier 2 surviving spouse's
22        annuity under this paragraph (1) shall be in the amount
23        of 66 2/3% of the Tier 2 monthly retirement annuity
24        that the deceased fireman would have been eligible to
25        receive under subsection (b) of this Section, based
26        upon the actual service accrued through the day before

 

 

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1        the fireman's death, but determined as though the
2        fireman was at least age 55 on the day before his or
3        her death and retired on that day.
4            (C) Notwithstanding any other provision of this
5        Article, the monthly Tier 2 surviving spouse's annuity
6        under subdivision (A) or (B) of this paragraph (1) of a
7        survivor of a person who first becomes a fireman under
8        this Article on or after January 1, 2011 shall be
9        increased on the January 1 next occurring after (i)
10        attainment of age 60 by the recipient of the Tier 2
11        surviving spouse's annuity or (ii) the first
12        anniversary of the Tier 2 surviving spouse's annuity
13        start date, whichever is later, survivor's pension and
14        on each January 1 thereafter, by 3% or one-half the
15        annual unadjusted percentage increase in the consumer
16        price index-u for the 12 months ending with September
17        preceding each November 1, whichever is less, of the
18        originally granted Tier 2 surviving spouse's
19        survivor's annuity. If the annual unadjusted
20        percentage change in the consumer price index-u for a
21        12-month period ending in September is zero or, when
22        compared with the preceding period, decreases, then
23        the annuity shall not be increased.
24            (D) Notwithstanding the other provisions of this
25        paragraph (1), for a qualified surviving spouse who is
26        entitled to a Tier 2 surviving spouse's annuity under

 

 

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1        subdivision (A) or (B) of this paragraph (1), that Tier
2        2 surviving spouse's annuity shall not be less than the
3        amount of the minimum widow's annuity established from
4        time to time under Section 6-128.4.
5        (2) Surviving children of a deceased fireman subject to
6    this Section who would otherwise meet the eligibility
7    requirements for a child's annuity set forth in Sections
8    6-147 and 6-148 shall be deemed qualified to receive a Tier
9    2 child's annuity under this subsection (c), which shall be
10    in lieu of, but in the same amount and paid in the same
11    manner as, the child's annuity provided under those
12    Sections; except that any salary used for computing a Tier
13    2 child's annuity shall be subject to the Tier 2 salary cap
14    provided under subsection (b) of this Section. For purposes
15    of determining any pro rata reduction in child's annuities
16    under this subsection (c), references in Section 6-148 to
17    the combined annuities of the family shall be deemed to
18    refer to the combined Tier 2 surviving spouse's annuity, if
19    any, and the Tier 2 child's annuities payable under this
20    subsection (c).
21        (3) Surviving parents of a deceased fireman subject to
22    this Section who would otherwise meet the eligibility
23    requirements for a parent's annuity set forth in Section
24    6-149 shall be deemed qualified to receive a Tier 2
25    parent's annuity under this subsection (c), which shall be
26    in lieu of, but in the same amount and paid in the same

 

 

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1    manner as, the parent's annuity provided under Section
2    6-149; except that any salary used for computing a Tier 2
3    parent's annuity shall be subject to the Tier 2 salary cap
4    provided under subsection (b) of this Section. For the
5    purposes of this Section, a reference to "annuity" in
6    Section 6-149 includes: (i) in the context of a widow, a
7    Tier 2 surviving spouse's annuity and (ii) in the context
8    of a child, a Tier 2 child's annuity.
9    (d) The General Assembly finds and declares that the
10provisions of this Section, as enacted by Public Act 96-1495,
11require clarification relating to necessary eligibility
12standards and the manner of determining and paying the intended
13Tier 2 benefits and contributions in order to enable the Fund
14to unambiguously implement and administer benefits for Tier 2
15members. The changes to this Section and the conforming changes
16to Sections 6-150, 6-152, 6-158, 6-164, 6-166, and 6-167 made
17by this amendatory Act of the 99th General Assembly are enacted
18to clarify the provisions of this Section as enacted by Public
19Act 96-1495, and are hereby declared to represent and be
20consistent with the original and continuing intent of this
21Section and Public Act 96-1495.
22    (e) The changes made by this amendatory Act of the 99th
23General Assembly are intended to be retroactive to January 1,
242011 (the effective date of Public Act 96-1495) and, for the
25purposes of Section 1-103.1 of this Code, they apply without
26regard to whether the relevant fireman was in service on or

 

 

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1after the effective date of this amendatory Act of the 99th
2General Assembly.
3(Source: P.A. 96-1495, eff. 1-1-11.)".